Page 2 Source: Company, www.dynamiclevels.com
Biocon- Making Survival Cheaper
Company Overview and Stock Price 3
Product Overview 4
Syngene: Exclusively Inclusive 6
Pharma Sector Outlook 7
Govt Initiatives in Pharma 8
Company Financials 9
Peer Comparison 13
Shareholding Pattern 14
Biocon enters Japan 16
Investment Rationale 17
Page 3 Source: Company, www.dynamiclevels.com
Company’s Overview and Stock Price
Biocon is India’s largest biotech company run by Kiran Mazumder Shaw. It has presence in more than 100 countries. Biocon has been driven by its strategy to provide affordable access to advanced biopharmaceuticals for global patient populations. It aspires to become a US $ 1 billion company by FY 18. As a fully integrated biopharma company it delivers innovative biopharmaceutical solutions, ranging from discovery to development and commercialization, leveraging the cutting edge science, cost-effective drug development capabilities and global scale manufacturing capacities, to move ideas to market. F16 Results highlights are as follows:
Revenues grew 16.9% YoY to 978.8 crore mainly due to 32.8% growth in the research segment Syngene.
Biopharma segment grew 8.6% YoY to 531 crore due to biosimilar launches in emerging markets,
EBITDA margins declined 31 bps YoY to 21.8% mainly due to higher R&D expenses. EBITDA grew 15.3% YoY to 213.3 crore.
Chart Hypothesis: Above is the weekly price chart of Biocon for last 1 yr, in which we can see that it made a new high of628.5 and has given breakout of important level of 545.
COMPANY PROFILE OF BIOCON
Date of Incorporation 29-Nov-1978 Date of Listing 07-Apr-2004
Management Name Designation
M Damodaran Addnl.Independent Director
Jeremy Levin Addnl.Independent Director
Vijay Kuchroo Addnl.Independent Director
Kiran Mazumdar Shaw
Chairperson & MD
Arun Chandavarkar Joint MD & CEO Daniel M Bradbury Non Exe. Director Russel Walls Non Exe. Director Suresh N Talwar Non Exe. Director Bala S Manian Non Exe. Director Mary Harney Non Exe. Director Charles L Cooney Non Exe. Director Ravi Mazumdar Non Exe. Director John Shaw Vice Chairman
Registered Office Address 20th K M, Hosur Road,Electronic
City,560100,Bengaluru,Karnataka,India Website
http:// www.biocon.com
BIOCON Share Price Performance EXCHANGE SYMBOL BIOCON Current Price * (Rs.) 610.35 Face Value (Rs.) 5 52 Week High (Rs.) 628.5(4-5-16) 52 Week Low (Rs.) 395.3(24-8-15) Life Time high (Rs.) 628.5(4-5-16) Life Time low (Rs.) 85 (2-12-08) Average Daily Movement 14.28 Average Volume 1178973 1 Month Return (%) 16.18 P/E Ratio (x) 13.67 Book Value 208.29 Market Cap 12252.00 (Cr) % of Promoter holding Pledged 0.04
Page 4 Source: Company, www.dynamiclevels.com
Product Overview
Biocon has systematically leveraged its technology platforms from enzymes to small molecules to recombinant proteins and antibodies. Through partnerships and alliances, Biocon has strategically moved up the value chain from supplying pharmaceutical bulk actives to developing proprietary molecules and own branded formulations. In the areas of custom and clinical research services, collaborative partnerships with complementary biotechnology and pharmaceutical companies are yielding rich results. These partnerships will positively impact all phases of discovery portfolio. Biocon offers range of products from fermentation derived small molecules to recombinant proteins and antibodies. In the specialized field of custom bio-manufacturing, Biocon provides high quality, cost-competitive services to domestic and international pharmaceutical companies.
Small Molecules: Biocon's Small Molecules business is built on a robust foundation of unique expertise in fermentation technology and entrenched presence in the chronic therapy space. Biocon’s differentiated portfolio spans complex molecules ranging from cardiovascular and anti-obesity agents to immuno-suppressants and narrow spectrum antibiotics. It provides affordable access to patients and partners across the globe.
APIs: Biocon is one of the largest statins and immunosuppressant’s manufacturers in the world and a preferred partner for Active Pharmaceutical Ingredients (APIs).
With a strong focus on R&D in the Small Molecules business, Biocon has built a robust pipeline of complex generic products. A steady stream of new Drug Master Files (DMF) is filed with various regulatory authorities in several countries.
