ICICI Direct's research report on Biocon
Small molecules segment accounts for 41% of turnover, comprises APIs like statins, immunosuppressants, specialty APIs & also includes generic formulations business. This vertical is seeing pricing pressure in some products. Biocon is exploring fewer opportunities but with higher profitability in this segment like moving into formulations & filing own ANDAs, 505 (b) (2) filing, etc.
Outlook
The management has guided a cautious outlook for FY18 on the back of delayed approvals for biosimilars in emerging markets. Hence, we downgrade Biocon to HOLD with a revised target price of Rs 1020.
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