Biocon (BIOCON) Q4 04/05 earnings summary

Executive summary

• FY05 consolidated Indian GAAP total income rose 34% to Rs 7,282 million; net profit increased 42% to Rs 1,975 million.

• Growth reflected biopharmaceuticals, enzymes and research services, alongside investment in manufacturing capacity and a longer-term proprietary drug pipeline.

• Strategy combined near-term generics and branded products with partnerships and discovery-led R&D focused on diabetes and oncology.

Financial highlights

• Consolidated Indian GAAP income was Rs 7,281.9 million vs Rs 5,419.1 million; PAT after minority interest was Rs 1,975.5 million vs Rs 1,386.4 million.

• Consolidated US GAAP revenue increased to Rs 7,125.7 million from Rs 5,406.4 million; net income rose to Rs 1,918.8 million from Rs 1,351.7 million.

• Standalone net sales rose 28.8% to Rs 6,463.6 million; standalone PAT increased 39.9% to Rs 1,743.9 million.

• Reported consolidated US GAAP gross profit was Rs 2,876.1 million, with a 40.4% gross margin; operating income was Rs 2,033.1 million.

• Standalone EPS was Rs 18.43; consolidated Indian GAAP EPS was Rs 20.88 basic and Rs 20.39 diluted.

Outlook and guidance

• FY06 growth drivers included US Simvastatin and Pravastatin sales ahead of expected generic entry in mid-2006, insulin, immunosuppressants, branded formulations and research services.

• Major capacity expansion was expected to be fully operational by Q2 FY06; new fermentation facility operations were expected during FY06.

• Insugen registrations were progressing in over 25 countries; European insulin market entry preparations and marketing arrangements were underway.

• Oral Insulin and h-R3 development were progressing; the partnership expected significant clinical data and manufacturing progress for Oral Insulin within two years.

• The antibody cell-culture facility was expected to be commissioned in FY06, in line with completion of h-R3 clinical evaluation.