Indian biopharmaceutical major Biocon faced headwinds in its biologics business during the fourth quarter due to logistics challenges on the back of coronavirus-led lockdowns. Speaking to BusinessToday.In, palpably upbeat on the propects for biosimilars and generics industries in the post-COVID world, Kiran Mazumdar-Shaw, executive chairperson of Biocon says, "Only the biologics had a weak quarter and the rest of the businesses performed very strongly. The biologics business got impacted by COVID-related logistics issue during the quarter."
"We were not able to ship little over Rs 100 crore worth of products from India as these were times when flights had also been cancelled and it was difficult to export," she added.
Shipping the inventory to the US and moving it to the distribution channels under the current scenario was a challenging exercise. "It is a one-off issue and we are very confident now that we will recover from this and will also start normalised growth," says Mazumdar-Shaw.
She, however, does not miss to remind "our small molecule business did very well and we were able to shift out before the lcokdown. I feel, if we did not have the hiccups we faced in the biologics business, this would have been a strong quarter, much like the previous three quarters."
Going forward, she says, "when you look at the healthcare sector around the world, there is a clear need to contain costs and in post COVID scenario costs will have to be contained even more. So you will find that there will be an uptick in the demand for both generics and biosimilars."
In a note shared with media, Mazumdar-Shaw stated: "Q4FY20 witnessed a muted growth of 6 per cent with revenues at Rs 1,644 crore due to operational challenges, including one-time COVID-19 related impact on our biologics business. Small molecules and research services businesses, however, delivered robust growth of 15 per cent and 14 per cent, respectively. On a full-year basis, we reported a revenue growth of 15 per cent led by a strong performance by biologics which grew by 29 per cent, small molecules by 18 per cent and research services by 10 per cent. We believe that the biologics business will recover in Q1 FY21, and fully normalise from Q2 FY21. For FY20, EBITDA at Rs 1,765 crore reported a growth of 15 per cent. Net profit, before exceptional item, at Rs 760 crore reported a 4 per cent growth. Core margins were strong at 33 per cent with EBITDA margin of 27 per cent and net profit margin of 11 per cent."
She further stated, "We are dealing with unprecedented challenges related to COVID-19, and as a science-led company we are engaged in several initiatives spanning diagnostic tests, vaccines and therapies towards combating COVID-19. We have also implemented several workplace safety measures in accordance with government guidelines, including temperature checks, wearing of masks, sanitising, zoning and physical distancing. We are confident that together with our teams and partners we will assure safe and uninterrupted manufacturing and enable access to our life-saving medicines despite the current challenges."
Some key highlights from the results:
- Crossed annual revenue milestone of Rs 2,000 crore for the first time
- Revenue from Generic Formulations more than doubled during the quarter
- Received EIR with VAI classification from US FDA for two distinct Small Molecules API manufacturing facilities in Bengaluru; inspections stand closed
- Closed US FDA inspection for Oral Solid Dosage facility located in Bengaluru with zero observations
- Biosimilar Pegfilgrastim, Fulphila, co-developed with Mylan, commercialised in Australia and Canada
- US FDA accepted the Biologics License Application for our proposed biosimilar Bevacizumab, co-developed with Mylan, for review under the 351(k) pathway
- Won patent litigation asserted by Sanofi for Insulin Glargine device patent in the US
- Insulin manufacturing facility in Malaysia received EIR from US FDA, denoting closure of inspections
- Received EIR from US FDA for two biologics manufacturing facilities in Bengaluru; inspection stands closed
- Biologics Drug Substance manufacturing facilities in Bengaluru receive EU GMP certification
- Received permission from Indian regulator DCGI for conducting clinical trials to study Itolizumab in treating moderate to severe patients with COVID-19 complications in India
- Commissioned a new research facility at Biocon Park in Bengaluru
- Repurposed one of its high-end laboratories to conduct RT-PCR tests for COVID-19, helping scale up testing capacity in Bengaluru, offering free testing services to city hospitals
- Partnered with Pune-based Mylab Discovery Solutions to supply reagents (primers and probes) for use in its COVID-19 RT-PCR testing diagnostic kits