Drug maker says better poised to licence and position its novel molecule Itolizumab, which has a Cuban origin
Bangalore-based Biocon hopes that the thaw in bilateral relations between the US and Cuba offers the company a "better opportunity" to licence and partner its novel molecule Itolizumab, used for the treatment of psoriasis.
The molecule, which has a Cuban origin, is the world's first novel anti CD-6 monoclonal antibody to treat multiple autoimmune diseases. The drug was launched in India in 2013 under the brand name Alzumab.
"Itolizumab is advancing well. With relations restored between Cuba and the US, we believe that this asset is now at much better position to be licensed and partnered. We have the global rights and that's why we are trying to license this molecule for a long time, but we were finding it difficult because of the Cuban origin challenge," Biocon chairperson and managing director Kiran Mazumdar-Shaw said on a conference call with media.
She said there was a restrictive issue pertaining to the US as until now it was very difficult to address the regulatory issues around Cuban-origin products.
The global psoriasis market size is estimated at $8.9 billion by 2018.
The company is also betting big on the licensing revenues.
"We have a number of assets that we normally licensed to local and regional partners, and this is a steady income stream for us. Over and above licensing income, it also translates into large commercial opportunity for us.
Our insulin Glargine, which has been licensed and now launched in Mexico and Columbia, has contributed to some of the revenues this quarter," Mazumdar-Shaw said. Its licensing income was Rs 19 crore in the last quarter.
"Biocon's global market strategy has been to work with local partners in emerging markets. Therefore, this kind of opportunities has two components: licensing, and profit-sharing and supply. There is now a steady pipeline of licensable assets with a number of regional partners, which would be a nice revenue stream for us," she said.
The company, which posted a 23% increase in its net profit for the April-June quarter at Rs 126 crore, is expecting a double-digit growth in its branded formulation business this fiscal. Over the past one year, Biocon has cut its smaller brands to focus on more profitable bigger ones. During the quarter under review, the company reported a 14% sequential growth in its branded formulation business to Rs 112 crore. The growth was led by metabolic, nephrology and market access divisions.
"We felt there are a large number of branded products which are just revenue accretive, but not necessarily adding to profits, and we decided to let go many of the smaller brands and focus on the big brands to make us a specialty branded formulations business. This strategy is certainly paying off," she said, adding some of the contributions of profitability and margins in this quarter came from branded formulations. Biocon CEO Arun Chandavarkar said the focus area for branded formulations will be oncology, metabolic, immunology and nephrology.
The company on Friday said it has appointed Narendra Chirmule as the head of R&D at Biocon.
Biocon shares closed at Rs 466.15 a piece on Friday on BSE, up 1.66% the previous close.
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