Biocon, a Rs.2,425 crore plus pharma company, has reported satisfactory performance during the second quarter ended September 2013 on account of an increased traction in emerging markets as well as higher sales from immuno-suppressants and insulins. Its consolidated net profit moved up by 13.3 per cent to Rs.102 crore from Rs.90 crore in the corresponding period of last year. The company's consolidated sales increased by 24 per cent to Rs.734 crore from Rs.592 crore. With improvement in profits, its EPS improved to Rs.5.1 from Rs.4.5 in the last period.
Biocon's biopharmaceuticals sales, including licensing income, increased by 20.2 per cent to Rs.447 crore from Rs.372 crore and the sales of branded formulations in domestic market up by 8.8 per cent to Rs.99 crore from Rs.91 crore. The income from contract research jumped by 45.7 per cent to Rs.188 crore from Rs.129 crore. Research and development expenditure declined by 9.3 per cent to Rs.39 crore from Rs.43 crore.
Kiran Mazumdar-Shaw, chairman and managing director, said, “Biocon has witnessed a strong performance in the first half of FY14 driven by an increased traction in emerging markets. Immuno-suppressants and insulins continue to drive growth. This is in part bolstered by capacity expansion of our insulins plant. Our biosimilar pipeline partnered with Mylan, continues to progress well and we anticipate Indian regulatory approval for our biosimilar Trastuzumab in the near future. The research services vertical has delivered a stellar set of numbers, despite an exceptional forex loss in Q2 FY14. This quarter also saw the launch of our second novel biologic, Alzumab, for psoriasis in India. Alzumab has already seen an encouragingly strong acceptance in the market. The branded formulations business has grown ahead of the market but has been muted by business and regulatory challenges. We remain confident that growth will continue across all business.”
The overall branded formulations growth was impacted due to systemic hurdles led by the chaotic implementation of the recent NPPA guidelines and the trade disputes on margins have resulted in widespread de-stocking and reduced off take. Biocon launched Alzumb (itolizumab), a First-in-class' novel biologic therapy or Psoriasis. With differentiated mechanism of action, Alzumab offers a new treatment paradigm for Psoriasis patients with a less aggressive dosing regimen and a longer treatment free period.
For the first half ended September 2013, Biocon's sales increased by 22.8 per cent to Rs.1,429 crore from Rs.1,164 crore in the corresponding period of last year. Biopharmaceuticals sales moved up by 20.7 per cent to Rs.886 crore from Rs.7.34 crore and that of branded formulations in domestic market increased by 12.4 per cent to Rs.200 crore from Rs.178 crore. Its income from contract research increased by 36.1 per cent to Rs.343 crore from Rs.252 crore. The net profit improved by 16 per cent to Rs.196 crore from Rs.169 crore with EPS of Rs.9.8 for the first half of FY14.
The small molecules portfolio sustained its strong performance through H1FY14 on the back of steady sales in immuno-suppressants and Orlistat. Its statins portfolio continues to support these growth drivers with increasing traction in other geographies. Its biosimilars portfolio saw a robust growth on account of higher demand for generic insulins from emerging markets. The company continue to enhance its emerging market footprint to provide a wider access to affordable insulin therapy to diabetics worldwide. Biocon has successfully completed the India phase III trial for biosimilar trasuzumab, and have filed for regulatory approval with the India Authorities.
Biocon's research services segment grew by 25 per cent during the first half with widespread growth across its service platforms. Peter Bains, director, Syngene International, said, “The strong performance of research services in H1FY14 reflects the underlying strength of our diversified service offerings, which span the discover and development continuum. This growth has been driven by a strong momentum in our manufacturing services platform along with a ramp up in our FTE contracts.”
The outlook for FY14 continues to be positive as the company balance its revenue growth with R&D investments. The company continue its efforts aimed at improving profitability with various cost control and portfolio optimization initiatives. The implementation of insulin plant in Malaysia is progressing as per schedule.