Despite Increased Sales of Biosimilars, Biocon's Profits Drop By 46%

On January 24, Biocon, the India-based biosimilar developer behind the recently FDA-approved trastuzumab biosimilar, Ogivri, reported its consolidated financial results for the third quarter of its fiscal year (ending on December 31, 2017).

Biocon’s chairperson and managing director, Kiran Mazumdar-Shaw, highlighted the company’s joint success with partner Mylan in gaining the FDA’s approval for Ogivri, saying that the company had reached a “major milestone” in gaining clearance for its Herceptin challenger in the United States’ market.

Yet approval of Ogivri came at a price to Biocon; after the French National Agency for Medicines and Health Products Safety found that the biosimilar developer had failed to comply with good manufacturing practices in the production of 3 biosimilar products (including trastuzumab), Biocon was forced to undergo a re-inspection of its fill-finish plant after addressing 35 problems related to drug product manufacturing and quality control operations.

The activities undertaken to requalify the facility caused production disruptions and supply constraints for some products, leading to declining sales.

Not only did the need to undertake the re-inspection apparently delay FDA approval of Ogivri, but it also, according to Biocon’s statement, “…led to production disruption and supply constraints for some products, thereby impacting sales.”

Also negatively impacting Biocon’s overall financial picture were depreciation costs related to operations in its Malaysian facility. In total, income from Biocon’s biologics division was down 15% for the quarter (compared to the same period for the company’s prior financial year), despite the fact that product sales grew 16% year over year, with increased sales of insulins and biosimilar antibodies. The company’s total net profits declined by 46%.

Despite disappointing profits, Biocon sought to reassure investors about its biosimilar potential by highlighting its recently announced partnership with Sandoz for the development of a portfolio of biosimilars. “This collaboration addresses some of the long-term biosimilars opportunities beyond the near-term opportunities being addressed by our existing and continuing successful global partnership with Mylan,” said Biocon. “This new partnership is a significant milestone in Biocon's journey of developing high quality, affordable biologics that have the potential to benefit patients globally.”

The Economic Times reported that Biocon’s shares closed down 1.2% after the quarterly report was issued.