Biocon Expects Approval For Two Products Towards End Of Fiscal, Says CEO
The company has guided for margin in the range of 23–24% for the current fiscal.
Biocon Ltd. is expecting approval for two new products towards the end of the fiscal and expects to see benefits from it in FY25, said Chief Executive Officer Siddharth Mittal.
The company's consolidated net profit fell 30% in the first quarter due to a one-time expense, and the pharmaceutical major does not expect this to be an "ongoing affair", said Mittal.
The company had to give a rebate to one of their customers on a deal done by pharmaceutical firm Viatris Inc. a couple of quarters ago, resulting in a fall in profit and a below-estimate Ebitda, Mittal told BQ Prime in an interview.
The sequential fall of 68% in profit was a result of this rebate and salary hikes due to the annual wage revision, he said.
CEO Siddharth Mittal (Source: Biocon/FB)
Biocon Q1 FY24 Highlights (Consolidated, YoY)
Revenue rose 60% to Rs 3,423 crore, against an estimate of Rs 3,355 crore.
Operating profit up 79% to Rs 714 crore as compared with an estimate of Rs 829 crore.
Operating margin at 20.9% against 18.7% a year ago. Analysts had estimated it at 24.7%.
Overall, Mittal guided for a margin in the range of 23–24% for the current fiscal. Biocon is expecting approvals for two new products towards the end of this fiscal and expects more benefits to flow from them in FY25.
However, one of these two products, Insulin Aspart, is from its Malaysian facility, which received eight observations from the U.S. Food and Drug Administration on inspection in July. The company said that while there were no data integrity issues, they were not sure on the timeline for clearance and accordingly, the new product approval associated with the plant.
In terms of listing its biologics arm, Biocon Biologics, Mittal said they were at least 12 months away from doing so. He has guided for a mid-30s margin on the biologics part of the business, which currently represents over 50% of the company's revenue.
The CEO expects growth at Syngene to be in the high-teens and the generics business at mid-teens for the year. The company is looking at high-teen or low-20s revenue growth, with the biosimilars business growing at double digits on an organic basis, excluding the impact of the Viatris acquisition, he said.
