HYDERABAD (Reuters) – India’s Biocon on Thursday posted a 29.8% fall in June-quarter profit, hurt by increased spending in research and development (R&D).
Consolidated net profit attributable to shareholders came in at 1.01 billion rupees for the first quarter ended June 30, compared with 1.44 billion rupees a year earlier.
Total expenses surged 66.8% to 32.99 billion rupees, while net R&D expenditure grew 59%, the biopharmaceutical company said.
Revenue from operations jumped 60% to 34.23 billion rupees, boosted by the biosimilars segment, the company’s biggest contributor, growth in which more than doubled to 20.15 billion rupees.
Biocon’s recent acquisition of U.S.-based Viatris’ biosimilars business last year, helped its segment shine.
Biosimilars are copies of costlier biological drugs used to treat illnesses such as cancer, rheumatoid arthritis, psoriasis, etc. The global biosimilars market is expected to triple to $74 billion by 2030, according to McKinsey.
But generic drug makers are struggling with intense price competition in the United States and Europe.
Revenue in the generic drugs segment rose 15.3% to 7 billion rupees, while research services saw a 25.4% jump to 8.08 billion rupees.
Last month, larger peers Dr Reddy’s Laboratories and Cipla posted first-quarter profits that beat estimates. Shares of Biocon closed 3.2% lower, ahead of the company’s results.
($1 = 82.5830 Indian rupees)
(Reporting by Rishika Sadam in Hyderabad and Yagnoseni Das in Bengaluru; Editing by Varun H K)
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