Biocon's results show FY 2013 revenue growth of 18%

Indian headquartered Biocon has released its full-year 2013 financial results (with the Indian 2013 financial year ending in March 2013). The results show revenue growth of 18% year-on-year (y/y), with revenues growing from INR21.5 billion (USD467 million) in the 12 months to March 2012, to INR25.4 billion in the same period of 2013. Profit before tax saw healthy growth of 56%, growing to reach INR6.1 billion in financial year (FY) 2013.

Especially strong revenue growth was seen in the Indian branded formulations division, which includes a number of novel biologics and biosimilars. This division experienced revenue growth of 36% y/y, with growth in this division reportedly being driven by the company's range of oncology supportive care, diabetes, and other biologic products. Biocon's two research services companies Syngene and Clinigene also saw revenues grow by a significant 36% to amass revenues of INR5.6 million in the year to March 2013.

Despite the positives around the full-year results, the fourth-quarter results were somewhat disappointing, with revenues declining 2% in quarter four of FY 2013 to INR6.5 billion, against INR6.6 billion in quarter three. Much of this decline was attributed to falling revenues from Biocon's biopharmaceuticals division, revenues of which declined 7% quarter-on-quarter.

A copy of the company press release highlighting financial results can be accessed here and a copy of the company financials can be accessed here.

Expenses also increased somewhat significantly over the 2013 financial year, with total expenses climbing 24% to reach INR19.4 billion. During the period, research and development (R&D) expenses increased 20% to INR1.6 billion. R&D expenses now represent some 6.5% of total revenues. The increased costs of R&D may be attributed to the high costs of developing biologics and biosimilars drugs.

Biocon's R&D pipeline

As well as highlighting its financial results, Biocon also chose to highlight its pipeline of biologics and biosimilars drugs. Biocon currently has nine biosimilars in development. Eight of these biosimilars are being developed through a partnership with US-headquartered Mylan, with Mylan extending the partnership to cover Biocon's biosimilar insulin products in February 2013 (see India: 14 February 2013: Biocon to partner with Mylan for biosimilar insulins). Mylan retains the exclusive commercialisation rights to Biocon's insulin analogue biosimilars in the Australia, Canada, Europe, the United States, and New Zealand, while retaining exclusive commercialisation rights in all "regulated markets" for Biocon's portfolio of biosimilar monoclonal antibodies.

Biocon's novel biologics pipeline received a number of significant boosts in FY 2013, including the announcement that Alzumab (itolizumab) received marketing approval from the Drug Controller General of India (see India: 9 January 2013: Biocon's novel anti-psoriasis drug approved in India). Also in the financial year, Biocon signed an agreement with US firm Bristol-Myers Squibb (BMS) allowing the latter an optional agreement to acquire worldwide marketing rights to Biocon's oral insulin candidate (see United States - India: 16 November 2013: Biocon and BMS sign oral insulin deal).

Outlook and implications

Biocon's financial results are in line with the FY 2012 results, which also showed revenues increasing by 14.5% (see India: 27 April 2012: Biocon's FY 2011/12 Revenues Increase by 14.5%). However, the company does not provide information on the reasoning behind the declining revenues over the fourth quarter. This said, Biocon did provide some suggestion that more firm control of costs would be undertaken.

The year has seen significant good news in terms of developing partnerships, especially for Biocon's biosimilar insulin products. With the company probably concerned over the ability to commercialise these products in regulated markets following Pfizer's pullout of its partnership with Biocon in March 2012 (see United States - India: 14 March 2012: Pfizer Terminates Diabetes Agreement with Biocon), the extension of the partnership with Mylan is likely to be seen as a strong positive for the company.