BackBiocon posts 39% fall in net profit Q2 even as biologics business booms
Excluding the impact of the one-time gain last year, the profit would have been higher by 3% at ₹189 croresBiocon’s R&D cost increased 36% to ₹104 crores for expansion of its portfolio, while its employee benefit expenses grew 22%
PremiumNEW DELHI : Biocon Ltd posted a 39% slump in its consolidated net profit for July-September at ₹216 crores, primarily due to the presence of a large one-time gain in the corresponding quarter last year.
Excluding the impact of the one-time gain last year, the profit would have been higher by 3% at ₹189 crores, Biocon said in a release.
An increase in research and development (R&D) cost and higher employee expenses also weighed on the bottomline.
Biocon’s R&D cost increased 36% to ₹104 crores for expansion of its portfolio, while its employee benefit expenses grew 22%, the company said.
The rise in employee cost was made to support independent management of small molecules and novel molecules businesses, as well as its wholly-owned subsidiary Biocon Biologics under new organizational structure, but this also dragged the company’s operating margin down by 200 basis points to 27%.
However, the company’s topline grew its topline grew 17% to ₹1,611crores, boosted by robust performance of its biologics and small molecule businesses.
“We expect growth momentum to build further in the second half of FY20, driven by biosimilars launches in the US and Generic Formulations business, and expected additional capacities coming online later this fiscal," Biocon chairman and managing director Kiran Majumdar-Shaw was quoted as saying in the release.
Bengaluru-based Biocon’s biologics operations showed a 40% jump in revenue to ₹516 crores, fuelled by sales of Fulphila--a biosimilar of anti-cancer drug pegfilgrastim--in the US, the biosimilar of adalimumab, Hulio, in Europe and biosimilar of anti-breast cancer drug trastuzumab in several emerging markets like Brazil, Turkey and Algeria. Sales of recombinant human insulin also remained strong, Biocon said.
Biocon Biologics has now set itself a revenue target of $1 billion by 2021-22 (Apr-Mar), Christiane Hamacher, chief executive officer, Biocon Biologics said in a company release.
The company’s small molecules and active pharmaceutical ingredient operations showed a 23% growth at ₹530 crore.
“Our APIs portfolio of statins and immunosuppressants witnessed a strong demand across all
key geographies, while our specialty APIs witnessed robust uptake in regulated markets this Quarter," Biocon said in its release.
Biocon’s branded formulation business, however, posted a 22% decline in sales at ₹128 crore due to weak growth in India and the United Arab Emirates (UAE).
In UAE, the branded formulations business continued to be under pressure due to lower offtake of branded generics following a price revision by the country’s Ministry of Health, Biocon said.
The company today also announced that Arun Chandavarkar, its chief executive officer and joint managing director, will retire on November 30, and will be replaced by Siddharth Mittal, its current chief financial officer and president – finance.
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