Biocon bets on R&D, biosimilars biz to boost growth
NEW DELHI: Biocon Ltd is betting on its biosimilars and research services business to raise growth, a top executive at the firm said. Bengaluru-based Biocon is expecting significant growth in 2018-19, after reporting a marginal rise in net profit in the March quarter.
“The muted FY18 performance was on account of continued pricing challenges in the generics business, coupled with a planned plant shutdown for requalification and lower licensing income in the biologics business,” Biocon chief executive officer Arun Chandavarkar said on the phone. “Further, branded formulations sales were soft at 11% YoY due to operational challenges in India business. In addition, operational expenses related to our Malaysia facility impacted the bottom line. However, a positive Q4 is indicative of a normalized business trend.”
Bicon posted a 2% increase in its net profit to ₹130 crore in the March quarter, against ₹127 crore a year ago.
“While Ebitda (earnings before interest, taxes, depreciation and amortization) for Q4FY18 grew at a robust 30% as compared to last year, Ebitda margins were maintained at 24% despite a low licensing income this quarter,” he said. “Additionally, the net profit growth at 2% for Q4FY18 was muted on account of a 44% increase in interest and depreciation costs to ₹112 crore for the quarter, largely attributable to Malaysia costs impacting our P&L and increased taxes. In addition, there are the normal business pressures like the pricing challenges for our small molecule business.”
Even as the dynamics for its traditional small molecule and branded formulations business remain challenging, with positive regulatory developments in the biosimilars business, the firm looks forward to a positive overall performance in FY19.
It has already got several approvals from US regulators and is expecting more from US and European regulators in the next couple of quarters.
While the firm expects to continue filings for its small molecules and active pharmaceutical ingredients, the focus will be on biosimilars. “If you look at our biosimilars where we have got our key filings in US, Europe and other key emerging markets, that’s where we are looking to see whether some of the numbers that we saw in Q4 whether we can sustain that as more of these opportunities pan out,” Chandavarkar said.