Generic Formulations: Biocon is developing value-added generic formulations for both emerging and developed markets.
The Generic Formulations business, established in 2012, filed its first set of Abbreviated New Drug Applications (ANDAs) in the US and Marketing Authorization Applications (MAAs) in the EU during FY 15. These filings are in line with their strategy of reducing the threat arising from the commoditization of APIs, by moving up the value chain to develop generic finished dosages for global markets.
Page 5 Source: Company, www.dynamiclevels.com
Forward integration of complex fermentation-based APIs, expertise in producing large-scale sterile injectables and manufacturing capabilities for device-based products are Biocon’s key differentiators in the competitive generic formulations business. To strengthen this business further, Biocon is also setting up a greenfield oral solid dosage facility.
Biosimilars: Biocon has leveraged its core strength of fermentation technology to develop a wide portfolio of generic Insulins and Analogs, biosimilar Monoclonal Antibodies (MAbs) and recombinant proteins. Biocon has emerged as a significant global player by competence and pioneering technology capabilities.
As the Biosimilars opportunity unfolds, Biocon is at the right place, at the right time. Biocon is rapidly growing its development, regulatory and clinical expertise, along with world class manufacturing capabilities, to make therapies affordable to patients, on a global scale. Biocon is well positioned to contribute towards lowering costs and increasing access to this highly innovative class of drugs. The Biosimilars opportunity is set to expand as patents expire on leading biologics and patients demand lower priced drugs. A number of top-selling biologics are due to lose product patent protection over the next 5-7 years, opening up a wealth of new possibilities for biosimilars players. Key therapy areas such as cancer, diabetes and rheumatoid arthritis will spearhead this new wave of biosimilars. Biocon is well placed to leverage many of these opportunities. Biocon is entering emerging markets with Recombinant Human Insulin (rh-Insulin), Insulin Analogs and Monoclonal Antibodies (MAbs), key products in Biosimilars portfolio.
Branded Formulations: Branded Formulations has been a strong growth driver and a considerable value builder for Brand Biocon. The Company is committed to achieving market leadership in its chosen therapeutic areas through a carefully orchestrated strategy of product differentiation and personalized medical support.
Biocon's presence in the chronic disease segment in India, is represented by over 80 brands spread across six therapeutic segments: Metabolics, Oncotherapeutics, Nephrology, Comprehensive Care, Immunotherapeutics and Virology.
Page 6 Source: Company, www.dynamiclevels.com
Syngene: Exclusively inclusive:
Syngene has championed the ‘Exclusively inclusive’ philosophy of Biocon by offering niche services to a large and diverse clientele. It has also established exclusively dedicated R&D centers for some of its anchor clients like Bristol. Incorporated in 1993 as a subsidiary of Biocon Limited, Syngene is a leading custom research and manufacturing organization, which supports R&D programs from lead generation to clinical supplies. At Syngene Clinical development group, partners with global pharmaceutical and biotechnology companies in their clinical development programs. It evaluates the safety and efficacy of new drugs across a wide range of therapeutic indications. Syngene team ensure: - Timely execution of projects - Cost effectiveness and quality of the projects - Confidentiality and protection of intellectual property
Mr. Jonathan Hunt, Chief Executive Officer - Syngene International Limited said, “We are happy to report excellent revenue growth of 31% during Q4 FY16, with revenues growing from Rs 254 Cr in Q4 FY15 to Rs 334 Cr in Q4 FY16. This growth has been driven by robust performances within all three of our key business verticals; dedicated R&D centers, discovery services as well as development & manufacturing services. On a full year basis, I am happy to report strong revenue growth of 28%; this momentum, combined with our extensive capital investment plans, puts us “on-track” to achieve our mid-term revenue target for FY 18 and deliver excellent returns for our investors”
Syngene International IPO oversubscribed 31 times.
Page 7 Source: Company, www.dynamiclevels.com
Pharmaceutical Sector Outlook
The Indian pharmaceuticals market is the 3rd largest in terms of volume
and 13th largest in terms of value. Branded generics dominate the
pharmaceuticals market, constituting nearly 70 to 80 % of the market.
India is the largest provider of generic drugs globally with the Indian
generics accounting for 20 % of global exports in terms of volume. The
Indian pharmacy industry, which is expected to grow over 15 % p.a.
between 2015 and 2020, will outperform the global pharmacy industry,
which is set to grow 5 % p.a. between the same periods. Presently the
market size of the pharmaceutical industry in India stands at US$ 20
billion. India has the largest number US FDA compliant plants. The
industry is expected to reach US$ 55 million by 2020, out of which
US$ 30 million will be for exports.
