Biocon Limited - PINC Visit Note

PINC Research met the management of Biocon to discuss the prospects of various businesses.

Key Takeaways

Mylan licensing income will continue for another 3 quarters; Incremental upside from the Mylan deal will come after the products are launched. Most of the products for the Mylan deal have patent expiries between 2014 and 2018.
No clarity yet on Tacrolimus launch; Biocon indicated that it will be present on market formation with 5 customers currently.
Axicorp margins at 5% are closer to the peak; Biocon has revenue visibility for 6 months for Axicorp after which there could be challenges in EU given the austerity measures being undertaken by the governments.
Licensing income from Human Insulin is possible between now and end of FY12; Management indicated that it was too early to say anything at the moment.
Oral Insulin partnering/out-licensing will not happen till end of CY10. Biocon will look at partnering only after the data is un-blinded which will happen towards the end of CY10. Partner for oral insulin will have to be a strong partner with proven skills to commercialise insulin.
Sustainable 15-18% growth over the next 2 years in product sales (all segments except Axicorp and Research Services).
Research Services IPO will happen after reaching critical size of USD100mn.
BMS contract currently employs 300 scientists and will employ 400 scientists at the peak of the contract in Q3 FY11. The BMS accounts for >25% of sales from Research Services.
Margins expansion will be driven by Insulin, Research Services and India formulations.

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