Analysts Give a Thumbs Up to Biocon’s Biosimilars Progress
HSBC Sec, Morgan Stanley, Citi turn bullish on co after it says its insulin glargine has met primary targets
Mumbai: Analysts gave a thumbs up to Biocon after the company said its copy of biopharmaceutical insulin glargine met the primary targets, which in effect takes the product closer to regulatory filings in the US.
With the biosimilar insulin crossing key interim milestones in the global phase-III, or advanced, clinical development programme, the Bengaluru-based drug maker said on Tuesday, it is on track for regulatory filings in the US and European Union in the current fiscal year. Biocon said also the global Phase III study for pegfilgrastim, a cancer treatment, has been completed and it has met the primary endpoint of demonstrating clinical equivalence with the reference product.
“We are excited about four potential biosimilar filings (glargine, trastuzumab, pegfilgrastim and adalimumab) in FY17 though launch will be dictated by potential litigation and interchangeability issues. We believe insulin glargine filing holds the most potential, given limited number of players and big market,” wrote Girish Bakru, healthcare analyst, HSBC Securities.
Morgan Stanley said it is overweight on the stock. “During the quarter, it received approval for insulin glargine in Japan (launch in F1H17). This should position its filing favourably in the US/EU and also gives access to multiple large EM markets such as South Africa, Brazil, Russia, and Turkey. It has partnered with PiSA (Mexico) to target rh-insulin in the US (moneti- zation in 2020 or later). We continue to position Biocon as a multi-year growth and rerating story,” it said in a note to clients.
Citi too raised the target price of the stock. Research services remain the key growth driver (for Biocon) but there are some signs of a pickup in other businesses as well, it said in a note. “The company appears to be making good progress on biosimilar initiatives; we believe this is the primary driver of stock valuations.” Biocon on Tuesday reported a 79% jump in its net profit for the fourth quarter of fiscal 2016. The company reported a net profit of .₹ 361 crore. Revenue crossed .₹ 1,000 core, up 17%.
Biocon said also that it restructured its legal entities to align with the growth strategies represented by its strategic business units.
“All our biosimilar assets will now be consolidated under the new legal entity, Biocon Biologics Limited incorporated in the UK as a subsidiary of Biocon Limited, India”, Managing Director Kiran MazumdarShaw said on a conference call.