Biocon Q1 net down 11.3%
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Biocon Q1 net down 11.3%

By agencies   |   Wednesday, 20 July 2005, 07:00 Hrs
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MUMBAI: Biocon Ltd. reported 11.3 percent fall in its quarterly net profit on Wednesday, hit by price pressures on its cholesterol-busting statin drugs.

Its shares fell as much as 4.8 percent on the result, but the Bangalore-based company with a market value of more than $1 billion said it was upbeat on its performance for the year.

Biocon said its net profit for the fiscal first-quarter ended June dropped to $87.9 million from $99.20 million in the year-ago period, while sales rose to $395 million from $363 million.

"As anticipated, pricing pressures in the European market have affected our percentage margins this quarter,” said Chairwoman Kiran Mazumdar-Shaw, the country's wealthiest woman on the basis of her 40 percent stake in Biocon.

The margin on earnings before interest, depreciation and amortization was steady at 30 percent over the quarter, but down from 33 percent a year ago, the company said.

"The outlook for the year ahead remains positive," Mazumdar-Shaw said, adding that the new growth drivers were insulin, immunosuppresants and branded formulations.

The company's shares, which fell to Rs 430 in early trade, later recovered to Rs 439.25 at 0537 GMT, still down 2.7 percent while the benchmark BSE index was up 0.4 percent.

Biocon, which also has service units for clinical trials and contract research, is aiming to be a key player with its human insulin, in which it aims to challenge Eli Lilly and Danish Novo Nordisk.

Biocon has a nine-year deal with Bristol-Myers Squbb to supply insulin and a separate partnership with U.S.-based privately held Nobex Corp.

The company's contract research unit Syngene signed up new contracts in the latest quarter, which will generate additional revenues in the coming quarters, the firm said.

Biocon, which began as an industrial enzyme maker, gradually expects to switch from bulk manufacture of enzymes and statins to its own research-developed drug molecules. Apart from insulin, it is in the process of developing a cancer drug.

"The real excitement in the quarter lies in the progress made in our discovery-led research programmes in diabetes and oncology (cancer research)," Biocon said.

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