Biocon - The ultimate biosimilars play!

Holding company discounts are always present. In the cases where the holding companies are in the same sector discount remains less but it never is zero. According to a report, the lowest discount in Indian scenario is present in HDFC (25%) where all the subsidiaries are in financial sector and the company is renowned for efficient capital allocation.


Based on the discussion here it seems like a prudent way to invest in Biocon is to allocate evenly between Biocon and Syngene. Even allocation should capture the close to true growth rate in the company as a whole.



I think one can look at what is happening with regard to biologicals in India and extrapolate it to ROW.
I will use Trastuzumab as an example.

Biocon was first to launch Trastuzumab generic in India in 2014 and at that time, it was priced just 15% below innovator. Now, many companies make Trastuzumab and hence, there is severe price erosion - to the tune of 60 - 70%.

Another phenomenon which has happened in India is launch of government sponsored health schemes - this has led to increase in volumes, but organization of practice - ie rather than scattered practices and hence drug usage, institutionalization of practice and tender based drug procurement.

It is pertinent to ask the management about their market share in India for Trastuzumab. As per my knowledge, there is tough price war and Reliance is grabbing progressively larger share of tender based procurement.

Since i am related to Oncology field, i can talk about products related to Oncology ie, Trastuzumab, Bevacizumab, Filgrastim, Peg-Filgrastim etc.

Although Biocon was very early in the race, US and EU regulatory pathways for approval of Biologicals took long time to get established and approve the first product. But once the pathways got established, it became easier to get approved as happens with chemical based generic pharma.

It is not that Biocon may not create wealth. However, IMHO, it faces an uphill task with progressive commoditization.

I am attaching two articles to emphasize the point that Biosimilars is an extremely competitive market in USA - the most lucrative pharma market in the World.

  1. An article about Pfizer biosimilar revenues dated 3rd February 2021 where there is competitive landscape / Market share data of Rituximab and Trastuzumab for H1 2020 which may be useful.

  2. Another article is about the threat of innovation to biosimilar story -
    Coherus Biosciences had 20% market share in PegFilgrastim before it got disrupted by launch of Onpro - An on body injector by Amgen
    It also mentions launch of Pegfilgrastim biosimilar by Pfizer in December 2020 - indicating more competition

Moreover, Both Trastuzumab and Rituximab have been already approved in Subcutaneous Forms - making the administration convenient and short - Another innovation which will hamper biosimilar growth.

These are some of my thoughts about competitive landscape of biologicals based on my knowledge. Kindly take them as input to the forum rather than any prediction about Biocon future performance.


Addition: If i understand correctly, there is no 6 month exclusivity as happens with non biological drugs like pomalidomide (NATCO) in case of biosimilars.


Question to fellow members:

When Systengene was spin-off from Biocon, they could have given shares to existing shareholder, instead they opted for holding company structure.
What is the rational management gave that time to have a holding company structure? Any ideal/link?

As per my research Syngene was listed mainly cause Biocon needed the money to fund development of Biocon Biologics.
Eventually Synegne will be de merged from Biocon and at that point in time, all shareholders of Biocon will recieve shares in Syngene.


Both statements aren’t true.

Syngene was listed to unlock value. It won’t be merged and pretty much functions like an independent entity.


Biocon Biologics and Viatris Receive European Commission Approval for Kixelle, Biosimilar Insulin Aspart.Here is the press release from the Company:-

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Biocon Biologics and Viatris Inc. Receive CHMP Nod for Abevmy® , a Biosimilar to Avastin® (Bevacizumab)

Biocon Biologics Ltd. (a subsidiary of Biocon Ltd.) announced today that the European
Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) has
adopted a positive opinion recommending the marketing authorization of their
biosimilar Bevacizumab, co-developed with Viatris, to be marketed as Abevmy®
(injection bevacizumab 100mg and 400mg). Abevmy® is a biosimilar to Roche’s
Avastin®, prescribed for all indications including metastatic colorectal carcinoma,
metastatic breast cancer, non-small-cell lung carcinoma, glioblastoma, ovarian,
cervical and renal cancer as part of a specific regimen.

The decision of the European Commission (EC) is expected in May 2021, which, when
approved, will grant marketing authorization in the 27 European Union (EU) member
countries and European Economic Area (EEA) member states of Norway, Iceland and
Liechtenstein. For the U.K., the Medicines and Healthcare Products Regulatory
Agency’s “reliance procedure” will be followed, and the U.K. marketing authorization
can be expected shortly after the EC decision.

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New Deputy CEO for Biologics appointed, most likely will become CEO eventually.

Biocon Pharma partners with Libbs Farmaceutica to launch generic formulations in Brazil

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Q4 call notes

  • Chief commercial officer appointed for emerging markets - boost to sales effort

  • FY22 growth to be better than FY21( especially biosimilar) - significant contribution from emerging market + new launches to do heavy lifting

  • Biosimilar- when the true impact will show of multi billion potential??- FY21 was impacted, misses on timing of contracts of approvals and launches impacted Developed markets. Emerging market are going well and will get stronger - FY22 will be better and FY23 will be even stronger - IMO this is in line with departure of CEO last quarter for Dr Karen - more in Q3 notes in thread. With Developed mkt opening up( US and EU) and emerging mkt holding up -things looking up. $1B valuations updates to be given in near future.

