Biocon Q2 net profit drops 3.94

Biotechnology major Biocon today said its consolidated net profit declined by 3.94 per cent to Rs 85.70 crore for the second quarter ended September 30,2011,due to high power costs and a rise in wages.

The company had posted a net profit of Rs 89.22 crore for the same period last fiscal,Biocon said in a statement. For the second quarter ended September 30,2011,the Bangalore-based firm posted net sales of Rs 508.44 crore,compared to Rs 420.35 crore for the same period last fiscal. Commenting on the results,Biocon CMD Kiran Mazumdar-Shaw said: 8220;The performance in branded formulations and research services has been particularly strong. The branded formulations segment has delivered a solid 37 per cent year-on-year growth,while research services has grown by a robust 20 per cent.8221;

8220;The global economic outlook is challenging at the moment. Nevertheless,I believe that the Biocon Group will continue to deliver broad-based growth in the second half,8221; Shaw added.

The company8217;s expenditure on manufacturing,staff and other expenses rose by 29 per cent to Rs 375 crore for the second quarter ended September 30,2011. The firm had spent Rs 291 crore in the same period last fiscal. For the six months ended September 30,the company posted net profit of Rs 155.75 crore,as compared to Rs 165.95 crore in the same period last financial year. The company said its biopharma business posted a 15 per cent year-on-year YoY increase in revenues in the first half of this fiscal on the back of strong growth across all segments,including statins,immunosuppressants and insulins. Biocon also announced the launch of its reusable insulin delivery device,InsuPen,in India. The device is capable of delivering both Basalog and Insugen,thus maximising patient convenience.

8220;The recent launch of InsuPen,our long-awaited device for insulin delivery,is expected to further propel sales in our branded formulations vertical,8221; Shaw said.

Additionally,a team of 125 diabetic care advisors has been recruited across India to support Biocon8217;s existing helpline for diabetics,it said. The company said its six divisions for branded formulations,namely diabetology,oncotherapeutics,nephrology,cardiology,immunotherapy and comprehensive care,have posted a combined Y-o-Y growth of 37 per cent for the six months ended September 30,2011. Biocon said its Treat-Plaq Phase 3 study in Psoriasis should be completed in the fourth quarter this year,with the results likely to be available in the first quarter of next year.

The company said Abhijit Barve,currently COO,Clinigene,will assume charge as Ramp;D President of Biocon with effect from November 1.

8220;Given the advancement of Biocon8217;s research pipeline increasingly into the clinic,Dr Barve8217;s extensive experience in clinical research will be a critical asset to Biocon8217;s Ramp;D,8221; Shaw said.

On a standalone basis,the company posted a net profit of Rs 68.07 crore for the second quarter,compared to Rs 87.33 crore for the same period last fiscal. Shares of Biocon were being quoted at Rs 347 apiece on the BSE in late afternoon trade today,down 0.43 per cent from their previous close.

While speaking to reporters in Bangalore,Shaw said increased fuel and power costs inflated company8217;s operational costs.

Energy costs rose 14 per cent to Rs 22.7 crore.

Expenditure on employees soared 34 per cent to Rs 77.8 crore. By next year,Biocon aims to hire 10,000 people,8221; Shaw said.

Asked about investment status of Biocon8217;s manufacturing facility at Jawahar Pharma City near Visakhapatnam,she said the facility has taken a backseat after the company started its work on setting up biomanufacturing and Ramp;D facility in Malaysia.

We will take a call on it later. We would decide whether to go for it or not,8221; Shaw said.

On Biocon8217;s plan to list its wholly-owned subsidiary Syngene Limited on the stock exchanges,Shaw said the company would begin listing preparations from the second half of next fiscal.

My first aim is to have a good six quarters of good business before taking a decision to list Syngene on stock exchanges,8221; she added.

US-based drug major Bristol-Myers Squibb had entered into an agreement with Biocon in March 2007 to collaborate with Syngene in drug discovery and development at the latter8217;s facility in Bangalore.

Replying to a query,Shaw said so far she has not seen the impact of global economic slowdown on health and pharmaceutical sectors.

In fact,our company has been growing. However,next few quarters will tell you the exact situation in world market. Generally,health sector is not impacted by the slowdown 8230; I only hope the generalisation remains true to itself,8221; she said.

Shaw said there has been better-than-expected offtake in fidaxomicin,an anti-bacterial drug,and Biocon is focused on improving operational efficiencies to meet the increased demand.