I was going through some online news articles stating huge saving for UK NHS with biosimilars.
http://www.nationalhealthexecutive.com/Robot-News/nhs-to-save-record-300m-on-biosimilar-drugs-deal
These articles state:
Harnessing the power of competition between drug companies, NHS England has now freed up hundreds of millions of pounds of savings to reinvest in patient care
Can someone with better understanding of Mylan/Biocon deal , confirm if Biocon got a good deal or it was just to enter UK market they compromised on margins ?
Biocon’s Adalimumab has not yet received approval in the EU / UK. This is an in licensing deal between Mylan and Fujifilm. Biocon claims that it retains its commercial interest in the launch (most likely a profit share) even though it is not the supplier.
That being said a 75% value erosion in the UK Adalimumab market is worrying. Even though they have a single payer system, I was expecting more of a 30-40% decline, in line with other biosimilars launched in Europe.
@rks00 Thank you for the information. Can you please give more details on what single payer system is and why you expected 30-40 % decline. Is this normal for biosimilars in all markets ?
I think he means one entity pays for entire country’s purchase compared to USA where insurance companies will pay for a generic drug but each insurance company decides which generic they approve
The contract is for £100m but it doesnt say if Mylan got the contract. Also Mylan/Biocon was just recently approved for EU. I dont think UK as being part of EU until March has a separate authority to approve drugs.
A contract usually takes a lot of time to negotiate but it is entirely possible Mylan-Biocon got it and they deferred the announcement until Mylan biosimiliar was approved by EU
Excellent result! Full year eps might be lower than my guesstimate. But I am satisfied.
Discl - Biocon 25% of my portfolio
Biocon Q4 results on 25 April. Here is a glimpse of what to expect - mylan concall transcript copy pasted below
https://finance.yahoo.com/news/edited-transcript-myl-earnings-conference-080248300.html
Fulphila doing well in US (15% market share). Herceptin sales in Europe will commence soon. My guess is 40% increase in net profit. Let us see…
Discl - Biocon 20% of my portfolio
How you arrived at 40 percent growth for PAT @ Biocon basis this ?
Kindly share if possible as I wish to understand the same .
40% increase in profits just a guess, but an educated guess - Pegfilgrastim (fulphila) in US and Insulin glargine in Europe were not approved or sold back in Q4 2018. Of course I could be wrong…
My expected 2019 full year EPS is Rs 14-15 (my guesstimate in early 2018 was 18-20, so I was wrong but still a good performance by the company), CMP 615. PE of 41 (approx) - not bad for a company growing in high double digits with increasing capacity utilization and decreasing debt.
R&D is approx 10% of sales which is very high for an Indian pharma company and this would ensure that biocon has good future pipeline of drugs in the high margin biosimilar space.
Also worth noting the fact that Trastuzumumab have been approved in the US and Europe but sales have not commenced yet due to confidential deal between Mylan and Roche - the sales will start soon according to the latest Mylan con call. This story will unfold in 2019-2020 I hope…
Discl - very biased since hold a significant amount, and continuing to add
Biocon has just announced that the Board will meet on 25th of April for dividend as well as Bonus
link:-https://www.nseindia.com/corporate/listcontract3_224201919116_BoardMeeting_Bonus_513.pdf
Stockcollector predict (could be wrong) 20% profit growth for 2020. Trastuzumumab in Europe/USA and glargine in USA could increase profits even further. EPS Rs 18 for 2020!!
R&D is 15% of total revenue and approx 50% of it is expended and 50% capitalised. This is huge and it ensures pipeline of high margin biologics in the future…
The Board of Biocon has recommended the issue of Bonus Shares by capitalisation of free reserves in the ratio of 1:1 i.e., 1 (one) bonus equity share of Rs. 5/- each fully paid-up for every 1 (one) existing equity share of Rs. 5/- each held by the members, as on the record date, subject to the shareholder’s approval through postal ballot.
The Board of Directors of Biocon Ltd at its meeting held on April 25, 2019, has considered, approved and recommended final dividend of Re. 1 per equity share of face value of Rs. 5/- each (Pre-bonus issue) for the financial year ended March 31, 2019, subject to shareholders’ approval at the ensuing Annual General Meeting (“AGM”). The dividend will be paid within 30 days from the date of shareholder’s approval at the ensuing Annual General Meeting.
Good podcast on future of biosimilars
Even if there are five players in future for each molecule and 60% price erosion still opportunities is big according to Morgan Stanley
(Go to second number podcast which is on Biosimilars)
If some can share the MS report on Biosimilars then it will be useful
Thanks
Ashit
https://www.biosimilarscouncil.org/resource/insulin-biosimilars-hearing/
Seems to be some positive remarks about switching between Reference product and Biosimilar Insulin
Thanks
Ashit
Dr. Sundar’s presentation at the FDA Public Hearing on Biocon Insulin
Thanks
Ashit
@rks00, Hi Rohit, since you initiated the thread Biocon has been more than a 3 bagger now 
. It is going thru a long consolidation with downward bias. Just wanted to know if you still track it. Are all the long term prospects (including biosimilars) still intact? How do you view its prospects for next 3-5 years?
Rgds.
What is the market size? Approx $200 million canadian dollars (1000 crores) - I got this info from the link below
Assuming 50% price erosion and 20% market share - gross annual sales 100 crores, assuming 30% after tax profit margin - 30 crores/annum
Not a big opportunity but decent enough…
Discl - Biocon 20% of my portfolio