Biocon Ltd on Thursday said it would sell its entire 78 per cent stake in AxiCorp GmbH back to the promoters of the German distribution company.

Ms Kiran Mazumdar-Shaw, Chairman and Managing Director, said staying in AxiCorp had become irrelevant in the light of Biocon's striking a worldwide arrangement with Pfizer in 2010 to sell four insulins. AxiCorp would support some of its clinical development plans in Europe but in a small way.

The mutually beneficial transaction would be completed by May or June for €42 million (around Rs 276 crore at current rates). When it bought into AxiCorp in February 2008, Biocon had invested €31 million (around Rs 200 crore) to gain a European market foothold for its insulin products.

She said AxiCorp was a low margin operative under Germany's stern regulations and a mandatory 16 per cent rebate on pharma products.

In the group income of Rs 2,813.66 crore (Rs 2,404 crore) for 2010-11, AxiCorp contributed Rs 971 crore, but in the Group net profit of Rs 367 crore (Rs 293 crore), AxiCorp delivered Rs 28 crore or 7 per cent.

Biocon's licensing income for the last fiscal grew three-fold to Rs 115 crore.

Standalone Q4 net profit grew 21 per cent to Rs 88 crore; net sales 13 per cent to Rs 379 crore. The fourth quarter group profit after tax was Rs 100 crore and income Rs 716 crore.

The company declared an interim dividend of Rs 1.50 per equity share and recommended a final dividend of Rs 3.

$1-BILLION GOAL

At a news conference, Ms Mazumdar-Shaw said Biocon was aiming to be a $1-billion company in three or four years and was on the verge of unique licensing deals for its novel drugs.

This year, Biocon would invest Rs 200 crore in its Bangalore research and manufacturing centres and in Hyderabad. It would hire 1,000 people for research, manufacturing and sales positions. It currently has 5,500 employees. Insulin pens were slated for launch.

SUPPLY TO OPTIMER

Ms Mazumdar-Shaw said she was upbeat on its upcoming high-margin ingredient supply of the drug fidaxomicin to US Optimer Pharmaceuticals Inc. Optimer expected approval in May for the anti-infective with a $ 1.5-billion market.

NEXT BIG DRUGS

Biocon was leading the global race for a non-injectible insulin and hoped to find a licensing partner for oral insulin IN105 by the end of this fiscal.

The next big drugs moving in the pipeline were for psoriasis and rheumatoid arthritis (T1h) and cancer drug candidate BVX20, all to be licensed to pharma majors after further trials.

Biocon's share price on the BSE fell by Rs 14 to Rs 370 on Thursday.

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