Bengaluru, Karnataka, India: July 25, 2019:
Biocon Ltd (BSE code: 532523, NSE: BIOCON), Asia’s premier biopharmaceuticals company, today announced its consolidated financial results for the fiscal first quarter ended June 30, 2019.
Commenting on the highlights, Chairperson & Managing Director, Kiran Mazumdar-Shaw stated:
“Our Q4 FY19 performance was led by robust growth in our Biologics and Research Services business segments, supported by a significant growth in the Small Molecules business.”
“Robust performance by our Biologics and Small Molecules business segments fuelled the 25% growth in Q1FY20 Revenue to Rs 1,490 Crore. Our long-term investments in biosimilars are delivering expected results as demonstrated by the 96% growth in our Biologics revenue at Rs 490 Crore this quarter, led by the expansion of our geographical footprint and increased penetration of our products in key developed and emerging markets. Small Molecules Revenue at Rs 480 Crore was driven by steady API sales and a multi-fold growth in Generic Formulations. Our Research Services business continues to provide profitable growth. The consolidated EBITDA for Q1 stood at Rs 462 Croreup by 51% and Net Profit (excluding exceptional item) at Rs 223 Crore grew by 86%.”
“We remain committed to develop high quality bio-therapeutics and enable affordable access to patients across world markets”.
- Fulphila®, biosimilar Pegfilgrastim co-developed by Biocon and Mylan, captures 21% volume share of the Pegfilgrastim syringes market in the U.S.
- Ogivri®, co-developed by Biocon and Mylan, becomes the first biosimilar Trastuzumab to be approved in Canada.
- Phase 1b/2 trial with Itolizumab in patients with acute graft-versus-host disease (aGVHD) and a Phase 1b trialin patients with uncontrolled moderate to severe asthmaare being conducted by our partner Equillium.
- A greenfield project for a fermentation- based manufacturing facility initiated at Visakhapatnam, Andhra Pradesh to cater to the anticipated strong volume growth in the Small Molecules APIs and Generic Formulations business.
FINANCIAL HIGHLIGHTS (CONSOLIDATED): Q1FY20
As per IND-AS In Rs Crore, except growth numbers
|Revenue from Operations#||1466||1124||30%|
|Net Profit (excl. exceptional income)||223||120||86%|
|Exceptional Item, Net of Tax||(17)||–|
|R&D Expenses in P&L||79||44||78%|
|Gross R&D Spends||110||88|
|Core EBITDA Margin||36%||27%|
|Net Profit Margin (excl. exceptional income )||15%||10%|
|Net Profit Margin*||14%||10%|
|#includes Licensing Income||7||5|
Notes: Figures above are rounded off to the nearest Cr; % based on absolute numbers.
PERFORMANCE REVIEW: Q1FY20
In Q1FY20, our Consolidated Revenue grew 25% to Rs 1,490 Crore from Rs 1,193 Crore in Q1FY19.
Net Profit (excluding exceptional item) stood at Rs 223 Crore reporting a growth of 86%.
Net Profit was impacted due to an exceptional item on account of tax on group entities restructuring.
Net Profit reported a growth of 72% at Rs 206 Crore(vs. Rs 120 Crore in Q1FY19).
Earnings before Interest, Depreciation and Amortization (EBITDA) increased 51% to Rs 462 Crore (vs. Rs 307 Crore in Q1FY19).
We reported a better quality of earnings this quarter as reflected in the consolidated EBITDA margin of 31% in Q1FY20 (vs. 26% in Q1FY19).
Core EBITDA margin for Q1FY20 (net of licensing, impact of forex and R&D) stood at 36% (vs. 27% in Q1FY19).
Net Profit margin (excluding exceptional item) stood at 15%.
Net Profit margin stood at 14% (vs. 10% in Q1FY19).
Net R&D expenses for the quarter at Rs 79 Crore was up by 78% ( vs. Rs 44 Crore in Q1FY19).
Gross R&D expenses were Rs 110 Crore, corresponding to 11% of our revenue (excluding Syngene).
BUSINESS SEGMENT REVIEW: Q1FY20
BIOLOGICS: Biosimilars & Novels
The Biologics segment was the strongest performing segment in the quarter, reporting a 96% revenue growth at Rs 490 Crore, led by the expansion of our biosimilars footprint in new markets and increased penetration of products already launched in some developed and emerging markets.
