Biopharmaceutical company Biocon’s second-quarter net profit grew fivefold to ₹354.7 crore year-on-year due to an exceptional income arising from ‘investment accounting’ of ₹171 crore in Equillium.
During the year ended March 31, 2018, the group had accounted for its 19.5% equity investment in Equillium Inc. as an associate.
Equillium IPO
During the quarter ended September 30, 2018, Equillium initiated its IPO and had changes in its board composition, resulting in a loss of significant influence over the investee.
“In accordance with lnd AS 23: Investments in Associates and Joint Ventures, the company fair valued its investment on the date of loss of significant influence which resulted in a gain of ₹1,707 million, net of tax expenses of ₹181 million for the quarter and half year ended September 30, 2018, which has been disclosed as an exceptional item in these financial results,” according to a BSE filing.
“The group, going forward has designated its investment in the equity of Equillium to be accounted for at fair value through other comprehensive income (FVOCI). Subsequent to the quarter end, Equillium completed its IPO and listed on NASDAQ on October 12, 2018.” Revenue from all the segments including small molecules, biologics, branded formulations, and research services rose in the second quarter.
Chairperson and managing director, Kiran Mazumdar-Shaw, said: “We delivered a strong revenue growth of 35% this quarter, driven by robust performance across small molecules and research services segments.
“We are greatly encouraged by the U.S. FDA’s acceptance of an IND submitted by our partner Equillium Inc. for Itolizumab, a novel monoclonal antibody, for an orphan indication. The positive opinions from the European CHMP for Biocon and Mylan’s Pegfilgrastim and Trastuzumab augur well for the future growth of our biosimilars business,” she said.