Biocon Ltd, a major biotechnological company in India, received setback during the first quarter ended June 2005 on account of stagnant sales, rising cost of production and higher taxation. The company’s consolidated net profit declined by 20 per cent to Rs 39 crore from Rs 49 crore in the corresponding period of last year. Its consolidated total sales remained same at Rs 174 crore in the quarter first of 2005-06. Though the sales through contract research activity increased by 35 per cent to Rs 19 crore from Rs 14 crore, the sales of biopharmaceuticals and enzymes declined by 3.2 per cent to Rs 155 crore from Rs 160 crore.
Kiran Mazumdar-Shaw, chairman & managing director, said, “I am satisfied that the overall financial performance is in line with our plan. As anticipated, the pricing pressure in the European markets has affected our percentage margins this quarter. The outlook for the year ahead remains positive. The new growth drivers viz., Insulin, immuno-suppressants and branded formulations are building the bio-pharmaceuticals business in a more robust manner and reducing the dependence on statins. New research contracts both at Syngene and Clinigene will deliver additional growth. The new capacities that will come on stream in the latter half of this fiscal will also contribute to overall growth.”
The company’s profit before interest, depreciation and taxation declined by 9 per cent to Rs 52 crore from Rs 57 crore. The company is enjoying a zero interest burden status, but its depreciation provision increased to Rs 7 crore from Rs 5 crore in the last period and taxation provision increased to Rs 7 crore from Rs 3 crore. The earning per share worked out to Rs 3.9 as against Rs 4.9 per cent for the last period.
The company’s subsidiaries Syngene International Pvt Ltd and Clinigiene International Pvt Ltd registered a 35 per cent growth over corresponding period of last year. Syngene has singed up new contracts this quarter which will generate additional revenues in the forthcoming quarters. Further, the strategic partnership with SCIREX, a US-based CRO, is also expected to generate additional business for Clinigene.
The company has made substantial progress in its discovery-led research programs in Diabetes and Oncology. These are expected to develop into large global opportunities in the next 2-3 years. It is therefore important in this context to evaluate Biocon’s business prospects with a long-term perspective rather than a quarterly review, Mazumdar-Shaw added.
Biocon will conduct a post marketing surveillance for ‘Insuen’ to establish its safety profile. Under the study, approximately 500 investigators will monitor about 7500 patients for a period of six months. This data is expected to be obtained by the end of this fiscal. Further the company has commenced pre-clinical studies to generate data for its Oral Insulin molecule, IN 105 to support IND filings with National and International regulatory authorities.