Stock opinion: Biocon

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As dollar price is increasing, our eyes are set to find beneficiaries of this increase. And we certainly found few opportunities.

Firstly we found industry, which benefits from dollar price increase has to be export-oriented industries. And when it comes to export India is largest exporter of Pharma and IT . This lead us to further search of specific company.

As we were searching for a company in these industries. We first followed recent news to filter out the best.

This time news around Biocon’s biosimilar news has caught our sight. If analysts are to be believed things can get a lot better for biocon this year.

  • The company and its partner Mylan are accelerating the introduction of the biosimilar for brand humira, used for arthritis, in Europe through Mylan in licensing with FKB. It would accelerate monetization benefits.
  • Analyst estimates that Biocon’s product can collect $ 100-120 million in annual revenue, as Biocon-Mylan are gaining 10 percent market share.
  • Biocon and Mylan had received approval for diabetes treatment biosimilar from Europe and Australia.
  • Biocon in December received approval from USFDA for trastzumab, a biosimilar used to treat breast cancer. Even monetization is about to start in Brazil and Russia. There is increasing visibility of earnings in perspective.
  • Other two biosimilar could get a nod from regulators in Europe in the second half of 2018.
  • The potential first mover advantage in pegfilgrastim in US and other launches in other markets give it an upper hand.
  • Biocon is building a biologic plant with an investment of $ 200 million in the next 3-4 years. Also, expansion at its Malaysian plant is in progress.
  • Biocon-Mylan partnership’s long-term strategic move in sandoz pact is adding a lot of benefits and strengthen its biosimilar pipeline.

Verdict:

We see significant upside in 2019, as Biocon is getting closer to monetize it biosimilar pipeline. We also see strong traction for biosimilar initiatives in FY 2019. Lastly, we think Biocon biologics could positively surprise investors in the medium term.

Experience of 8 years in stock investment. I learned everything by making a lot of mistakes and losing a good amount of money, I am here to make sure you don’t lose on either: Hope or Money.

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