Biocon’s stock surged by 8.5% on Tuesday, January 7, reaching ₹389 per share, a level not seen since mid-September. The rise was fueled by a combination of positive news, including regulatory approval for its psoriasis treatment in Japan and a favorable rating upgrade from global brokerage firm Jefferies.
Approval of Ustekinumab BS in Japan
Biocon’s subsidiary, Biocon Biologics, announced on Monday that it had received approval from Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) for its biosimilar drug, Ustekinumab BS. This subcutaneous injection is a biosimilar to Stelara® (Ustekinumab), a monoclonal antibody used to treat Psoriasis Vulgaris and Psoriatic Arthritis (PsA). Biocon Biologics developed and manufactured the drug, which will be marketed in Japan by its exclusive partner, Yoshindo Inc.
The approval follows an earlier announcement from Biocon Biologics in August 2024, when it confirmed a settlement and licensing agreement with Janssen Biotech Inc. and Johnson & Johnson. This agreement paved the way for the commercialization of Ustekinumab in Japan once regulatory approval was obtained.
Advancements in Diabetes Care Project
In addition to the psoriasis drug approval, Biocon Biologics shared progress on its diabetes care initiative. The company revealed in November that its “Embedding Specialist Nurses in Diabetes Care” project, in collaboration with Diabetes Africa and St. Paul’s Hospital Millennium Medical College in Ethiopia, was advancing well. The initiative aims to train nurses to become diabetes specialists, ultimately improving diabetes care across Ethiopia.
Jefferies Upgrades Biocon’s Rating
Jefferies also upgraded its rating on Biocon’s stock to ‘Hold’ in its latest report. The brokerage raised its target price for the stock to ₹400 per share, citing recent developments, including the regulatory approval of Biocon’s Bengaluru manufacturing facility. The US Food and Drug Administration (USFDA) granted the facility a “Voluntary Action Indicated” (VAI) status, indicating that while minor issues were noted, they were not serious enough to require enforcement action. This designation allows Biocon to continue its operations without facing additional regulatory hurdles.
Jefferies also highlighted the upcoming USFDA approval of Biocon Biologics’ biosimilar Stelara, expected to launch in February 2025. This approval is expected to drive growth in Biocon’s biologics business, further bolstering the company’s outlook.
Stock Price Recovery
Biocon’s stock has shown impressive recovery over the past 21 months, climbing from ₹206 per share to ₹389—an 87% increase. This recovery follows a significant drop in stock price from January 2021 to March 2024, during which Biocon’s value fell by nearly 57%. Despite this recent surge, the stock is still 21% lower than its peak of ₹487 per share, reached in December 2020.
With these positive developments and strategic upgrades, Biocon’s stock appears poised for continued growth, driven by its expanding biosimilars portfolio and strong market positioning in the pharmaceutical sector.
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