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After registering encouraging data from oral insulin trials, Biocon is looking to partner on this with global pharma firms. What will be the key priorities in the next financial year, in the wake of sound growth in different verticals?
The key priorities will be to launch our various products in the emerging markets. Our focus will also revolve around the branded formulation business, which has seen significant traction in the recent time. On a nine-month basis, this business has seen 32 per cent growth in the current financial year.
Also, the services business through our contractual research units, Syngene and Clinigene, along with insulin programme, will remain growth spots for us. On a three to five year basis, we want to sustain the present growth level over 20 per cent and are hopeful of achieving it.
Which are the major challenges the company may have to face for sustaining such growth momentum?
The major challenge will come from the regulatory front. If we receive regulatory approvals for our insulin products, we will witness significant upside. Growth will also depend on the advances of our novel drug programme, that are under different phases of trial.
Further, the growth of our branded formulation business will determine the curve of the business. However, I don't think finances will be ever an issue for the company. We are nearly a zero-debt company and will face no problems in fund raising for scaling up our operation.
Which factors do you attribute for the significant improvement in operating margin?
Licensing income and sound product mix are the two factors behind recent margin expansion. All our products in the biopharmaceutical segment did well.
Will you specify the amount of licensing income for the company in the first nine months? How much did you get from the Pfizer deal during the third quarter?
The total licensing income was Rs 122 crore (Rs 1.22 billion) in the first nine months of this fiscal. We have received around Rs 75 crore (Rs 750 million) from outlicensing in the third quarter from various sources. However, I will not be able to give the amount from Pfizer.
The Rs 75 crore (Rs 750 million) has been accounted under various heads in the balance sheet, like R&D expenditure, among others.
R&D expenditure saw significant rise in the third quarter. What is your outlook on this front for the next fiscal?
R&D is very much a part of our business. Overall, we spend around eight per cent of our revenue on research activities. For the current fiscal, we will stick to our previous guidance of Rs 150-160 crore. However, it may see a certain upside in the next fiscal, with R&D expenditure increasing to 10 per cent of the total revenue.
Which factors made for sound growth of Syngene and Clinigene after the recent muted performance?
We have introduced many value-added services, along with partnership-based research, which have pushed the performance of both our contractual research arms. We are optimistic about the growth prospects of these arms and may look at listing these entities in the next 18 months.
What is the way forward for oral insulin after the recent human trail data released by the company?
We have got encouraging results from our human trial of oral insulin in the recent past. This trial has proved its efficacy and safety standards. We will continue with our trials in the near future. In the meantime, we will start discussing with global pharma companies for partnership in the oral insulin space.