Increasing investments in the sector
• The Indian pharmaceuticals market increased at a CAGR of 17.46 per cent in 2015 from US$ 6 billion in 2005 and is expected to expand at a CAGR of 15.92 per cent to US$ 55 billion by 2020. • By 2020, India is likely to be among the top three pharmaceutical markets by incremental growth and sixth largest market globally in absolute size. • India’s cost of production is significantly lower than that of the US and almost half of that of Europe. It gives a competitive edge to India over others.
Generic drugs form the largest segment
• With 70 per cent of market share (in terms of revenues), generic drugs form the largest segment of the Indian pharmaceutical sector. • India supplies 20 % of global generic medicines market exports in terms of volume, making India the largest provider of generic medicines globally and expected to expand even further in coming years • Over the Counter (OTC) medicines and patented drugs constitute 21 % and 9 %, respectively, of total market revenues of US$ 20 billion.
Page 8 Source: Company, www.dynamiclevels.com
Government Initiatives in Pharma
The Government of India’s 'Pharma Vision 2020' aims at making India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments. Further, the government introduced mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines. Some of the major initiatives taken by the government to promote the pharmaceutical sector in India are as follows:
Indian Pharmaceutical Association, the professional association of pharmaceutical companies in India, plans to prepare data integrity guidelines which will help to measure and benchmark the quality of Indian companies with global peers.
The GOI plans to give incentive to bulk drug manufacturers, including both state-run and private companies, to encourage ‘Make in India’ programme and reduce dependence on imports of active pharmaceutical ingredients (API), nearly 85 % of which come from China.
The Department of Pharma has set up an inter-ministerial co-ordination committee, which would periodically review, coordinate and facilitate the resolution of the issues and constraints faced by the Indian pharmaceutical companies.
The Department of Pharma has planned to launch a venture capital fund of Rs 1,000 crore to support start-ups in the R&D in the pharmaceutical and biotech industry.
Indian and global companies have expressed 175 investment intentions worth Rs 1,000 crore in the pharmaceutical sector of Gujarat.
Telangana has proposed to set up India's largest integrated pharmaceutical city spread over 11,000 acres near Hyderabad, complete with effluent treatment plants and a township for employees, in a bid to attract investment of Rs 30,000 crore in phases. Hyderabad, which is known as the bulk drug capital of India, accounts for nearly a fifth of India's exports of drugs, which stood at Rs 95,000 crore in 2014-15.
'Pharma Vision 2020' aims
at making India a global
leader in end-to-end drug
manufacture.
GOI plans to give
incentive to bulk drug
manufacturers
Encourage ‘Make in India’
programme and reduce
dependence on imports of
API
Page 9 Source: Company, www.dynamiclevels.com
Company Financials
Income Statement (in Cr) Mar16 Dec15 Sep15 Jun15 Mar15 Mar16
Quarterly Quarterly Quarterly Quarterly Quarterly Annual
Net Sales 970.3 828.2 828.48 778.96 830.38 3,405.90
Other Operating Income 8.5 8.2 8.72 54.03 7.3 79.5
Total Income From Operations 978.8 836.4 837.2 832.99 837.68 3,485.40
Increase/Decrease in Stocks 23.9 -28.5 -41.2 13.99 9.88 -31.8
Consumption of Raw Materials 307.8 310.3 346.66 290.12 292.29 1,254.90
Purchase of Traded Goods 29.5 30.9 24.16 22.42 35.34 107
Employees Cost 173.5 158.9 149.68 154.27 136.56 636.3
Depreciation 62.8 62.1 59.61 57.8 58.52 242.3
Other Expenses 231 175.7 160.24 140.01 178.38 699
Total Expenditure 828.5 709.4 699.15 678.61 710.97 2,907.70
Operating Profit 150.3 127 138.05 154.38 126.71 577.7
Other Income 24.7 19.7 24.6 23.52 16.83 84.5
PBIT 175 146.7 162.65 177.9 143.54 662.2
Interest 1.4 1.5 2.93 4.42 -- 10.2
P/L Before XO Items & Tax 173.6 145.2 159.72 173.48 143.54 652
Exceptional Item 268.4 -- 307 -- 95.16 575.4
P/L Before Tax 442 145.2 466.72 173.48 238.7 1,227.40
Tax 58.2 24.1 137.69 36.95 21.9 256.9
PAT 383.8 121.1 329.03 136.53 216.8 970.5
Minority Interest -22.9 -18.1 -23.06 -10.29 -15.26 -74.4
Net Profit/(Loss) For the Period 360.9 103 305.97 126.24 201.54 896.1
Equity Share Capital 100 100 100 100 100 100
Reserves -- -- -- -- -- 3,954.70
EPS (Rs.) 18.05 5.15 15.3 6.31 10.08 44.81
Profitability Highlights:
Top line of the company has increased YoY from 830 Cr to 970 Cr
Co has exceptional item of rs 268.4 Cr exceptional item was on account of the previously deferred amounts of Rs 268 crore relating to clinical trial and development activities of insulin products with its Mexican partner, Lab PiSA
The firm’s contract research arm Syngene had contributed about 33% to Biocon revenues.
