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Biocon Ltd.

BSE: 532523 Sector: Health care
NSE: BIOCON ISIN Code: INE376G01013
BSE 00:00 | 25 May 324.50 -4.65
(-1.41%)
OPEN

332.40

HIGH

332.40

LOW

322.90

NSE 00:00 | 25 May 324.20 -5.20
(-1.58%)
OPEN

330.00

HIGH

332.75

LOW

322.80

OPEN 332.40
PREVIOUS CLOSE 329.15
VOLUME 41165
52-Week high 420.25
52-Week low 314.90
P/E 450.69
Mkt Cap.(Rs cr) 38,959
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 332.40
CLOSE 329.15
VOLUME 41165
52-Week high 420.25
52-Week low 314.90
P/E 450.69
Mkt Cap.(Rs cr) 38,959
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Biocon Ltd. (BIOCON) - Chairman Speech

Company chairman speech

Unwavering Purpose

Dear Shareholders

The pharmaceutical and healthcare industry's fight against COVID-19 intensified overthe past year as fresh waves of infections hit many countries around the world. As thepandemic left societies and economies in disarray biotechnology-led companies quicklydeveloped diagnostics vaccines and therapies to tilt the battle in favor of humanity.

India has been at the forefront of this crusade producing cost-effective vaccines atscale for millions of people. At the same time the country has continued to supply aglobal patient pool with generic and biosimilar therapies to prevent and treat non-COVIDhealth threats such as cancer diabetes heart attacks HIV infections malariatuberculosis etc.

Biocon Group Endures COVID-19 Challenge

As an innovation-led life sciences group based in India Biocon and its subsidiariesensured that we delivered on our promise of providing access to life-saving healthcaresolutions during COVID-19.

Our belief that the top priority in a public health crisis is to protect human livesled all employees of Biocon Biocon Biologics and Syngene to relentlessly contributetowards ensuring continuity of operations

Despite lockdowns in the country and many parts of the world. The unwavering purpose ofour people to put ‘patients first' enabled us to sustain the supply of life-savingmedicines worldwide. We also took up the challenge to find solutions to support India'sfight against COVID-19 by leveraging our deep scientific expertise and large scalemanufacturing capabilities. From diagnostics to therapies from testing to vaccinationswe did our best to make a meaningful difference. As we continued with our operations wealso focused on protecting our people and ensuring their health and well-being. Weinvested in implementing strict safety protocols and regularly engaged with our people tokeep them motivated. The leadership team constantly monitored the fast evolving situationand took data-driven decisions for operational planning across our facilities.

Realizing The Biosimilars Promise

Our Biosimilars business revenue at H 28002 million recorded a growth of 21% in FY21.We commercialized our third biosimilar Insulin Glargine in the U.S. and obtainedregulatory approvals for key biosimilars Bevacizumab and Insulin Aspart in the EuropeanUnion. Our biosimilars benefited 3.1 million patients during the year.

With the pandemic overwhelming healthcare systems globally chronic diseases took abackseat as budgets and resources were diverted to tackle COVID-19. This and otherCOVID-related challenges affected the growth trajectory of our Biosimilars business. Inthe post-COVID world we believe Biocon Biologics will have a larger opportunity to shapethe global biosimilars landscape as healthcare systems worldwide are compelled toleverage both generics and biosimilars to contain medical costs.

As the only company from India to have three biosimilars commercialized in the U.S. andamong the select few globally to have five biosimilars approved in Europe we areconfident of enabling affordable access to expensive biologic drugs for several millionpatients globally.

Our diverse portfolio of products straddling monoclonal antibodies for cancer andautoimmune diseases and rh-insulin and insulin analogs for diabetes as well as ourcontinued commitment to quality and product safety position us to deliver robust andenduring growth in the coming years. The market potential for biosimilars remains solidwith biologics worth ~USD 90 billion in originator sales losing exclusivity over the nextdecade. The confidence of investors in Biocon Biologics' growth story is reflected in theentity's post-money valuation of ~USD 4.17 billion during the last round of fundraisingfrom Abu Dhabi-based ADQ. Including the infusion from ADQ we have raised ~USD 330 millionfrom top global investors like True North Tata Capital Growth Fund and Goldman Sachs.

