Biocon (BIOCON) Q4 07/08 earnings summary

Executive summary

• FY08 consolidated total income rose 10% to Rs 10,902m; EBITDA increased 17% to Rs 3,350m and PAT before exceptional items and minority interest rose 12% to Rs 2,180m.

• Portfolio shift toward biopharmaceuticals accelerated after the October 2007 enzyme-business divestment; licensing income, research services and branded formulations supported the growth mix.

• Enzyme-sale gain lifted consolidated PAT after exceptional items to Rs 4,639m; excluding exceptional items, PAT after minority interest was Rs 2,245m.

Financial highlights

• Consolidated total income was Rs 10,902m versus Rs 9,896m; net sales were Rs 8,334m and contract research revenue was Rs 1,755m.

• Consolidated EBITDA was Rs 3,350m versus Rs 2,873m; PBT before exceptional items was Rs 2,309m versus Rs 2,110m.

• PAT before exceptional items was Rs 2,180m, up from Rs 1,941m; after minority interest, PAT was Rs 2,245m versus Rs 2,003m.

• Exceptional items net of tax were Rs 2,394m; reported consolidated PAT after exceptional items was Rs 4,639m.

• Recommended dividend totaled 100%, or Rs 5/share, including a special Rs 2/share dividend following the enzyme-business sale.

Outlook and guidance

• Four biosimilars—GCSF, Reteplase, Streptokinase and insulin analogs—were targeted for launch within two years, subject to partnerships and market approvals.

• Insulin capacity expansion was underway, with the new facility expected to be commissioned later in 2008; EU and multiple Asian, Latin American and African registrations were progressing.

• Oral insulin IN-105 entered Phase II in India; Anti-CD6 T1h Phase II studies for rheumatoid arthritis and psoriasis were expected to complete in 2009.

• Management expected pipeline programs to deliver significant upside over the next 2–3 years; global Phase III development and commercialization would require substantial investment and partnerships.

• Clinigene planned 40% manpower growth, expansion of its human pharmacology unit to 86 beds and a six-bed Phase I glucose-clamp unit.