If we exclude the exceptional item PAT has gone down QoQ by 6%, on including the exceptional item the PAT has gone up by 217%
Page 10 Source: Company, www.dynamiclevels.com
Balance Sheet (In Mn) Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
Total Current Assets(A) 18,072 19,997 22,400 26,388 24,626 39,932
Cash & Near Cash Items 2,984 2,836 4,735 5,564 4,620 19,213
Short Term Investments 5,421 7,310 7,208 9,476 6,049 4,285
Accounts & Notes Receivable 4,958 4,917 5,097 5,998 7,705 8,229
Inventories 4,137 3,783 3,984 3,766 4,527 5,114
Other Current Assets 572 1,151 1,376 1,584 1,725 3,091
Total Long-Term Assets(B) 17,784 19,453 21,761 31,118 39,128 44,884
Long Term Investments 478 511 645 645 1,000 4,123
Gross Fixed Assets 19,766 23,217 26,610 37,577 44,688 NA
Accumulated Depreciation 6,327 7,852 9,672 11,711 13,943 NA
Net Fixed Assets 13,439 15,365 16,938 25,866 30,745 38,837
Other Long Term Assets 3,867 3,577 4,178 4,607 7,383 1,924
Total Assests(A+B) 35,856 39,450 44,161 57,506 63,754 84,816
Total Current Liabilities (C) 10,606 10,158 9,899 13,796 15,547 16,276
Accounts Payable 2,965 3,478 3,455 3,472 4,293 5,471
Short Term Borrowings 2,474 1,873 1,033 2,575 3,476 3,949
Other Short Term Liabilities 5,167 4,807 5,411 7,749 7,778 6,856
Total Long Term Liabilities(D) 4,545 6,530 6,663 12,620 13,779 24,872
Long Term Borrowings 658 698 1,640 6,062 7,696 20,724
Other Long Term Borrowings 3,887 5,832 5,023 6,558 6,083 4,148
Total Liabilities 15,151 16,688 16,562 26,416 29,326 41,148
Minority Interest 377 38 653 823 1,722 3,112
Share Capital & APIC 3,788 3,788 3,788 3,788 3,788 1,000
Retained Earnings & Other Equity 16,540 18,936 23,158 26,479 28,918 39,556
Total Shareholders Equity(E) 20,705 22,762 27,599 31,090 34,428 43,668
Total Liabilities & Equity(C+D+E) 35,856 39,450 44,161 57,506 63,754 84,816
Book Value Per Share 102 114 135 151 164 203
Balance Sheet Highlights:
Total assets of the company has 136% which shows that overall growth of BIOCON has more than doubled in last 6 years
Long term Borrowing of the company has almost doubled YoY, BIOCON is mainly investing on expansion and R&D, with the expectation of creating positive cashflows in the years to come.
Book Value has doubled in 6 years from 102 to 203.
