Bio-pharmaceutical company Biocon on Wednesday saw a 46 percent decline in net profit to Rs 92 crore in the third quarter ended December 31 due to lackluster sales of small molecules and biologic divisions, and high interest and depreciation costs related to its Malaysian insulin facility.
The Bangalore-based firm had posted a net profit of Rs 171 in the third quarter of previous fiscal year.
Total revenue remained flat at Rs 1,092 crore in the October-December period, Biocon said in a statement. The interest and depreciation costs related to its Malaysian insulin facility rose 40 percent year-on-year to Rs 112 crore, while licensing income from biologics division dropped sharply from Rs 79 crore to Rs 12 crore.
The EBITDA stood at Rs 256 Crore, with an EBITDA margin of 23 percent for Q3FY18. The EBITDA margins were at 30 percent during corresponding quarter last year.
The company said the “operating margins declined on account of lower licensing income, compounded by fixed and operating costs related to Malaysia operations.”
The sales of small molecules or API business declined 9 percent to Rs 369 crore in Q3, faced with headwinds arising from pricing pressures and channel consolidation in the US impacting its cholesterol lowering statins business.
However, the company said it saw continued demand for immuno-suppressants offset some of the loss in sales. It also said Rosuvastatin calcium, its first ever generic formulation launch in the competitive US market, has garnered about 10 percent market share.
Revenues from the biologics vertical, comprising Novel Biologics and Biosimilars, declined 15 percent to Rs 190 crore, as plant modifications undertaken to comply with regulatory requirements led to production disruption and supply constraints for some products, the company said, but added that its plant has resumed commercial production.
“Adjusted for licensing income, product sales grew 16 percent year on year with growth seen in both insulins and biosimilar antibodies portfolio,” Biocon said.
The branded formulations business, which includes sales in India and UAE, reported a revenue of Rs 156 crore, a YoY growth of 27 percent driven by strong sales of key brands.
The Research Services business that’s housed under listed subsidiary Syngene registered a growth of 17 percent to Rs 387 crore, on the back of a strong performance by the chemical development vertical and good traction in discovery services.
Gross R&D spends for Q3FY18 stood at Rs 94 crore.
“This has been a significant quarter for Biocon as we crossed a major milestone of obtaining USFDA approval for biosimilar Trastuzumab partnered with Mylan. Another highlight was the announcement of a new strategic partnership with Sandoz to develop, manufacture and commercialize a portfolio of next wave of biosimilars for global markets,” said Kiran Mazumdar-Shaw, Chairperson & Managing Director of Biocon.
“Our Branded Formulations and Research Services segments reported a healthy double-digit growth during this quarter. We expect growth in other segments to revive from early next fiscal,” Mazumdar-Shaw said.
Shares of Biocon declined 1.12 percent to close at Rs 634.60 on BSE, while the benchmark Sensex gained 0.06 percent to end 36,161.64 points.