Biopharmaceuticals

- Small Molecules (APIs & Generic Formulations)

Biocon continues to be a trusted partner for global pharmaceutical companies, which rely on our complex and difficult-to-make Small Molecule Active Pharmaceutical Ingredients (APIs) for their formulations spanning statins, immunosuppressants, antifungals, anti-obesity, anti-diabetics, ophthalmologicals, oncologicals and urologicals etc.

We have built significant brand equity across our extensive customer base in both developed and emerging markets by leveraging our unique technological strengths in fermentation science and complex chemistry. Our large scale, worldclass manufacturing and research capabilities, a strong quality culture and a proven track record of cGMP compliance have enabled us to efficiently develop differentiated and complex products to emerge as a strong global player. We are leveraging our high science capabilities and extending that to our Small Molecules business to build a portfolio of complex, difficult-to-make Generic Formulations, which will establish us as a high quality player in niche segments. Our strategy is to manufacture formulations where we can backward integrate to in-house APIs to achieve economies of scale. The pipeline comprises of oral solids and parenteral formulations in both potent and non-potent categories of compounds in the core therapeutic areas of metabolics, cardiovascular, oncology and immunotherapy.

Small Molecule - APIs
Our Small Molecule APIs business, a significant revenue driver for Biocon, reported a stable performance in FY16 across regulated and emerging markets. We filed several Drug Master Files (DMFs), including for key immunosuppressants, with the US FDA, during the year. We became the first generic company to receive a Certificate of Suitability (CEP) for Rosuvastatin Calcium API from the European Directorate for the Quality of Medicines (EDQM). During the year, we also successfully underwent audits by both developed market regulators like US FDA as well as emerging market ones like Mexico’s COFEPRIS. Our Denmark based partner introduced its proprietary Envarus® XR formulation based on Biocon’s tacrolimus for the prophylaxis of rejection in kidney transplant patients in the US.

A significant expansion during the year was the acquisition of the US FDA-approved potent API facility in Vishakhapatnam, India, from Acacia Life Sciences. The acquisition of this 45,000 sq. ft. facility will be advantageous in scaling up our activities as compared to setting up a new facility. We also expanded our API
manufacturing capacity for key immunosuppressants and statins to meet the growing market demand.

Generic Formulations
We marked a major milestone in our strategy of forward integration from APIs to finished dosages in the Small Molecules space with the European approval of Rosuvastatin Calcium tablets, a generic equivalent of AstraZeneca’s Crestor® tablets. The approval through the decentralized procedure will give us ready access to over 15 European countries. The overall market size for Rosuvastatin in Europe is USD 1.2 billion.

This first Generic Formulations approval in the regulated markets underscores Biocon’s unique strengths in the chronic therapies space and our compliance with global regulatory standards that enable us to achieve the highest quality benchmarks for all our products. It augurs well for this emerging business, which will be one of our growth drivers in the coming years. We filed the initial set of Abbreviated New Drug Applications (ANDAs) in the US and Marketing Authorization Applications (MAAs) in the EU in FY15. This year, we made two ANDA filings and also acquired an ANDA dossier for Simvastatin from a third party, adding to our nascent pipeline for the US. We also bolstered our MAA portfolio in the EU.

A new entity Biocon Pharma Ltd. was established in FY16 to represent the Generic Formulations business. We started construction of our first potent oral solid dosage formulations facility in Bangalore during the year to support this business. The recently-acquired oncology API manufacturing facility in Vishakhapatnam will ensure complete vertical integration of potent products.

Outlook
Our capabilities in fermentation technology-based manufacturing have enabled us to straddle a complex matrix of manufacturing requirements for high value, niche APIs.

To offset the growing commoditization in statins, we have been moving towards a more profitable product mix with a better contribution from products like immunosuppressants where we have developed strong capabilities. This is already leading to better earnings quality in the Small Molecule APIs business.

We have a clear strategy to pursue the Generic Formulations opportunity in both developed as well as emerging markets by utilizing our well-established R&D Capabilities and cGMP compliant manufacturing facilities, including our injectable formulations and fill-finish facilities. To feed our small pipeline and target early-market entry, we are evaluating new molecules. Cumulatively, we expect to file 15-20 applications over the next few years. We will look at all options including First-to-Files and Para IVs as part of our plans for the Generic Formulations business. The investments in building commercial manufacturing scale for potent / oncology APIs and drug products will enable us to aggressively address global opportunities in the coming years.