Biocon’s 10% profit growth in Q3 misses forecast, revenue growth above expectations

Biopharmaceuticals company Biocon reported robust revenue growth for the three months ended December 31, led by strong growth in biosimilars business, even as its profit growth lagged analyst estimates.

Biocon posted a consolidated net profit of Rs 187 crore for the fiscal third quarter, compared with Rs 169 crore in the quarter ended December 31, 2020, with around 10% year-on-year growth. This came below expectations that the firm could post a profit of over Rs 200 crore.

On the flip side, its revenue from operations shot up 17% to Rs 2,174.2 crore over the year-ago period. Street expectations had pegged this to come around 15%. Total revenue grew by 18% to Rs 2,223 crore.

The company’s shares slid 0.5% in opening trades in a weak Mumbai market on Friday. The company had disclosed its financials after trading stopped for the day on Thursday.

Other Key Highlights

1) Biosimilars business grew faster than expectations at 28% to Rs 981 crore.

2) Research services unit Syngene’s revenue was up 10% at Rs 641 crore and generics units delivered 7% growth at Rs 607 crore.

3) EBITDA at Rs 537 crore grew by 25%, which was impacted by mark-to-market loss attributed to Biocon Biologics’ equity investment in Adagio.

4) Core EBITDA stood at Rs 715 crore with a margin of 33%.

Management Commentary

Kiran Mazumdar-Shaw, Executive Chairperson, Biocon, said, “Biocon Biologics achieved a key milestone with the commercialization of the world's first interchangeable biosimilar, our Insulin Glargine, in the US. Approvals for several of our generics and biosimilars in global markets, and renewal of key long-term research service agreements at Syngene, position us for a strong close to this fiscal.”

Siddharth Mittal, CEO and Managing Director at Biocon, said he was pleased with the robust sequential growth in the generics unit in the third quarter that was driven by its US launch of Everolimus 10mg tablet, a vertically integrated formulation, as well as a ramp-up of demand in its API business. The Everolimus launch also contributed to the year-on-year revenue growth, he said.

“The quarter saw a return to normalized operations, which had been impacted due to COVID-related challenges in previous quarters. During the quarter, we continued to make progress on our product pipeline, with three new approvals – one in the U.S. and two in Europe,” Mittal said.

“Our partnership with Tabuk Pharmaceuticals paves the way for expansion into the Middle East and North Africa and underscores our commitment to make medicines available to patients who need them around the world,” he added.