Insulin Glargine is $2.2bn opportunity in the insulin segment – Biocon

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Excerpts of an interview with Kiran Mazumdar Shaw, Executive Chairperson, Biocon published on CNBC TV18 dated 2nd September 2020:
Biocon and Mylan announced the launch of Semglee (Insulin Glargine injection) in the U.S. to expand access for patients living with Diabetes. Ms Mazumdar Shaw said that the commercialization of insulin glargine in the U.S. represents another milestone achievement for the company in making insulin based therapy globally.
The company is leveraging science and global scale manufacturing expertise to expand affordable access of biosimilar insulins to patients in Japan, Australia, Europe, India and key emerging markets. The U.S. launch of Semglee takes the company closer to realizing its aspirations of reaching ‘one in five’ insulin dependent people with diabetes worldwide.
The company expects Semglee to contribute significantly to the company’s goal of impacting 5 million patients’ lives and achieving $1bn revenues by the end of FY22E.
The company rigorously compared Semglee to the reference insulin glargine in participants with type-1 and 2 diabetes and found similar glycemic results in both groups. As a result, this insulin was approved by the FDA for the same indications as its reference product Lantus, thus expanding access for millions of people within this important patient community.
Semglee has an identical amino acid sequence as Sanofi’s Lantus and is approved for the same indications. This product has now received regulatory approval in more than 45 countries around the world and is the third product approved by FDA through the Mylan- Biocon collaboration.
She mentioned that this product already has a $6bn market opportunity in terms of Lantus sales and the company expects it to be $2.2bn opportunity.
Consensus Estimate: (Source: market screener website)
The closing price of Biocon was ₹ 410/- as of 24-Aug-2020. It traded at 46x/ 31x/ 26x the consensus EPS estimate of ₹ 8.9/ 13.4/ 15.8 for FY21E/ FY22E/ FY23E respectively.
Consensus target price of ₹ 413/- implies a P/E multiple of 26x on FY23E EPS of ₹ 15.8.
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