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Biocon-Mylan’s Biosimilar For Cancer Drug Pegfilgrastim Gets U.S. FDA Nod

Biocon Ltd. and its partner Mylan N.V. have received approval for their first biosimilar of cancer medicine pegfilgrastim from the U.S. drug regulator for selling in the American market.

Their drug, which will be sold under the brand name Fulphila, is expected to be the first biosimilar of pegfilgrastim available in the U.S. market to help patients with non-myeloid cancer reduce the risk of infection following myelo-suppressive chemotherapy, according to a statement issued by the U.S. Food and Drug Regulator last night. Pegfilgrastim is sold under the brand name Neulasta in the U.S.

Shares of Biocon closed 7.2 percent lower at Rs 607.40 apiece after rising to an all-time high of Rs 696 in the intra-day trade.

Neulasta had U.S. sales of $4.2 billion for the 12 months ending March 31, 2018, according to data from pharma and healthcare consultancy firm IQVIA.

Fulphila is the second biosimilar developed by the the Bengaluru-based drug maker to get an approval from the U.S. drug regulator after Trastuzumab in late 2017. Mylan anticipates launching Fulphila in the coming weeks. The company had recently reiterated its second half 2018 launch guidance for pegfilgrastim.

Relief For Biocon

The drug launch allays fears of regulatory issues at Biocon’s Bengaluru plant, where Fulphila will be produced, as it had received a Form 483 from the U.S. FDA with seven observations in May. The approval indicates that Biocon’s response to the observations were satisfactory and the plant is cleared for future exports.

“We are prepared for the imminent launch for the drug,” Kiran Mazumdar Shaw, chairman and managing director of Biocon, told BloombergQuint, adding that Mylan being the front-end partner will try to garner as much market share as possible.

On the impact on Biocon’s financials, she said the deal with Mylan is on a profit-sharing basis and the revenues they will generate will be by supply of the drugs to Mylan. Operating margins are attractive and lucrative given that Biocon has invested substantial capital in the venture, she said.

This approval represents a further endorsement of the Biocon-Mylan partnership’s ability to successfully develop complex molecules to exacting quality and regulatory standards, said Arun Chandavarkar, chief executive officer and joint managing director, Biocon.

This expands our oncology portfolio for the benefit of cancer patients and supports our mission to improve access to high quality, affordable bio-pharmaceuticals globally.
Arun Chandavarkar, CEO & Joint MD, Biocon

Here’s what brokerages said on Biocon post the approval:

Morgan Stanley

  • It is the best proxy for biosimilars in India, which would take center stage in the generics world in the next decade.
  • Product pipeline appears to be ripening, with monetisation visibility in this financial year--potentially one launch in the U.S. and three or four in the European region.

Dolat Capital

  • Expecting 20-25 percent market share with 20-25 percent price erosion for the first year of launch for Biocon taking it to earnings per share of Rs 12-16.
  • The drug would be manufactured at the Bengaluru plant. We are awaiting U.S. FDA EIR post the May 2018 inspection as the observations were very minor and now it has already approved the product.

The stock of Biocon has doubled in the last 12 months, compared to a 12 percent rise in the S&P BSE Sensex.

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