Buy Biocon; target of Rs 400: Sharekhan

Sharekhan is bullish on Biocon has recommended buy rating on the stock with a target price of Rs 400 in its research report dated June 28, 2024.

Broker Research

July 01, 2024 / 12:28 IST

Buy

26 Aug, 2025 12:21

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Sharekhan's research report on Biocon

Biocon recently signed an exclusive licensing and supply agreement with Handok, a specialty pharmaceutical company in South Korea, for commercialisation of its vertically integrated, complex drug product, Synthetic Liraglutide. Liraglutide is an injection in pre-filled pen, used to treat chronic weight management as an adjunct to a reduced-calorie diet and increased physical activity. Biocon will undertake the development, manufacturing, and supply of the drug product, and Handok will be responsible for obtaining regulatory approvals and commercialization in the South Korean market. GLP-1 is a decadal opportunity, and the size of Liraglutide in South Korean market is $47 million T as per IQVIA. Biocon is also the first company to obtain approval for diabetes drug, Liraglutide in the UK market. As per IQVIA, the total addressable market opportunity for GLP-1 in diabetes and weight loss in U.K. was US $425 million.

Outlook

After integration of Viatris, the company is seeing a continuous increase in market share across all products. Going forward, we believe there are many green shoots such as 1) Lowering of debt to reduce finance costs, 2) Increased market share of biosimilars post successful integration of Viatris business, and 3) Pick-up in generic API segment driven by complex launches in the peptide space, 4) GLP-1 opportunity from FY26E and 5) Collaboration with Eris Life Science to penetrate its branded formulation business into the domestic market. Hence, we maintain a Buy rating on the stock. We value Biocon on an SOTP basis to arrive at a price target (PT) of Rs. 400 Per share (earlier Rs 350 per share).

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