The long-awaited launch of interchangeable Semglee (insulin glargine) by Biocon Ltd and its partner Viatris in the United States should boost its profit outlook. The fact that the launch was on schedule announced by the company should give confidence.
The ramp-up in sales of three biosimilars launched by Biocon in the United States has been eagerly followed by investors. It should be noted that competition has intensified, posing challenges in terms of gaining market share. Even in the two products launched, Pegfilgrastim and Trastuzumab, analysts at Axis Securities Ltd have said that competitors such as Amgen, Sandoz, Pfizer and Genentech are cutting prices to maintain their market share.
The result is that biosimilar activity could face a price erosion during the second half of FY22. In this context, the launch of interchangeable Semglee may help shift the prescription share of leader Lantus. Analysts at HSBC Securities and Capital Markets (India) Pvt. Ltd said: “We believe Semglee could potentially reverse the results of Biocon’s biosimilar efforts in the United States, where we have seen moderate market adoption for all three launched products. “
Meanwhile, the street is also considering approving the launch of the oncology biosimilar Avastin. Biocon’s foray into the vaccine segment through a strategic partnership with the Serum Institute of India, although at an early stage, is also positive.
The company is also doing well in the research services segment. In the second quarter, research services grew 17% year-on-year (year-on-year), contributing to one-third of total revenue. Biosimilars which contributed 39% to overall sales increased 10% year-on-year.
Despite the bright spots, analysts are unwilling to raise earnings estimates, given continued pressure on generic prices and increases in commodity prices.
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