Serving Patient Needs Through Generics

The Generics business acted with agility to ensure supplies of much-needed generic APIs(Active Pharmaceutical Ingredients) and formulations from India to the rest of the worldbelying fears of large-scale medicine shortages due to the pandemic. We supply statinsimmunosuppressants narrow-spectrum antibiotics and other APIs to over 100 countries andwere able to serve our partners despite COVID-related disruptions. Revenues from theGenerics business grew by 6% over the previous year to H 23359 million supported bydouble-digit growth in Generic Formulations and a modest single-digit growth in APIs.

In FY21 Generics Formulations achieved a key milestone with the launch of Tacrolimuscapsules an immunosuppressant used to treat organ transplant patients in the U.S. Italso entered new partnerships to expand commercial footprint to Singapore Thailand andBrazil.

We remain committed to investing in building new capabilities and capacities acrossfunctions including R&D Manufacturing and Quality and strengthening our productportfolio to deliver long-term sustainable growth in our Generics business.

Making A Difference With Our Novel Biologics

Realizing the acute need for an effective treatment for people hospitalized withCOVID-19 and those at risk of developing severe illness we repurposed our ‘first inclass' anti-CD6 monoclonal antibody Itolizumab which has a unique ‘mechanism ofaction' in controlling cytokine release syndrome (CRS). The Drugs Controller General ofIndia (DCGI) granted Restricted Emergency Use approval to Itolizumab in July 2020 totreat CRS in patients experiencing moderate to severe acute respiratory distress syndrome(ARDS) due to COVID-19. We are gathering additional data as part of the Phase 4 postmarketing study for Itolizumab which will further validate the potential of this therapyin COVID-19. Results from the Phase 2 clinical trial which established Itolizumab as apromising safe and effective immunomodulatory therapy for COVID-19 with survival andrecovery benefits have been published in a prestigious peer-reviewed scientific journalin FY21.

Equillium our U.S.-based partner reported encouraging developments on the clinicaladvancement of Itolizumab in treating acute graft-versus-host disease lupus lupusnephritis and uncontrolled asthma. We are expecting clinical data from all studies laterin calendar year 2021.

Boston-based Bicara Therapeutics is spearheading the development of novel bi-functionalfusion antibodies in immuno-oncology. Its lead program BCA101 is in Phase 1/2 clinicaltrials in the U.S. and Canada. Bicara started operating as a standalone company under anindependent management team in FY21 after we ceded control to its Board and Management.

Keeping Research Projects On Track

Despite a challenging year Syngene successfully delivered on its commitment to clientswho depend on the Company for their research and development needs. It delivered revenueof H 21843 million and an annual growth of 9%. Syngene also built on its integrated drugdiscovery and development portfolio during the year signing on new clients and renewingcontracts with existing ones like Bristol Myers Squibb. It also invested and built on itsscientific and manufacturing capabilities during the year.

Tackling COVID-19

The Biocon Group was able to very quickly pivot its capabilities to fight againstCOVID-19 in FY21. Itolizumab our novel anti-CD6 monoclonal antibody repurposed forCOVID-19 has benefited over 27000 patients suffering from acute lung inflammation. Wehave a comprehensive portfolio of products for treating COVID-19 patients at differentstages of the disease spectrum including RemWin (Remdesivir) and ARAFLU(Favipiravir) for mild to moderate patients ALZUMAb-L (Itolizumab) for moderate tosevere patients and CytoSorb for critical patients.

Biocon's Research Services subsidiary Syngene manufactured Remdesivir under a licensefrom Gilead and distributed in India through Biocon Biologics and Sun Pharma to addresspatient needs for this life saving therapy. Syngene leveraged its deep scientificexpertise to develop various solutions to support the nation's battle against COVID-19.

Syngene through its repurposed high-end laboratory conducted 185000 RT-PCR testsof which 90% were free of cost. The Company also developed an ELISA (Enzyme-LinkedImmunosorbent Assay) antibody testing kit for COVID-19. Currently scientists at Syngeneare engaged in developing an mRNA technology platform for vaccines including a novelvaccine against COVID-19 using the measles virosome and working to generate a human-ACE-2transgenic mouse to support studies on prevention or treatment of SARS-CoV-2 infection.Additionally it developed and validated several relevant assays for assessing immuneresponse against SARS-CoV-2. To support the government's efforts to combat and contain thepandemic Syngene has set up a Vaccination Center to provide free vaccination for BioconGroup employees and their families.

