Biocon Q1 profit drops 51% to Rs 81 crore

Revenue dropped 4 per cent to Rs 988 crore in the April to June quarter, Biocon said

Biocon Ltd, India’s largest biopharma firm, said its first quarter profits dropped 51 per cent to Rs 81 crore on account of lower sales of small molecules and branded formulations.

Revenue dropped 4 per cent to Rs 988 crore in the quarter ended June, Biocon said.

The Bengaluru-based firm had reported profits of Rs 167 crore on revenue of Rs 1,033 crore in the same period last year.

“Our biologics business had a strong quarter led by insulins sales. Financial performance was muted largely due to a combination of factors: weakening of US dollar, GST impact, and inclusion of operational and fixed costs of Malaysia (manufacturing facility). Additionally, the YoY comparison was impacted by the one-time adjustment in Q1FY17 related to Indian accounting standards migration,” said Kiran Mazumdar-Shaw, chairperson and managing director, Biocon in a statement.

“The outlook for FY18 remains cautious as much depends on regulatory approvals and tender outcomes for our biosimilars in key emerging markets. However, we will endeavour to maintain healthy core operating margins, going forward,” Shaw said.

The firm said operating margins--calculated as revenue minus expenses--stood at 29 per cent in the quarter.  

In the quarter, the Oncologic Drugs Advisory Committee (ODAC) of the US Food and Drug Administration (FDA) has recommended the approval of Biocon's biosimilar Trastuzumab - a drug used to treat breast cancer.  It also got approval from the Indian regulator for the biosimilar of another cancer drug Bevacizumab.

Biologics business grew 15 per cent to Rs 184 crore, while its research services business grew 6 per cent to Rs 291 crore in the quarter. 

Net spend on research and development (R&D) was Rs58 crore in the June quarter, 13 per cent higher than the same period last year. 

Biocon’s earnings before interest, tax, depreciation and amortization (EBITDA) was down 19 per cent to Rs246 crore on account of inclusion of fixed and operational costs related to Malaysian facility, and increase in staff costs.