Biocon, a Rs.2,850 crore plus pharma major, has posted flat growth in consolidated net profit during the second quarter ended September 2014 as its net sales improved only by two per cent. Its net profit remained same at Rs.102 crore and EPS worked out to Rs.5.1. The company's consolidated net sales increased by 2.2 per cent to Rs.750 crore from Rs.734 crore in the corresponding period of last year. With flat growth in sales and profits, Biocon scrip opened lower at Rs.472 on BSE as against its previous close of Rs.479.75.
Biocon's income from biopharmaceuticals improved by 2 per cent to Rs.558 crore from Rs.546 crore in the similar quarter of last year and its income from contract research improved by 2 per cent to Rs.192 crore from Rs.188 crore. The sales of biopharma segment declined by one percent to Rs.442 crore mainly due to geo-political challenges in terms of credit risk in the MENA region, reduced offtake of specialty API, and capacity constraints. The outlook for the biopharma business remains challenging for the remaining part of this fiscal. The company continue to work towards further optimization of its product portfolio in the small molecules vertical.
Kiran Mazumdar-Shaw, chairman and managing director, said, “The growth of our core biopharma business this quarter has been muted largely due to capacity constraints and geo-political challenges in the Middle East. However, clinical progress in our key global programmes for generic insulin glargine and trastuzumab is indicative of the value accretion that is realizable in the foreseeable future. The strategic investment by Silver Leaf Oak in Syngene validates the strength of our research services business and sets a good valuation benchmark. Whilst we continue to invest in R&D and capacity building for our insulins and antibodies portfolio, we expect branded formulations and Research services businesses to drive growth in the interim.”
The branded formulations business recorded revenues of Rs.116 crore as against Rs.99 crore in the same period of last year. The vertical grew ahead of the industry reporting a robust growth of 17 per cent on year to year basis. Its key brands CANMAb, BIOMAb EGFR, ALZIMAb, INSUGEN and BASLOG continue to benefit a large patient pool in India. The growth this quarter was driven by oncotherapeutics, metabolics, and nephrology divisions. The vertical continues with the strategy to drive synergies and profitable growth around key anchor brands and optimization of product portfolios.
The company's partner Mylan initiated multicenter phase III trials for its insulin glargine in the US. Two trials, both for 24 weeks, comprising a total of 1,100 patients are expected to be completed by June 2016.
The Malaysia insulin facility remains on track and likely to commission in second half of 2015. The commercialization of products from Malaysia will commence post validation and regulatory approvals from respective countries.
For the first half ended September 2014, Biocon's total sales increased only by 3 per cent to Rs.1,468 crore from Rs.1,429 crore in the same period of last year. Its net profit moved up by 5 per cent to Rs.205 crore from Rs.196 crore. Its R&D expenditure declined sharply by 19 per cent to Rs.66 crore from Rs.82 crore.