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Biocon (Price Rs. 387 (as on Jan 20 ), TP Rs. 480, ER 24.0%, EDY 1.1%,
2M) : Licensing Income Drives Beat
Licensing Income Drives Beat — Biocon’s reported 3Q numbers were
higher than our expectations (13% beat on EBIDTA and 9% beat on net
income), almost entirely driven by higher licensing income (net of
higher R&D spend) during the quarter. Other than this, the only
surprise was subdued performance at Axicorp, which was offset by
strong growth in Biopharma and a recovery in research services.
Biopharma drives topline — Higher sales in Biopharma (+22% YoY; +15%
QoQ) & higher licensing income (up 339% YoY – largely from Pfizer) led
to good revenue growth (+15% YoY). Launch of tacrolimus earlier in
FY11, continued growth in the India branded biz & a pick up in statins
were the main factors aiding strong growth in Biopharma. Research
services (+14%) also grew well following a pick up in fortunes at
Syngene. However, the Axicorp biz (-15%YoY, -19% QoQ) in Germany was
affected by compulsory rebates in the German market from this quarter.
Profitability aided by higher licensing Income — EBIDTA margins
improved 317bps YoY, primarily on the back of higher licensing income.
R&D expenses were higher as well, with charges of cRs300m (related to
insulin for Europe) that were capitalized earlier being expensed
during the quarter. Net Profit growth (+22% YoY) was subdued due to
unusually higher tax rate (c22% vs. 15%), which is expected to
normalize over the full year.
Key Earnings Call Takeaways — a) Encouraged by the oral insulin (IN
105) trial results and hopes to be able to shortlist a potential
licensing partner in the next 6 months b) Revenues from India and
other emerging markets under the insulins deal with Pfizer to commence
in FY12; c) Plans to bolster immunosupressants pipeline with 3 new
products (one filed, two under development for the US); d) Expects to
launch reusable pen for insulin in mid-2011; e) Expects to file human
insulin in Europe in mid CY12. Glargine trials for EU to also start in
CY11
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Biocon (Price Rs. 387 (as on Jan 20 ), TP Rs. 480, ER 24.0%, EDY 1.1%,
2M) : Licensing Income Drives Beat
Licensing Income Drives Beat — Biocon’s reported 3Q numbers were
higher than our expectations (13% beat on EBIDTA and 9% beat on net
income), almost entirely driven by higher licensing income (net of
higher R&D spend) during the quarter. Other than this, the only
surprise was subdued performance at Axicorp, which was offset by
strong growth in Biopharma and a recovery in research services.
Biopharma drives topline — Higher sales in Biopharma (+22% YoY; +15%
QoQ) & higher licensing income (up 339% YoY – largely from Pfizer) led
to good revenue growth (+15% YoY). Launch of tacrolimus earlier in
FY11, continued growth in the India branded biz & a pick up in statins
were the main factors aiding strong growth in Biopharma. Research
services (+14%) also grew well following a pick up in fortunes at
Syngene. However, the Axicorp biz (-15%YoY, -19% QoQ) in Germany was
affected by compulsory rebates in the German market from this quarter.
Profitability aided by higher licensing Income — EBIDTA margins
improved 317bps YoY, primarily on the back of higher licensing income.
R&D expenses were higher as well, with charges of cRs300m (related to
insulin for Europe) that were capitalized earlier being expensed
during the quarter. Net Profit growth (+22% YoY) was subdued due to
unusually higher tax rate (c22% vs. 15%), which is expected to
normalize over the full year.
Key Earnings Call Takeaways — a) Encouraged by the oral insulin (IN
105) trial results and hopes to be able to shortlist a potential
licensing partner in the next 6 months b) Revenues from India and
other emerging markets under the insulins deal with Pfizer to commence
in FY12; c) Plans to bolster immunosupressants pipeline with 3 new
products (one filed, two under development for the US); d) Expects to
launch reusable pen for insulin in mid-2011; e) Expects to file human
insulin in Europe in mid CY12. Glargine trials for EU to also start in
CY11
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