The encouraging trend of significant biosimilars adoption in both Europe and U.S. provides an opportunity for Biocon to increase penetration of its portfolio thus enabling wider patient access leading to a dominant market share, going forward. Fulphila®, biosimilar Pegfilgrastim co-developed by Biocon and Mylan reported strong sales this quarter recording a 21% volume share of the Pegfilgrastim syringes market in U.S. till May 2019.
(Bloomberg Symphony data, Goldman Sachs report June 2019).
During the quarter Ogivri®, co-developed by Biocon and Mylan, was approved by Health Canada as the first biosimilar Trastuzumab to be approved in the country. We also extended our geographic footprint in EU with the commercialization of Ogivri® (biosimilar Trastuzumab) thus expanding access to a high quality biosimilar for breast and gastric cancer patients in these markets.
Our partner Mylan continues to commercialize Semglee®, biosimilar Insulin Glargine, in EU which furthers our mission to provide affordable insulin therapy to a larger patient pool in the region.
We witnessed robust sales of our biosimilar Trastuzumab, Insulin Glargine and rh-Insulin in key emerging markets in AFMET and LATAM regions. We also received regulatory approvals in some key emerging markets for biosimilar Trastuzumab and Insulin Glargine, which augurs well for the future.
Our partner Mylan, which recently launched in-licensed biosimilar Adalimumab (Hulio) in Europe has extended the commercialization rights for the biosimilar from Europe to global markets. Biocon retains its economic interest in this expanded in-licensing arrangement and will gain a share of profits from global markets.
Biocon received the Certificate of GMP compliance from EMAfor its manufacturing facilities for Biologics Drug Product, including an additional manufacturing line, and Drug Substancefacility at Biocon Park, Bengaluru, following an inspection by the European agency in March 2019. This certification will enable us to continue addressing the growing needs of patients in the EU markets and enhance access to our high quality biosimilars. We have also received Certificate of GMP Compliance from TGA, Australia for the Drug Product facilities at Biocon Park.
The U.S. FDA pre-approval inspection of Biocon Malaysia’s Insulin Glargine Drug Substance, Drug Product and Device assembly facilities resulted in 12 observations across the three units. We are confident of addressing these expeditiously. We do not expect any change to our partner Mylan’s commercialization plans for Insulin Glargine in the U.S.
Our biosimilars business is gaining global recognition with three of our molecules being commercialized in developed markets viz. Pegfilgrastim in U.S., Trastuzumab in EU and Canada, and Insulin Glargine in EU and Japan. We have also commercialized our key biosimilars in many emerging markets across AFMET, LATAM, APAC regions.
We aspire to be a global leader in biologics, making a difference to patients, people, partners and business through affordable and innovative healthcare solutions, going beyond the product. We believe we have the science, scale, scope and technology to gain market-share by addressing growing patient needs, worldwide.
Our partner Equillium, which has licensed Itolizumab for development in U.S. and Canada, is conducting a Phase 1b/2 trial in patients with acute Graft-Versus-Host Disease (aGVHD) and a Phase 1b trial in patients with uncontrolled moderate to severe Asthma with Itolizumab (EQ001) and plans to initiate a Phase 1b proof-of-concept trial for the treatment of Lupus Nephritis during the second half of CY 2019.
The Branded Formulations business, which includes sales in India and UAE, reported a de-growth of 9% at Rs 133 Crore, as uncertainty in the UAE market continued to weigh down the overall performance of this segment.
In India, our Top Ten brands contributed 78% to overall sales. Our key brands like Basalog®, CANMAbTM , BIOMAb EGFR® and KRABEVA® reported a strong double digit growth. Our flagship insulin products, Insugen® and Basalog®, have cumulatively made a difference to over 35,800* diabetes patients in India this quarter. Our biologic cancer therapies, BIOMAb EGFR®, CANMAbTM& KRABEVA® benefited over 1,250# patients in India during Q1FY20.
Our business in UAE continued to be impacted due to re-pricing of branded generic products mandated by the Ministry of Health. On the other hand, CANHERA (biosimilar Trastuzumab) has captured a high-twenties share of the market for Trastuzumab in UAE (Source: IMS YTD May 2019) in volume terms. Glaricon, our biosimilar Insulin Glargine, is one of the fastest growing brands (Source: IMS YTD May 2019) in the market.
