Pharmaceutical News Today
Biocon Biologics Eyes ₹4,500 Crore Debt Raise to Refinance Obligations and Fuel Expansion
Biocon, a prominent player in biopharmaceuticals, has achieved significant milestones both in India and globally. The company, known for its biologics, biosimilars, and APIs, has also ventured into generic formulations across the US and Europe. Through its subsidiary, Biocon Biologics (BBL), it has established itself as a global leader in biosimilars, boasting eight commercialized products in crucial markets like the US and Europe, with 20 more in the pipeline spanning areas like diabetology, oncology, and immunology.
Now, Biocon Biologics, a key arm of Biocon, is in the process of raising ₹4,500 crore through debt. This move aims to refinance existing financial commitments and meet upcoming payments to Viatris shareholders within this fiscal year. HSBC and MUFG have been entrusted with managing this significant financial transaction.
Sources close to the development revealed that Biocon faces a substantial $335 million payment obligation to Viatris shareholders by FY25, stemming from an acquisition deal finalized in November 2023. The newly raised debt will specifically target the refinancing of existing debt and ensure readiness for these impending financial obligations.
Previously, Biocon and its subsidiary BBL secured funding through strategic investments. Kotak Investment Advisors and Edelweiss were involved, leveraging BBL shares and issuing non-convertible debentures to fortify their financial position.
In terms of financial performance, Biocon has been diligent about reducing its debt burden, successfully trimming $250 million of its $1.2 billion debt load in FY24. Management has underscored debt reduction as a top priority, exploring various avenues including debt, equity, and hybrid instruments. However, high interest costs have somewhat impacted profitability, with the net profit margin resting at 7% in FY24.
Biocon reported consolidated revenues of ₹15,621 crore for FY24, with BBL contributing significantly at ₹8,824 crore, representing a substantial 57% revenue share. The company holds a 70% stake in BBL, while Viatris remains the second-largest shareholder at 14%.
The acquisition of Viatris’ biosimilar business has notably augmented Biocon’s market presence, albeit adding $1.2 billion in debt. Looking ahead, the company anticipates total debt obligations to reach ₹4,800 crore from FY26 onwards, following the commencement of repayment on acquisition-related debts.
With the completion of the Viatris biosimilar business transition in November 2023, BBL has solidified its market position, reinforcing its product offerings and market penetration.
Biocon continues to be a pivotal force in the biopharmaceutical sector, navigating strategic financial maneuvers to sustain growth and consolidate its global footprint in biologics and biosimilars.
Caution Prevails Among Investors in Crowded Oncology Market, Despite Industry Resurgence
Investors are approaching the crowded oncology field with caution, navigating a landscape where new opportunities are sought amidst fiscal prudence.
At the 13th Annual Clinical Trials in Oncology East Coast 2024 conference in Burlington, Massachusetts, experts discussed the current state of oncology clinical trials against a backdrop of regulatory and financial complexities.
Sally Wang Liang, Venture Partner at HighLight Capital, highlighted how recent government interest rate hikes have impacted venture capitalists’ ability to secure robust returns, dampening enthusiasm compared to previous funding peaks. This caution has lengthened financing rounds as companies return to existing investors, reducing available capital for new ventures.
Dr. Filip Janku, CMO of Monte Rosa, acknowledged the challenging funding climate but stressed that resilient candidates, when managed effectively, will persevere despite financial volatility.
Liang noted a nascent resurgence in the industry, with intermittent IPO opportunities, biotech mergers, and select companies securing substantial financing. However, she emphasized that investors are currently favoring less risky sectors over oncology.
The fluctuating popularity of oncology, characterized by a glut of promising yet unproven candidates, poses a significant challenge. Liang observed a shift away from established treatments like PD-1 inhibitors and GLP-1 agonists, indicating a preference for novel, groundbreaking therapies.
Investor sentiment, influenced by evolving industry trends, underscores the dynamic nature of oncology investments, where identifying high-potential candidates amidst a sea of contenders remains paramount.
