Biocon posts strong results on contract research biz
year 2007, as revenues in its research services unit soared.
Operating income for the year ending 31 March 2007 was up 23 per cent, to Rs 287 crore (€50m) from Rs 234m crore in the previous year. The company also recorded a 25 per cent increase in sales from Rs 793 crore in the previous year to Rs 990 crore in the fiscal year. The Bangalore-based company's annual performance was largely driven by its contract business as revenue in the firm's research services and licensing segment grew 63 per cent, to Rs 163 crore contributing 17 per cent of its operating revenues for the year. M.B. Chinappa, Biocon's vice president of finance, told Outsourcing-Pharma.com that the company will focus on increasing the share of its research services segment to a quarter of its total revenue in the next three years. Chinappa said Biocon is planning to boost its contract research business as global pharma companies are increasingly looking to outsourcing R&D to India. "We are also planning to invest heavily in building up additional infrastructure in the next two years to support our contract services business growth," said Chinappa in an interview. Biocon's contract research segment includes its R&D services business performed by its subsidiary Syngene and its clinical research unit, which is run by Clinigene. In addition, the company also performed well in its biopharmaceuticals and enzymes business, as the segment grew 20 percent during the fiscal year, contributing 83 per cent to operating revenues. With a heavier focus on contract services, Chinappa said the enzymes segment will contribute 10 per cent of the firm's revenues in the next three years while the share biopharmaceuticals will be reduced to 65 per cent. Meanwhile, the drug maker said its net profit for the quarter ending 31 March 2007 jumped 27 per cent to Rs 61 crore, while sales were Rs 279 crore, up 30 percent from Rs 215m crore the previous year. During the quarter, Biocon's subsidiary Syngene entered into a partnership with Bristol-Myers Squibb (BMS) to provide the drug giant with services for the development of drugs. Syngene is currently building a new R&D facility in Bangalore, which will house up to 400 Biocon scientists who will provide medicinal chemistry, biology, drug metabolism, and pharmaceutical development services on behalf of BMS. Biocon and BMS already had a working relationship prior to the deal. However, no further details of the current or new arrangement, or the expected facility completion date were released by Miller for "competitive reasons." "Our strategy of building global scale in our products and services businesses has delivered robust profits this fiscal year," said Kiran Mazumdar-Shaw, chairman and managing director of Biocon. "Today, Biocon and its subsidiaries have created a unique matrix of capabilities that has earned us a strong reputation as a preferred partner to global pharma and biotech companies," she added.