The share price of Biocon, the fully integrated biopharmaceutical, fell 5.85% intraday on February 25 after it informed about the US drug regulator – Food and Drug Administration (USFDA) issuing Form 483, a detailed observations for its Bengaluru unit.
The company however believes the observations are procedural in nature.
However, it seems the investors took the opportunity of booking profit in the stock, which has rallied 40% in the last six months.
The USFDA conducted a Pre-Approval Inspection (PAI) and GMP inspection of the API manufacturing facility in Bengaluru from January 20 to January 24. It made five observations in Form 483, Bicon said in a statement to the exchanges.
Last week, the USFDA also conducted a pre-approval inspection (PAI) of Biocon’s subsidiary, Biocon Sdn. Bhd’s Insulins manufacturing facility based in Malaysia, for Insulin Glargine, during February 10-21 and issued a Form 483 with three observations.
Biocon will soon respond to the FDA with an appropriate Corrective and Preventive Action Plan (CAPA) and address these observations expeditiously. The FDA has set a target action date for its Insulin Glargine application in June 2020.
The outcome of this inspection does not in any way impact the commercialisation plans of Insulin Glargine in the US
The biologics segment (28% of FY19 revenues) includes biosimilars and insulin. The company is heavily spending in this space.
The progress has been encouraging with approvals and launches in the US, EU, Japan, Australia, and Emerging Markets. Post the Mylan Upjohn (Pfizer) merger, the scope has been extended to China as well
Biocon’s contract research organisation (CRO) arm Syngene contributes 33% of total revenues. The company caters to 331 clients including eight out of global top 10 global players
Backed by a strong pipeline (28 products under development) and expected new launches, we expect biologics growth momentum to sustain. The management is confident of achieving US$1 billion biological revenues by end of FY22.
With better visibility, the company has optically accelerated the scalability capex and R&D, which is likely to push related expenses higher in the near term.
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