AbbVie Appeals to Supreme Court Over Attorney-Client Privilege in Antitrust Lawsuit
AbbVie is seeking the U.S. Supreme Court’s intervention to overturn a federal court’s decision mandating the release of documents related to its legal strategy against a generic drug maker over a decade ago. The dispute stems from a ruling by Judge Harvey Bartle III in Philadelphia, who invoked a crime-fraud exception to pierce AbbVie’s attorney-client privilege, arguing that the communications were part of an effort to thwart competition illegally.
Initially, AbbVie faced legal scrutiny in 2011 for allegedly using litigation tactics to delay Perrigo’s generic AndroGel, violating antitrust laws in the process. The company’s subsequent appeal to the U.S. Court of Appeals for the Third Circuit was unsuccessful, prompting its appeal to the Supreme Court. AbbVie contends that the lower court’s application of the crime-fraud exception was overly broad and threatens the integrity of attorney-client confidentiality, a cornerstone of the legal system.
Meanwhile, AbbVie is embroiled in another lawsuit filed in 2019, where several drug distributors accuse the company and Besins Healthcare of artificially inflating AndroGel prices through anti-competitive practices. The product, once a blockbuster with $1.1 billion in sales, saw a significant decline due to safety concerns, culminating in substantial legal penalties and settlements.
The broader implications of AbbVie’s legal battles underscore ongoing debates over competition in the pharmaceutical industry and the delicate balance between patent protection and market access for generics.
PREVAIL Act Sparks Controversy Over Pharmaceutical Patent Oversight
Lawmakers have put forth new legislation named PREVAIL that could reshape patent approval processes within the pharmaceutical industry, stirring debate amidst broader healthcare issues dominating the 2024 presidential campaign.
Introduced by Senators Chris Coons (D-DE) and Thom Tillis (R-NC), the Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act aims to bolster innovation by limiting federal oversight of patent approvals. The legislation seeks to safeguard inventors’ property rights and reduce constraints on patent eligibility.
Key provisions of PREVAIL include curbing the authority of the Patent Trial and Appeal Board (PTAB), which was established in 2012 to scrutinize patent applications and invalidate wrongful patents. The bill proposes extending patent protections even to products deemed obvious or previously known, challenging the PTAB’s role in reviewing such patents.
Simultaneously introduced with PREVAIL is the Patent Eligibility Restoration Act (PERA), which seeks to broaden patent eligibility criteria, potentially allowing patents on isolated genes and other naturally occurring phenomena in the pharmaceutical sector.
Critics argue that these legislative moves could empower pharmaceutical companies to prolong monopolies, escalate drug prices, and stymie competition from generic alternatives using what they term as “wrongful patents.” Organizations like the Campaign for Sustainable Rx Pricing have voiced concerns that PREVAIL could hinder government oversight of patent claims and perpetuate high drug costs.
Supporters, however, argue that the reforms are necessary to streamline innovation by addressing unintended consequences of past patent law reforms, which they claim have deterred investment and innovation in the industry.
The legislative push comes amidst heightened scrutiny from the Federal Trade Commission (FTC), which has been actively challenging purportedly improper patents listed in the FDA’s Orange Book, a repository of approved drug products. The outcome of this legislative debate could significantly influence the future landscape of pharmaceutical patents and pricing policies.
Empowering Future Pharma Leaders: NIPERs Boost Industry Links and Career Pathways
The National Institutes of Pharmaceutical Education and Research (NIPERs) are set to ramp up their efforts in bridging the gap between academia and the pharmaceutical industry, aiming to bolster placement support and industry interaction. A recent study by the Department of Pharmaceuticals reveals that a significant majority of students at NIPERs feel optimistic about their prospects for placement training.
According to the study titled “Bridging academia-industry gap to achieve self-reliance for NIPER institutions in India,” conducted by the Entrepreneurship Development Institute of India, students have responded positively to the placement support offered by NIPERs. The report recommends expanding outreach to pharmaceutical industries and enhancing related activities to better prepare students for careers in the field.
The research surveyed 217 students, 69 alumni, and 32 faculty members across seven NIPERs, highlighting the importance of hands-on training and workshops for students’ professional development. It also emphasizes the role of startups in providing real-world insights into industry challenges.
Interestingly, the study found that while job placement remains a key priority for students, many are also keen on pursuing entrepreneurial ventures, higher education, and research opportunities. This trend underscores the evolving aspirations among pharmaceutical graduates beyond traditional job placements.
