Eye on Pharma: Biocon's Profits Drop by 51% Despite Strong Insulin Sales

Biocon’s net profits for the past quarter dropped by 51%, according to a statement made by the Bangalore-based drug manufacturer.

Chairperson and managing director Kiran Mazumdar-Shaw explained the company’s disappointing financial results by saying that, while Biocon had a strong quarter for insulin sales, its financial performance was inhibited by a weak US dollar, the impact of goods and services taxes, and operational costs related to the company’s facility in Malaysia. News of the drug maker’s quarterly performance caused shares of the company to drop by over 2% on Friday.

Biocon’s weak earnings are not the only bad news that the company faced in July; earlier this month, the French National Agency for Medicines and Health Products Safety (ANSM) found that Biocon had failed to comply with good manufacturing practices for 3 of its biosimilars made in the company’s facility in Bangalore, India. ANSM found 35 issues—11 of which were deemed “major deficiencies”—related to drug product manufacturing and quality control operations. Biocon said that it is working together with Mylan to implement a proposed corrective and preventative action plan with a goal of early ANSM re-inspection of its facilities.

Yet the company remains buoyed by several recent developments, most notably the FDA’s Oncologic Drugs Advisory Committee (ODAC)’s unanimous recommendation of approval for Biocon and Mylan’s trastuzumab biosimilar, one of the drugs affected by ANSM’s inspection results. The company also points to promising data from its insulin glargine biosimilar that it presented at the American Diabetes Association’s 77th Scientific Sessions.

“Much depends on regulatory approvals and tender outcomes for our biosimilars,” said Mazumdar-Shaw. “However, we will endeavor to maintain healthy core operating margins, going forward."

In order to gain a lucrative foothold in the US biologics marketplace, the company may need to look beyond approvals. Though many hailed ODAC’s recommendation of Biocon and Mylan’s trastuzumab for its potential to increase access to a lower-cost treatment option for HER2-positive metastatic breast cancer, questions remain as to whether the drug will gain acceptance and uptake in the US marketplace. A recent survey by ZS Associates indicated that oncologists, payers, and pharmacy directors may be reluctant to prescribe or cover products manufactured by Biocon, and instead would prefer products manufactured by more established, well known drug makers.

Regulatory action for Biocon and Mylan’s trastuzumab biosimilar is expected in September.