Biocon stock slides on poor Q3 results, exit of biologics arm's MD

The stock markets on Friday reacted negatively to Biocon’s weak third quarter results, coupled with the sudden exit of its biologics’ Managing Director Christiane Hamacher over “professional differences” with the chairperson. 

From its previous close of Rs 441.95 apiece on Thursday, the stock closed 10.89 per cent or Rs 48.15 lower at Rs 393.80, on Friday.

Biocon took a near-19 per cent hit on a year-on-year (YoY) basis on its consolidated net profit at Rs 186.6 crore for Q3, owing to a dip in its generics business and headwinds across operational, regulatory, and commercial functions. 

Consolidated revenue for Q3 increased by 7.20 per cent to Rs 1,879 crore, against Rs 1,753 crore for the said quarter last year. 

Growth in consolidated revenue came on the back of a 13 per cent rise in research services and an 11 per cent in its biosimilars business YoY, along with core Ebitda margin of 31 per cent, said Executive Chairperson Kiran Mazumdar-Shaw. 

However, its generics business reported a 3 per cent dip in to Rs 561 crore, compared to Rs 576 crore last year.

Analysts believe the market has reacted negatively owing to the imminent miss on the company’s $1-billion guidance on its biosimilars business by FY21-22, especially after Hamacher’s exit. 

Biocon stated late on Thursday that pursuant to a mutual agreement, Hamacher has stepped down as MD of subsidiary Biocon Biologics, and ceased to be a member of the board effective January 20. 

“This decision was taken due to professional differences with the chairperson on strategic priorities and vision for the company,” it stated, adding that Hamacher’s last working day as CEO would be February 28. 

Hamacher will be succeeded by BBL board member Arun Chandavarkar, who takes over as managing director effective January 21, for a period of up to two years, with Shaw being the executive chairperson of BBL from January 21, 2021 until March 31, 2022.