Biocon has retained good portion of earnings from 16540 to 39556 million
Page 11 Source: Company, www.dynamiclevels.com
Cash Flows (In Mn) Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
Net Income 3,675 3,384 5,089 4,138 4,974
Depreciation & Amortization 1,567 1,758 1,793 2,036 2,210
Other Non-Cash Adjustments 2 (480) 76 (548) (1,215)
Changes in Non-Cash Capital 2,692 980 (1,923) 377 (3,540)
Cash From Operating Activities 7,936 5,642 5,035 6,003 2,429
Disposal of Fixed Assets 6 0 1 28 --
Capital Expenditures (1,890) (2,745) (3,586) (7,885) (8,381)
Increase in Investments (825) (1,541) (1,981) (2,479) --
Decrease in Investments 21,105 823 1,643 2,170 --
Other Investing Activities (21,730) (473) (236) (1,623) 2,967
Cash From Investing Activities (3,334) (3,936) (4,159) (9,789) (5,414)
Dividends Paid (768) (997) (1,162) (1,755) (1,446)
Change in Short Term Borrowings (594) (535) (1,028) 1,634 171
Increase in Long Term Borrowings 623 174 1,191 4,579 3,247
Decrease in Long Term Borrowings (1,769) (215) (206) (186) (145)
Other Financing Activities 97 348 1,379 344 105
Cash From Financing Activities (2,411) (1,225) 174 4,616 1,932
Net Changes in Cash 2,191 481 1,050 830 (1,053)
Free Cash Flow (CFO-CAPEX) 6,046 2,897 1,449 (1,882) (5,952)
Free Cash Flow To Firm 6,106 2,941 1,483 (1,870) (5,932)
Free Cash Flow To Equity 4,312 2,321 1,407 4,173 (2,679)
Free Cash Flow per Share 30.92 14.79 7.40 (9.59) (29.76)
Cash Flow Highlights:
BIOCON has incurred capital expenditure due to which overall cash flow of the Company has become negative
Operating Cash flow is positive but declined due to deal with Syngene.
Page 12 Source: Company, www.dynamiclevels.com
Ratio Analysis Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
Valuation Ratios
Price Earnings 19.85 13.84 10.53 20.13 18.87 10.79
EV to EBIT 17.31 11.74 11.80 15.21 19.42 17.48
EV to EBITDA 12.17 7.76 8.09 10.94 13.42 12.31
Price to Sales 3.77 2.29 2.16 2.89 3.04 2.84
Price to Book 3.39 2.10 2.03 2.80 2.87 2.38
Dividend Yield 0.01 0.02 0.03 0.01 0.01 0.01
Profitability Ratios
EBITDA Margin 0.29 0.25 0.23 0.25 0.23 0.24
Operating Margin 0.21 0.17 0.16 0.18 0.16 0.17
Profit Margin 0.21 0.17 0.20 0.14 0.16 0.26
Return on Assets 0.11 0.09 0.12 0.08 0.08 0.12
Return on Equity 0.19 0.16 0.20 0.14 0.16 0.24
Leverage & Coverage Ratios
Current Ratio 1.70 1.97 2.26 1.91 1.58 2.45
Quick Ratio 1.26 1.48 1.72 1.52 1.18 1.95
Interest Coverage Ratio (EBIT/I) 52.90 67.24 97.70 35.46 31.52 56.64
Tot Debt/Capital 0.13 0.10 0.09 0.22 0.25 0.36
Tot Debt/Equity 0.15 0.11 0.10 0.28 0.32 0.57
Others
Asset Turnover 0.55 0.54 0.59 0.57 0.51 0.46
Accounts Receivable Turnover 3.80 4.15 4.96 5.19 4.51 4.28
Accounts Payable Turnover 2.86 2.43 2.95 3.03 3.28 NA
Effective Tax Rate 0.15 0.14 0.16 0.20 0.15 0.21
Ratio Analysis:
Biocon’s debt equity has increased but still the company is managing to maintain it below 1 benchmark of pharma industry
Return on Asset has increased yoy by 50% from 0.08 to 0.12
Return on Equity has increased yoy by 50% from 0.16 to 0.24
Biocon’s Interest Coverage ratio is very good 56.64 which signifies company has enough earnings (EBIT) to repay its increasing debt.
