- Biocon Limited share price fell over 3% despite a 14% jump in revenue between April and June 2020.
- The research and development expenditure went up 35% and pushed the profit down by a quarter compared to the same time last year
- However, Syngene, where Biocon owns 70% stake, has projected a double-digit revenue growth for the rest of the financial year.
- Check out the latest news and updates on Business Insider.
The Bengaluru-based biopharmaceutical company Biocon Limited share price fell over 3%. Investors were disappointed by the 26% fall in profit to ₹167.8 crore — despite a 14% rise in revenue— between April and June 2020 compared to a year earlier. However, the shares of its subsidiary Syngene, the integrated research, development and manufacturing company, where Biocon owns 70% stake, is up and about with gains of over 5%— the rally is close to 13% in the last two days.
The pain in Biocon
Biocon, executive chairperson,
The company spent 35% more on the research and development as the COVID-19 pandemic peaked. However, research services (which made for a quarter of the company’s revenue) didn’t grow at all. The revenue from the segment was ₹422 crore, unchanged from a year ago.
Syngene looks to return to growth
COVID-19 impacted performance at Syngene with Q1 profits dropping 19% due to temporary suspension of operations on back of the lockdown; revenues were flat at `437 crores year-on-year. Margins held steady at 32%, driven by savings in raw material costs and certain operational efficiencies. The biggest takeaway was Syngene’s optimistic guidance - the management expects to see double-digit growth for the rest of the year.
Future outlook from Biocon
Earlier this month, the Drugs Controller General of India (DCGI) granted ‘restricted emergency use approval’ for Itolizumab, our novel anti-CD6 biologic therapy for the treatment of cytokine release syndrome (CRS) in COVID-19 patients with moderate to severe acute respiratory distress syndrome (ARDS).
The company also received the
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