Business
Updated : Mar 19, 2018, 05:30 AM IST
Biopharma company Biocon on Wednesday said that it is looking at entering new markets such as Latin America, Eastern Europe and Southeast Asia to mitigate the risk associated with the Middle East and North African markets (MENA).
Kiran Mazumdar-Shaw, chairman and managing director, Biocon, said that there is no lack of demand in the MENA markets but the concerns are related to credit risk. In eastern Europe, even Ukraine continue to be a bit of worry and so the company is focusing more on LatAm and Southeast Asia.
"We have been addressing these markets (LatAm, Eastern Europe and Southeast Asia) as in the past but there are regulation gestation period in these markets. So as we get more and more approvals in these markets we will focus more aggressively in these kind of opportunities. We are watching the MENA region very carefully and if things improve, obviously we will get back to that market," she said.
On the earnings front, the Bangalore-based company reported a flat growth in the quarter ended September 30 with its net profit at Rs 102 crore, almost unchanged from the corresponding period last fiscal. Total income rose 3% to Rs 773 crore during the period under review from Rs 753 crore in the year-ago period. The rise in its income came from the branded formulation business, which grew 17% at Rs 116 crore this quarter, thereby outpacing the industry growth.
"We have no doubt seen muted growth in our core biopharma this quarter due to capacity constraint that continue to challenge us, as do the geo-political credit risks challenges in the MENA region. However, we are actively engaged for entry into new markets to mitigate the risk associated with the MENA region," she said.
The CMD also said that the capacity constraint is another challenge for the company. The insulin problem is likely to be addressed through its Malaysian facility which is expected to be operationalised by the fiscal-end.
However, the regulatory approvals may vary for different markets, which can be anywhere between 12 to 24 months depending on the market. The capacity issue of Syngene, the contract research and manufacturing subsidiary, too will take at least two years to really ramp up. Some brownfield expansions are also expected to be completed next year, she said.
Talking about the core biopharma business, Mazumdar-Shaw said that the outlook looks challenging even for the remaining part of the fiscal.
For insulin glargine, Biocon's partner Mylan has already initiated multicenter phase III trials in the United States. Two trials, both for 24 weeks, comprising a total of 1100 patients (500 type-1 diabetes mellitus patients & 600 type-2 diabetes mellitus patients) are expected to be completed by June 2016.
"This I believe is a very important milestone for two partners since insulin Glargine is a $8 billion global opportunity with very few players addressing the biosimilars market, " Mazumdar-Shaw further said.
The company also expects some important read-outs in the oral insulin segment by the end of this fiscal or early next fiscal.
"Oral insulin is a partnered deal with Bristol-Myers Squibb and this is an option agreement where we are suppose to do a number of trials to basically answer certain questions were not been answered in the previous set of trials," she added.