On a mission to impact a billion lives
Biocon's philosophy of affordable innovation to make life-saving medicines accessibleto everyone anywhere on the planet has never been more relevant than it is today. We arein the throes of a global pandemic and the world is looking up to the healthcare industryto develop vaccines treatments diagnostics and products that will see it through theCOVID-19 crisis.
The novel coronavirus outbreak has demonstrated that if humanity is to survive as aspecies it is imperative that there is equitable access to all essential health productsand technologies without distinction of race religion political belief and economic orsocial condition. Universal access to quality healthcare for all is non-negotiable.
In the fight against COVID-19 low- and middle-income countries (LMICs) seem to befaring better than wealthier better-resourced developed nations. With this change indynamics we are likely to witness greater reciprocity and sharing of best practicesbetween LMICs and high-income countries (HICs) leading to genuine bi-directionalpartnerships.
As well established business models are dismantled and long-held assumptions dispelledwe could see healthcare being reshaped and democratized around the planet.
The future will call for a new approach to prevention screening diagnosis therapymonitoring and management of disease. Demand for therapies that are patient-focuseddata-driven and digitally enabled will increase. Patient care will move to non-clinicalsettings driven by technology and connectivity even as accelerated adoption of digitaltherapeutics empowers patients with point-of-care management.
Greater application of Artificial Intelligence (AI) and Machine Learning will make drugdiscovery and development more innovative cheaper and faster. Efficient capacity creationand productivity optimization will be critical in the next normal. This will expand theapplication of medical technology at a pace and scale not witnessed before.
The novel coronavirus has exposed significant shortcomings in public healthcare systemsworldwide. In the aftermath of the crisis citizens will demand better and more resilientnational health systems. This will force governments to explore innovative partnershipswith the private sector to address essential healthcare infrastructure create viablehealthcare contingency plans and build strategic reserves of key supplies.
There will be a reprogramming of national economic priorities towards universalhealthcare and providing social safety nets for the most vulnerable sections of society.
COVID-19: A potential opportunity for the Indian pharmaceutical industry
The COVID-19 emergency has spurred a re-discovery of India's capabilities in bothhigh-end scientific research and mass production. The Indian healthcare industry swiftlyresponded to the crisis with innovative and indigenous solutions. Indian companies havealso tied up with international vaccine developers to offer their global-scaleinfrastructure to produce potential COVID-19 vaccines in bulk.
India is currently the world's third-largest producer of pharmaceuticals in volumeterms supplying to over 200 countries. India also caters to 60% of the world's vaccinedemand. The country exported USD 19 billion worth of pharmaceuticals in FY19. With theright kind of policies and incentives India can reinforce its global standing as apharmaceutical powerhouse.
As a company led by innovation and global scale manufacturing capacity to take complexgenerics and biosimilars to the maximum number of people Biocon is well-positioned forthe future.
Having completed a successful 40-year journey we are now looking ahead to the nextfour decades. We will use our science scale and expertise to reduce disparities in accessto essential drugs develop innovative solutions to resolve issues of affordabilityensure availability of our biopharmaceuticals to the maximum number of people and assurecontinuous supplies of quality products while demonstrating the highest levels of ethicscompliance and governance.
Our Impact Manifesto reinforces our commitment to ensure that everyone anywhere on theplanet can realize the right to a healthy life.
Unlocking universal access to affordable insulin
In the run-up to the 100th anniversary of the discovery of insulin as atreatment for diabetes we have embarked on a mission to unlock universal access tohigh-quality insulin guided by the conviction that such an essential therapy needs to beaccessible to patients globally.
More than a 100 million people require insulin therapy for the management of theirdiabetes the silent pandemic' that currently affects 475 million (Source:IDF) people worldwide.
At a time when the world is seeking viable long-term solutions to improve insulinaccess and affordability our Mission 10 cents' is offering recombinant humanInsulin (rh-Insulin) at less than 10 U.S. cents / day for direct procurement bygovernments in LMICs where millions of people cannot access insulin as it isunaffordable. This initiative coincides with WHO's first-ever insulin pre-qualificationprogram. Biocon Biologics is talking to several governments for ways to disintermediatethe supply of insulin.
The recent approval of our Insulin Glargine by the U.S. Food and Drug Administrationwill enable us to serve the needs of patients in the U.S.
Delivering on our commitment in FY20
We reported a robust 15% growth in consolidated revenue at Rs. 65286 million inFY20. The Small Molecules and Research Services businesses crossed annual revenuemilestones of Rs 20000 million each growing by 18% and 10% respectively. On theother hand the Biologics segment reported annual growth of 29% with revenues at `19513million despite a weak fourth quarter. We ended the year with a Net Profit (beforeexceptional items) of Rs 7600 million an EBITDA margin of 27% and Net Profitmargin of 11%.
