The fiscal year gone by has been one of the most exciting ones for Biocon. We delivered on our promise of affordable innovation, recorded robust top line and bottom line growth, augmented our capacities, optimized our product portfolio and introduced initiatives to achieve operational efficiencies.
We successfully commercialized two world-class, low-cost monoclonal antibodies, an outcome of our innovation model– ALZUMAb™ and CANMAB™ , in India in FY14.
Our novel, ‘first-in-class’ biologic drug for chronic plaque psoriasis, ALZUMAb™, was made available to patients in August 2013. It is the first biological drug for psoriasis to be researched, developed and manufactured in India. ALZUMAb™ has received an enthusiastic response from both physicians and patients as it is an affordable treatment option that promises patients a better quality of life. This unique product offers an effective biologic treatment solution to 1-2% of the Indian population who suffer from psoriasis.
Biocon followed this up with CANMAb™, the world’s lowest priced trastuzumab. The launch of CANMAb™ in India represents an important milestone. It demonstrates that Biocon’s decade-long experience and expertise in developing biologics has equipped the company with the necessary clinical development and manufacturing skills to deliver high quality, world-class products.
Creating IP, Adding Value
With these two launches, Biocon has again proved to the world that as far as scientific talent is concerned Indians are second to none.
Moreover, these two launches have lent credibility to our strategy of building a rich pipeline of innovative programs that has today made Biocon one of the highest R&D spenders in this country.
I believe that the only way we can create exponential and enduring value for Biocon’s stakeholders is through innovation and intellectual wealth and I am happy to say we are doing just that.
Here, I would like to draw attention to the fact that Biocon has been able to deliver on its promise of affordable innovation despite the current hostile environment towards pharma innovation in India.
Uncertainty over clinical trials is just one of the several challenges that Biocon faced in FY14. But in keeping with the company’s ethos, we addressed them with a sense of dedication and determination.
The clinical trials environment in India has become extremely challenging because of the irrational stand taken by courts on the issue and the government’s knee-jerk policy-making to mollify the judiciary.
If the situation is not rectified, it can have an irretrievable impact on India’s ability to partake in new drug development and end up denying patients here the benefits from the latest advances in medical science.
To address the increasing product commoditization in the small molecules business and improve profitability, Biocon had embarked on its strategy of moving up the value chain to forward integrate into building a robust pipeline of generic formulations, including ANDAs for the US market. This pipeline of difficult-to-make, technology-intensive molecules will be the growth driver for the small molecules business in the next few years. It will also make Biocon among the few companies in the world with a strong portfolio of small molecule generics as well as generic biologics.
In FY14, the domestic pharma industry saw growth slow down to 6% due to the combined impact of economic slowdown, intense competition, and issues related to drug price controls. However, leveraging the strengths of its business model with a focus on specialty pharma, Biocon was able to outpace the industry, growing its India business revenue at 13%, over double the pace of the industry growth.
Besides, the India branded formulations business, other principal revenue drivers like insulin exports and research services also helped Biocon’s revenue jump 16% in FY14. Our profit for the previous year was boosted by an exceptional income related to the dissolution of our global partnership with Pfizer. Excluding the exceptional income recognized last year, profit for FY14 grew 28%.
Good demand from emerging markets for our insulin exports led to a 15% growth in Biopharma sales for the year. To meet increasing demand, Biocon had enhanced its insulin manufacturing capacity in Bangalore in FY14.
Given Syngene’s growing stature as a pharma outsourcing partner of global repute, it was no surprise then that our research services business reported stellar growth of 28% in FY14.
Syngene, which has marquee clients like BMS and Abbott, got a strong endorsement of its capabilities this year after Baxter established its Global Research Center at Syngene in Bangalore.
In FY14, Biocon strengthened its focus on research partnerships with two important collaborations.
Biocon entered into a pact with Quark Pharmaceuticals to develop novel therapeutics for treating serious ophthalmic conditions like glaucoma.
It also tied up with Advaxis for developing a novel cancer immunotherapy to treat HPV-associated cervical cancer in women.
As a leading bio-pharma enterprise Biocon embarked on establishing Biocon Academy, a Centre of Excellence for Advanced learning in Biosciences. The Academy will train engineering and biotech graduates to enhance their employability and strengthen the talent pipeline for the benefit of the country’s bio-pharma sector. The first batch of 30 students who underwent 16 weeks of rigorous learning and skill development will be ready for placements in May. As an extension of its Corporate Social responsibility Biocon is offering 75% of the course fee as scholarship to all the students.
For its flagship program, the Academy has collaborated with Keck Graduate Institute, California.
Biocon was ranked No 6 amongst the Top Ten Global Best Employers as a mark of recognition for its Clarity of vision, CSR initiatives and Quality of research, by the ‘Science’ Magazine in 2013. It had debuted on the list in 2012 at No. 19.
We stay committed to pursue our innovation led business strategy and build superior value for Biocon and its stakeholders.
Biocon has delivered a strong financial performance for Q4 and FY14. Despite this, a section of the business media have focussed solely on the reported net profit for the quarter and the financial year in their headlines, which gives a misleading picture of the company’s actual performance.
Biocon’s net profit in the previous year was boosted by an exceptional income related to the dissolution of its global partnership with Pfizer.
- In revenue terms, there was a 15% year-on-year increase in quarterly numbers and a 16% jump in annual terms.
EBITDA for the quarter soared 56% and for the full year rose 25%.
Profit After Tax (excluding exceptional items) zoomed 75% for the quarter and 28% for the year.
EBITDA Margin was 25% for FY14; 26% for Q4
As the quality of Biocon’s financial results have indeed been robust, we would seek your help in correcting the negative perception that has been created by some misleading headlines, please look into this aspect while doing stories on Biocon’s results.