Biocon reports 13% rise in quarterly net profit at Rs102 crore

Biopharmaceutical major Biocon has reported a 13 per cent year-on-year growth in net profit, at Rs102 crore, for the July-September quarter of the current financial year, and a 17 per cent growth in quarterly revenue to Rs753 crore, on the back of strong performance of its biosimilar and small molecule research business.

Biocon said its R&D expenses stood at Rs39 crore, constituting 9 per cent of biopharma sales of Rs447 crore for the July-September 2013-14 quarter.

The company's small molecules and biosimilars business, which constitutes around 60 per cent of the revenue, grew 20 per cent, driven by demand for generic insulins in emerging markets.

The research services arm under the subsidiary Syngene reported revenues of Rs188 crore in the quarter, a growth of 46 per cent.

Commenting on the results, chairman and managing director Kiran Mazumdar-Shaw stated, ''Biocon has witnessed a strong performance in the first half of FY14 driven by an increased traction in emerging markets. Immuno-suppressants and insulins continue to drive growth.

"This is in part bolstered by capacity expansion of our insulins plant. Our bio-similar pipeline partnered with Mylan, continues to progress well and we anticipate Indian regulatory approval for our biosimilar Trastuzumab in the near future.

''The Research Services vertical has delivered a stellar set of numbers, despite an exceptional forex loss in Q2 FY14. This quarter also saw the launch of our second novel biologic, `Alzumab', for Psoriasis in India. `Alzumab' has already seen an encouragingly strong acceptance in the market.

"The Branded Formulations business has grown ahead of the market but has been muted by business and regulatory challenges. We remain confident that growth will continue across all businesses.''

In the $20-billion global insulin market, Biocon is now the fourth-largest player, after Novo Nordisk, Eli Lilly, and Sanofi Aventis.

"We are only present in emerging markets, so we are still a small part of the global pie. But, once we get into the US, Europe, and other mature markets, we hopefully would gain some traction," added Mazumdar-Shaw.

The company's branded formulations business, however, reported a more muted 9-per cent growth for the quarter as compared to the other core businesses due to various external regulatory challenges.

"Our continuous investments in capacities and capabilities have helped us enhance our end-to-end discovery, development and manufacturing offerings," said Peter Bains, director, Syngene International. He added that the company expects the current business momentum to continue through the next two quarters.

For the first half of the financial year (April-September 2013-14), Biocon said its biopharma business (Syngene and Clinigene) grew 21 per cent while branded formulations recorded  13 per cent growth while research services recorded 36 per cent growth and R&D investments grew 9 per cent to Rs82 crore.

Biocon said the outlook for FY14 continues to be positive and that the company is continuing efforts to improve profitability with various cost control and portfolio optimisation initiatives even as we it balances revenue growth with R&D investments.