The Hindu Business Line : Biocon Q4 net up 7.6% on biopharma, contract research

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Biocon Q4 net up 7.6% on biopharma, contract research

1:1 bonus issue declared; separate cardiology unit formed

G.R.N. Somashekar

Ms Kiran Mazumdar Shaw, Chairperson and Managing Director, Biocon Ltd, and Mr Arun Chandavarkar, Chief Operating Officer, at a press conference at the company premises near Bangalore on Tuesday. —

Our Bureau

Bangalore, April 22 Biotechnology major Biocon closed the fourth quarter of 2007-08 with a 7.6 per cent higher consolidated net profit year-on-year at Rs 65.30 crore. Group sales for the quarter saw a negligible dip to Rs 279.22 crore.

The standalone net profit for the January-March 2008 quarter was 30.8 per cent higher year-on-year at Rs 62.03 crore. Standalone fourth quarter sales of Rs 219.75 crore, however, dipped 5.9 per cent year-on-year.

Company officials said there was actually a small growth if read without the enzymes business, which has been sold. Enzymes gave the company Rs 26-crore revenue last fiscal.

The Bangalore-based biotechnology major announced 1:1 bonus shares subject to shareholder approval. The board also declared a special dividend of Rs 2 per share in addition to a normal dividend of Rs 3 per share.

For the entire year ended March 31, 2008, the group turnover grew 10 per cent to Rs 1090.2 crore (Rs 989.55 crore) and net profit was Rs 463.91 crore (Rs 200.25 crore).

Standalone turnover was 7.6 per cent higher at Rs 929.2 crore and net profit was Rs 434.9 4 crore – up 30.8 per cent after exceptional items.

Ms Kiran Mazumdar-Shaw, Chairman and Managing Director, said, “We are pleased with our overall performance and have delivered the highest profits to date.

We expect the year ahead to realise a good return on these investments, especially at Syngene and Clinigene. We have delivered a 13 per cent increase in PAT, despite a Rs 27-crore increase in depreciation.” She said, “The strong financial base enables us to recommend a 1:1 bonus issue that we believe will improve market liquidity to support Biocon’s growing profile as a bellwether stock in the life science sector.”

BIOPHARMA THE DRIVER

Biopharma saw 12 per cent growth this year to touch Rs 832 crore. Growth would also come from biosimilars in the European and US markets. The drug discovery programmes would start giving revenues. Contract research grew 29 per cent to Rs 176 crore, contributing 16 per cent to the consolidated revenue.

Research arm Syngene generated Rs 40 crore. R&D spend rose from Rs 27 crore to Rs 45 crore.

Research spend would grow to Rs 70 crore in the coming year as programmes enter the clinical stage.

CARDIOLOGY CARVED OUT

A separate cardiology division with dedicated sales force has been carved out of the cardio-diabetes business. The focus would be on the flagship, statins. “Branded formulations would see 100 per cent growth and we want to make it a Rs 500-crore business in two years,” said Mr Rakesh Bamzai, President-Marketing.

The cardiology market constitutes 10 per cent or about Rs 3,200 crore of the domestic drug market and is growing at 21 per cent.

The headcount would be increased mainly in the field force which has been crossing over to other sectors. Salary bill shot up 12-18 per cent compared with 5-10 per cent in the previous years. This is in tandem with the 15 per cent salary growth across the industry.

“We are going to address them in other ways.”

Ms Mazumdar Shaw said the listing process of Syngene was expected this year and the clear picture would emerge by the third quarter.

The stock price closed slightly higher at Rs 508.8 after an intra-day high of Rs 551.