Memorandum

Biocon 1Q17 – Mylan-partnered biosimilar insulin glargine submitted for regulatory review in Australia and Canada, with FDA submission expected “shortly;” Phase 3 study for oral Insulin Tregopil to begin soon – April 27, 2017

Executive Highlights

  • Management highlighted continued progress of its Mylan-partnered biosimilar insulin glargine (Sanofi’s Lantus), which was submitted for regulatory review in Australia and Canada in 1Q17. The product remains under review with the EMA and will be submitted to the FDA “shortly.”
  • Biocon has filed a Clinical Trial Application (CTA) in India for a pivotal phase 3 study of its oral insulin candidate Insulin Tregopil.
  • No new updates were reported regarding Biocon’s development plans for its portfolio of biosimilar versions of rapid-acting insulin aspart (Novo Nordisk’s NovoLog) and insulin lispro (Lilly’s Humalog). 

Biocon recently provided its 1Q17 (F4Q17) earnings update in a call led by Chairperson Ms. Kiran Mazumdar-Shaw. Most notably, management highlighted the continued progress of its Mylan-partnered biosimilar insulin glargine (Sanofi’s Lantus), which was submitted for regulatory review in Australia and Canada in 1Q17. Mylan’s US filing for the biosimilar insulin glargine was expected by April 2017 and Biocon reaffirmed that submission will occur “shortly.” The product remains under review with the EMA (submitted November 2016) and is on track to be the third-to-market biosimilar insulin glargine in Europe, following Lilly/BI’s Abasaglar (launched in late 2015) and Merck’s MK-1293 (submitted to the EMA in late 2015). The product is already available in Japan (launched by Biocon’s partner Fujifilm Pharma in 2Q16), the second largest market for insulin glargine outside of North America and Europe, though management to date has not shared specific details on how the product is faring against Sanofi’s originator Lantus and Lilly/BI’s Abasaglar (the only other biosimilar insulin glargine formulation approved in Japan) besides noting that it has been “well-received.”

In 1Q17, the Ypsomed-partnered INSUPen Pro was added to Biocon’s portfolio of pen injectors in the Malaysian market, alongside the INSUPen, INSUPen EZ, and BasalogOne. Biocon also highlighted the ongoing commercial operations at its long-awaited insulin facility in Johor, Malaysia, which commenced in 4Q16 after receiving regulatory approval from the Malaysian Ministry of Health in 2Q16. The Malaysian facility was built to quell mounting capacity concerns regarding Biocon’s original facility in Bengaluru, India, and promises to significantly expand Biocon’s manufacturing and commercial capacity. Biocon hopes that this additional Malaysian facility will help it expand its share in both the recombinant human insulin and biosimilar insulin glargine markets, though this may prove an uphill battle given the difficulty and complexity of quality assurance for biologic manufacturing and the underlying fact the global insulin market is currently heavily dominated by Novo Nordisk, Sanofi, and Lilly. Currently, commercial sales are allowed only to the Malaysian market from the Malaysian facility, but additional regulatory filings are underway to allow commercial sales from the new facility to other markets. Biocon has been awarded a three-year contract by Malaysian Ministry of Health for supplying rh-Insulin cartridges and reusable insulin pens for people with diabetes in Malaysia.

  • Biocon has filed a Clinical Trial Application (CTA) in India for a pivotal phase 3 study of its oral insulin candidate Insulin Tregopil. Details for this study are not yet available on ClinicalTrials.gov, but management stated in 3Q16 update that the trial is slated to begin at some point after April 2017, the completion of Biocon’s fiscal year. The company also shared in its 1Q16 update that it hopes to eventually seek a pharmaceutical partner for the development and commercialization of the product, and we look forward to hearing more updates on this front. The competitive landscape for oral insulin is quite small, encompassing only Biocon’s Insulin Tregopil and Oramed’s ORMD-0801, for which a phase 3 study is currently being planned. Given the right partner (and, of course, strong phase 3 data) Biocon stands to make real gains in this arena with potential first-to-market status. However, our confidence in the feasibility of oral insulins as a whole is measured. This is a very difficult proposition, given the dosing challenges, lower bioavailability, and narrower therapeutic range of oral insulin, not to mention the potential of newer drugs such as SGLT-2 inhibitors and GLP-1 agonists to delay insulin initiation. To this end, Novo Nordisk discontinued the development of the former frontrunner in the oral insulin arena, OI338GT (NN1953), despite “generally encouraging” phase 2a results.
  • The call also contained no new updates on Biocon’s development programs for its rapid-acting biosimilar insulin candidates: biosimilar insulin aspart (Novo Nordisk’s NovoLog) and biosimilar insulin lispro (Lilly’s Humalog). The last updates on these programs we’ve heard came from Biocon’s 3Q16 (F2Q17) update, in which management explained that the biosimilar formulations of insulin aspart and insulin lispro remain “on track” in preclinical development, with clinical trials to be initiated “sometime soon.” We have heard very few updates on these products since the 2013 announcement of Biocon’s development and commercialization collaboration with Mylan for biosimilar formulations of insulin glargine, insulin aspart, and insulin lispro. That said, the relatively light commentary on biosimilar insulin aspart and insulin lispro is unsurprising in light of Biocon’s current focus on getting approval for biosimilar insulin glargine, plus the sluggish state of the rapid-acting insulin market in general.
  • On the financial front, Biocon reported revenues of ~$102 million, up 4% year-over-year (YOY). Management acknowledged that 1Q17 revenues were somewhat dampened from past quarters; for comparison, the company reported double digit YOY gains in 4Q16 (34%), 3Q16 (21%), 2Q16 (11%), and 1Q16 (17%). The Biologics portfolio (which, in terms of diabetes products, includes rh-Insulin and biosimilar formulations of insulin glargine, insulin aspart, and insulin lispro) totaled ~$19 million, flat YOY. The Branded Formulations portfolio (which, in terms of diabetes products, includes Basalog [branded insulin glargine] and Insugen [biphasic isophane insulin], both of which are currently on the market in India) totaled ~$20 million, up 25% YOY.

-- by Abigail Dove, Helen Gao, and Kelly Close