Biocon stock: Rich valuations, regulatory news flow may add to volatility

Analysts expect Biocon to gain 20-25 per cent market share and after factoring in a 20-25 per cent price erosion in the first year, they see its earnings improving to Rs 12-16

Biocon’s second biosimilar approval, pegfilgrastim (Neulasta), for launch in the US market with partner Mylan, is being seen as a booster dose for the medical industry. However, what came as a shock was the nearly 12 per cent fall in Biocon’s stock price in intra-day trade on Tuesday, in the aftermath of the news of the approval coming in.

First the bad news: after reaching an all-time high of Rs 695, which the Biocon stock scaled on Tuesday during intra-day trade, analysts said trading valuation was high.

Since October last year, the stock has risen almost 90 per cent versus