Financial Daily from THE HINDU group of publications
Thursday, Jul 21, 2005
Financial Daily from THE HINDU group of publications Thursday, Jul 21, 2005 |
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Corporate Results
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Bio-tech & Genetics Biocon Q1 net dips 20% Our Bureau
Bangalore , July 20 BIOCON Ltd reported that its first quarter net profit of Rs 39 crore had shown 20 per cent decline compared to Rs 49 crore during the corresponding quarter last year. It attributed the fall to price erosion of statins in Europe, capacity constraints, increased depreciation on new facilities and higher R&D investment during the quarter. Consolidated sales of Rs 174 crore were a flat growth year-on-year; and sequentially, the last quarter. The biotech major reported Rs 2-crore erosion in total income compared to Rs 178 crore in Q1 of the last fiscal and attributed it to investment of its IPO fund in its expansion programme. Ms Kiran Mazumdar-Shaw, CMD of the Rs 728-crore biotech major, said the profits took the brunt of price pressures on statins in the European markets and capacity constraints in what she said was a transition year. "The prospects for the year remain positive. The overall financial performance is in line with our plan." Biocon's business prospects, she said, should be viewed in the longer term rather than a quarterly review. Contract research services from subsidiaries Syngene and Clinigene showed 35 growth over the Q1 of the last fiscal and showed a matching sequential growth. She however, pegged the growth on the cancer antibody-based molecule and oral insulin, which she hoped would hit the market in 2-3 years. "The real excitement in the quarter lies in the progress made in our discovery-led research programs in diabetes and oncology. These are expected to develop into large global opportunities in the next 2-3 years," Ms Mazumdar-Shaw said. Statin strategy The new growth drivers were the human recombinant insulin — Insugen — which was launched in November last year; immuno-suppressants and branded formulations. These would also reduce the dependence on statins, which had taken a beating of 35-40 per cent on an average in prices but still kept their market share in Europe. Insugen was introduced in Latin American and West Asian markets. As for the cholesterol-fighting statins, Biocon was in talks with a few innovator companies that were making proprietary combination drugs using statins. While pravastatin and simvastatin were expected to enter the US market after patents lapsed in mid-2006, the statin combination drugs would open another avenue for Biocon as API (active pharma ingredient) supplier. Expansion and new research contracts at Syngene and Clinigene are expected to push growth. The new contracts signed by Syngene this quarter and the tie-up between Clinigene with US contract research organisation SCIREX.
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