Page 13 Source: Company, www.dynamiclevels.com
Peer Comparison
Company Name: BIOCON LTD
WOCKHARDT LTD
CIPLA LTD
AUROBINDO PHARMA
LUPIN LTD
SUN PHARMA
Latest Fiscal Year: 03/2016 03/2016 03/2015 03/2015 03/2015 03/2015
52-Week High 628.50 1,748.20 748.00 891.50 2,129.00 1,010.10
52-Week High Date 5/4/2016 12/2/2015 8/17/2015 12/30/2015 10/6/2015 5/25/2015
52-Week Low 395.30 705.75 494.55 582.00 1,280.00 704.00
52-Week Low Date 8/24/2015 2/12/2016 3/29/2016 2/25/2016 3/29/2016 11/24/2015
Daily Volume 389,572 580,864 331,729 701,934 203,378 763,878
Current Price: 617.55 963.25 535.00 817.40 1,609.55 806.10
52-Week High % Change -1.7% -44.9% -28.5% -8.3% -24.4% -20.2%
52-Week Low % Change 56.2% 36.5% 8.2% 40.4% 25.7% 14.5%
Total Common Shares 200.0 110.5 803.0 584.0 449.5 2,071.2
Market Capitalization 123,510.0 106,440.0 429,810.6 478,317.6 725,419.0 1,940,015.7
Total Debt 24,673.0 22,041.9 17,033.3 NA NA NA
Minority Interest 3,112.0 4,703.7 1,804.8 NA NA NA
Cash and Equivalents 23,498.0 14,781.1 9,354.9 NA NA NA
Current Enterprise Value 127,797.0 118,404.5 441,078.9 514,102.6 725,758.3 1,902,859.9 Above table shows that among all the peers BIOCON is the strongest having hit 52 week high recently in 2016 while all the shares have hot 52 week low in 2016
FII Holding & P/E Ratio Comparison
INSTRUMENT % FII Holding
P/E Ratio
Debt Equity
Int. Coverage
BIOCON 13.63 13.62 0.32 84.15
AUROBINDO PHARMA
28.78 26.19 0.75 16.64
CIPLA 9.85 25.59 0.16 13.83
LUPIN 37.03 35.97 0.05 393.41
SUN PHARMA 26.41 49.79 0.3 14.53
WOCKHARDT 2.23 32.26 0.54 14.05
BIOCON has lowest PE ratio, with low Debt equity and high interest coverage ratio.
Price & Volume Comparison INSTRUMENT Price Avg. Volume Market
Cap (Rs. in Cr)
BIOCON 617 1140382 12207
AUROBINDO PHARMA
815 1621480 47773
CIPLA 535 1968193 43109
LUPIN 1609 1103972 72355
SUN PHARMA 803 2564929 193816
WOCKHARDT 958 991621 10501
BIOCON is a Midcap Company with good average volume Price Performance Comparison
INSTRUMENT Price 1M 3M 6M 1Y
BIOCON 617.3 13.79 33.41 39.38 40.63
AUROBINDO PHARMA 815.6 7.7 18.1 -1.79 27.08
CIPLA 535.1 6.36 -0.38 -16.41 -18.05
LUPIN 1609.7 4.24 -13.36 -10.33 -9.32
SUN PHARMA 803.95 -0.79 -5.9 10.02 -14.35
WOCKHARDT 958 -0.76 -0.59 -38.2 -26.2
BIOCON is the top performer given highest return in last 1 year where its peers have given negative return.
Page 14 Source: Company, www.dynamiclevels.com
Shareholding Pattern
Shareholding Pattern Mar-16 Dec-15 Sep-15 Jun-15 Mar-15
Promoter and Promoter Group (%) 60.72 60.72 61.02 61.02 61.02
Indian 39.92 39.92 39.92 39.92 40.42
Foreign 20.80 20.80 21.10 21.10 20.60
Institutions (%) 19.35 19.77 19.21 19.91 19.10
FII 13.63 12.80 11.83 11.59 10.73
DII 5.72 6.97 7.38 8.33 8.37
NonInstitutions (%) 19.93 19.51 19.76 19.06 19.87
Bodies Corporate NIL NIL 1.44 1.55 2.65
Others 17.99 17.66 18.32 17.51 17.23
Custodians 1.94 1.85 NIL NIL NIL
Total no. of shares (cr.) 20.00 20.00 20.00 20.00 20.00
BIOCON’S shareholding shows that FII investment has been contact throughout the year
Persons holding securities more than 1% of total number of shares under category Public Shareholding.
