Biocon Q1 net profit up 47% on strong biologics, research services business

Riding on the back of a strong biologics and research services business, biotechnology major Biocon on Thursday posted a sharp 47 per cent increase in its consolidated net profit at Rs 1.20 billion for the first quarter ended June, 2018.

Total revenue of the company rose to Rs 11.93 billion, up 21 per cent from Rs 9.87 billion in the same period of the previous year, Biocon stated.

With an operating margin of 26 per cent for the quarter, its earnings before interest, tax, depreciation and amortisation stood at Rs 3.07 billion, a 25 per cent increase from the corresponding quarter last year. However, the company’s gross spend on research and development declined 8 per cent to Rs 880 million on YoY basis.

“We started the year with a strong performance across our business segments. This performance was led by a 36 per cent growth in our biologics business and a 39 per cent increase in research services revenues,” said Kiran Mazumdar-Shaw, the company’s chairman and managing director.

A major milestone during this quarter was Fulphila, co-developed by Biocon and partner Mylan, becoming the first biosimilar Pegfilgrastim to be approved and launched in the US. It has been introduced as a more affordable therapy option for cancer patients undergoing chemotherapy in the US.

“The approval and launch of our biosimilar Pegfilgrastim in the US is a significant milestone for Biocon and sets the tone for the future success of our biosimilars business,” said Shaw.

During the quarter, it also witnessed strong retail market uptake of another biosimilar Trastuzumab to treat breast cancer patients in Brazil. It is yet to be launched in the US.

The company gained market share in several emerging markets such as Malaysia, Algeria and UAE. Its insulin brand Insugen now holds a 75 per cent share of the rh-insulin market in Malaysia.

Its branded formulations business, which includes sales in India and UAE, reported a revenue of Rs 1.47 billion, representing a growth of 13 per cent YoY in the quarter.

The company had reported muted performance in the last financial year owing to pricing challenges in the generics business along with lower licensing income in the biologics business. Also, its operational expenses related to Malaysian facility had also impacted its bottom line. However, a business trend has a lot of normalised since then which has been reflected in its first-quarter results.

Financial highlights (consolidated) Rs bn
 

Q1FY19 Q1FY18 Growth (%)

Net profit 1.2 0.81 47

Total revenue 11.93 9.87 21

Ebitda 3.07 2.46 25

Source: Company results