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Cutting PT; Remain EW: We remain on BIOS in view of limited depth in the near-term product
pipeline, a slightly more distant (three-years plus) monetization time frame for insulin/MAbs in the
regulated markets, and now-fading NCE premium (subsequent to disappointing clinical data for
IN105). We are cutting our price target to Rs386 to reflect the lower IPR premium.
Longer-term cash flow drivers are gestating: For the EU insulin launch, BIOS targets
completion of clinical trials by end-2011, dossier submission by mid-2012, and launch in 2013.
Clinicals for generic Glargine in EU will likely commence by end-2011 (with launch planned for
2014 after key patent expiration). It targets to launch the pen device in the domestic market by
mid-2011.
IN105 (Oral Insulin) commentary: BIOS remains optimistic about its lead NCE compound –
IN105 – even though it did not meet its primary end point (met multiple secondary endpoints) of
lowering HbA1c levels by 0.7% (compared to placebo) due to a high placebo effect. We are
unsure about: 1) how the company will overcome the placebo effect in subsequent studies; and
2) why the possible lifestyle changes in the patients did not affect the post-prandial data.
Other highlights from the call: BIOS has four customers for tacrolimus in the US market and
the approval for the fifth customer is imminent. It targets the launch of human insulin with PFE in
emerging markets in F2012. The company reported F3Q11 results broadly in line with our
expectation. Excluding technology licensing income and one-off expenses, we believe the
company earned Rs800mn in net profit for the quarter (MSe – Rs770mn).
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Cutting PT; Remain EW: We remain on BIOS in view of limited depth in the near-term product
pipeline, a slightly more distant (three-years plus) monetization time frame for insulin/MAbs in the
regulated markets, and now-fading NCE premium (subsequent to disappointing clinical data for
IN105). We are cutting our price target to Rs386 to reflect the lower IPR premium.
Longer-term cash flow drivers are gestating: For the EU insulin launch, BIOS targets
completion of clinical trials by end-2011, dossier submission by mid-2012, and launch in 2013.
Clinicals for generic Glargine in EU will likely commence by end-2011 (with launch planned for
2014 after key patent expiration). It targets to launch the pen device in the domestic market by
mid-2011.
IN105 (Oral Insulin) commentary: BIOS remains optimistic about its lead NCE compound –
IN105 – even though it did not meet its primary end point (met multiple secondary endpoints) of
lowering HbA1c levels by 0.7% (compared to placebo) due to a high placebo effect. We are
unsure about: 1) how the company will overcome the placebo effect in subsequent studies; and
2) why the possible lifestyle changes in the patients did not affect the post-prandial data.
Other highlights from the call: BIOS has four customers for tacrolimus in the US market and
the approval for the fifth customer is imminent. It targets the launch of human insulin with PFE in
emerging markets in F2012. The company reported F3Q11 results broadly in line with our
expectation. Excluding technology licensing income and one-off expenses, we believe the
company earned Rs800mn in net profit for the quarter (MSe – Rs770mn).
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