Bengaluru-based biopharmaceutical company Biocon Limited recently released their Q4 FY24 results, indicating a 56.7 per cent decline in consolidated profits to ₹135.5 crore compared to ₹313.2 crore in Q4 of the previous year. Siddharth Mittal, CEO & Managing Director, Biocon Limited, spoke to businessline about the performance and outlook of the group’s three business segments - Biosimilars, Generics, and Research Services - and discussed future roadmaps. Edited excerpts:


Overview of the three business segments and their outlook for the coming year? 

If I look at the three businesses, Biosimilars grew 12 per cent in Q4 on a year-on-year (y-o-y) basis, crossing billion dollar revenue this year, while Generics de-grew by 3 per cent and the research services business de-grew by 8 per cent. Our formulations business grew by 36 per cent, statins and immunosuppressants delivering good growth as we expand our volume share in the US. However, this was offset by the de-growth in our API business due to the ongoing pricing pressure and intense competition. 

In Biosimilars, we saw 58 per cent growth for the year, including a 12 per cent quarterly increase, driven by the Viatris acquisition. Products like Pegfilgrastim, Trastuzumab, and Semglee gained significant market share in the US, and we expanded our presence in Europe and emerging markets, contributing to overall growth.


Why is the degrowth happening in the Generics business? What kind of potential do you see in the year ahead?

Within Generics, two-thirds of revenue comes in from API and one-third revenue comes in from formulation. The formulation business grew by 36 per cent, while the API business de-grew and that’s why the net effect of the two is a small degrowth. 

Now, the outlook for next year is that in the first half, we expect similar numbers to continue from Q4, while we’ll see growth from H2 because we have key launches coming up in the US, Europe, and a few emerging markets.


Comments on launches being planned for? And guidance for growth and profitability

We recently received approval for Liraglutide in the UK and plan to launch it by year-end through our partners Zentiva and ourselves. We also have a file in the advanced stages of review with the EMA, and we aim to launch it by the end of the year. 

Liraglutide in Europe and the UK will be our key growth driver for us. In the US, several products, including injectables and orals are in the final FDA review stages, . While these products are not expected to be very large individually, their combined impact should drive significant growth.

The profitability percentage should be very similar to what we saw in FY24. However, we have not given any guidance yet regarding the growth rate. We are waiting for a few approvals to come in, and ongoing customer discussions, so we don’t want to give exact numbers at this stage.


Regarding the landmark number of over $1 billion in revenue, was this primarily due to the Viatris integration or was there organic growth as well?

It’s a combination of both. The 58 per cent growth  in the biosimilars business was primarily because of the Viatris acquisition. Still, on a quarter-on-quarter basis, we saw a 12 per cent growth, which is completely organic. The acquisition was completed in November 2022, so the previous fourth quarter fully factored in its impact. On an organic basis, last year, we reported ₹2,102 crore in revenue for the Biosimilar segment, and on that base, we had a growth of 12 per cent, which was completely organic.


In terms of debt reduction, where are you in your journey? Are you comfortable right now? 

In an ideal world three times debt to Ebitda is very comfortable, but given the growth prospects in the coming years, even levels up to four times work. We did pay down 250 million of acquisition debt in the last fiscal year and are completely cognizant of the fact that at the current levels, the debt/EBITDA ratios are high. We are working on various options to reduce the debt to more comfortable levels, and we should see something in this fiscal year.


In terms of manufacturing and investments, could you outline some plans?

We have several ongoing projects, including expanding our peptide facility and establishing a new injectable facility in Bangalore to address the peptide opportunities. Additionally, we’re expanding our non-immunosuppressant fermentation capacity in Bangalore and our biologics facilities in Malaysia, especially the drug product facility.

We’ve been very careful about new capex projects, but we’re proceeding where we see huge opportunities and demand outpacing supply. Peptides is an area where we are investing a lot, and in generics, we anticipate investing around ₹1,200 crores over the next five years, unlike the last 5 years, where we invested almost ₹1,800 to ₹2,000 crore. At the group level, our capex outlay over the next couple of years is estimated to be around ₹2,000 to ₹2,200 crore, with around ₹500 crore going to generics, primarily for upcoming projects like our injectable and peptide facilities.

(additional inputs by BL Intern Vidushi Nautiyal)