Biocon Q4 FY17 Revenue Rs 974 Cr; Net Profit Rs 127 Cr; Board of Directors Recommends 2:1 Bonus Shares
Commenting on the performance, Chairperson and Managing Director Kiran Mazumdar-Shaw stated: “We have closed the year FY 17 with a strong revenue growth of 18% led by a sturdy performance of our Biologics as well as Small Molecules businesses. On a full year basis, our EBITDA rose 34%, while Net Profit before exceptional item reported a robust growth of 54 %.
Our revenue growth was muted in Q4 FY 17. Our EBITDA margin at 24 % in Q4 reflects a healthy operational performance. Our Net Profit for Q4 at Rs 135 Cr, represents a growth of 75%, after adjusting for an exceptional item in Q4FY16.”
She added: “FY17 was a landmark year wherein we established our credibility as a global biosimilars player with the launch of Biocon’s Insulin Glargine pen in Japan and submission of five regulatory filings of our biosimilars in the developed markets of US and EU. Our Malaysia facility became operational with the Malaysian government’s exclusive contract for Biocon’s insulins, which expanded our footprint in emerging markets. The multiple clinical and regulatory milestones crossed in our biosimilars business augur well for the future.”
Highlights of Q4 FY17:
- Biologics License Application (BLA) for a proposed biosimilar Pegfilgrastim accepted for review by the US FDA; Second Successful BLA filing of the Mylan/Biocon Partnership in the US.
- Marketing Authorization Application for biosimilar Bevacizumab, post completion of RoW-focussed Phase 3 clinical trial in metastatic colorectal cancer, has been submitted for approval in India.
- Regulatory submissions for Insulin Glargine were made in the developed markets of Australia and Canada.
- The Malaysia government’s 3-year exclusive offtake agreement for rh-insulin cartridges and reusable pen provided a fillip to this business in Q4FY17.
- NeoBiocon ranked among the Top 15 pharmaceutical Companies, in UAE.
- Biocon has won the 9th National IP Award 2017 and WIPO Users Trophy in the category ‘Top Indian Company for Creating Global Brand’.
- Biocon’s board recommends the issue of Bonus shares in the ratio of 2:1.
- Biocon’s board recommends a Final Dividend of Rs. 3/- per share for FY17 (pre bonus).
- Biocon Foundation collaborated with the Department of Health & Family Welfare of Karnataka to establish eLAJ smart clinics in 15 PHCs across six districts in the state.
- Biocon Academy achieved 100% placement for its Batch 8 of the Biocon KGI Program in Biosciences.
FINANCIAL HIGHLIGHTS: Q4 & FY17
As per IND-AS numbers In Rs Crore, except growth
|Syngene: Research Services||272||316||(14%)||1,138||1,060||7%|
|PBT (Before Exceptional Items)||159||141||13%||850||591||44%|
|Net Profit (Before Exceptional Items)||135||77||75%||620||403||54%|
|Exceptional Item (Net)||(8)||256*||(8)||147*|
|R&D Expenses in P&L||65||99||(35%)||267||274||(3%)|
|Gross R&D Spends||98||152||402||427|
|Net Profit Margin||13%||34%||15%||16%|
Notes: Figures above are rounded off to the nearest Cr; % based on absolute nos.
For financials in IGAAP kindly refer to the fact sheet
* Exceptional item of Rs 256 Cr in Q4FY16 was on account of deferred revenue recognition pertaining to rh-insulin development and associated taxes. Additionally, FY16 Exceptional item includes impairment of an intangible asset of Rs 109 Cr
EXECUTIVE COMMENTARY: PERFORMANCE REVIEW:
Our Q4 Revenue at Rs 974 Crore reported a muted growth due to elongated approval timelines in some emerging markets, discontinuance of some in-licensed products and impact of the fire at Syngene. Biocon, excluding Syngene, reported a topline growth of 4%.
EBITDA for Q4 stood at Rs 231 Crore. EBITDA Margin at 24% reflects a satisfactory operational performance. Net Profit before exceptional item for the quarter at Rs. 135 Cr, reflects a growth of 75% YoY. Net Profit for Q4FY17 was Rs 127 Cr. The exceptional income in Q4FY16 was on account of a deferred revenue recognition pertaining to partnering of our rh-insulin development program.