Supply chain disruptions impaired mobility and industry-wide dislocation as a falloutof the COVID-19 pandemic affected parts of our business with the Biologics businessbearing the brunt in the concluding quarter.
Still Biocon reinforced its reputation of resilience and reliability by continuing tosupply life-saving therapies worldwide despite lockdowns and other production and supplychain disruptions due to COVID-19.
An effective business continuity plan allowed us to run essential and criticalmanufacturing and quality operations with reduced staffing thus minimizing the impact onpatients and partners. At the same time we prioritized the health and safety of ouremployees and implemented additional safety measures at our facilities.
United against COVID-19
Meeting our business commitments amid unprecedented challenges did not deter us fromcontributing to global efforts to tackle COVID-19 through innovative science.
Biocon is repurposing its psoriasis biologic drug ALZUMAb (Itolizumab) ananti-CD-6 IgG1 monoclonal antibody to treat COVID-19. Earlier during the year wereceived the Drugs Controller General of India's approval to conduct a clinical trial inmoderate to severe patients with COVID-19 complications. This trial is underway atmultiple hospitals in Mumbai and Delhi and we are seeing an encouraging response frompatients being treated with Itolizumab.
Our research services subsidiary Syngene has repurposed one of its high-endlaboratories to conduct RT-PCR tests for COVID-19 helping scale up the testing capacityin Bengaluru by offering their services for free to government hospitals. Syngene is alsoworking to supply reagents (primers and probes) for COVID-19 diagnostic testing toclients. At the same time it is collaborating on research projects related to vaccinedevelopment which could represent a longer-term solution for fighting the coronaviruspandemic.
Caring corporate citizen
Going beyond business we are addressing the needs of the disadvantaged and underservedpopulations through our Corporate Social Responsibility (CSR) initiatives.
Biocon Foundation continues to make consistent long-term impact in improving the publichealthcare system through its various programs. The Foundation touched nearly 230000lives in FY20 through its various healthcare programs such as eLAJ smart clinics NCDclinics and oral cancer screening camps.
The sustainability ethos at Biocon Foundation drives our efforts to resuscitateBengaluru's dying lakes. After reviving the Hebbagodi lake the Foundation has startedwork on rejuvenating the polluted Yarandahalli lake in the vicinity. Embankmentstrengthening fencing and lake de-weeding have been completed. Artificial floatingwetlands have also been deployed for continuous natural cleaning of the water and a greenbelt has been developed around the lake.
The Foundation also responded to the plight of daily wage earners and migrant laborersaffected by the economic fallout of the COVID-19 crisis and provided dry ration food kitsto thousands of migrants in Bengaluru Hyderabad and Visakhapatnam. Biocon and itsemployees also contributed to the PM CARES Fund. The Foundation also contributedadditional funds to the Chief Minister's Fund for relief and rehabilitation work in theareas of Karnataka that were worst hit by devastating floods in 2019.
Through Biocon Academy we are helping upskill life sciences graduate and post-graduatestudents with world-class training. In FY20 120 students successfully graduated from theAcademy and found jobs with leading biotech and biopharma companies in India. Over 20faculty members from more than 10 universities and colleges across India and Malaysia alsoreceived training under the Biocon Academy Certificate Program in Faculty Development.
Management and Board changes
Dr Arun Chandavarkar retired as Chief Executive Officer (CEO) and Joint ManagingDirector of Biocon in November 2019 after 29 years of outstanding contribution to theevolution and success of the Company. Siddharth Mittal who was President Finance and acore member of the leadership team since May 2013 succeeded him. I am confident that asCEO and Managing Director of Biocon Ltd he will build immense value for Biocon and itsstakeholders. Starting April 1 2020 I have taken on the responsibility of steering theCompany as Executive Chairperson for a period of five years.
During the financial year under review Dr Jeremy Levin resigned as an IndependentDirector from the Board owing to his expanding commitments in the U.S. and Russell Wallsstepped down as an Independent Director on attaining the age of 75 years. We thank both ofthem for their valuable contribution to the Company.
Dividend declaration postponed
Owing to the uncertainty created by the unprecedented circumstances of the COVID-19pandemic the Board of Directors has deemed it prudent not to declare a dividend for FY20in order to prioritize cash and maintain liquidity. As the business environment evolvesover the coming months the Board will review the proposal for dividend as appropriate forFY21.
Spending on medicines across the globe for non-COVID diseases has been reprioritizedwith healthcare systems strained due to the pandemic. As the situation improves andspending returns there will be a tremendous opportunity for a ramp-up in generics andbiosimilars sales. Our differentiated offerings across segments position us well to make asignificant impact in a post-COVID world.
Finally I would like to thank our esteemed shareholders partners and otherstakeholders for putting their faith in us. We are confident of emerging stronger togetherfrom this global crisis.
June 15 2020