Moreover, the report indicates a strong interest among students and alumni in pursuing PhDs and engaging in research collaborations, both domestically and internationally. It stresses the need for NIPERs to foster international partnerships to enrich the research environment.
The study further reveals that the vast majority of students and alumni are aware of the placement cells at their respective institutes, reflecting effective communication within NIPERs. However, there’s room for improvement in ensuring that all graduates receive adequate placement training.
In conclusion, while NIPERs are largely meeting students’ expectations regarding placement support, there’s a growing emphasis on expanding these efforts to encompass broader career aspirations and international collaborations in the pharmaceutical sector. This proactive approach could not only enhance job readiness but also foster innovation and research in the field.
India Emerges as a Hub for Computational Chemistry in Global Pharma Research
India’s rise in computational chemistry is drawing substantial global attention and investments in pharmaceutical research, according to Krishnakumar Muraleedharan, Cresset India’s country manager.
Muraleedharan highlighted India’s evolution from a leader in generic drug manufacturing to a pivotal player in drug discovery and development. He attributed this transformation to India’s robust academic foundation, a burgeoning biotechnology sector, supportive government policies, and increased investments in research and development over the past decade.
Cresset, recognizing India’s expanding pharmaceutical market, strategically invested in the country to enhance its services across the Asia-Pacific region. Muraleedharan emphasized the company’s commitment to leveraging advanced computational methods and artificial intelligence (AI) for accelerating drug discovery processes.
The decision to establish operations in Bengaluru was driven by the city’s dynamic tech ecosystem, skilled workforce, collaborative culture, and cost-effective research capabilities. Bengaluru’s proximity to esteemed institutions like the Indian Institute of Science (IISc) and the National Centre for Biological Sciences (NCBS) provides Cresset access to top talent in computational chemistry.
Muraleedharan underscored Bengaluru’s status as a leading biotech and pharmaceutical hub, home to prominent companies like Biocon, Syngene, and Jubilant Biosys. He praised government initiatives such as the Biotechnology Industry Research Assistance Council (BIRAC), which bolster the city’s appeal for R&D activities by supporting startups and research institutions.
Cresset’s choice of Bengaluru aligns with its strategic goals to harness India’s academic prowess, vibrant biotech ecosystem, advanced infrastructure, supportive policies, collaborative spirit, and strategic location, Muraleedharan concluded.
High Court Stay Prompts PCI to Reconsider New Pharmacy Institutes in Maharashtra
The Pharmacy Council of India (PCI) has decided to reconsider applications from new pharmacy institutes in Maharashtra for the academic year 2024-25, following an interim stay issued by the High Court of Bombay. This decision comes after the Court intervened in response to a petition filed by Sant Dnyaneshwar Bahuuddeshiya Sevabhavi Sanstha challenging the PCI’s directive to halt new institute approvals.
In a recent circular, the PCI stated that it would process applications if institutions submit all required statutory documents, including Consent of Affiliation from the Examining Authority and a No Objection Certificate (NOC) from the State Government.
The High Court’s intervention stemmed from concerns raised by the Higher and Technical Education Department in Maharashtra regarding an increase in pharmacy institutes without adequate planning, potentially compromising educational standards. The PCI had initially issued a directive on February 12, 2024, barring new permissions and expansions for the academic year 2024-25 based on these concerns.
However, the Court deemed the PCI’s blanket directive unjustified solely on the basis of an email from the HTE Department, asserting that the right to establish educational institutions cannot be curtailed without due legal process. Pending a final decision on the petition, the Court granted interim relief, allowing institutions’ applications to be considered independently of the PCI’s directive.
This development echoes similar legal battles in other states where pharmacy colleges challenged PCI directives, leading to favorable outcomes in various High Courts and the Supreme Court. Previously, the Delhi High Court and Karnataka High Court had ruled in favor of pharmacy colleges, overturning PCI’s moratorium on new institute openings from the academic year 2020-21.
The PCI’s decision to review applications in Maharashtra marks a significant step in reconciling regulatory concerns with educational aspirations, influenced by evolving judicial interpretations and the imperative of ensuring quality education in pharmaceutical sciences.
