Biocon tanks 10% on lower-than-expected December quarter results

Due to professional differences with the chairperson on strategic priorities and the vision for the company, Dr Christiane Hamacher has stepped down as the MD of Biocon Biologics

Shares of Biocon plunged 10 per cent to Rs 400 on the BSE in the morning deals on Friday after the company posted below par December quarter (Q3FY21) results, with consolidated net profit down 17 per cent year on year (YoY) at Rs 169 crore.

Ebitda (earnings before interest, taxes, depreciation, and amortization) declined 10.1 per cent YoY to Rs 400 crore, while Ebitda margins contracted 383 basis points YoY to 21.6 per cent mainly due to higher employee, R&D and other expenditure.

The company's Q3FY21 revenue grew 5.9 per cent YoY to Rs 1,851 crore, led by biosimilars and research services segments. The growth was dragged down by generics sales – down 3 per cent YoY to Rs 561 crore.

The management said the generics business experienced a subdued performance in Q3 as demand moderated following a period of advance buying by customers in the first half of this fiscal, apprehending supply disruption in the wake of the pandemic. Growth, it said, was also impacted by delays in regulatory approvals of certain products that required physical inspection of the company's facilities, due to Covid-19 related travel restrictions.

"The biosimilars segment revenue growth this quarter was driven by steady market share of the company's products in the US and growth in key most of the world (MoW) markets including Africa, Middle East, Turkey (AFMET) and India," the management said.

Meanwhile, due to "professional differences with the chairperson on strategic priorities and the vision for the company", Dr Christiane Hamacher has stepped down as the Managing Director (MD) of Biocon Biologics, a subsidiary of Biocon. She also ceased to be a member of the Board of Directors of Biocon Biologics effective from January 20, 2021.

"This decision was taken due to professional differences with the chairperson on strategic priorities and vision for the company. Her last working day as CEO would be February 28, 2021,” the company said in a statement.

Dr Arun Chandavarkar, Member of the Board of Biocon Biologics, took over as the new MD of Biocon Biologics effective Jan 21, 2021 for a period of up to two years.

At 10:05 am, Biocon was trading 9 per cent lower at Rs 402 on the BSE, as compared to a 0.11 per cent decline in the S&P BSE Sensex. Trading volumes on the counter more-than-doubled with a combined 11.6 million equity shares having changed hands on the NSE and BSE till the time of writing of this report.