What started off with a seed capital of Rs10,000 in 1978, is today a company worth several thousands crore rupees. Biocon, India’s largest and fully-integrated, innovation-led biopharmaceutical company enjoys the reputation of marketing cost effective drugs, courtesy its fermentation-based technology. Biocon is a global provider of innovative biopharma products and engages itself in all phases of the product cycle, from discovering to development and then commercialising the same drugs. Syngene and Clinigene, subsidiaries of Biocon, conduct R&D programs for international pharma majors. It also gained popularity by becoming the first Indian company to export enzymes to USA and Europe in 1979.

Priority areas

Around 10 per cent of its biopharma revenues are invested in R&D. Its R&D spends rose 45 per cent to Rs68 crore in Q3 FY2016 against Q3 FY2015 reflects progress of its biosimilars segment. Biosimilars are highly similar versions of approved and authorised biological medicines. Also, the on-time commissioning of the Malaysia plant, designed as Asia’s largest integrated insulins manufacturing facility, has made it one of the world’s largest insulin producers.

Growth drivers

Biocon has one of the largest portfolios of insulins and biosimilar protein therapeutics in advanced stages. Its biosimilar strategy is playing out with greater credibility. It is confident of filing four biosimilars in CY16 and regulatory approvals in US and Europe in FY17.

As per the Frost & Sullivan Global Biosimilars Report, the global market opportunity for biosimilars is estimated to reach $24 billion in 2019. Globally, the industry is set to witness another leap in growth. The company’s growth is fueled by five powerful growth accelerators— Small Molecules, Biosimilars, Branded Formulations, Novel Molecules, and Research Services, with a focus on emerging markets. The unfolding biosimilars opportunity globally bodes well for the investors. The stock has given returns of 91 per cent since January 2013. Investors with the long-term horizon can invest in Biocon.

Why Buy

• Poised for global impact with biosimilar insulins and antibodies target of $1 billion in sales by FY19

• Opportunity to leverage through geograhic diversification into selective markets of Malaysia, US and Europe

Watch out For

• The regulatory pathways and product acceptance in advanced markets remains a risk

olmdesk@outlookindia.com