Biocon to monetise 2 $250m molecules

CMD Kiran Mazumdar-Shaw is set to monetise at least two candidates from the company’s impressive portfolio of novel biologics soon.
BANGALORE: With an intent to take Biocon Ltd to the top of the global biotech heap in three years, CMD Kiran Mazumdar-Shaw is set to monetise at least two candidates from the company’s impressive portfolio of novel biologics soon.

“I would like to be among the top-ten global biotech companies based on revenues in three years and among the top five by 2020,” Shaw told DNA Money in an exclusive interview, adding she has set a $1-billion revenue target within that time.

That means Biocon, which logged Rs 1,090 crore in revenues last year, will have to grow at least four times its current size within three years. 

A beginning of sorts towards this will be with the impending licensing deals on two of Biocon’s lead molecules, which she says should be valued upwards of $250 million each.

The molecules in question are the oral insulin candidate IN 105, which is set to enter Phase-III clinical trials, and a novel drug candidate T1h, which is a monoclonal for treating rheumatoid arthritis.
Biocon is expected to launch the oral insulin in the US and European markets by FY10.

The market size for the product in the two regions, according to Reliance Money analysts Surya Narayan Patra and Vinod Pushpanthan, is estimated at around $2 billion.

“This will happen sooner than later, but I would like to wait for some more data points on these two candidates, which have blockbuster potential,” said the lady who is called India’s biotech queen.

Biocon’s current discovery pipeline comprises at least five candidates, of which two are towards the end of their phase-II trials and two are in the pre-clinical stages. An oncology drug, BIOMAb EGFR, has already reached the market for treatment of head and neck tumours, and trials are being conducted for expanding its application to other tumours.

According to Shaw, there are 4-5 candidates in the insulin basket alone, apart from the several good prospects in monoclonal antibodies — which are a big opportunity in the unregulated markets, though developed markets could take some time in opening up.

“I strongly believe that Biocon has been undervalued by the market as people look at current finances and tend to discount the future prospects,” she said. While the success rate of new drug discovery is not very high in the industry, 80% of Biocon’s own research programmes are very much on track, she said.

According to India Infoline analyst Dr Bino Pathiparampil, Biocon is a safe bet for the long term, given the upsides possible from penetration of generic insulin in the regulated markets and the novel oral insulin product under development. In addition, it has $80 million in cash on books and has a low debt-equity ratio (25%) apart from positive operating cash flows, he said in a report soon after the second quarter results.
p_chitti@dnaindia.net

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