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Biocon Ltd. — Call Transcript 2023
Nov 11, 2023
61176_rns_2023-11-11_36bd157e-8bb8-44fc-95e0-5c7b81ea0b9e.pdf
Call Transcript
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Biocon Limited 20th KM, Hosur Road Electronic City Bangalore 560 100, India T 91 80 2808 2808 F 91 80 2852 3423
CIN : L24234KA1978PLC003417
www.biocon.com
BIO/SECL/SP/2023-24/115
November 11, 2023
| To, The Secretary BSE Limited Department of Corporate Services Phiroze Jeejeebhoy Towers, Dalal Street,Mumbai – 400 001 |
To, The Secretary National Stock Exchange of India Limited Corporate Communication Department Exchange Plaza, Bandra Kurla Complex Mumbai – 400 050 |
|---|---|
| Scrip Code - 532523 | Scrip Symbol- BIOCON |
Dear Sir/Madam,
Subject: Presentation and Video Recording of Q2 FY24 Earnings Call
Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), please find enclosed the presentation on Q2FY24 Earnings Call conducted on November 10, 2023. The same is also available on the website of the Company at www.biocon.com.
Further, the Video Recording w.r.t. the Earnings Call is also available on the website of the Company at https://www.biocon.com/news-biocon/video-gallery-biocon/quarterlystatements-biocon/#1653297216088-5a4e9281-2d49.
Kindly take the above said information on record.
Thanking You,
Yours faithfully,
For Biocon Limited
MAYANK Digitally signed by MAYANK VERMA VERMA Date: 2023.11.11 15:28:39 +05'30' _______
Mayank Verma Company Secretary & Compliance Officer Membership No.: ACS 18776
Encl. as above
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Q2 FY24 Earnings Call November 10, 2023
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Safe Harbor Statement
Certain statements in this release concerning our future growth prospects are forward-looking statements, which are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated in such statements. factors that could cause actual results to differ from our forward-looking Important materially expectations include, amongst others general economic and business conditions in India, our ability to successfully implement our strategy, our research and development efforts, our growth and expansion plans and technological changes, changes in the value of the Rupee and other currencies, changes in the Indian and international interest rates, change in laws and regulations that apply to the Indian and global biotechnology and pharmaceuticals industries, increasing competition in and the conditions of the Indian biotechnology and pharmaceuticals industries, changes in political conditions in India and changes in the foreign exchange control in India. Neither the nor its directors and of the affiliates have to or regulations company, any any obligation update otherwise revise statements circumstances after this date or to reflect the occurrence of any reflecting arising underlying . events, even if the underlying assumptions do not come to fruition
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Chairperson Opening Remarks
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Group Financials Highlights : Q2 FY24
| Consolidated (in ₹ Cr.) | Q2 FY24 | Q2 FY23 | YoY % |
|---|---|---|---|
| Total Revenue | 3,620 | 2,384 | 52 |
| Biosimilars | 1,969 | 997 | 97 |
| Research Service | 910 | 768 | 18 |
| Generics | 676 | 652 | 4 |
| Core EBITDA1 | 1,100 | 815 | 35 |
| % Margin | 32% | 35% |
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Leadership Appointments
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Kedar Upadhye
Chief Financial Officer, Biocon Biologics
Peter Bains Group CEO
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Group CEO Opening Remarks
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Key Leadership Appointments
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Dr. Uwe Gudat Chief Medical Officer Biocon Biologics
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Dr. Arlene Wolny
Global Head of Regulatory Affairs Biocon Biologics
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Ramprasad Bhat
Head – Branded Formulations India Biocon Biologics
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Nitin Tiwari
Quality Head, Biocon Limited
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Financial Highlights Q2 FY24
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Financial Hi hli hts: Q2 FY24 g g
| Consolidated (in ₹ Cr.) | Q2 FY24 | Q2 FY23 | YoY % | ||
|---|---|---|---|---|---|
| Total Revenue | 3,620 | 2,384 | 52 | **Biosimilars +97% | |
| Core EBITDA1 | 1,100 | 815 | 35 | Growth across Generics, Biosimilars & Research Services | |
| % Margin | 32% | 35% | |||
| EBITDA | 900 | 535 | 68 | Net R&D spendat ₹264 Cr, up ₹22 Cr vs Q2 FY23, representing 10% of revenues ex-Syngene |
|
| % Margin | 25% | 22% | |||
| Profit Before Tax (Before exceptional charge) |
238 | 246 | (3) | Increase in depreciation, amortization and interest expense by ₹376 Cr, primarily related to acquisition of Viatris’ biosimilar business |
|
| % Margin | 7% | 10% | |||
| Net Profit (Before exceptional charge) |
142 | 168 | (16) | Increase in minority interestdue to dilution of shareholding in Syngene and Biocon Biologics on account of the Viatris deal |
|
| Net Profit Margin % | 4% | 7% | |||
| 1 | Core EBITDA defined as EBITDA before forex, | dilution gain in Bicara, R&D, | licensing income and mark to market movement on investments. |
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Financial Highlights: Q2 FY24
| Consolidated (in ₹ Cr.) | Q2 FY24 | Q2 FY23 | YoY % | |||
|---|---|---|---|---|---|---|
| Net Profit (before exceptional charge) |
142 | 168 | (16) | Exceptional items: | ||
| • | Q2 | FY24 | ||||
| • | PLI accrual reversal for last year | |||||
| • | Stelis acquisition related expenses | |||||
| Exceptional Items (net of tax and minority interest) |
(16) | (122) | • | Q2 | FY23 | |
| • | Deal related expenses of the Viatris | |||||
| transaction | ||||||
| • | MAT credit balance charge on adoption of | |||||
| new tax regime of 25% | ||||||
| Net Profit (Reported) |
126 | 47 | 168 |
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Generics Q2 FY24
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Biocon Generics: Q2 FY24 Highlights
Performance driven by continued traction in our US generic formulations business and expansion in MoW markets. API business performance muted. Announced a partnership agreement with Juno Pharmaceuticals for the commercialization of Liraglutide in Canada Acquired U.S. FDA approved oral solid dosage facility of Eywa Pharma Inc. Received seven generic formulations approvals across markets. Two API approvals each, received in the U.S. and EU