Category Mar-16 Dec-15 Sep-15 Jun-15 Mar-15
Glentec International Promoters 19.77 19.77 19.77 19.77 19.77
Kiran Mazumdar Shaw Promoters 39.64 39.64 1.86 39.64 39.64
ARUN SURESH CHANDAVARKAR Non Promoters 1.1 1.1 1.1 1.1 1.1
Franklin Templeton Investment funds Non Promoters 3.02 NIL 2.93 2.79 2.7
KIRAN MAZUMDAR SHAW - Trust Non Promoters 1.75 1.75 NIL NIL NIL
LIC of India Health Protection Plus fund Non Promoters 1.55 2.36 2.5 2.93 3.12
MURALI KRISHNAN K N Non Promoters 1.05 1.05 1.14 1.14 1.14
RELIANCE CAPITAL TRUSTEE CO. LTD Non Promoters 1.23 1.28 NIL NIL NIL
Swiss Finance Corporation (Mauritius) Ltd Non Promoters NIL NIL 1.03 NIL NIL
Promoters of BIOCON have kept their investment constant throughout the year
Page 15 Source: Company, www.dynamiclevels.com
79.14%
9.49%
5.75%
3.97%
0.53% 0.28% 0.27%
0.57%
Unknown CountryUnited States
India
Luxembourg
Britain
Finland
Ireland
75.24%
18.55%
4.23% 1.98% Other
Investment Advisor
Individual
Government
Geographic Ownership Distribution
Unknown Country 79.14%
United States 9.49%
India 5.75%
Luxembourg 3.97%
Britain 0.53%
Finland 0.28%
Ireland 0.27%
Others 0.57%
Institutional Ownership Distribution
Other 75.24%
Investment Advisor 18.55%
Individual 4.23%
Government 1.98%
36.80%
18.34%
44.85%
Ownership (Institutional)
Ownership (Retail & Other)
Ownership (Insider)
Ownership Statistics
Shares Outstanding (M) 200.0
Float 33.8%
Ownership (Institutional) 36.80%
Ownership (Retail & Other) 18.34%
Ownership (Insider) 44.85%
Page 16 Source: Company, www.dynamiclevels.com
BIOCON enters Developed Market for the 1st time ever.
BIOCON received first regulatory approval in a developed
country to sell its biosimilar product 'Insulin Glargine' in
Japan.
In Japan BIOCON will be partnering with FUJIFILM Pharma
the key pharma Co in that country.
This is the first biosimilar that would enter Japan from any
non multinational company (MNC). Japan has only 3
players for the product currently.
This will offer business worth USD 8-10 billion from FY17.
This deal will also help BIOCON enter other developed
markets especially US and Europe.
Insulin is almost approaching USD 100 million businesses;
this is a significant regulatory approval that will enable
BIOCON to exponentially grow its insulin and insulin
analogue business in the years to come.
The company hopes to enable the Japanese government to
bring down its healthcare expenditure on diabetes with the
use of this cost effective, high quality biosimilar Insulin
Glargine.
The company aims to capture a significant share of the
Japanese Glargine market of USD 144 million which is the
second largest market outside of North America and
Europe and is largely dominated by disposable pens.
Page 17 Source: Company, www.dynamiclevels.com
Investment Rationale
The global market opportunity for biosimilars is estimated to reach US$24 billion in 2019.
The Indian pharmaceutical market size is expected to grow to US$ 100 billion by 2025, driven by increasing consumer spending, rapid urbanization, and raising healthcare insurance among others.
Big Pharma is beginning to realize that global priorities are shifting from providing exclusive and expensive drugs to more affordable drugs which can help enhance access.
The opportunities are in the fast-growing emerging markets, where the old business model of expensive medicines targeted at niche populations of affluent patients will not work.
Biocon has been driven by its strategy to provide affordable access to advanced biopharmaceuticals for global patient populations. Through ‘Exclusively inclusive’ approach, BIOCON is developing a specialty portfolio of products that can benefit millions of patients the world over.
BIOCON has set out to build global reach and economies of scale and is steadfastly investing in developing a range of affordable therapies for diabetes, cancer and autoimmune diseases, most of which were previously unaffordable and hence inaccessible to many.
The biotech industry is fast approaching its own patent cliff. Some recent biosimilars approvals are beginning to make a difference by increasing accessibility for a larger patient population. Biocon, with its rich pipeline of biosimilars under development, is at the right place at the right time.
BIOCON’s aim over the next 10 years is to provide Biocon’s Insulin products to one in five diabetic patients in need of insulin-based therapy, anywhere in the world.
BIOCON is the largest producers of insulins in Asia. Over the past decade, more than a million patients have benefited from Biocon’s inclusive diabetes management portfolio.
The on-time commissioning of the Malaysia plant, designed as Asia’s largest integrated insulins manufacturing facility, has put BIOCON on track to become one of the world’s largest insulin producers.
BIOCON’s entry into Japan will offer business worth USD 8-10 billion from FY17
We recommend BUY in BIOCON @ 560-580 with the Target of 750 as BIOCON is the
Market leader globally in biopharma and is trading at a very low PE of 14 compared to
industry PE of 42.
