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00:00 Hello and welcome to NDTV Profit. I am your host Varsha Chandranani. Biocon reported its
00:07 Q4 FY24 results wherein if you see our revenue was up around 4% while EBITDA margin was 23%
00:18 versus 26% last year but it did beat estimates of 21% while net profit was down 46%. To talk
00:27 more about the overall numbers and what's happening around BioSimilar we have with us
00:32 Mr. Shrihas Tambe who is CEO and MD of Biocon Biologics. Welcome to the show. Thank you
00:39 very much. So just according to you how was the quarter? What stood out and what were
00:45 the disappointments? Thank you very much for that question. I think it's important to look
00:51 at this quarter. It's a very special quarter because this is the first full quarter since
00:57 we completed the acquisition and Biocon Biologics was running the business. If you go back at
01:04 the beginning of the year we had said that we will be a billion dollar company by the
01:09 time we end March 2024 and we're very pleased that we were able to meet that commitment
01:16 and at the end of 2024 March we have crossed the billion dollar mark. That's the first
01:23 piece of good news that we've got. The second is the year on year growth has been remarkable.
01:29 We've grown 58% over last year. And the third piece which is specific to the quarter is
01:36 that it's also been a very, very powerful quarter where it set us up very nicely for
01:42 the year ahead. Where you're seeing sequential growth of about 12% and importantly very healthy
01:49 EBITDA margins which are in the mid-20s. So I would say all the financial metric, the
01:56 indicators that are there are all signalling in the right direction. We've got our threshold
02:02 of a billion dollars that we had committed to. We have taken control of our business.
02:08 The growth has come on the back of strong market shares that we've been able to grow
02:13 in all geographies, not just the United States but also in Europe and also in key emerging
02:18 markets. So we feel very strong about the quarters coming ahead and the foundational
02:25 piece which we have set in place has really played out very well for us.
02:30 Well, now speaking about your biosimilar business, we did see its sales sustain its momentum
02:37 at 9% quarter on quarter. Now it's EBITDA margin to reverted almost 24% due to lower
02:44 R&D cost. Now what is the growth that you are expecting and where you're seeing this
02:49 going forward?
02:52 I think we need to put some of these things in the right context because as business grows
02:57 you will see certain percentages move up and down. One of the key things to remember that
03:03 R&D when you are doing development is still sizable on a full year basis. If you look
03:09 at what Biocon Biologics has invested, it's in that 10% range which we had guided for
03:15 at the beginning of the year. So we've stayed to that range, point number one.
03:20 Then subsequent to that, if you see between quarters as product goes through a development
03:25 phase, you will see expenses which will come in a particular quarter and will be lower
03:30 than the other. But we believe in general as revenues start growing further, you will
03:36 see the R&D as a percentage being in the range that we are in at this point, which is in
03:41 that 8% to 10% range or about 8% or 9% that you're seeing today.
03:47 Also I wanted to know your take on the pressure on US biotech funding that we are seeing due
03:53 to which we saw pressure in our research business as well. Are things improving there?
04:00 Certainly, I think if you look at it, I would respond to this in two different ways. One
04:06 is if you continue to see this as the, from a funding standpoint or the Fed rates that
04:11 you would see, we see that some of those things are pulling off and we are expecting things
04:16 to become more normalized over a period of time. And as things stabilize and get to a
04:23 better place, we'll obviously see more liquidity in the market. So clearly we believe that
04:28 it's pointing in the right direction. In terms of interest in Biocon Biologics from a funding
04:35 standpoint, that's always been strong and it's about making sure that we have the right
04:41 set of investors, the right alignment on what we want to do. And that's how we've approached
04:46 it. We've taken a very measured approach in how we want to do this. And you will see us
04:52 moving forward as well to see how we want to bring in more equity within Biocon Biologics.
05:00 So can you expect a single digit or double digit growth in FY25 out there?
05:06 I think one of the key things that you have to look at is all our product market shares
05:12 have grown and they continue to grow in a very, very strong manner. So we believe with
05:19 existing products in a very strong mode and new products to be launched, which is very
05:25 eminent once FDA comes and approves our new products. I think growth is expected to come.
05:33 Now whether it will be a single digit or double digit, I wouldn't want to specifically comment
05:38 on numbers, but I think it's fair to say that we have a very strong growth coming up in
05:43 the quarters to come.
05:44 Now speaking about your Vietris merger, how are the synergies playing out there and how
05:50 are you seeing this going forward considering the growth prospects that we have?
05:58 The Vietris acquisition that we completed in November of December of last year, calendar
06:07 year, I think has been a very important phase for us. It has transformed Biocon Biologics
06:13 from a two country science and ops company to 120 country presence that we have today
06:21 as a fully integrated global player. So it's been very transformative in nature. It's not
06:28 just an acquisition, it has changed the way we've done business. We believe being integrated
06:35 is the way to succeed and that is what has happened.
06:39 Now how has it played out for us? I think it's played out very well. We've got the people
06:45 on board, people are very excited about driving business in a company that's very focused
06:52 on biosimilars and making sure we launch these products. But the proof in how this integration
06:58 is playing out is in how the business has ensured continuity. That was really the focus
07:06 and it's reflected in the market share numbers. So if market shares have grown, it means customers
07:12 believe in the new model and also the employees are confident about the new integrated organisation.
07:20 I think on both counts, you will see that these things have played out very well. So
07:25 we feel good about this.
07:29 Those are some of the cues coming in from the management of Biocon Biologics about what
07:34 you can expect going forward. But on that note, it's time to slip into a short break
07:38 and on the other side, we get you the management of Sangwe Movers. Stay tuned in.
07:42 [MUSIC]
07:52 (upbeat music)