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Biocon- Making Survival Cheaper
Company Overview and Stock Price 3
Product Overview 4
Syngene: Exclusively Inclusive 6
Pharma Sector Outlook 7
Govt Initiatives in Pharma 8
Company Financials 9
Peer Comparison 13
Shareholding Pattern 14
Biocon enters Japan 16
Investment Rationale 17
Page 2 Source: Company, www.dynamiclevels.com
Companys Overview and Stock Price
Biocon is Indias largest biotech company run by Kiran Mazumder Shaw. It has presence in more than 100 countries. Biocon has been driven by its strategy to provide affordable access to advanced biopharmaceuticals for global patient populations. It aspires to become a US $ 1 billion company by FY 18. As a fully integrated biopharma company it delivers innovative biopharmaceutical solutions, ranging from discovery to development and commercialization, leveraging the cutting edge science, cost-effective drug development capabilities and global scale manufacturing capacities, to move ideas to market. F16 Results highlights are as follows:
Revenues grew 16.9% YoY to 978.8 crore mainly due to 32.8% growth in the research segment Syngene.
Biopharma segment grew 8.6% YoY to 531 crore due to biosimilar launches in emerging markets,
EBITDA margins declined 31 bps YoY to 21.8% mainly due to higher R&D expenses. EBITDA grew 15.3% YoY to 213.3 crore.
Chart Hypothesis: Above is the weekly price chart of Biocon for last 1 yr, in which we can see that it made a new high of628.5 and has given breakout of important level of 545.
COMPANY PROFILE OF BIOCON
Date of Incorporation 29-Nov-1978 Date of Listing 07-Apr-2004
Management Name Designation
M Damodaran Addnl.Independent Director
Jeremy Levin Addnl.Independent Director
Vijay Kuchroo Addnl.Independent Director
Kiran Mazumdar Shaw
Chairperson & MD
Arun Chandavarkar Joint MD & CEO Daniel M Bradbury Non Exe. Director Russel Walls Non Exe. Director Suresh N Talwar Non Exe. Director Bala S Manian Non Exe. Director Mary Harney Non Exe. Director Charles L Cooney Non Exe. Director Ravi Mazumdar Non Exe. Director John Shaw Vice Chairman
Registered Office Address 20th K M, Hosur Road,Electronic
BIOCON Share Price Performance EXCHANGE SYMBOL BIOCON Current Price * (Rs.) 610.35 Face Value (Rs.) 5 52 Week High (Rs.) 628.5(4-5-16) 52 Week Low (Rs.) 395.3(24-8-15) Life Time high (Rs.) 628.5(4-5-16) Life Time low (Rs.) 85 (2-12-08) Average Daily Movement 14.28 Average Volume 1178973 1 Month Return (%) 16.18 P/E Ratio (x) 13.67 Book Value 208.29 Market Cap 12252.00 (Cr) % of Promoter holding Pledged 0.04
Page 3 Source: Company, www.dynamiclevels.com
Biocon has systematically leveraged its technology platforms from enzymes to small molecules to recombinant proteins and antibodies. Through partnerships and alliances, Biocon has strategically moved up the value chain from supplying pharmaceutical bulk actives to developing proprietary molecules and own branded formulations. In the areas of custom and clinical research services, collaborative partnerships with complementary biotechnology and pharmaceutical companies are yielding rich results. These partnerships will positively impact all phases of discovery portfolio. Biocon offers range of products from fermentation derived small molecules to recombinant proteins and antibodies. In the specialized field of custom bio-manufacturing, Biocon provides high quality, cost-competitive services to domestic and international pharmaceutical companies.
Small Molecules: Biocon's Small Molecules business is built on a robust foundation of unique expertise in fermentation technology and entrenched presence in the chronic therapy space. Biocons differentiated portfolio spans complex molecules ranging from cardiovascular and anti-obesity agents to immuno-suppressants and narrow spectrum antibiotics. It provides affordable access to patients and partners across the globe.
APIs: Biocon is one of the largest statins and immunosuppressants manufacturers in the world and a preferred partner for Active Pharmaceutical Ingredients (APIs).
With a strong focus on R&D in the Small Molecules business, Biocon has built a robust pipeline of complex generic products. A steady stream of new Drug Master Files (DMF) is filed with various regulatory authorities in several countries.
