Biocon Q2 net dips 11 pc to Rs 168 crore; board approves fundraising

Biotechnology major Biocon on Monday said its consolidated net profit declined by 11 per cent to Rs 168 crore in the second quarter ended September 30, 2022, on account of rise in overall expenses.

The Bengaluru-based firm had reported a net profit of Rs 188 crore (before exceptional items) in the July-September quarter of previous fiscal.

Revenue from operations rose to Rs 2,320 crore in the period under review as compared with Rs 1,840 crore in the September quarter, Biocon Ltd said in a statement. Total expenses rose to Rs 2,110 crore in the second quarter, up 30 per cent, as against Rs 1,619 crore in the July-September period of last fiscal.

The company said its board has approved the issuance of redeemable, non-convertible debentures aggregating ''up to INR equivalent of USD 250 million on private placement basis and issue of Commercial Paper up to INR equivalent of USD 275 million on private placement basis''.

Biocon Executive Chairperson Kiran Mazumdar-Shaw said the company reported a strong consolidated revenue growth on the back of 34 per cent growth in biosimilars, 26 per cent in research services and 18 per cent in the generics business.

''We have delivered a resilient performance in H1FY23, with all segments delivering strong revenue growth. We expect to consolidate on this performance in the second half of FY23. Enhanced capacities and new launches will drive growth for our API and generic formulations business, while continued business momentum should help Syngene achieve its guidance for the full year,'' she added.

Mazumdar-Shaw said the consolidation of Viatris' global biosimilars business and the strategic vaccines alliance with Serum Institute will add to the growth of the biosimilars business in the second half of the current fiscal.

''We have secured necessary financing and obtained relevant approvals for the Viatris transaction, which is expected to close shortly,'' she added.

The company said the transaction to acquire Viatris' global biosimilars business is expected to conclude soon.

''On closing, Biocon Biologics will issue Compulsorily Convertible Preference Shares (CCPS) in the company valued at USD 1 billion and make an upfront cash payment of USD 2 billion to Viatris,'' it said.

To fund the cash component of the deal, Biocon Biologics has secured USD 1.2 billion of debt, it added.

The balance will be funded through an equity infusion of USD 650 million by Biocon and USD 150 million by Serum, the company said.

''Biocon will fund USD 230 million from existing reserves and USD 420 million through mezzanine financing. Biocon is in the process of securing investments to retire the mezzanine financing, post deal closure,'' it added.

Biocon's stake in Biocon Biologics will be 68 per cent post the conclusion of the Viatris and Serum transactions, the company noted.

The strategic alliance with Serum Institute Life Sciences (SILS) for vaccines is on track for closure by the end of third quarter, it added.

Serum and Biocon Biologics, a unit of Biocon, had entered into a collaboration in September last year.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)