Net R&D spends at Rs. 65 Crore for Q4FY17 stood at 10% of our ex-Syngene sales, reflecting our commitment to our Novels and Biosimilars global development programs. At a gross level, R&D spends for the quarter were Rs 98 Crore.
Full Year FY 17
We closed FY17 with a Revenue of Rs 4,079 Crore, an increase of 18%, on the back of robust growth in our Biologics as well as our Small Molecules businesses. Our Research Services business through Syngene contributed sales of Rs 1,138 Crore, reporting a muted growth of 7% in FY 17. On a standalone basis, Syngene reported a revenue growth of 14% at Rs 1,272 Crore.
Biocon’s EBITDA at Rs 1,137 Crore reported a robust growth of 34%. EBITDA margin improved to 28% from 24% last year. Biocon reported Net Profit before exceptional item at Rs 620 Crore, a strong growth of 54% YoY. Net Profit for the full year stood at Rs 612 Crore, reporting a growth of 11%. R&D Spends in the P&L statement for FY17 were Rs 267 Crore, while Gross R&D spends were Rs 402 Crore.
The Small Molecules business reported sales of Rs 387 Crore in Q4FY17. For the full year, this business recorded sales of Rs 1,587 Crore, reporting a growth of 14%. Our statin APIs and immunosuppressant APIs portfolio continues to do well.
We have entered new markets in AFMET, LATAM, NAFTA and CIS regions with some of our key statins, immunosuppressants and specialty molecules, which augurs well for this business. However, some of the products continue to face pricing pressure. A few regulatory submissions for key products in some emerging and regulated markets have also been made.
The Biologics segment reported revenue of Rs 119 Crore for Q4FY17, largely driven by sales of Biosimilars, including rh-insulin, insulin glargine and trastuzumab in global markets. For the full year, the Biologics segment reported a strong growth of 34% at Rs 458 Crore.
Biosimilars: Insulins & Analogs
Biocon, which is among the Top 3 biosimilar players globally# for Insulins made further progress this quarter and recorded a strong growth led by increased traction in emerging markets along with expansion of its commercial footprint.
The robust sales of rh-Insulin cartridges and reusable insulin pens to the Ministry of Health (MoH), Malaysia contributed significantly to this growth.
Biocon launched INSUPen Pro a customized Insulin re-usable pen developed in partnership with a Swiss based company Ypsomed, in Malaysia this quarter. This further strengthens our portfolio of pen injectors which include INSUPen, INSUPen EZ and BasalogOne.
Regulatory submissions for Insulin Glargine were made in the developed markets of Australia and Canada, in partnership with Mylan. Filing for this product with the USFDA is expected shortly.
Biosimilars: Monoclonal Antibodies & Recombinant Proteins
The Biocon-Mylan collaboration to co-develop a broad portfolio of biosimilar products for the global marketplace made good progress in Q4FY17.
USFDA accepted our Biologics License Application (BLA) for a proposed biosimilar Pegfilgrastim, for review. This is the second BLA accepted by FDA this year, as a part of Mylan and Biocon partnership and builds upon the acceptance of regulatory filings for proposed biosimilar Pegfilgrastim in Europe, Australia, and Canada.
For Bevacizumab, our ROW-focussed Phase 3 clinical trial in metastatic colorectal cancer is complete and we have submitted our Marketing Authorization Application in India. An additional global Phase 3 trial in non- small cell lung cancer has commenced. We continue to move towards regulatory submissions for our biosimilar Adalimumab.
Our biosimilar Trastuzumab has begun to make a difference with better penetration in some of the emerging markets which also boosted the overall growth of Biologics business this quarter and during FY17.
#in terms of volume market share- Units: Source: IMS MAT Sep 2016
Our novel insulin program made further progress in Q4FY17. A Clinical Trial Application (CTA) for Insulin Tregopil has been filed with the Indian regulator for a pivotal Phase III study to clinically validate its promise as an orally delivered, rapid acting prandial insulin in managing Type 2 diabetes. A multiple ascending dose study in Type 1 diabetes patient population is planned in FY18.
