Biocon is strategically pursuing in-licensing opportunities to bolster its biosimilars portfolio and drive significant margin expansion, leveraging a multi-product launch cycle and a shift towards consolidating its global commercial footprint.
IMAGE: An employee of Biocon works inside the company’s research and development centre in Bengaluru. Photograph: Abhishek N Chinnappa/Reuters
Key Points
- Biocon is actively pursuing in-licensing opportunities for biosimilars to leverage its global commercial footprint and strengthen existing therapy franchises.
- The company’s strategy shifts to a ‘consolidate’ phase in FY27, focusing on improving capacity utilisation, expanding margins, and enhancing return on capital employed.
- A multi-product launch cycle, including five biosimilar launches in the US within the next 12 months, is expected to be a key revenue driver, particularly in the second half of FY27.
- Biocon aims to expand biosimilar Ebitda margins beyond the current 26 per cent, driven by operating leverage from new product launches and interest cost savings.
- The company sees significant opportunity in the GLP-1 market, particularly for generic liraglutide in obesity indications, and anticipates a return to double-digit Ebitda for its generics business.
Biocon is actively scouting for in-licensing opportunities in biosimilars as the company looks to leverage its expanding global commercial footprint to strengthen its therapy franchises, managing director and chief executive oficer (MD & CEO) Shreehas Tambe said on Thursday.
“We have built capabilities across several markets and are actively looking for synergistic opportunities.
“We continue to scout for such opportunities to strengthen our presence in our franchise,” Tambe told journalists.
The company’s criteria for in-licensing is disciplined products would need to complement existing therapy areas rather than open entirely new ones.
Tambe cited etanercept as a template.
“We did not develop the product ourselves, but we brought it in because it completed our portfolio and fitted our commercial strategy,” he said.
Strategic Shift and Growth Outlook
The in-licensing push comes as Biocon shifts gears in financial year 2026-27 (FY27) from what management has called the “preserve” phase of its strategy to “consolidate”, with the major investment cycle now largely behind it.
The focus now shifts towards improving utilisation of capacity built, expanding margins, and driving a steady improvement in return on capital employed.
On the growth outlook for FY27, Tambe pointed to a multi-product launch cycle as the key revenue driver, with impact expected to be more pronounced in the second half of the year.
Five biosimilar launches are expected in the US alone in the next 12 months.
Yesintek, Biocon’s biosimilar to Stelara, has already scaled to close to 20 per cent market share, “nearly a fifth of the market”, as Tambe put it.
Denosumab biosimilars have launched, adding to the oncology and bone health franchise.
Insulin aspart, branded Kirsty, has launched in closed-door networks, and will expand into commercial payer channels in the second half.
Aflibercept biosimilar Yesafili is expected to enter the US market in the second half of FY27, and Bevacizumab is expected to start driving sales around the same time.
“Multiple products will drive sales and revenues.
“However, the focus will not only be on top-line growth or market share, but also on ensuring sustainable margins and profitable growth,” Tambe said.
Margin Expansion and Capability Leadership
On margins, biosimilar Ebitda (earnings before interest, taxes, depreciation, and amortisation) came in at 26 per cent for Q4FY26, with the full-year Ebitda margin also at 26 per cent — up 40 per cent on a like-to-like basis.
Tambe sees room to expand further. “Over the mid- to long-term, there is no reason why margins should not improve.
“We are launching new products, but costs are not expected to scale proportionately.
“So, operating leverage will certainly improve Ebitda margins,” he said.
Tambe also pushed back on the characterisation of Biocon as simply a low-cost manufacturer.
“It is not cost arbitrage, it is capability leadership.
“We are developing products which are high science,” he said, arguing that Biocon’s decade-long head start gives it a structural advantage as the space gets more crowded.
A significant tailwind on the profitability front will come from interest cost savings following the buyout of minority shareholders in Biocon Biologics.
The company expects over Rs 300 crore in interest savings to flow through the P&L (profit and loss) on a full-year basis in FY27, going directly below the Ebitda line.
At a consolidated level, Biocon delivered approximately 200 basis points (bps) of Ebitda margin expansion in FY26 on a like-to-like basis, driven by improved product mix and operational excellence.
GLP-1 Opportunity and Generics Business
On the GLP-1 opportunity, Tambe said the initial market response to generic liraglutide in the US, for which Biocon received FDA approval during the quarter covering both diabetes and weight management indications, has been positive.
With semaglutide generics locked out of the US market until 2032, he sees a window, particularly in obesity indications, where reimbursement for branded semaglutide remains limited.
“We are optimistic, but we will continue monitoring the space closely,” he said, describing the Canada opportunity as a marathon rather than a sprint, and flagging the semaglutide opportunity as the larger long-term prize.
For the generics business, which posted a full-year Ebitda margin of 5 per cent on revenues of Rs 3,168 crore — up 17 percent Y-o-Y on a like-to-like basis — Tambe said a return to double-digit Ebitda is on the horizon as utilisation of recently commissioned facilities improves.
“We do not expect this to be too long before you see double-digit Ebitda contributions,” he said.
