The Hindu : Business : Biocon net jumps 42 p.c.

Online edition of India's National Newspaper
Thursday, Apr 21, 2005

Business

Business

Biocon net jumps 42 p.c.

Special Correspondent

Positioned as largest producer of human insulin The company's vision is to be an integrated biopharmaceutical enterprise of global distinction.

AIMING HIGH: The Chairman and Managing Director of Biocon, Kiran Mazumdar Shaw, and the Vice Chairman, International Business Development, John Shaw (centre), arriving to address a press conference in Bangalore on Wednesday. The President, Research & Development, Shrikumar Suryanarayan (right), is also seen. — Photo: Sampath Kumar

BANGALORE: Biotechnology major, Biocon, today announced a 42 per cent jump in net profit to Rs. 198 crores in 2004-05 up from Rs. 139 crores in the previous year. Its total income increased by 34 per cent to Rs. 728 crores from Rs. 542 crores. The company declared a dividend of 40 per cent (Rs. 2 per share of Rs. 5).

40 p.c. dividend

Announcing the results, the Biocon Chairperson and Managing Director, Kiran Mazumdar Shah, said the company would maintain the current levels of operating margin. "However, the profit will not grow as fast as sales in the year ahead. This will be partly attributable to an increased depreciation charge on our new facilities which will cater to large U.S. market opportunities for Simvastatin and Pravastatin emerging in 2006 but more importantly, the company plans to significantly increase R&D investments to support a discovery led research strategy." The net margins expanded marginally to 27 per cent.

"All our key businesses, namely, biopharmaceuticals, enzymes and research services demonstrated positive growth." Revenues from the bio- pharmaceuticals business improved by 28 per cent to Rs. 557 crores from Rs. 435 crores, from custom and contract research by 70 per cent to Rs. 66 crores (Rs. 39 crores) and from sales-enzymes to Rs. 90 crores (Rs. 67 crores).

Ms. Mazumdar-Shaw said the outlook for the year ahead was "very positive". We expect statins immuno suppresants, insulin and branded formulations to deliver significant growth. Research services will also be key growth drivers." The biotechnology sector, she remarked, needed to be evaluated on a medium to long term rather than on a quarterly basis. "Biotechnology can be best described as a businessmodel wherein much of the potential is invisible given the inherent development and regulatory time lines." Ms. Mazumdar-Shaw said 62 per cent of the revenue (Rs. 442 crores up from Rs. 340 crores last year) came from exports to over 50 countries. The company's vision was to be an integrated biopharmaceutical enterprise of global distinction and would soon be the first company, globally, to manufacture human insulin using a Pichia expression system. In addition, Biocon is positioned to be India's largest producer of human insulin and India's first company to set up commercial production of monoclonal antibodies.

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