24 Nov Biocon bets big on new class of weight-loss drugs
The current market for such drugs can be exemplified by the runaway success of Novo Nordisk’s Ozempic branded GLP-1, which has caught the imagination of celebrities and corporate tycoons, not to mention the ultimate cachet, TikTok, in the US. Though it is a drug to treat diabetes, it is the weight-loss aspect that has led to the frenzy
Midcap pharma player Biocon Limited aims to launch its maiden glucagon-like peptide-1 (GLP-1) drug, which is known to induce weight loss, leveraging its strong position in peptide manufacturing, when the drug goes off patent, according to a top company executive.
GLP-1 receptor agonist drugs are a class of medications used in the treatment of type 2 diabetes but have also gained popularity recently after they became widely used for their weight-loss properties.
In an interview with Moneycontrol, Biocon CEO Siddharth Mittal said that company plans to launch its maiden GLP-1 weight-loss drug by 2025. It will be among the first wave of weight-loss injectables to be launched in the EU and US in CY25. He added that given Biocon’s existing capabilities in peptide production, the company is confident of successfully launching the injectable(s).
The global market of GLP-1 drugs is currently around $14.2 billion and is estimated to grow at a compound annual growth rate (CAGR) of 11.3 percent from 2023 to 2032, according to Global Market Insights.
The current market for such drugs can be exemplified by the runaway success of Novo Nordisk’s Ozempic branded GLP-1, which has caught the imagination of celebrities and corporate tycoons, not to mention the ultimate cachet, TikTok, in the US. Though it is a drug to treat diabetes, it is the weight-loss aspect that has led to the frenzy.
The global weight management market size was estimated at $142.58 billion in 2022 and is expected to grow at a CAGR of 9.94 percent from 2023 to 2030.
Biocon’s operations are currently divided into three segments—generics, research services and biosimilars. The generics segment reported Rs 676 crore revenue in Q2FY24. On the generics front, the company is into manufacturing complex products including peptides.
Also read | Biocon Q2 results: Net profit more than doubles to Rs 172.7 crore
Mittal said that as the company has historically been involved in peptides production, it expects to be ahead in the race for such peptides. “Now, what we believe differentiates ourselves from many others who are also trying to do peptides is our complex development capabilities that we’ve had because of biologics for decades,” Mittal said.
Currently, the global leaders in these drugs are Novo Nordisk and Eli Lilly with their products Ozempic, Wegovy and Zepbound. These are expected to go off patent after 2030. Another GLP-1 product, Novo Nordisk’s Victoza for Type 2 diabetes, will go off patent in late 2024.
Studies in the US have found that individuals with obesity who took 2.4 mg of Wegovy weekly experienced an average 14.9 percent decrease in body weight.
Biocon’s generics segment faced challenges in Q2 due to active pharmaceutical ingredient (API) pricing pressure. Hence, it had reduced the revenue growth guidance in the generics segment to be in low double digits/high single digit for FY24. Mittal noted the expanding pricing pressures in generics, extending beyond the US to various emerging markets. “We had heard about the US pricing pressures for many quarters. But now we are also seeing pricing challenges in many other emerging markets,” Mittal remarked. He highlighted the historical strength of Biocon in generics API sales but acknowledged the deeper impact of pricing pressure in markets such as the US, Europe and emerging markets.
Brokerage view
In August 2023, credit rating agency ICRA raised its outlook and assigned a ‘stable’ outlook on the long-term rating. This decision followed the successful acquisition and consolidation of revenues from Viatris (acquired in 2022) into Biocon Biologics Ltd. ICRA emphasised Biocon’s diversified business mix, highlighting its established market position across segments, integrated operations within the pharmaceutical value chain, and a geographically diversified presence spanning various countries. The agency underscored Biocon’s robust biosimilar portfolio in the oncology, diabetes and autoimmune segments, coupled with a formidable product pipeline.
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