Leading biotech company Biocon recently released its quarterly results, showing revenues growing by 30 percent, driven by growth in the biosimilars business. However, Biocon’s other two businesses, including contract research services and generics, faced some challenges. Peter Bains, Group CEO of Biocon, spoke about how Syngene, the contract research arm of pharma giant Biocon, is poised for a positive turnaround in the second half of the year as venture capital funds flow back into biotech, driving renewed investment and growth in the industry, and spoke about the rise in requests for proposals (RFPs), expansion in biomanufacturing and the Biosecure Act, which is expected to turn the current headwinds for the sector into tailwinds.
Q: What factors will drive this expected growth in research services?
Research services experienced a temporary phenomenon, essentially related to a tightening of venture capital funding for biotechnology in the US. The expected growth is driven by several factors. First, the release of funds by venture capitalists, which takes more than a quarter to materialize. In addition, we are seeing a significant increase in our requests for proposals (RFPs).
In the first quarter, several pilot projects for pharmaceutical companies were also launched. The successful completion of the pilot projects should form the basis for future cooperation on a larger scale.
What does the increase in RFPs mean for Syngene?
RFPs are at a four-year high and are up 50 percent year-over-year. We are confident that we can successfully capitalize on some of these opportunities, so the challenges we currently face should turn into advantages in the second half of the year.
How well is Syngene positioned to benefit from the Biosecure Act?
Companies are trying to diversify their exposure to China with the Biosecure Act, which is leading to a significant increase in enquiries. While this shift will not produce immediate results, we expect a steady influx of enquiries as companies re-orient themselves over the next few years. We believe Syngene is very well positioned to capitalize on this opportunity in India.
What role does organic production play in Syngene’s growth strategy?
Biomanufacturing supported by specialised centres has continued to grow despite the decline in research services, with this upturn being driven by both commercial and clinical projects.
So the Syngene story is only temporary. It is a turnaround and we expect the momentum to increase in the second half of the year and help the research service meet its guidance for the year.
Can you also elaborate on how Biocon is addressing price pressure in the generics segment?
The company is addressing pricing pressure in the generics segment through geographic expansion and new product launches. We are actively expanding beyond our primary market in the US into Europe, Asia, Latin America and Australasia. Upcoming launches include liraglutide, a GLP-1 for obesity and diabetes.
What impact are new product launches such as liraglutide expected to have on overall performance?
We have secured approval for the launch of liraglutide in the UK by the end of this financial year and are preparing this independently and with our partner. Peptides, especially liraglutide, are crucial to our generics business.
Obesity is a global epidemic with serious consequences leading to cardiovascular disease and diabetes. It is closely linked to diabetes as both diseases have common causes and co-occur. Biocon is well positioned to address this problem due to our long-standing global expertise and competence in insulins.
We are taking a global approach, operating in different markets and forming partnerships, such as the recent collaboration with Handok in South Korea, to maximize patient reach. In addition, additional GLP-1 and peptide products such as semaglutide and tirzepatide are being developed to strengthen our position in this market.
The biosimilar segment has shown strong performance. What were the main drivers for this growth?
Biosimilars recorded growth of 11 percent on a comparable basis, mainly due to strong performance in the USA, where we achieved significant market shares in our oncology business with values between 19 and 20 percent. The stable development of the insulin business complemented this growth.
We plan to launch five new products in the US over the next two years and have three new products in the pipeline in Europe. The current momentum is encouraging and we can use these new products as fuel to achieve sustainable momentum over the next few years.
