Does This U.S. FDA Letter Spell Trouble For Biocon?

Biocon Ltd.’s plan to launch its key diabetes drug in one of the biggest markets for most Indian drugmakers may be delayed after the company failed to receive an approval from the U.S. regulator.

The U.S. Food and Drug Administration issued a complete response letter for the new drug application for Insulin Glargine—used to treat type 1 and type 2 diabetes—filed by Biocon’s partner Mylan N.V., according to an exchange filing. The FDA issues a complete response letter to an applicant if the agency determines that it will not approve the application or abbreviated application in its present form for one or more reasons.

The complete response letter has been issued pending completion of the corrective and preventive actions submitted to the U.S. FDA in response to the observations made at the conclusion of the pre-approval inspection of Biocon’s insulin manufacturing facility in Malaysia in June 2019, the filing said. The drugmaker shifted the site for manufacturing Insulin Glargine from Bengaluru to Malaysia in June last year after the U.S. FDA issued observations at its Indian plant.

Biocon requested the U.S. FDA for site change to Malaysia, which is a much larger dedicated integrated insulin facility, to be able to meet the demands of the market. It was not linked to the regulator’s inspection of the company’s Indian plant, its spokesperson told BloombergQuint.

The Indian drugmaker said the complete response letter did not identify any outstanding scientific issues with the application. While the company is confident of the quality of its application and doesn’t anticipate any impact of this on the commercial launch timing of insulin glargine in the U.S., Amit Rajan of Prosfora Technologies said the product’s approval would “certainly be delayed”.

As product-specific observations have been made, Biocon may have to give some more analytical data before the agency considers the approval, the managing director at the firm that advises drugmakers on good manufacturing practices, told BloombergQuint. In terms of overall capability of the company to produce sterile products, according to Rajan, it remains to be seen what observations have been made by the U.S. FDA in their inspection of the Bengaluru facility that closed last week.

In August, HSBC in a report said it’s critical for Mylan to receive a timely approval from the U.S. FDA for Insulin Glargine to determine the course of biosimilars sales. After Merck & Co. halting development of biosimilars for Insulin Glargine citing unfavourable economics, HSBC said it’s an attractive opportunity for Biocon and Mylan who can potentially enter as second follow-on biosimilars after Eli Lilly and Boehringer Ingelheim’s launch in December 2016.

Biocon has launched insulin glargine in the European Union, Japan and other emerging markets. The product is approved in Australia and New Zealand and was under review in the U.S. It was aiming to launch the product in the U.S. by March next year.

The global market size for Insulin Glargine is $3.9 billion, of which the U.S. accounts for around 66 percent, according to Edelweiss. HSBC estimates the U.S. for Insulin Glargine at $2 billion. Eli Lilly & Company, Boehringer Ingelheim, Sanofi S.A. and Novo Nordisk A/S are among the drugmakers that are present in the global insulin market.

Troubles At Malaysia Unit Not New

In June this year, the U.S. FDA awarded a Form 483 to Biocon with 12 observations after conducting an inspection at its manufacturing facility in Malaysia. Of these, two observations were a repeat.

The observations in the Form 483—a copy of which was reviewed by BloombergQuint—highlighted deficiencies in quality control procedures, media fill studies, aseptic practices and non-suitable equipment.

Biocon, in a post-earnings conference call after the first quarter, had said it’s working to resolve the issues highlighted in the Form 483 for its Malaysia facility and doesn’t expect any change to Mylan’s commercialisation plans for Insulin Glargine in the U.S.

There are no other outstanding inspection related issues with Malaysia facility. In fact, the Malaysia facility recently received EU GMP (European Union good manufacturing practice) certification in August 2019, the Biocon spokesperson said.

FDA Observations For Bengaluru Unit

Biocon received four observations from the U.S. FDA for manufacturing practices at its Bengaluru facility.

The regulator awarded a Form 483 to one of the company’s biologics drug product facilities after an inspection from Aug. 22-30, Biocon said in the same filing.

The drugmaker, however, said this won’t impact supplies from this facility and it’s confident of addressing these observations through a corrective and preventive action plan in a timely manner.

But according to Morgan Stanley’s analyst Sameer Baisiwala, the observations could be related to the expansion of capacity to produce more pegfilgrastim (chemotherapy drug).