Industry Trend Analysis - Algerian Insulin Agreement Highlights Biocon's Biologic Ambitions - OCT 2017

BMI View: This collaboration complements Biocon's efforts to commercialise its biologic and biosimilar products in less well - regulated markets, but enhances Abdi Ibrahim's expansion aims also. Biocon's Biologic segment is still a small part of its business, but has grown quickly over the last few years. Launching its insulin product in Algeria will further boost sales, but its partnership with Mylan will ultimately mean the more valuable US and European biosimilar markets will be in reach imminently.

Abdi Ibrahim is collaborating with Biocon to launch what it claims will be the first biosimilar product in Algeria. The product, BasalogOne, is a basal insulin; it is administered once-daily subcutaneously to adult patients with Type II diabetes needing long-acting insulin for hyperglycaemia control, and to adults with Type I diabetes and paediatric patients aged six years and older.

Abdi Ibrahim has established a subsidiary in Algeria, Abdi Ibrahim Remede Pharma (AIRP), through a partnership with Remede Pharma in 2014. The firm aims to be amongst the top ten pharmaceutical companies in Algeria by 2020. AIRP held product launch meetings in three cities in Algeria, Constantine, Oran and Algiers, during which physicians were updated about the Algerian diabetes market and BasalogOne.

According to Abdi Ibrahim, there are around 3mn diabetes patients in Algeria, and in 2016 the cost of diabetes products surpassed USD400mn. Of this, around USD300mn was spent on insulin products to treat around 600,000 patients. BMI figures suggest that in 2016, diabetes accounted for 423,249 disability-adjusted life years (DALYs). We forecast this to rise to 627,403 by 2030.

Algerian Diabetes Burden Will Show Steady Rise
Total Diabetes DALYs, 2016-2030
Source: World Health Organization (WHO)/ BMI

Insulin A Key Biologic For Biocon

The agreement with Abdi Ibrahim continues Biocon's strategy with regard both to its Biologics business, including biosimilars, and for its insulin products within that segment. Biocon is establishing itself as a premier India-based biologics manufacturer, and whilst its Biologics segment remains small compared to other segments, it is showing a consistent rate of increase.

For FY17, ended March 31 2017, Biocon's total revenues reached INR40,787mn (USD607.3mn), up by 17.9% over the INR34,602mn reported for FY16. Within this, revenues from the Biologics segment reached INR5,793mn (USD86.3mn), equal to 14.2% of total revenues, and considerably behind the company's largest segment, Small Molecules, which reached INR16,330mn (USD243.2mn). However, the Biologics segment achieved growth over FY16 of 43.2%, when this segment's revenues had been worth INR4,046mn. Similarly, Biologics revenues rose by 41.6% in FY16 compared to the INR2,857mn reported for FY15.

Biologics A Small But Rapidly Growing Segment
Biocon's Annual Financial Results By Segment (INRmn)
Source: Biocon, BMI

Biocon claims to possess one of the largest global biosimilar portfolios with ten disclosed molecules in its pipeline, of which nine are being developed in partnership with Mylan. Biocon received its first developed market approval for its insulin glargine product in Japan in partnership with Fujifilm Pharma. In July 2016, Fujifilm Pharma launched Biocon's Insulin Glargine BS Injection Kit in Japan. This is a ready-to-use, prefilled disposable pen with 3mL of 100IU insulin glargine. Biocon noted that the insulin market in Japan is small, but the success in getting the product approved and commercialised has reinforced Biocon's belief that it is well positioned to address insulin glargine opportunities in other developed markets through the Mylan partnership.

Being able to market its biosimilar products in the regulated markets, and in particular the US and EU, will be crucial for Biocon's long-term success in this field, and the regulatory and commercial strengths afforded by its partnership with Mylan will undoubtedly set it on course for this. However, as the agreement with Abdi Ibrahim in Algeria demonstrates, the firm is also looking to capitalise on the smaller and less regulated markets; the anticipated product launch in Algeria complements other recent developments.

In February 2017, Malaysia's Ministry of Health awarded a three-year contract to Biocon's Malaysian subsidiary for the supply of recombinant human insulin (rh-insulin) formulations manufactured at the firm's large-scale biopharmaceutical facility in Johor, Malaysia. Biocon claimed that its rh-insulin is the first locally manufactured biosimilar biologic product approved by Malaysia's National Pharmaceutical Regulatory Authority (NPRA) for commercial sales in the country. The contract marked a commercialisation milestone for Biocon's first overseas facility in Malaysia.

The contract is worth MYR300mn (USD67.6mn) and is for supplying rh-insulin cartridges and reusable insulin pens under the Malaysian Government's Off-Take Agreement initiative. The contract is extendable for an additional two years subject to approval by the Malaysian Government. Biocon distributes the insulin products through CCM Pharmaceuticals.

Biocon claims to be Asia's largest insulins producer, producing rh-insulin, insulin glargine and insulin delivery devices in India and a number of emerging markets. The firm further claims to be the largest Indian insulins company. It has received regulatory approvals for its rh-insulin in over 60 emerging markets. In November 2016, Biocon and its partner, Mylan, announced the regulatory filing with the EMA for Biocon's insulin glargine validated at the Malaysian facility.

Insulin is emerging as a key product for Biocon, but its partnership with Mylan will soon bear fruit in Western regions. In July 2017, the FDA's Oncologic Drugs Advisory Committee recommended approval the companies' proposed biosimilar trastuzumab; in September 2016, the EMA accepted the trastuzumab MAA for review. In February 2017, Mylan and Biocon's BLA for a biosimilar pegfilgrastim was accepted for review by the FDA.