Biocon Q2 profits down 23% on higher R&D expenses, forex losses

Our Bureau Bengaluru | Updated on October 23, 2020 Published on October 23, 2020

Biocon, impacted by higher R&D expenses, staff costs and forex losses, has posted 23.01 per cent lower profits for the period to Rs 195.4 crore on a consolidated basis for the second quarter of fiscal 2020-21 as compared with Rs 253.8 crore. The Company's total income is higher by 9.62 per cent to Rs 1,760.3 crore as against Rs 1,605.7 crore in the same period last year.
Commenting on the results, Kiran Mazumdar-Shaw, Executive Chairperson, Biocon, said “Our profitability was impacted on account of higher R&D expenses, staff costs, other expenses and forex losses. However, our core EBITDA margins stood at a healthy 32 percent indicating sound operational performance.”

“Our insulin Glargine, Semglee, was commercialized in the US by our partner Mylan, during the quarter, thus heralding our entry into the US insulins market. With this launch, we have expanded our portfolio of biosimilars and occupy a position of impactful influence in the biosimilars segment.”

“As a part of our commitment to address the novel coronavirus pandemic in India, the Biocon Group is working on a comprehensive portfolio of products for treating mild to severely ill Covid-19 patients. We have introduced Araflu (Favipiravir) in addition to Cytosorb and Alzumab-L, and Syngene has started manufacturing Remdesivir under a voluntary licensing agreement with Gilead,” she added.

Generics business

The company’s generics business reported revenue growth of 8 percent yoy, driven by a strong performance in generic formulations business in the US, where it continued to hold mid to high teens market share. In the API business, growth was largely driven by immunosuppressants and other speciality APIs.

Siddharth Mittal, CEO and Managing Director, Biocon Limited, said, “Company’s Q2 performance was in line with expectations. I am pleased that we were able to ensure business continuity and serve patients across the world despite the challenges that Covid-19 brought with it. Looking ahead, we expect the generic formulations business to continue to drive growth, based on new launches in the US for products which are currently under regulatory review. We also plan to commercialise Remdesivir in India as part of our commitment towards providing treatment for Covid-19.”

Biosimilars segment

The biosimilars segment reported a revenue growth of 11 percent to Rs 676 crore in Q2 driven by sales of our key biosimilars in developed as well as most of the world (MoW) markets. Dr Christiane Hamacher, CEO & Managing Director, Biocon Biologics said, “As a part of our commitment to enable universal access to affordable insulins in low- and middle-income countries we also rolled out our ‘Mission 10 cents’ in the Philippines. While we continue to see strong demand for our products globally, we are experiencing some operational challenges which have prevented us from achieving our full potential.”

Research Services

Research Services revenue was driven by good performances in the discovery services and dedicated R&D Centre businesses. As a part of the voluntary licensing agreement with Gilead, Syngene has started manufacturing Remdesivir in Bengaluru. The company has also joined a global consortium, led by Bristol Myers Squibb (BMS), to support research on Covid-19. The consortium will work towards developing new approaches to Covid-19 testing, apart from acting as a knowledge repository on the virus.
Biocon closed at Rs 417.20 per share on BSE, down by Rs 12.30 (2.86 percent) from the previous close of Rs 429.50.

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Published on October 23, 2020
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