Biocon Q3 Results: Reports Loss On One-Time Expenses
Biocon's Q3 operating profit rose 30% to Rs 634 crore, while revenue surged 35% to Rs 2,941 crore.
Biocon Ltd. reported net losses in the third quarter due to certain one-time expenses, leading to missed forecasts.
The Bengaluru-based drugmaker posted a net loss of Rs 42 crore in the December quarter, according to an exchange filing. That compares with the Rs 233 crore consensus estimate of analysts tracked by Bloomberg, and a net profit of Rs 187 crore in the corresponding quarter of the previous fiscal.
The company charged one-time expenses under 'exceptional items' to the extent of Rs 271 crore in the quarter, "primarily pertaining to deal related expenses of the Viatris transaction".
The write-off included expenses written off towards modification of a compound financial instrument, reversal of the Service Exports from India Scheme claim receivables, professional fees like advisory, legal counsel and valuation experts incurred for the acquisition of the Viatris biosimilars business, and impairment of certain intangible assets.
The company said its net profit, excluding exceptional items, stood at Rs 140 crore, down 25% from Rs 187 crore over the same period in the previous fiscal. Profit was impacted due to dilution of Biocon's stake in Biocon Biologics and Syngene, it said.
Biocon Q3 Highlights (YoY)
Revenue rose 35% to Rs 2,941 crore, against the estimated Rs 2,752 crore.
Operating profit was up 30% to Rs 634 crore, compared with the Rs 642 crore forecast.
Operating margin stood at 21.6% against 22.5% a year ago, and an estimate of 23.3%.
Other Highlights (YoY)
Revenue from generics saw a growth of 18% to Rs 718 crore and contributed to 24% of the total revenue.
Biosimilars—Biocon Biologics Ltd.—reported growth of 54% at Rs 1,507 crore, accounting for 50% of the revenue.
Research services—Syngene—reported a growth of 23% at Rs 786 crore and made up 26% of the quarterly revenue.
There was no revenue from novel biologics during this quarter.
Biocon expects to end the fiscal on a strong note with healthy growth across businesses.
"Biocon Biologics is tracking towards exiting the year at a $1 billion trajectory, excluding vaccines,” said Kiran Mazumdar-Shaw, executive chairperson at Biocon.
She said biosimilars as a business segment offers differentiated growth to Biocon Biologics based on vertical integration and a unique portfolio of insulins and antibody-based immunotherapeutics.
The December quarter captures a fraction of the acquired business, but the financials will recognise the entire biosimilars business from the fourth quarter.
The generics business' third-quarter results were in line with expectations, delivering healthy sequential and year-on-year revenue growth, said Siddharth Mittal, chief executive officer at Biocon Biologics.
"The performance was driven by immunosuppressant API sales and generic formulations, which saw an uptick in the sales of statins as well as recent product launches."
Mittal expects the Zentiva partnership in Europe and long-term strategic partnership with Farmanguinhos in Brazil to contribute towards attaining mid-teens growth in the short to medium term.
"Our focus remains on geographical expansion, new product launches, strengthening our product pipeline and executing on key capex projects."
Biocon To Pare Debt Related To Viatris Deal
Biocon had raised $420 million of mezzanine financing to part-finance the $650 million equity infusion into Biocon Biologics.
It has entered into a definitive agreement with Kotak Strategic Situations Fund for a structured funding up to Rs 1,200 crore. This funding, together with the recently-concluded stake sale in Syngene, will help reduce net debt, according to the filing.
Shares of Biocon closed 1.18% lower before the results were announced on Tuesday, compared with a 0.99% rise in the benchmark Sensex.