Biocon's profit halved by regulatory 'headwinds' that hit its biosimilar plant

Bicon Managing Director Kiran Mazumdar-Shaw
Biocon founder and Managing Director Kiran Mazumdar-Shaw pointed to regulatory issues at a plant making biosimilars for the company and Mylan as having undercut its earnings in the last quarter.

Biocon and partner Mylan have been having difficulties getting some biosimilars to market because of regulatory concerns. Now, the efforts to deal with those problems are taking a toll on Biocon’s bottom line.

The Indian drugmaker reported that its net profit for the quarter ended in September fell 53% to 69 crore ($10.7 million) from the 147 crore ($22.7 million) in the same quarter a year ago. Biologics revenues were flat, and small molecule revenues were off 13% as pricing pressures hit customers. Total revenues were up 3% at 1019 crore ($157.4 million), the company reported (PDF) late last week.

While Biocon expects “headwinds” to ease by the end of the year, founder and Managing Director Kiran Mazumdar-Shaw in a statement pointed to factors that had “muted” earnings for the last quarter.

“In particular, plant modifications undertaken to comply with regulatory requirements led to production disruptions," Mazumdar-Shaw said. "Additionally, we experienced regulatory and tender delays in some emerging markets for our biosimilars business.”

RELATED: FDA slams Biocon sterile plant where Herceptin biosimilar is to be produced

She pointed to the filing of an application with the FDA by partner Mylan for their version of a long-acting insulin that would compete with Sanofi’s blockbuster Lantus as a "significant development" this quarter, but that move was immediately met with a patent lawsuit from Sanofi. 

RELATED: Sanofi sues Mylan over Lantus patents, seeking to defend its top-selling drug

The partners are seeking approval in the U.S for their biosimilars of Roche’s blockbuster cancer drug Herceptin (trastuzumab) and Amgen’s blockbuster chemo drug Neulasta. But Biocon’s difficulties began last spring when the FDA criticized the Bangalore plant where it is making its biosimilars. In an eight-page, 10-observation Form 483, the FDA described problems across a variety of processes, leading Biocon to make plant changes.

RELATED: Mylan and Biocon Herceptin biosimilar delayed by FDA for 3 months

Their Herceptin biosimilar got a good response from FDA reviewers, but just ahead of a September PDUFA date the FDA put off a decision to go over some more info in the application that Biocon said had nothing to do with manufacturing concerns. The next month, the FDA sent the two a complete response letter for the Neulasta biosimilar that was tied manufacturing issues.

European regulators also raised questions about the Bangalore plant, leading Biocon and Mylan to pull their applications for the same two biosimilars there. Biocon said in its earnings release that it is working on its corrective actions and working toward an EU reinspection of the plant that would allow it to resubmit the applications for those two products.