Well, Most of the investors fell prey to the rosy narratives of being a first mover in a niche area with a visionary approach.
The problem is that not much deep dive was attempted on part of individual investors to evaluate the actual commercial/biz performance of those niche products commercially.
Even if we keep debt for acquistion apart giving mgmt a benefit of doubt or the grace period to excel in knitting a niche biz, the actual products for which all these concessions r being given needs an evaluation.
The problem with biocon is that the biosimilar products are niche in india and they r 1st mover but when it comes to the sales area i.e. US, they r not so niche and they have to compete with many established players with fat wallets.
The outcome of all this is their r 8~10 players competing for the mkt share.
The result is huge price erosion upto 50% to grab mkt share.
But the irony with Biocon is that even if they r the cheapest but still they are not in top in mkt share
So, something is really not working on the commercial realization of products the way it ought to be .
Result of all this not syncs well for long term margins and revenue front.
Mkt somehow works on actual profits at the end then the narratives.
Ogivri is biocon
Ogivari eroded 45% in 2 years
It got 9% mkt share in 2 years
The nearest cheap competitor got 44% mkt share in 2 years
Eroded 40% in 2 years
Biocon was 1st to get approval
2 years down the line it eroded 45% with 9% mkt share
Ye sirf ek biosimilar ka example hai.
This is siruation when only 5 players r there
Imagine when 10~15 player will be there.
After 2~4 years
How much we will erode ?
70%
How much mkt share we expect ?
20%
-70% * 20% = opportunity size ?
