Biocon to list services unit in 18 months

Biocon to list services unit in 18 months

Kuala Lumpur: Biocon Ltd, India’s largest listed biotechnology firm, plans to list its research services unit Syngene within the next 18 months or so, chairwoman Kiran Mazumdar-Shaw said.

“We expect to unlock a lot of value from this particular business," Mazumdar-Shaw told Reuters in an interview. “The IPO proceeds will certainly be used to support the increasing capex needs of Syngene," she added.

However, she declined to give any details on the initial public offering.

Mazumdar-Shaw also said Biocon is focusing on posting $1 billion in revenue in three to five years, helped by growth in its insulin business.

Biocon and Pfizer agreed last year to a deal in which Pfizer would globally sell insulin drugs made by Biocon.

Biocon has been in other deals as well. In 2009, it 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.

Analysts on average expect Biocon’s full-year net income of Rs380 crore on revenue of Rs2,190 crore, according to Thomson Reuters I/B/E/S.

Malaysian R&D Facility

The company, whose flagship brands include Insugen for the treatment of diabetes and Abraxane for cancer, last week said it would invest about 500 million ringgit in its research and development facility in Malaysia.

“Our facility in Johar Baru in the first phase is going to be an insulin facility and that is really to cater to Pfizer’s global needs," Mazumdar-Shaw said.

The facility will be operational in three years and has a potential of creating more than 500 jobs, she added.

The company has about 6,000 employees.

Shares in Biocon have lost almost 12% since 21 July through Monday when the company posted its first-quarter profit below forecast as licensing income dropped.

They were trading up 1.75% at Rs332.15 at 11:00 am.

Bangalore-based Biocon, which the market values at about $1.45 billion, was set up by Mazumdar-Shaw in her garage in 1978. The company now delivers products in about 75 countries.

The company’s experimental oral insulin drug, IN-105, is in final stage trials and Biocon had earlier said it was in talks with several potential partners for the global development and commercialization of the drug.