Biocon 2020 Annual report takeaways.

Reading Time: 4 minutes

Biocon: Bring high quality affordable medicines to all.

  • Generics division: Crossed an annual revenue milestone of Rs 2000 crs. (31% of sales)
    • Extended footprint to China through a licensing deal for 3 Generic Formulations.
    • Started construction of a Rs 600 crs greenfield, fermentation-based manufacturing facility in Andhra Pradesh, India to cater to anticipated growth in APIs business.
    • Clients acquisitions increased market share in APIs. 
    • Pipeline of niche, difficult-to-make molecules with high barriers to entry. (fermentation-derived statins and immunosuppressants)
  • Novel molecules: 
    • R&D stage, No revenues as of now.
    • Started global clinical trials for first-in-class oral insulin molecule, Insulin Tregopil, in Type 1 diabetes. Type 2 diabetes completed Phase II. 
      • More than a 100 million people require insulin therapy for their diabetes. The ‘silent pandemic’ that currently affects 475 million people worldwide)
  • Started a clinical trial in India to study Itolizumab in treating moderate to severe patients with COVID-19 complications.
  • Biologics: Plan to list Biocon Biologics in next 2-3 years+ Reach $1B in rev by FY22 (addressable market size by $33 billions)

(Read more about Biologics & Biosimilars  here: )

  • Revenues at Rs 1953 crs (29% of sales)
  • Touched the lives of 2.1 million patients through access to our biosimilars.  A pipeline of 28 molecules which will require investments.
  •  PE investment for a minority stake, indicating an equity valuation of USD 3 billion (~ 10 times EV/ sales)
  • Expanded commercial footprint of key biosimilars: (US- most lucrative)
    • Pegfilgrastim (Australia, Canada)
    • Trastuzumab (US, Australia, Canada)
    • Insulin Glargine (Australia)
  • Growth opportunity: Increasing market share in biosimilars
    • The recent launch of Trastuzumab in the US.
    • The upcoming launch of Insulin Glargine in the US, & Pegfilgrastim in the EU coupled with the launch of Insulin Aspart and Bevacizumab in EU and US (Partner: Mylan)
Also Read on FinMedium:  Market Update for 21/07/2020: | Street-fluence
  • Received regulatory clearances from both U.S. and EU regulators for our Insulin Glargine manufacturing facility in Malaysia.
  • Dream: Universal access to high-quality insulin nearly 100 years post its development by providing rh-Insulin at less than 10 U.S. cents per day in low- and middle-income countries. (by government collaboration)
  • Research Services: Syngene (Biocon owns 70%)
  • Branded Formulation: Sales of Rs 536crs (8% of sales)
    • Strong pricing pressure in India & UAE (40% price decline across 60% of our product range)
    • Wounded up the JV entity in the UAE as the partner came under investigation for governance issues.
  • 78% of sales is international: significant Fx risk.
  • Trend: The future will call for a new approach to prevention, screening, diagnosis, therapy, monitoring and management of disease. Demand for therapies that are patient-focused, data-driven and digitally enabled will increase.
  • India exported $ 19 billion worth of pharmaceuticals in FY19. Also, caters to 60% of the world’s vaccine demand.
  • No dividend for FY20 to maintain liquidity.
  • Guidance on gross R&D spends: In FY21, is expected to remain between 12% and 14% of revenues ex-Syngene. 
  • Guidance on capex spends: USD 200 million in FY21, split equally between Small Molecules and the Biosimilars businesses. (Capex during FY20: Rs 974 crs)
    • Will be funded through internal accruals, debt raise (until debt/equity < 0.5) & additional PE funding in Biocon Biologics.
  • Employee cost increased by 25% YoY, as it is a front ended with high operating leverage.
  • Board consistency of good pedigree in strategic fields.
Also Read on FinMedium:  Which Multicap funds have become Flexicap Funds (2020-21)?
  • Bull case for Indian generic Pharma: Combined value of drugs for which patents will expire between 2020 and 2023= $127 billions.
  • Power to challenge current policies & bring change:
  • 8 of the top 10 institutional shareholders increased their stake in FY20.


If you are looking for investment advice, click here and we will reach out to you within 24 hours.

Source link

Every Wednesday and Saturday, we send Info-Graphic and FinMedium Weekly Digest newsletters to our 25000+ Subscribers.

Join Them Now!

JST Investments

JST Investments

JST Investments is a Mumbai-based investment firm that believes in long-term wealth creation. It's a brainchild of Aditya Kondawar, Aditya Shah, and Anish Moonka.
Please Share :)