Biocon triples Q2 net profit

Bangalore-based biotech major Biocon has more than tripled its net profit to Rs 76 crore in the July-September quarter compared with Rs 25 crore in the same period last year. Total revenue during the period rose 31 per cent to Rs 581 crore, according to the consolidated results announced today.

The jump in net profit is partially due to mark-to-market (MTM) losses of Rs 25 crore in the comparable quarter last year, which depressed the profit then. Without the losses, net profit last year would have been Rs 50 crore, and profit growth during the recent quarter would have been a more muted 52 per cent.

Profitability was also aided by healthy growth across all sectors.

Kiran Majumdar-Shaw, chairman and managing director of Biocon, attributed the growth to the performance of its German subsidiary AxiCorp, its R&D unit Syngene, clinical research outsourcing arm Clinigene, and growth in the insulin business. She termed it as one of the most impressive quarters in the company’s history,

Shaw said, although margins were low for Axicorp in a high-volume business, the company was helping improve its margins. She added that growth this year was realisation of investments in the recent past that had come to the end of their gestation period.

The company has announced that it has put its MTM losses behind and forex vulnerability would no longer affect them. “Last year, the dollar was covered for us at a fixed level but, now, we have taken an insurance-based approach where we have downside protection,” said Shaw.

The biopharmaceuticals business netted Biocon Rs 507 crore — an increase of 30 per cent over the corresponding period last year, while the contract research business, consisting of Syngene and Clinigene, recorded an income of Rs 73 crore — an increase of 37 per cent. The operating margin for the company was at 21 per cent, while earning per share was Rs 3.84.

Meanwhile, there are plans to start commercial production of the world’s first oral insulin, dubbed IN 105, in early 2011. The company will complete patient enrolment for clinical trials for the products in the current quarter.