Higher R&D expenses, staff costs and forex losses have dragged Biocon's profits (before exceptional item & discontinuing operations) by 12 per cent to ₹174 crore on a consolidated basis for the second quarter of fiscal 2020-21 as compared with ₹198 crore.
Company’s total revenues is higher by 10 per cent to ₹1,760 crore as against ₹1606 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 per cent, indicating sound operational performance.”
Generics business
The company’s generics business reported revenue growth of 8 per cent year-on-year (yoy), driven by a strong performance in our generic formulations business in the US, where our products 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, “Our 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 per cent to ₹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, “Our biosimilars business recorded quarterly revenue of ₹676 crore with a growth of 11 per cent yoy, led by biosimilars Trastuzumab and Pegfilgrastim in developed markets including the US. We also launched Insulin Glargine, our third product in the US, to address the needs of patients with diabetes. 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. However, we are confident of addressing these, going forward, as a part of our commitment to expand access to life-saving, quality biosimilars including monoclonal antibodies and insulin analogs, for millions of patients across the globe.”
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.
Jonathan Hunt, CEO & Managing Director, Syngene said: “The Q2 saw a positive return to growth following a muted first quarter that was impacted by Covid-19. This result reflects a robust operating performance as we have adapted to the Covid-19 situation. We are at near-normal operating levels with all our scientists working on site with proper protective measures.”