Our other Novel programs, Itolizumab (anti-CD6 monoclonal antibody) and QPI 1007 (SiRNA), are also progressing actively in ongoing clinical trials. The clinical study using a sub-cutaneous form of Itolizumab, currently on in Australia has completed PK and immunogenicity assessment in Stage I and Stage 2 is scheduled to start soon.
The Branded Formulations business, which includes sales in India and UAE, reported Revenue of Rs 131 Crore, a growth of 25% during Q4FY17. For full year, Branded Formulations sales stood at Rs 549 Crore. Sales were impacted due to price caps on some of the key brands and the discontinuance of Abraxane®, a key in-licensed oncology molecule, in the India and UAE markets.
Biocon’s focus on its specialty brands has led to an increase in prescriptions share for both Insugen® and Basalog®. During the quarter, Biocon launched Parit (Rabeprazole) and Parit D (Rabeprazole D) inlicensed from Japan’s Eisai Pharma. These are anti-ulcer products of the class of proton-pump inhibitors and will further strengthen our metabolics portfolio.
RESEARCH SERVICES – SYNGENE
Syngene our Research Services business contributed Sales of Rs 272 Crore in Q4FY17 and Rs 1,138 Crore, for the full year reporting a muted growth. However, on a standalone basis Syngene reported a sustained revenue growth of 14% with a healthy growth in EBITDA and PAT at 24% and 19% respectively, for the full year. The performance was impacted due to temporary disruptions related to the fire in December 2016.
During this quarter, Syngene signed a strategic agreement with a Canadian biotech firm and also collaborated with Herbalife Nutrition to set up a dedicated Nutrition Research and Development Lab at Biocon Park. This is Syngene’s fifth dedicated center and second for nutrition research. These strategic partnerships will provide a fillip to Syngene’s business going forward.
RECOGNITION FOR STRONG IP CULTURE
Biocon is being recognized both nationally and internationally for consistently creating intellectual wealth through an incisive intellectual property strategy. We have won two awards recently, the 9th National Intellectual Property Award 2017 in the category of ‘Top Indian Company for Creating Global Brand’ by the Office of Controller General of Patents, Designs and Trademarks, Dept. of Industrial Policy & Promotion, Govt. of India and ‘WIPO Users Trophy’ given jointly by the Indian Intellectual Property Office and World Intellectual Property Office, Geneva, Switzerland.
DECLARATION OF BONUS SHARES & FINAL DIVIDEND
The Board of Directors of the Company at the meeting held on April 27, 2017 recommended the issue of 2 bonus shares for every 1 share held in Biocon.
The Board also recommended a Final Dividend of Rs. 3/- per share for FY17, (pre bonus).
Enclosed: Fact Sheet – with Financials as per IND-AS and IGAAP
Biocon Limited, publicly listed in 2004, (BSE code: 532523, NSE Id: BIOCON, ISIN Id: INE376G01013) is India’s largest and fully-integrated, innovation-led biopharmaceutical company. As an emerging global biopharmaceutical enterprise serving customers in over 120 countries, it is committed to reduce therapy costs of chronic diseases like autoimmune, diabetes, and cancer. Through innovative products and research services it is enabling access to affordable healthcare for patients, partners and healthcare systems across the globe. It has successfully developed and taken a range of Novel Biologics, Biosimilars, differentiated Small Molecules and affordable Recombinant Human Insulin and Analogs from ‘Lab to Market’. Some of its key brands are INSUGEN®(rh-insulin), BASALOG® (Glargine), BIOMAb-EGFR™ (Nimotuzumab), CANMAb™ (Trastuzumab), Evertor® (Everolimus) and ALZUMAb™ (Itolizumab), a ‘first in class’ anti-CD6 monoclonal antibody. It has a rich pipeline of Biosimilars and Novel Biologics at various stages of development. Visit: www.biocon.com
The company will conduct a call at 9.00 AM IST on April 28, 2017 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 223938 1081. Other toll numbers are listed in the conference call invite which is posted on the company website www.biocon.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 May 5, 2017 on +91 22 3065 2322. Playback ID: 44711. 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.