Biocon Ltd. share price target

25 January 2019 BIOS reported strong revenues, up ~46% YoY to INR15.1b (est. INR14.1b), led by strong growth in Biologics (28% of sales) and Research Services business (30% of sales). Superior product mix led to ~610bp YoY rise in gross margin (GM). EBITDA margin expanded ~560bp YoY (+80bp QoQ) to 26.5% on back of higher gross margin and lower employee cost, down ~280bp (as % of sales). This impact was partially off-set by higher other expense, which was up ~330bp (as % of sales). Absolute EBITDA increased by ~85% YoY (+20% QoQ) to INR4.1b on revenue growth and margin expansion. EBIT margin for the Biologics segment stood at ~30% v/s (-3%) YoY and 25% QoQ. PAT more than doubled to INR2.2b, growing ~136% YoY on back of strong revenue growth, margin expansion, and lower tax rate at 16.7% v/s 25.2% in 3QFY18.

Biocon Limited is an Indian biopharmaceutical company based in Bangalore, India.

ICICI Securities Ltd | Retail Equity Research Strong Q2 numbers were on the back of 136% YoY growth in Biologics segment led by commercial launch of biosimilar...

22 October 2018 received a positive opinion from CHMP for its Herceptin biosimilar for the EU market. BIOS/Mylan also have in place the EU good manufacturing practices (GMP) certification for their drug product and drug substance facilities. Biocon/Mylan would be the fifth team to receive a positive opinion for Herceptin for the EU market. Amgen received positive opinion from CHMP in Mar-18 and is in process to get approval EU commission. Though the market size is considerable, there is settlement in place between Mylan and Roche for launching the same in EU market. The inspection history at BIOS facilities (both drug substance as well as drug product) indicates successful compliance in place and would not be a hurdle for approval of any product. Recently, BIOS successfully completed the USFDA inspection (periodic GMP inspection) at its drug substance facility at Bengaluru with zero 483s.

24 September 2018 received a positive opinion from CHMP for its Neulasta biosimilar for the EU market. BIOS/Mylan also have in place the EU good manufacturing practices (GMP) certification for their drug product and drug substance facilities. Biocon/Mylan would be the fourth team to receive a positive opinion for Neulasta for the EU market. Accord (subsidiary of Intas Pharma) and Coherus received a positive opinion in July 2018, followed by Sandoz (Novartis division) and Cinfa Biotech in September 2018. The global market size of Neulasta is ~USD4.5b (as of CY17; ex-US sales USD600m). Separately, the drug product facility was inspected in April-May 2018 and received the Establishment Inspection Report (EIR) in June 2018. Successful inspections at both its facilities imply minimal regulatory hurdles for sales of pegfilgrastim biosimilar in the US market. BIOS/MYL, leading companies vying for approval in the regulated markets are Apotex, Sandoz, Coherus, Pfizer and Dr.

ICICI Securities Ltd | Retail Equity Research Revenues grew 20% YoY to | 1124 crore (I-direct estimate: | 1214 crore) mainly due to 35.5% YoY growth in Biologics to | 250 crore (Idirect estimate: | 239 crore) and 39.5% YoY growth in contract research to | 406 crore (I-direct estimate: | 425 crore) EBITDA margins increased 60 bps YoY to 21.2% (I-direct estimate: 20.7%) mainly due to lower R&D; spend. EBITDA grew 23.8% YoY to | 238 crore against I-direct estimates of | 251 crore Net profit grew 47.4% YoY to | 119.8 crore (I-direct estimate: | 127.6...

5 June 2018 Neulasta biosimilar version) was based on a comprehensive package of analytical, non-clinical and clinical data, which confirmed that the product is highly similar to Neulasta. Because of non-interchangability clause, BIOS/MYL would have to invest marketing efforts to garner business from this product. Other than BIOS/MYL, leading companies vying for approval in regulated markets are Apotex, Sandoz, Coherus, Pfizer and Dr Reddys. However, Apotex has not yet received approval for its BLA (biologic license application) version from USFDA. Coherus would be submitting the day-180 responses by the end of May and expects further opinion from advisory group CHMP (Committee for Medicinal Products for Human Use) on day-210, which is around end of June 2018. EU regulators are reviewing marketing authorization applications filed by BIOS/MYL, Sandoz and Cinfa Biotech. Specifically, BIOS/MYLs MAA was accepted in November 2017, Cinfa Biotechs in October 2017, and Sandoz filed in October 2017.

ICICI Securities Ltd | Retail Equity Research Revenues increased 26% YoY to | 1170 crore (I-direct estimate: | 1098 crore) mainly due to 48% YoY growth in Biologics to | 241 crore (I-direct estimate: | 179 crore) and 45% YoY growth in Syngene to | 409 crore (I-direct estimate: | 359 crore). EBITDA margins remained at 20%, however lower than I-direct estimates of 22.0% mainly due to lower gross margins led by change in product mix. EBITDA increased 24% YoY to | 233 crore...

Subdued revenue (up 1% YoY) and EBITDA (down 20% YoY on higher staff costs) were in line with estimates. Higher depreciation and lower other income pulled PAT down 46% YoY (11% lower than our estimate).

ICICI Securities Ltd | Retail Equity Research Biocon reported flat YoY revenues at | 1058 crore (I-direct estimate: | 1073 crore). Biopharmaceutical segment declined 9% YoY to 369...