Biotechnology major Biocon on Thursday reported revenues of Rs.2,814 crore in 2010-11, an increase of 17 per cent over the previous year. The company made a net profit of Rs.368 crore, an increase of 25 per cent over the previous year.
The announcement of the results was upstaged by the revelation that Biocon is divesting its 70 per cent stake in the German pharmaceutical company Axicorp, which it had acquired for a consideration of euro 30 million in early 2008.
Biocon Chairman and Managing Director Kiran Mazumdar-Shaw said the decision to divest in favour of the existing promoter shareholders followed the Biocon's alliance with global pharmaceutical major Pfizer for commercialisation of biosimilar insulin and insulin analogs. Ms. Shaw clarified that Axicorp's licence to sell Biocon's products in Germany would stand terminated after the divestment. The transaction, whose value she refused to reveal, would be concluded during the first quarter of this year, she added.
Biocon reported sales of Rs.2,771 crore during 2010-11, an increase of 17 per cent. Revenue from biopharmaceuticals (Biocon) amounted to Rs.1,483 crore, registering a growth of 26 per cent. However, revenues generated from Axicorp grew only 7 per cent, amounting to Rs.971 crore. Ms. Shaw admitted that overall profitability was affected by the poor margins generated by Axicorp. She pointed out that while margins in Biocon were more than 30 per cent, margins in Axicorp was only 2 per cent. “We are not worried too much about top line growth as much as we are concerned about overall profitability,” Ms. Shaw remarked.
Biocon, in association with Pfizer is investing $160 million to expand the insulin manufacturing facility in Malaysia.
Ms. Shaw said the company's engagement with Pfizer had resulted in licensing income from Pfizer, contributing significantly to the company's revenues — from Rs.50 crore in 2009-10 to a little over Rs.150 crore in 2010-11. Ms. Shaw admitted that staff costs had increased significantly during the year, but said the company planned to add 1,000 more employees to its current workforce of 5,500. The company announced an interim dividend of Rs.1.50 and a final dividend of Rs.3.
Ms. Shaw said the company was conducting final stage trials on its experimental oral insulin drug, IN-105, for which it has said it expected to find a global partner.
