Kiran Mazumdar Shaw on how biologics and small molecules drove Biocon profit in Q1
- Biologics is the segment to watch as we have invested in it and it is delivering for us.
- Small molecules which delivered a 20% growth this quarter.
- We have anticipated demand and gone for capacity expansion.
When I look at Biocon numbers, the small molecules which was not expected to do well, actually grew 20% and after a long time of investments, the biologics have started to pay off. Can you talk to us about these two?
Let me quickly touch upon small molecules which delivered a 20% growth this quarter. It was really spearheaded by very strong performance in API sales largely driven by immunosuppressants. What was bolstering this growth was also the generics business that we have in the US market which is largely led by the statins -- Rosuva, Simva and now Atorvastatin.
This is what really led to a very good performance in the small molecules business. But let me now focus on our stellar performance that we delivered in biologics. Biologics has been performing well in the last few quarters but really the ramp up is now being seen because we have seen a 9% sequential improvement in biologics performance and as you know we have nearly doubled growth from Rs 250 crore in last fiscal to Rs 490 crore this fiscal. A large part of the quality of earnings that you are seeing in biologics is reflected by the very rich realisation that we have in biologics and which is delivering 38% EBITDA margins. That is really a very strong growth.
Biologics is really the segment to watch because this is what we have invested in and it is beginning to deliver for us. Going forward, we expect this momentum to continue and the second half is expected to be even stronger because the real recognition of the Trastuzumab launched in US market by that time. This is what we are really focussing on for this fiscal.
When we talk about Trastuzumab as you mentioned in your last answer, Amgen has gone ahead and launched the first biosimilar Trastuzumab, which of course nobody was expecting and people were expecting that Biocon would be the first to launch biosimilars. Does it still represent a very small market compared to what Biocon is targeting?
Yes, this was an unanticipated launch and I would say that they are launching with the presentation of 420 mg which is not in the market today because Roche has completely converted the market to a 150 mg market. What is important is that Mylan Biocon have both the presentations which are very strongly focussed on a strong entry into the market. Also, Amgen is a big pharma company and the way they address a biosimilar market is going to be very different from the way Mylan approaches a biosimilar market. You can see that we have had the most successful launch for biosimilars through Fulphila.
Mylan has done an excellent job of entering the biosimilar pegfilgrastim market with a very successful launch and I have no doubt that when we enter the market with our biosimilar Trastuzumab. it is going to be a very successful launch as well.
I do not want to comment on Amgen’s entry into the US market and the way it has entered and you know possibly with the presentation that does not exist today in the market. The way they will probably approach the market will be very different to the way Mylan will approach the market.
Till the time the capacity comes in the second half, are you facing some market share issues in certain drugs?
The way I look at it is that we have had a very strong and successful pegfilgrastim launch; fulphila is doing extremely well in the market. Proactively we have actually anticipated the growing demand and have put into place capacity expansion which will soon come on board. We are going to track it very strongly moving ahead and we expect to see an even higher growth in the second half of this fiscal.