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The Biocon Chairman and Managing Director, Ms Kiran Mazumdar-Shaw, announcing the company results in Bangalore on Wednesday. - Sampath Kumar

Bangalore , April 20

BIOCON Ltd today reported a Rs 198-crore PAT that was higher by 42 per cent over the previous fiscal and a total income 34 per cent higher at Rs 728 crore for the year ended March 31, 2005.

The company did not give out the fourth quarter results. In explanation, the Chairman and Managing Director, Ms Kiran Mazumdar-Shaw, said Biocon planned "to give results on annualised basis." She said, "Biotechnology is a sector not measurable on quarterly basis and its fortunes are linked to licences, patents and (regulatory) policy issues."

Ms Mazumdar-Shaw, said though sales growth during the current fiscal was expected to be healthy, "profit for the year ahead will not grow as fast as sales."

However, the current levels of operating margins would prevail, she announced at a news conference here. The board has recommended a dividend of 40 per cent or Rs 2 per share of Rs 5.

This was because of an increased depreciation charge on the new facilities that were meant to cater to large market opportunities in the US next year for cholesterol-lowering drugs. Also, Biocon was significantly increasing R&D investments as part of its discovery-led research strategy. "We believe this approach will deliver superior shareholder value over the medium and long term," she said.

Largely because of the capacity expansion that was coming through during the current year, "we are confident of achieving healthy sales growth, despite the pricing pressure on our statins business."

The human recombinant insulin, Insugen, which was launched in November last year, would show its contribution this year and was expected to take 8-10 per cent (or Rs 1.5 to 1.75 crore) of the Rs 178-crore domestic market.

Growth drivers for the company would be statins till 2008; insulin and immunosuppressants (that are used by organ transplant patients) from this year; monoclonal antibodies used in cancer treatment from 2006-07; third party clinical research activities through subsidiary Clinigene from next year. Research services had picked up and would push business growth through 2010.

Cancer vaccine & oral insulin

Ms Mazumdar-Shaw said the in-licensed head and neck cancer vaccine R&D programme, hR3, with Cuban firm CIMAB, had made significant progress into phase 2B trials. It would be extended to pancreatic, lung, breast and other cancers and the company would seek fast track approval by the year-end.

The tie-ups with Nobex for oral insulin and with Vaccinex for human antibodies were progressing. "We see these as rapidly developing into very large global opportunities over the next 3-4 years."

The oral insulin programme has entered pre-clinical animal toxicity studies. The INDA (investigative new drug abbreviation required for new molecule) would be filed by December this year. It would be 2-3 years before it would enter the stage of human trials and commercial launch.

The monoclonal antibodies (MAbs) could enter the market during the first quarter of 2006.

"The outlook for the year ahead is positive. We expect statins, immunosuppressants, insulin and branded formulations to deliver significant growth."

Biocon was following a differentiated strategy of generic biopharmaceuticals for short-term growth; in-licensing tie-ups for mid-to long-term strategy and new drug discovery such as small molecules, proteins and MAbs for the long haul.

Of the total income of Rs 728 crore, the bulk of Rs 557 crore or 77 per cent came from biopharmaceuticals including export of pravastatin to Europe; Rs 90 crore or 12 per cent from enzymes; Rs 66 crore or 9 per cent from custom research. Exports accounted for Rs 442 crore or 62 per cent of the sales.

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