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Biocon sees 15% growth in 2 yrs

Biocon sees 15% growth in 2 yrs
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First Published: Mon, Aug 23 2010. 03 34 PM IST
Updated: Mon, Aug 23 2010. 03 34 PM IST
Bangalore: India’s top listed biotechnology firm Biocon Ltd expects revenue growth of 15% over the next two years each, while seeking partnerships with global drugmakers for experimental drugs, its finance chief said.
Biocon plans to grow its revenue in the fiscal years ending March 2011 and 2012 through strong sales of insulin in emerging markets, cholesterol lowering statins and immuno-suppresants, Murali Krishnan K N, Biocon’s president-group finance, told Reuters in an interview on Monday.
Beyond 2012, he expects even higher revenue growth. For the year ended March 2010, Biocon’s revenue was Rs2,405 crore ($516 million).
Shares in Biocon have surged 27% this year, boosted largely by reports the world’s top drug maker Pfizer was in talks to buy a stake in or partner with Biocon for its experimental new drug for diabetes, oral insulin, or other drugs.
“At this point of time, it is purely speculative,” Krishnan said, adding that the company was in talks with several global drug firms for various business opportunities on drug research and development.
He said there was a lot of interest from international firms to partner with Bangalore-based Biocon, which was set up by Kiran Mazumdar-Shaw in 1978.
Shaw set up Biocon in her garage in Bangalore after getting a master’s brewing degree in Australia.
Biocon last year struck a deal with US drug maker Mylan to develop and sell multiple generic biotech medicines for the global market. It also has a long-term research deal with Bristol-Myers Squibb.
Western drug companies, battling slowing sales in home markets, are looking at various avenues of boosting sales and cutting costs that include inking drug supply deals, research tie-ups and acquisitions in emerging markets.
Revenue Growth
“For two years, it is going to be small molecules and insulin in the emerging markets that will give us the approximate 15% growth,” Krishnan said.
“Thereafter it should be more than this number, because the regulated markets will have opened up and the biosimilar MAbs will also give us some kind of revenue,” he said, referring to monoclonal antibodies that are a class of antibodies produced by one type of cell.
Biocon expects to launch a generic insulin in Europe by fiscal year 2013, he said.
The firm will invest three to Rs500 crore ($64 million-$107 million) over the next three years to set up plants that would supply generic biotechnology drugs to Europe and the United States, Krishnan said.
Biocon, which has cash of about Rs300 crore, will fund this expansion through bank loan and internal accruals, he added.
Biocon shares ended up nearly 1% in Monday trade on the Bomay Stock Exchange, after scaling a more than 6-year high of Rs355.80 in final trades, in a flattish Mumbai market.
Drug Trials
Biocon’s oral insulin is going through late-stage trials in India, the results for which are expected only by December, he said. Biocon would only consider outlicensing the molecule after those results.
“There is no point in doing it today. In the midst of where we are today, we lose out on the opportunity of having moved to the final stage trials,” Krishnan said.
“Also, Biocon can afford the cost of moving from phase II to phase III in India,” Krishnan said referring to mid-stage and final stage clinical trails respectively.
The company’s other experimental new drug for the treatment of psoriasis is undergoing late-stage trials in India.
Biocon, which has been planning to list its research services unit Syngene but had put it off due to poor market conditions earlier, does not see that happening in the current fiscal year, Krishnan said.
“We don’t need the money today, probably by end of next fiscal, we will embark on new projects and opportunities, then we will have to go for more expansion,” Krishnan said.
Biocon plans to grow its revenue in the fiscal years ending March 2011 and 2012 through strong sales of insulin in emerging markets, cholesterol lowering statins and immuno-suppresants, Murali Krishnan K.N., Biocon’s president-group finance, told Reuters in an interview on Monday.
Beyond 2012, he expects even higher revenue growth. For the year ended March 2010, Biocon’s revenue was Rs2,405 crore ($516 million).
Shares in Biocon have surged 27% this year, boosted largely by reports the world’s top drug maker Pfizer was in talks to buy a stake in or partner with Biocon for its experimental new drug for diabetes, oral insulin, or other drugs.
“At this point of time, it is purely speculative,” Krishnan said, adding that the company was in talks with several global drug firms for various business opportunities on drug research and development.
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First Published: Mon, Aug 23 2010. 03 34 PM IST
More Topics: Biocon | Outlook | Biotechnology | Pfizer | Pharma |