Biosimilars: Indian Positioning
Page 18 Source: Company, www.dynamiclevels.com
Disclaimer: Research Disclaimer and Disclosure inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014. Dynamic Equities Pvt. Ltd. is a member of National Stock Exchange of India Ltd. (NSEIL), Bombay Stock Exchange Ltd (BSE), Multi Stock Exchange of India Ltd (MCX-SX) and also a depository participant with National Securities Depository Ltd (NSDL) and Central Depository Services Ltd.(CDSL). Dynamic is engaged in the business of Stock Broking, Depository Services, Investment Advisory Services and Portfolio Management Services. Dynamic Equities Pvt. Ltd. is holding company of Dynamic Commodities Pvt. Ltd. , a member of Multi Commodities Exchange (MCX) & National Commodity & Derivatives Exchange Ltd.(NCDEX). We hereby declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are registered. SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise letters or levied minor penalty on for certain operational deviations. Answers to the Best of the knowledge and belief of Dynamic/ its Associates/ Research Analyst who prepared this report
DYANMIC/its Associates/ Research Analyst/ his Relative have any financial interest in the subject company? No
DYANMIC/its Associates/ Research Analyst/ his Relative have actual/beneficial ownership of one per cent or more securities of the subject company? No
DYANMIC/its Associates/ Research Analyst/ his Relative have any other material conflict of interest at the time of publication of the research report or at the time of public appearance? No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation from the subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have managed or co-managed public offering of securities for the subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation or other benefits from the Subject Company or third party in connection with the research report? No
DYANMIC/its Associates/ Research Analyst/ his Relative have served as an officer, director or employee of the subject company? No
DYANMIC/its Associates/ Research Analyst/ his Relative have been engaged in market making activity for the subject company? No
General Disclaimer: - This Research Report (hereinafter called “Report”) is meant solely for use by the recipient and is not for circulation. This Report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. The recommendations, if any, made herein are expression of views and/or opinions and should not be deemed or construed to be neither advice for the purpose of purchase or sale of any security, derivatives or any other security through Dynamic nor any solicitation or offering of any investment /trading opportunity on behalf of the issuer(s) of the respective security (ies) referred to herein. These information / opinions / views are not meant to serve as a professional investment guide for the readers. No action is solicited based upon the information provided herein. Recipients of this Report should rely on information/data arising out of their own investigations. Readers are advised to seek independent professional advice and arrive at an informed trading/investment decision before executing any trades or making any investments. This Report has been prepared on the basis of publicly available information, internally developed data and other sources believed by Dynamic to be reliable. Dynamic or its directors, employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information / opinions / views. While due care has been taken to ensure that the disclosures and opinions given are fair and reasonable, none of the directors, employees, affiliates or representatives of Dynamic shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including loss profits arising in any way whatsoever from the information / opinions / views contained in this Report. The price and value of the investments referred to in this Report and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future performance. Dynamic levels do not provide tax advice to its clients, and all investors are strongly advised to consult with their tax advisers regarding taxation aspects of any potential investment. Opinions expressed are our current opinions as of the date appearing on this Research only. We do not undertake to advise you as to any change of our views expressed in this Report. User should keep this risk in mind and not hold dynamic levels, its employees and associates responsible for any losses, damages of any type whatsoever. Dynamic and its associates or employees may; (a) from time to time, have long or short positions in, and buy or sell the investments in/ security of company (ies) mentioned herein and it may not be construed as potential conflict of interest with respect to any recommendation and related information and opinions. Without limiting any of the foregoing, in no event shall Dynamic and its associates or employees or any third party involved in, or related to computing or compiling the information have any liability for any damages of any kind. We and our affiliates/associates, officers, directors, and employees, Research Analyst(including relatives) worldwide may: (a) from time to time, have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the subject company/company (ies) discussed herein or act as advisor to such company (ies) or have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of Research Report. Dynamic may have proprietary long/short position in the above mentioned scrip(s) and therefore may be considered as interested. The views provided herein are general in nature and does not consider risk appetite or investment objective of particular investor; readers are requested to take independent professional advice before investing. This should not be construed as invitation or solicitation to do business with Dynamic. Dynamic Equities Pvt. Ltd. are also engaged in Proprietary Trading apart from Client Business.
https://www.dynamiclevels.com/en/disclaimer