Biocon’s net profit up marginally

A steep growth in biologics and research services businesses led biopharmaceuticals firm Biocon Ltd to post a 27% rise in its fourth quarter total revenue, which stood at Rs 1,237 crore. The Bengaluru-headquartered firm’s net profit rose by 2% to Rs 130 crore from Rs 127 crore a year ago, representing a net profit margin of 11%.

Biocon said its biologics and research services businesses grew 47% and 45%, respectively, while its traditional small molecules and branded formulations businesses turned in a positive performance in the fourth quarter.

“We crossed a key milestone in Q4 when our Insulin Glargine (for treating diabetes mellitus), received regulatory approvals in the developed markets of Europe and Australia. Our biosimilar Trastuzumab (for treating breast cancer) also got approval in Turkey,” said Kiran Mazumdar-Shaw, chairperson and managing director, in a statement.

The company’s EBITDA (earnings before interest, tax, depreciation and amortisation) grew 30% at Rs 300 crore, with an EBITDA margin of 24% for the fourth quarter.

For the year FY18, Biocon’s total revenue rose by 6% to Rs 4,336 crore from Rs 4,079 crore a year ago. Its year-on-year EBITDA fell by 9% to Rs 1,035 crore from Rs 1,137 crore. Its year-on-year net profit also came down by 39% to Rs 372 crore from Rs 612 crore, on the back of interest and finance charges.

“The muted FY18 performance was on account of continued pricing challenges in the generics business coupled with a planned plant shutdown for requalification and lower licensing income in the biologics business. In addition, operational expenses related to our Malaysia facility impacted the bottom line. Recent approvals of our biosimilars along with the strong performance of Syngene are expected to positively impact overall performance in FY19,” Mazumdar-Shaw said.

The company said the recent regulatory approvals of its biosimilars coupled with strong performance by Syngene bode well for FY19. Biocon and Mylan’s co-developed insulin glargine SemgleeTM is the first biosimilar from the partnered portfolio to be approved in the developed markets of EU and Australia. Biocon also received Insulin Glargine approval in South Korea. Furthermore, Biocon and Mylan have agreed to accelerate the introduction of biosimilar Adalimumab (for treating autoimmune disorders) in Europe through Mylan’s in-licensing arrangement with Fujifilm Kyowa Kirin Biologics.

“While market dynamics for small molecules and India branded formulations remain challenging, we expect the segments to recover from the pressures faced in FY18, going forward,” the company said.

On April 27, Biocon’s shares were trading at Rs 661 per share, down 0.38%, on the NSE.