Life Sciences Sector Awaits Budget Boosts for Innovation and Growth in India
With the Union Budget looming, India’s life sciences sector is eagerly anticipating significant boosts aimed at fostering innovation and investment in new chemical entities (NCEs) and new biological entities (NBEs). These measures are seen as crucial for sustaining the sector’s growth momentum and enhancing its global competitiveness.
Over recent years, the life sciences industry in India has demonstrated impressive resilience and expansion. Key among its expectations is the introduction of a 200% weighted deduction for companies engaged in R&D related to NCEs and NBEs. This incentive is poised to galvanize research endeavors, positioning India as a frontrunner in life sciences innovation.
Additionally, there is a strong push for incentives aimed at bolstering domestic medical device manufacturing. Proposed initiatives include a concessional tax regime and profit-linked incentives designed to stimulate innovation and investment in this critical sector. The goal is to solidify India’s stature as a leading global producer of medical devices, ensuring affordability and accessibility.
Ahead of the budget, stakeholders are advocating for the continuation or expansion of customs duty exemptions on pharmaceutical imports and life-saving drugs. There’s also a plea for the rollback of health cess on essential medical devices to lighten the financial burden on consumers. Lowering customs duties on imported diagnostic equipment and revising GST rates on laboratory supplies are further priorities to encourage R&D investments and improve sector efficiency.
In terms of infrastructure, the sector is calling for a Production Linked Incentive (PLI) scheme to attract investments in healthcare infrastructure. This includes funding for modern healthcare facilities nationwide. Addressing healthcare workforce shortages through enhanced training and improved working conditions is also critical to fortifying the healthcare system.
Regulatory clarity is another focal point. The sector seeks standardized policies governing company interactions with healthcare professionals, ensuring uniformity and compliance across the industry.
Overall, the life sciences sector remains hopeful that the upcoming budget will meet these expectations, reinforcing India’s status as a hub for research and innovation. These measures are aligned with the ‘Atmanirbhar Bharat’ vision, aiming to propel the sector to a projected value of USD 130 billion by 2030 and a market size of USD 450 billion by 2047.
IDMA GSB Seminar Empowers Gujarat Pharma Entrepreneurs on Scaling Up Challenges and Strategies
At the AGM and one-day seminar organized by the Gujarat State Board of the Indian Drug Manufacturers Association (IDMA GSB), aspiring pharma entrepreneurs learned a crucial lesson: starting a business is straightforward, but scaling it up poses significant challenges.
Under the theme “Scale Up 360,” seasoned entrepreneurs shared invaluable insights aimed at grooming future industry leaders. Dr. Davinder Singh, Executive Vice-President and Head of Global Manufacturing at Sun Pharmaceutical Industries, took center stage to delve into the complexities of scaling manufacturing processes and product marketing.
Dr. Singh emphasized three pivotal elements essential for business expansion. He stressed the importance of establishing a solid foundation with robust systems and processes, alongside the necessity of a dynamic business strategy capable of adapting to evolving market conditions. Financial sustainability and optimal resource management, he added, are critical for achieving profitable growth.
Addressing the audience, Dr. Singh underscored the significance of a well-defined business strategy that addresses key questions such as product differentiation, sales channels, target markets, and strategies for business expansion. He highlighted the need for businesses to retain customers effectively, thereby preventing attrition to competitors.
However, Dr. Singh also pointed out three major barriers hindering business scalability: inadequate leadership development, insufficient systems to manage increased complexity, and weaknesses in marketing capabilities.
The seminar also featured insights from Nikhil Chopra, CEO and Whole-Time Director of J B Chemicals and Pharmaceuticals Ltd, who shared strategies for effective brand building through real-life examples. Ganesh Nayak, Executive Director of Zydus Lifesciences Ltd, provided his perspective on scaling up operations in the pharmaceutical sector.
J D Rawal, Executive Secretary of IDMA GSB, noted the seminar’s success with over 250 participants from Gujarat’s pharmaceutical industry in attendance. The event served as a platform for industry veterans to impart knowledge and guidance crucial for navigating the challenges of business growth and development in the competitive pharmaceutical landscape.