Biocon (BIOCON) Q4 11/12 earnings summary

Executive summary

• FY12 consolidated revenue rose 16% to ₹21,483m, led by Research Services and Branded Formulations; EBITDA was ₹5,791m and continuing-operations PAT ₹3,384m.

• Growth in the two leading businesses was partly offset by lower licensing income; consolidated PAT from continuing operations was nearly flat YoY.

• Strategy centered on moving up the value chain, expanding biosimilars and emerging-market partnerships, and growing integrated research services.

Financial highlights

• Consolidated revenue increased 16% to ₹21,483m from ₹18,576m; EBITDA was ₹5,791m versus ₹5,732m.

• Continuing-operations PAT was ₹3,384m versus ₹3,399m; EBITDA margin fell to 27% from 31%, and PAT margin to 16% from 18%.

• FY12 total PAT was ₹3,384m versus ₹3,675m, including discontinued-operations loss on divestment of ₹32m versus ₹276m profit in FY11.

• Standalone revenue was nearly flat at ₹16,224m; standalone PAT fell 44% to ₹2,555m and EPS before exceptional items was ₹13.04 versus ₹23.49.

• Licensing and development fees fell to ₹27m from ₹2,065m standalone, following exceptionally high FY11 technology-transfer income.

Outlook and guidance

• Malaysia biopharmaceutical manufacturing and R&D facility expected to become operational in FY15, subject to regulatory approvals.

• Biosimilar rh-Insulin Phase III trial in the EU was expected to complete in FY13; Insulin Glargine Phase I trial for developed markets was ongoing.

• Progress novel assets to proof-of-concept before out-licensing; expand biosimilar commercialization through multiple regional partnerships after Pfizer exit.

• Priorities include small-molecule ANDA and 505(b)(2) filings, differentiated research services, and stronger domestic and emerging-market brands.