How bio-similars are reshaping the Biocon story in India?

Biocon has an array of bio-similars under process largely in the areas of oncology, diabetes and addressing autoimmune deficiencies. But how big is the bio-similars market that can be addressed by Biocon?

July 06, 2020 8:53 IST | India Infoline News Service
In a pharma world that is racked up with complex technical stuff, the one word that is doing the rounds these days is bio-similars. It is already being touted as the next big trend in pharma and is expected to bring about a quantum change in the way medicines are administered and diseases are attacked. The existing Indian expertise in generics can only help address healthcare up to a point. The next big challenge is addressing more complex health challenges. That is where biologics and bio-similars come in.

What exactly are biologics and bio-similars?

To understand bio-similars we first need to understand what is a biologic. The relation between a biologic and bio-similar is akin to the relationship between a chemical formulation and a generic, but we will come back to that later. A biologic can include vaccines, gene therapy, tissues, cell proteins, monoclonal antibodiesetc. Unlike your typical chemical formulations that are chemically derived, these biologics are generally derived from living organisms such as humans, animal microorganisms or yeast. Biologics are more potent in treating complex ailments like cancer, kidney diseases, autoimmune diseases etc.

The entire development of biologics is not only complex but also time consuming and expensive. After all the effort, there is a low probability of success and in most cases the final drug turns out to be extremely expensive. That is exactly where bio-similars fit in. Bio-similars are exact copies of the biologic just as small molecule generics ape the chemical formulations. The big shift in the US came after Barrack Obama signed a special law for abbreviated pathway to biologics. Bio-similars were legally permitted if data could demonstrate that the bio-similar was highly identical to an approved biologic.

Bio-similars: How Biocon is leveraging the opportunity

In 2016, Biocon hived off all its bio-similar assets under Biocon Biologicals. This company already has a running partnership with Mylan and a new Greenfield unit is likely to be commissioned by the end of FY21. The table captures the status of Biocon’s bio-similar initiatives.

Name of Molecule Therapeutic Area Alliance with Latest Status
Trastuzumab Oncology Mylan Launched in EU and Approved in the US
Pegfilgrastim Oncology Mylan Launched in the US and approved in EU
Bevacizumab Oncology Mylan Launched in India, Global Phase III
Filgrastim Oncology Mylan Pre-Clinical stage
Pertuzumab Oncology Mylan Early Development
Insulin Glargine Diabetes Mylan Launched in EU, Under review in the US
Insulin Aspart Diabetes Mylan Global Phase III
Insulin Lispro Diabetes Mylan Pre Clinical Stage
Recombinant Human Insulin Diabetes Mylan Launched in EMs and in active development for the US
Adalimumab Autoimmune Mylan Launched in-licensed product in EU
Etanercept Autoimmune Mylan In-licensed product for approval in EU
Various Assets Oncology and Immunology Sandoz Early stage development
Data Source: Company Filings

Clearly, Biocon has an array of bio-similars under process largely in the areas of oncology, diabetes and addressing autoimmune deficiencies. But how big is the bio-similars market that can be addressed by Biocon?

Bio-similars are big, but they are getting awfully bigger

The overall bio-similar market was estimated at $10 billion in 2018. According to Global Market Insights, this is expected to increase to $70 billion by 2025. That is CAGR growth of nearly 38% consistently till 2025. The European market for bio-similars is much larger and closer to $9 billion while the US markets is currently less than $700 million. But both the US and EU markets are expected to grow exponentially as the need for complex treatments to more advanced immune diseases need economical medication. That is where bio-similars can play a big role. Check the graphic below.

Data Source: www.visiongain.com

Biologics the big focus area for Biocon

With a booming global opportunity, Biologics is fast emerging as the big opportunity for Biocon. If you look at recent numbers, it is biologics that has been driving growth and margins for Biocon. While the small molecules business (chemical generics) has grown by 14%, the biologics business has grown by 31% YOY. But there is a major challenge to address in the area of biologics and bio-similars and that pertains to huge R&D outlays.

The bio-similar business at Biocon witnessed 71% YOY growth in R&D outlays and that is likely to keep margins under pressure. Even though R&D is value accretive, it does put pressure on margins in the short run. Clearly, if Biocon is aiming at big growth, the focus will have to be substantially on bio-similars.

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