  • QoQ biosimilar rev and profit lower - some pricing pressure and higher expenses , generally Q3 is stronger than Q4 as yearly pattern, emerging mkt doing well( Algeria, Brazil etc)

  • Remote virtual FDA inspection to help continue pending inspection - delays to be made up over time with upcoming launches

  • FY 22 generic( 80:20 - API vs formulations)- double digit growth for formulations, mid single digit for API, capacity constraints- vizac and hyd ( syntehetic) facilities commission is key to API growth , Generics to go strong from FY23

  • Bicara R&D will not impact P&L going forward due to subsidiary to associate conversion, they plan to raise funds as well - till date $40M funding from Bicon - FY 21 no is 180 cr of R&D.

  • Syngene - going good, Mangalore plant various approvals over 2 years to deliver strong performance, no of new wins/current client biz extension announced

  • Malaysia- running in loss in FY21, glargine pickup in FY 22 to help, EBIDTA at break even , PBT $33M losses in FY21.

Summary trends

  • Emerging mkt is key focus and trigger for biosimilar in FY 22- direct control of Biocon
  • Developed mkt opening may help in FY 22 - pricing pressure and partner dependency are constraints , new launches can help to some extent
  • Generics triggers only in FY23
  • Syngene already gave guidance for FY22 - 15% revenue, 10% type for profit - FY 23 may be entirely different in upside with Mangalore plant commercial and contributing significantly
  • Bottom line to look better with Bicara R&D reduction and Malaysia plant hopefully not running in losses.

All three equal share biz lines now -Biosimilar - 25 to 30% growth, Syngene 15%, Generics 8% type - from 7.2K cr in FY 21 to 9K cr in FY 22, current mkt cap is 46K cr( 5 times FY 22 sales) - Reasonable for a high entry barrier and long runway biz esp with many players from Pharma and chemical quoting a 10X+ sales

Invested and Added


Here are my notes from FY21Q4 concall

  • Biosimilar business
    o Growth was due to increase in emerging market sales + market share gains for pegfilgrastim and trastuzumab in developed markets + slight increase in glargine market share in US
    o Insulin Glargine is at 2% market share currently, missed getting into the formulary list last year and looking to get into the list in CY22
    o Waiting for US FDA to audit their facility post which they should get approval for bevacizumab and insulin aspart in US. FDA has announced guidelines for virtual inspections and are starting with US based facilities
    o The bevacizumab miss was because FDA wasn’t able to carry out inspection, FDA doesn’t have any further scientific question; Currently, the biosimilar entrants have garnered market share of 65% (50% for amgen alone)
    o Received approvals for bevacizumab and insulin aspart in Europe; Have 5 approved products + 2 products with economic interest in Europe
    o WHO pre-qualification approval for Trastuzumab 150 mg and 420 mg opens opportunities in 46 LMIC countries
    o Expect higher growth in FY22 compared to FY21
    o Goldman Sachs investment is treated as debt for accounting purpose
  • Generics business
    o Saw US pricing pressure, maintained mid-teen market share in sartan products
    o Expect modest growth in FY22 and strong uptick in FY23
    o 80% sales comes from API and 20% from formulations; Got approval for 4 DMFs in US in Q4FY21
    o Tacrolimus was launched in Q3FY21 and is gaining market share, everolimus (vertically integrated) will be launched in FY22
    o Entered Brazil market through partnership with Libbs Farmacêutica
    o Expect double digit growth in formulations and single digit in API division
  • Novel biologics business
    o Bicara is being categorized as an associate because it is being managed as an independent biotech company. This resulted in exceptional income of 160 cr. From now, Bicara will be raising funds independently and Biocon’s position will gradually come down because of equity dilution (current stake is 87%); Biocon’s investment in Bicara is $40mn till date; Its share losses will be ~200cr. in FY22 (will be limited to carrying value of investment on sale)
    o Clinical results for itolizumab expected in CY21
    o Expect commissioning of greenfield plant in Vizag in CY22 (will be largely catering to immunosuppressant). This will unlock growth in API division
    o Biosimilars: Will spend $125mn in biosimilars in FY22 ($100mn in FY21)
    o Generics: Plans to spend 2000 cr. over next 3-years (250 cr. spend in FY21)
  • R&D will be higher than FY21 (at 11% of sales ex syngene) because of clinical trials for 3 molecules
  • Malaysian facility operated at a PBT loss in FY21 (PBT ~ $33mn loss, EBITDA ~ $4mn profit), it should turn profitable once glargine picks up in US
  • At consolidated level, gross debt ~ 4500 cr., net debt ~ 700 cr.

Disclosure: No investments as on date


Link to the earnings call

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Hi All, A very naive question.
As Biocon Biologics would come up with an IPO of it’s own in some time would it make any sense to wait and be part of that rather than investing in Biocon now
I am trying to understand the merits and demerits of this


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Biocon Biologics IPO will happen only ones they scale up the business to billion dollar and beyond. So if someone wants to benefit from initial scale-up in Biosimilars business, they have to invest through Biocon itself.


@ankush12495 Thanks for the input, just a follow up, if my understanding is correct any incremental revenue generated due to Biosimilar will reflect in Biocon (share price) till the time they carve Biosimilar out of it, until then it would make sense to play the Biocon theme, is this a right interpretation?

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Yes that’s right…


a very basic question: what’s the current stake of Biocon in Syngene?