MOSL: BIOCON (Neutral)-Favorable regulatory outcome enhances biosimilars prospects
BIOCON: Favorable regulatory outcome enhances biosimilars prospects
(BIOS IN, Mkt Cap USD5.5b, CMP INR665, TP INR625, 6% Downside, Neutral)
- The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) has issued a positive opinion recommending approval for Biocon (BIOS)/Mylan's Neulasta biosimilar - Fulphila. Subsequent approval - post consideration by the regulatory agency - would enable BIOS/Mylan to launch Fulphila in the EU market.
- We note that a few more companies have also received a positive opinion from CHMP and filing of one more company is under review. This implies considerable competition for the product in the EU market.
- Separately, the week-long USFDA inspection at Biocon's Bengaluru drug substance facility was completed successfully on 21st September 2018 with zero 483s. This augurs well for the company's Fulphila sales in the US market.
- Given the favorable regulatory pathway emerging for biosimilars in the US/EU markets and the significant untapped market potential, we believe that biosimilars prospects remain very promising from a 4-5 year perspective. BIOS also stands to benefit from its improved traction in approved products and healthy pipeline of pending approvals.
- However, given the limited upside potential from current levels, we maintain our Neutral stance on the stock with a price target of INR625 (30x 12M forward earnings).
Biocon is an Indian biopharmaceutical company. Through its subsidiaries, Co. manufactures biotechnology products and is engaged in research and development in biotechnology. Co. provides a range of products from fermentation derived small molecules to recombinant proteins and antibodies. It has developed and taken a range of novel biologics, biosimilars, differentiated small molecules and recombinant human insulin and analogs from 'Lab to Market'. In research services, Co., through Syngene International Limited, is engaged in the business of custom research in drug discovery while the other subsidiary Clinigene International Limited (Clinigene) is engaged in clinical development.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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