Biocon arm's growth formula: US rollouts & debt reduction

Mumbai: Biocon Biologics, the biosimilar unit of Biocon, said it expects to launch six biosimilar products in the US, and is prioritising debt reduction to spur growth and lift margins.

"Six product launches are scheduled in the next two years, subject to USFDA approvals," Shreehas Tambe, chief executive and managing director, told ET in an interview.

He added that the company is also exploring ways to reduce finance costs by optimising debt repayment timelines and interest rates.

Tambe said Biocon Biologics has paid $175 million so far out of $335 million due to Viatris for the acquisition of biosimilar aflibercept. Biocon Biologics acquired Viatris' biosimilar business for $3.33 billion in November 2023.

"The $335 million, made up of two components, $175 million we have to make for aflibercept and $160 million is deferred payment," Tambe said.

"The $175 million we have already paid down, and that has come through the accruals that we had from the Eris Lifesciences deal and internal accruals. The balance of $160 million, we are comfortably able to make that payment," Tambe added.

The company has outstanding debt of about $1.2 billion as of June 30. The company has repaid debt of $250 million.

Biocon Biologics is Biocon's only unit to record revenue growth in the June quarter.

Revenue at Biocon Biologics, which comprises 61% of the parent's revenue, rose 3% from a year earlier to ₹2,083 crore in Q1FY25. The company said on a like-to-like basis, the biosimilar business grew 11% in the quarter, led by market share gains for biosimilars such as Ogivri (anti-cancer), Fulphila(anti-cancer), and Semglee (insulin glargine).

Total revenue in the other two units-generics and API business--fell 6% YoY to ₹659 crore in the June quarter. Research services business declined 2% to ₹790 crore.

Tambe said Biocon Biologics has expeditiously addressed Form 483 observations raised by USFDA in its July inspection through a comprehensive Corrective and Preventive Action (CAPA) plan. The company underwent a US FDA inspection of its manufacturing facilities for combined current good manufacturing practices (cGMP) and pre-licensing inspection (PLI) for five monoclonal antibody products.

According to the company, the observations are procedural in nature and does not expect the current supply of its products.