When the Biolizard starts to sprout bubbles, you cannot grind up his rail anymore. Instead, use Shadow's Homing Attack to continuously attack the bubbles that are still on him, slowly climbing up until you are close enough to hit the shiny red light.

Use your rings wisely. When running from its mouth, stay near the middle of the platform. When running from the its mouth and you reach a dark spot, jump. Do not take any chances since one river will suck you to oblivion. When it bends down and smoke appears from its mouth, grind up the tube and jump on the life support system. When he shoots the orbs, let them hit you. He will wait a little while so you can collect lost rings. Try not to get too far away from the mouth because he will do a tail whip. When he summons the tiny bubbles, do the Homing Attack up to the top. Guide your attack so that it goes to the top of the lizard. This will inflict damage. When he is at a red life status, he and a small barrage of his balls will start to float with you. Avoid the balls and get to the life support. Press B to complete the battle.

To defeat the lizard in space (after the Shadow Attack), you will need do a some tag teaming. Sonic is gold sonic and Shadow is white shadow in this level. Pressing A makes you attack and rise and B makes you descend. In this stage you need to hit a few swells on its body. Note that you have a ring life support. When this runs out, you are dead. Hit his swells a few times and dodge the lasers and the balls.