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Biocon net rises 11% in Q2 to Rs 188 cr, revenue up 10% at Rs 1,945 cr

Revenue growth was primarily driven by good performance of its research services and biosimilars business segments

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Biocon | Q2 results | Pharma sector

Deepsekhar Choudhury 

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Biocon

Biotechnology major Biocon's consolidated net profit rose 11 per cent, before exceptional items, to Rs 188 crore for the September quarter compared to Rs 169 crore reported in the corresponding period last year.

The company said in a late night filing on Thursday that its consolidated revenue rose 10 per cent to Rs 1,945 crore in Q2FY22 on a year on year basis.

his was primarily driven by good performance of its research services and biosimilars business segments, which reported a growth of 17 per cent and 10 per cent, respectively.

The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) was up 35 per cent at Rs 551 crore and profit before tax (before exceptional items) rose 27 per cent to Rs 276 crore.

The exceptional item relates to modification of the optionally convertible debentures of a private equity investment in its subsidiary Biologics and reversal of SEIS claims relating to a prior period.

Kiran Mazumdar-Shaw, executive chairperson of Biocon, said, “Biologics made strategic moves this quarter which will drive future growth of our biosimilars business and deliver long term value for our shareholders. The US FDA's approval of Semglee as the first interchangeable biosimilar product, under the 351(k) regulatory pathway, is a milestone for both and Viatris, and will enable us to expand patient access to our Insulin Glargine.”

“The quarter also marked Biocon Biologics' strategic entry into vaccines and the infectious diseases segment through key partnerships with Serum Institute Life Sciences and Adagio Therapeutics,” she added.

Biocon Biologics and Serum Institute Life Sciences (SILS) have entered into a strategic alliance that provides Biocon Biologics an asset light and accelerated entry into the vaccines segment.

The near term focus would be on Covid-19 vaccines and the company will have access to SILS’ current development pipeline to address unmet needs in other communicable diseases like mosquito-borne infections.

The alliance provides Biocon Biologics a committed access to 100 million doses of vaccines annually for a period of 15 years and commercialisation rights to SILS vaccine portfolio leading to a committed revenue stream and related margins in exchange for a 15per cent stake at a post money valuation of about $4.9 billion.

While Biocon’s revenue in Q2FY22 missed the Street’s consensus by 2 per cent, the company’s EBITDA and profit after tax beat analyst estimates by 1 per cent and 8 per cent, respectively.

“Miss on revenue remains a concern as biosimilar revenues declined nearly 2 per cent quarter-on-quarter, indicating that modest market share gains aren’t translating to incremental revenues and even quarter on growth in Syngene and Generics could not compensate for this. We note a sharp improvement in profitability with Biosimilars profit before tax margin at 23.5 per cent, the highest in 10 quarters,” said an analyst note by brokerage firm Edelweiss post the earnings announcement.

“Biosimilar sales grew 10 per cent year on year but declined 2 per cent quarter on quarter. Secondary data indicates uptake in trastuzumab (~100bps jump QoQ) and insulin glargine (3 per cent share in August) while pegfilgrastim was flattish.

The growth in market share has slowed down versus previous quarters,” the Edelweiss analyst note added.

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First Published: Fri, October 22 2021. 11:52 IST
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