SMALL MOLECULES: APIs & Generic Formulations
The Small Molecules business reported a revenue growth of 20% for the quarter at Rs 480 Crore, led by strong sales of our key APIs and a robust performance of our Generic Formulations business.
Our statins, immunosuppressants and specialty molecule APIs witnessed steady demand from customers in India, EU, LATAM, APAC, CIS and NAFTA regions. We also filed new Drug Master Files (DMF) for our specialty APIs in key regulated markets this quarter.
The Generic Formulations revenue grew multi-fold as the business built on its strong performance in the previous quarters, with Rosuvastatin and Simvastatin formulations maintaining their market shares, and recently introduced Atorvastatin registering good growth through the acquisition of key accounts in the U.S. market.
All our Small Molecules manufacturing sites, both APIs and formulations, have valid EIRs/ EU cGMP certifications. Over the years we have built a good track record with the leading regulatory agencies across the globe including U.S. FDA and EMA.
We have initiated a greenfield project at Visakhapatnam, Andhra Pradesh with an investment of Rs 600 Crore to secure our anticipated growth in fermentation-derived APIs, including our strong portfolio of immunosuppresants. This expansion will enable us to deliver on our vertically integrated strategy of developing and commercializing our own ANDAs and also service the needs of our global API customers. We expect this facility to be operational over the next 3 years followed by commercialization based on regulatory approvals in major markets.
RESEARCH SERVICES – SYNGENE
Revenue from the Research Services business this quarter stood at Rs 421 Crore driven by Discovery Services and Dedicated R&D Centre businesses. Overall the company reported a modest 4%growth.
During the quarter, Syngene completed a U.S. FDA inspection for its Human Pharmacology Unit (HPU) in clinical development, making it the seventh successful FDA inspection without any observations. The Company is setting up a new research centre in Hyderabad to support its long term growth strategy.
*The estimated patient reach numbers have been calculated indirectly based on volume supplied and certain assumptions related to dosage per patient, duration of treatment, units sold, internal data and market research reports.
About Biocon Ltd:
Biocon Limited, publicly listed in 2004, (BSE code: 532523, NSE Id: BIOCON, ISIN Id: INE376G01013) is a fully-integrated, innovation-led global biopharmaceuticals company committed to enhance affordable access to complex therapies for chronic conditions like diabetes, cancer and autoimmune diseases. The Company has developed and commercialized a range of Biosimilars (Monoclonal Antibodies, Pegfilgrastim, rh- Insulin and Insulin Glargine), Novel Biologics and differentiated Small Molecules in India and key emerging markets. It has a large portfolio of biosimilars under global clinical development with three of these commercialized in the developed markets of EU, U.S. and Japan. It has promising novel assets in immunotherapy under development. Some of its key brands are INSUGEN® (rh-insulin), Basalog One® (prefilled Glargine pen), CANMAbTM(Trastuzumab), KRABEVA® (Bevacizumab), BIOMAb-EGFR®(Nimotuzumab) and ALZUMAbTM (Itolizumab).
www.bioconbiologics.com Follow-us on Twitter: @bioconlimited
The company will conduct a call at 9.00 AM IST on July 26, 2019 where the senior management will discuss the company’s performance and answer questions from participants. To participate in this conference call, please dial the numbers provided below ten minutes ahead of the scheduled start time. The dial-in number for this call is +91 22 6280 1151. Other toll numbers are listed in the conference call invite which is posted on the company website www.bioconbiologics.com. The operator will provide instructions on asking questions before the start of the call. A replay of this call will also be available from the conclusion of the call till August 2, 2019 on +91 22 7194 5757 or +91 22 6663 5757, Playback Code: 30993. Transcript of the conference call will be uploaded on the company website in due course.
DISCLAIMER: This press release may include statements of future expectations and other forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects upon Biocon and its subsidiaries/ associates. These forward-looking statements involve known or unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from our expectations include, amongst other: general economic and business conditions in India and overseas, our ability to successfully implement our strategy, our research and development efforts, our growth and expansion plans and technological changes, changes in the value of the Rupee and other currency changes, changes in the Indian and international interest rates, change in laws and regulations that apply to the Indian and global biotechnology and pharmaceuticals industries, increasing competition in and the conditions of the Indian and global biotechnology and pharmaceuticals industries, changes in political conditions in India and changes in the foreign exchange control regulations in India. Neither Biocon, nor our Directors, or any of our subsidiaries/associates assume any obligation to update any particular forward-looking statement contained in this release.