Generic Formulations: Biocon is developing value-added generic formulations for both emerging and developed markets.
The Generic Formulations business, established in 2012, filed its first set of Abbreviated New Drug Applications (ANDAs) in the US and Marketing Authorization Applications (MAAs) in the EU during FY 15. These filings are in line with their strategy of reducing the threat arising from the commoditization of APIs, by moving up the value chain to develop generic finished dosages for global markets.
Page 4 Source: Company, www.dynamiclevels.com
Forward integration of complex fermentation-based APIs, expertise in producing large-scale sterile injectables and manufacturing capabilities for device-based products are Biocons key differentiators in the competitive generic formulations business. To strengthen this business further, Biocon is also setting up a greenfield oral solid dosage facility.
Biosimilars: Biocon has leveraged its core strength of fermentation technology to develop a wide portfolio of generic Insulins and Analogs, biosimilar Monoclonal Antibodies (MAbs) and recombinant proteins. Biocon has emerged as a significant global player by competence and pioneering technology capabilities.
As the Biosimilars opportunity unfolds, Biocon is at the right place, at the right time. Biocon is rapidly growing its development, regulatory and clinical expertise, along with world class manufacturing capabilities, to make therapies affordable to patients, on a global scale. Biocon is well positioned to contribute towards lowering costs and increasing access to this highly innovative class of drugs. The Biosimilars opportunity is set to expand as patents expire on leading biologics and patients demand lower priced drugs. A number of top-selling biologics are due to lose product patent protection over the next 5-7 years, opening up a wealth of new possibilities for biosimilars players. Key therapy areas such as cancer, diabetes and rheumatoid arthritis will spearhead this new wave of biosimilars. Biocon is well placed to leverage many of these opportunities. Biocon is entering emerging markets with Recombinant Human Insulin (rh-Insulin), Insulin Analogs and Monoclonal Antibodies (MAbs), key products in Biosimilars portfolio.
Branded Formulations: Branded Formulations has been a strong growth driver and a considerable value builder for Brand Biocon. The Company is committed to achieving market leadership in its chosen therapeutic areas through a carefully orchestrated strategy of product differentiation and personalized medical support.
Biocon's presence in the chronic disease segment in India, is represented by over 80 brands spread across six therapeutic segments: Metabolics, Oncotherapeutics, Nephrology, Comprehensive Care, Immunotherapeutics and Virology.
Page 5 Source: Company, www.dynamiclevels.com
Syngene: Exclusively inclusive:
Syngene has championed the Exclusively inclusive philosophy of Biocon by offering niche services to a large and diverse clientele. It has also established exclusively dedicated R&D centers for some of its anchor clients like Bristol. Incorporated in 1993 as a subsidiary of Biocon Limited, Syngene is a leading custom research and manufacturing organization, which supports R&D programs from lead generation to clinical supplies. At Syngene Clinical development group, partners with global pharmaceutical and biotechnology companies in their clinical development programs. It evaluates the safety and efficacy of new drugs across a wide range of therapeutic indications. Syngene team ensure: - Timely execution of projects - Cost effectiveness and quality of the projects - Confidentiality and protection of intellectual property
Mr. Jonathan Hunt, Chief Executive Officer - Syngene International Limited said, We are happy to report excellent revenue growth of 31% during Q4 FY16, with revenues growing from Rs 254 Cr in Q4 FY15 to Rs 334 Cr in Q4 FY16. This growth has been driven by robust performances within all three of our key business verticals; dedicated R&D centers, discovery services as well as development & manufacturing services. On a full year basis, I am happy to report strong revenue growth of 28%; this momentum, combined with our extensive capital investment plans, puts us on-track to achieve our mid-term revenue target for FY 18 and deliver excellent returns for our investors
Syngene International IPO oversubscribed 31 times.
Page 6 Source: Company, www.dynamiclevels.com
Pharmaceutical Sector Outlook
The Indian pharmaceuticals market is the 3rd largest in terms of volume
and 13th largest in terms of value. Branded generics dominate the
pharmaceuticals market, constituting nearly 70 to 80 % of the market.
India is the largest provider of generic drugs globally with the Indian
generics accounting for 20 % of global exports in terms of volume. The
Indian pharmacy industry, which is expected to grow over 15 % p.a.
between 2015 and 2020, will outperform the global pharmacy industry,
which is set to grow 5 %