Biocon shares zoom 8% after Jefferies upgrade to 'hold', price target lifted by 43%

Jefferies' new price target for Biocon translates into a 12 percent upside potential from Monday's close.

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26 Aug, 2025 12:21

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International brokerage Jefferies has upgraded its rating on drugmaker Biocon to 'hold' citing positive newsflow around the regulatory approval of its Bengaluru manufacturing unit. Building on the optimism, Jefferies also lifted its price target for the stock by a whopping 43 percent to Rs 400, translating into an upside potential of around 12 percent from Monday's closing price.

The positive rating action on the stock lifted shares of Biocon nearly 8 percent higher on January 7. At 11.01 am, shares of Biocon were trading at Rs 382.95 on the NSE.

The US Food and Drug Administrations gave a greenlight to Biocon's biologics unit in Bengaluru, granting it a “Voluntary Action Indicated” (VAI) status. The US FDA’s VAI classification is a regulatory designation given after an inspection of a facility. It indicates that while minor issues may have been observed, they are not critical enough to warrant further regulatory or enforcement action. VAI is generally a favorable outcome for companies, as it means they can continue business operations without additional regulatory hurdles.

With the Bengaluru unit getting a go ahead from the FDA, regulatory clearance for Biocon's Malaysia unit remains the focal points for investors.

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Aside from the regulatory clearance, Jefferies' bullishness over Biocon also stemmed from the approval of the company's biosimilar Stelara, slated for a launch in February 2025. Biocon's subsidiary--Biocon Biologics received approval from the USFDA to launch its biosimilar version of Janssen's Stelara in early December.

Stelara, used to treat multiple autoimmune disorders, emerged as the top selling drug for Janssen with sales of $7 billion in the US in 2023. Biocon however, will market the drug under the brand name Yesintek.

The approval will open the door for the launch of the biosimilar, potentially boosting the company's revenue and profitability, despite strong competition from rival biosimilars. The USFDA has already approved five biosimilars of Stelara, all of which are expected to enter the market in the fourth quarter of FY25, with Amgen's version set to be the first to be marketed. According to analysts at Jefferies, the approval will increased the growth visibility for Biocon's biologics business.

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