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In INR Cr Q2 FY24 Q2 FY23 YoY %
Segment Revenue 676 652 4
PBT 66 54 22
% of revenue 10 8
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Process validation at the Company’s greenfield immunosuppressant API facility in Visakhapatnam successfully completed
Expect sustained performance from the generic formulations and some recovery in API business performance
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Biosimilars Q2 FY24
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Biocon Biologics: Biosimilars – Q2 FY24 Business Update
Integrated North America business – seamless commercial operations from 1[st] September; remain on track to transition Europe, JANZ and the remaining Emerging Markets later during the year
Good momentum across oncology and insulins; Addition of new customers enables volume growth, accommodating for price erosion
Key Products’ Market Share[1]
| United States | United States | ||
|---|---|---|---|
| Sep-23 | Jun-23 | Sep-22 | |
| Fulphila (bPegfilgrastim) | 19% | 16% | 11% |
| Ogivri (bTrastuzumab) | 12% | 11% | 10% |
| Semglee (bGlargine)2 | 11% | 12% | 9% |
bAdalimumab (US): adoption of biosimilars slower than anticipated across the market
Potential to improve EU performance with the completion of transition
Divesting non-core Dermatology and Nephrology business in India, sharpening focus and aligning it with our global portfolio and strategy
Europe
| Jul-23 | May-23 | Jul-22 | |
|---|---|---|---|
| Fulphila (bPegfilgrastim) | 8% | 7% | 5% |
| Ogivri (bTrastuzumab) | 4% | 5% | 5% |
| Abvemy (bBevacizumab) | 7% | 5% | 1% |
| Semglee (bGlargine) | 2% | 2% | 1% |
| Hulio (bAdalimumab) | 6% | 6% | 6% |
| Nepexto (bEtanercept) | 2% | 1% | 1% |
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- Market shares based on IQVIA volumes, Eq.SU I 2. Includes both Semglee and unbranded Glargine
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Biocon Biologics: Biosimilars – Q2 FY24 Financial Update
Revenues marginally down despite significantly lower licensing revenues versus last quarter
Excluding licensing revenues, sequential growth at 6%, reflecting underlying positive performance of commercial products
Core EBITDA[1] margin in line with guidance of mid-30s; R&D at 11% of revenue
Sequential increase of ₹35 Cr in D&A and interest expense
| In INR Cr | Q2 FY24 | Q1 FY24 | QoQ % |
|---|---|---|---|
| Revenue | 1,969 | 2,015 | (2) |
| Core EBITDA1 | 660 | 513 | 29 |
| % of revenue | 34 | 28 | |
| EBITDA | 453 | 457 | (1) |
| % of Revenue | 23 | 23 | |
| PBT | (15) | 24 | (164) |
| % of Revenue | (1) | 1 |
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- EBITDA before R&D, licensing income, forex and mark-to-market movement on investments
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Biocon Biologics: Biosimilars – Q2 FY24 Other Business Updates
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European Commission granted MA for Yesafili (bAflibercept): EU brand sales of ~$1.8 billion annually
US FDA has issued a CRL for the BLA of our Insulin Aspart
Key Catalysts
Activation of near-term catalysts: bAdalimumab, bAspart and bBevacizumab
Future growth catalysts: bAflibercept, bUstekinumab, bDenosumab (total originator sales of $25b)
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- EBITDA before R&D, licensing income, forex and mark-to-market movement on investments
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Novels Q2 FY24
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Novel Molecules: Bicara Therapeutics*
BCA 101
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Recently presented updated, positive interim data from its ongoing, open-label Phase 1/1b dose expansion study of BCA101 in European Society for Medical Oncology (ESMO) Congress.
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Strong investigator interest to enroll patients in future studies
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US$108 million Series B Financing from dedicated biotech investors is being realized in a staggered manner
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Biocon recorded a step-up gain of ₹75 crores in the consolidated P&L statement during the quarter
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*a US based clinical-stage biotechnology company. In Q4FY21, Biocon ceded control over the Board of Directors and Operations of Bicara to enable it to operate independently under a US based leadership team and raise funds to advance its development programs. As a result of this change, Bicara was classified as an Associate from a Subsidiary under IND-AS.
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Research Services Q2 FY24
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Syngene: Q2 FY24 Update
| In Manufacturing Services, Syngene continued to make good progress on the long-term biologics manufacturing partnership with Zoetis Strong performance led by Development and Manufacturing Services; supported by sustained momentum in Dedicated Centers |
In INR Cr Q2 FY24 Q2 FY23 YoY % |
|---|---|
| Revenue 910 768 18 EBITDA 276 232 19 % of Revenue 30 30 PBT 158 130 22 % of revenue 17% 17% |
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Concluding Remarks
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Concluding Remarks: Q2 FY24
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Biocon Biologics on track with its accelerated transition program to create a fully integrated globally scaled leading biosimilar enterprise
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Sustained momentum and market share gains seen with commercialized products in the U.S. and Europe demonstrates the effectiveness of Biocon Biologics’ commercial engine
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Provides a strong foundation for future of Biocon Biologics; rich pipeline with new product launches planned almost every year through 2030
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Remain on track to deliver $1 billion revenue for Biocon Biologics, mid-teen constant currency growth in Syngene and an improved second half performance in Generics.
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Q&A
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