Biocon slips 4% despite arm denying bribery charges

Shares of Biocon were down 4 per cent to Rs 312.55 on the BSE in Wednesday’s intra-day trade despite Biocon Biologics denying allegations of bribery against the company and its officials associated with the approval process of one of its products in India. Biocon Biologics, a subsidiary of Biocon, is a unique, fully integrated global biosimilars organization.

"We strongly condemn any acts of corruption and violation of rules by way of offering or paying bribes or undue favours, either directly or indirectly. We adopt global best practices in corporate governance and business responsibility," Biocon Biologics said in a statement.

The company clarified after a news article appeared on The Hindu, dated June 21, 2022, titled 'Biocon subsidiary caught offering bribe to waive off trial of new drug'.

"Biocon Biologics follows due regulatory process for all our product approvals by the Drugs Controller General of India (DCGI). The entire application process in India is online and all meeting minutes can be found on the website of the Central Drugs Standard Control Organization (CDSCO). It is unfortunate that Biocon Biologics has been named in this controversy," the company said. CLICK HERE FOR FULL DETAILS

At 10:26 AM, the stock of Biocon was down 3 per cent at Rs 316.10, as compared to 1 per cent decline in the S&P BSE Sensex. Earlier, it had hit a 52-week low of Rs 309.30 on Monday, June 20, 2022.

In the past two months, Biocon has underperformed the market as it fell 17 per cent as against 9 per cent decline in the Sensex, after it reported a 4 per cent year-on-year (YoY) fall in consolidated net profit to Rs 283.9 crore in Q4FY22. It had posted a consolidated net profit of Rs 296.4 crore in the same quarter previous fiscal.

Meanwhile, consolidated revenue from operations in Q4FY22 rose 31 per cent YoY at Rs 2,409 crore as against Rs 1,842 crore in the year-ago period.

Analysts at Nirmal Bang Securities have a 'accumulate' rating on Biocon with a target price of Rs 364 per share.

They believe that the company has multiple opportunities in the near to medium term to build on. It includes Serum Vaccine distribution alliance, launch of multiple biosimilars - bevacizumab, insulin aspart and adalimumab. While the Serum vaccine distribution alliance is expected to start contributing to the topline from H2FY23.

The new manufacturing facility for immunosuppressant is also expected to be commercialized in FY23, wherein the company has invested around Rs 500 crore. "Biocon aspires to become a globally dominant manufacturer of immunosuppressants API. Among the limited competition high value opportunities in the US market on the small molecule front, gRevlimd and gCopaxone are the ones that are lined up," the brokerage firm said.