Paying Tribute To Our Colleagues Lost To COVID-19

The second wave of COVID-19 in India has tragically impacted us and we have lost someof our dear colleagues across Biocon Biocon Biologics and Syngene. We express our deepestcondolences to the bereaved families. We understand we cannot compensate the loss of ahuman life however we have taken steps to help their families rebuild their lives.Biocon Group has decided to pay the families of the deceased 50% of the employee's grosssalary for two years up to a maximum payout of H 50 lakhs. We will also extend theeducation allowance support for two children until the age of 18. We will also assist withjob hiring for either the spouse or child in one of our group companies or help themfind employment elsewhere depending on their education and eligibility. The above supportis in addition to the Group Term Life Insurance and other benefits applicable as per theCompany's policy. We sincerely appreciate the contributions made by our dear colleaguesand earnestly share the grief of their families.

Financial Performance

Despite a tough and unpredictable year Biocon delivered a credible financialperformance with consolidated revenue growing 14% to H 73603 million and EBITDA climbing8% to H 19071 million representing an EBITDA margin of 26%. Net Profit (beforeexceptional item and discontinuing operations) was at H 7540 million. Our determinationto keep investing in science to stay a step ahead of the pandemic is reflected in the 19%rise in our Gross R&D spends to H 6270 million in the year.

Dividend Postponed

On account of the uncertainty due to the unprecedented second wave of the COVID-19pandemic in India Biocon's Board of Directors has deemed it prudent not to declare adividend for FY21 in order to prioritize cash and maintain liquidity. As the businessenvironment evolves over the coming months the Board will review the dividend payable forFY22.

Strengthening The Management

The Board of Biocon Biologics appointed Dr. Arun Chandavarkar as the Managing Director(MD) w.e.f. January 21 2021 and entrusted him to steer the Company to the next level.Shreehas Tambe was promoted from Chief Operating Officer to the position of Deputy ChiefExecutive Officer (CEO). We appointed Susheel Umesh as the Chief Commercial Officer forEmerging Markets to drive the Company's business in these markets. Susheel brings over 30years of experience in the pharmaceuticals industry having worked in India France andSub-Saharan Africa for leading global pharma companies.

I do believe we have a strong leadership team in place now to drive the future growthof our Biosimilars business and return the Company to its high growth trajectory soon. Iwill also be playing a more active role as the Executive Chairperson of Biocon BiologicsLimited. I am also happy to welcome Prof. Peter Piot Director of the London School ofHygiene & Tropical Medicine and the Handa Professor of Global Health to the Board ofBiocon Biologics Limited as an Independent Director. His scientific expertise and longexperience in global healthcare will be invaluable for the Company.

Recently the Board of Biocon Limited has appointed Indranil Sen as the Chief FinancialOfficer of Biocon in place of Anupam Jindal who resigned from the position due topersonal reasons.

Looking Ahead

In the face of the biggest health calamity faced by humanity in a century

Biocon kept its commitment to its patients and partners in FY21. We are continuing tobrave the challenges of the second wave of COVID-19 in India and hope that with increasingvaccination coverage the social and economic situation in India will improve. We lookforward to an overall improvement in business sentiment. On the back of investments madeso far we expect to drive revenue growth in our Biosimilars Research Services andGenerics businesses in FY22. We will continue to focus on expanding our product portfoliostrengthening the development pipeline and accelerating capacity enhancement. We willinvest in skilling our workforce to prepare for a digital future. These initiatives willbolster our pursuit of enabling affordable access to essential and life-saving medicinesfor patients worldwide. At a time when the world sadly acknowledges inequitable access tovaccines we hope that our purposeful business philosophy embedded in health equity andaccess resonates with our partners and every stakeholder.

I would like to thank our esteemed shareholders partners and other stakeholders forcontinuing to repose their faith in us. While the pandemic will bring many furtherchallenges our unwavering purpose of ensuring equitable access to healthcare gives us theconfidence to build a stronger better Biocon for the future.

Thank You.

Yours sincerely Sd/-

Kiran Mazumdar-Shaw

Executive Chairperson June 18 2021

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