 "Jonathan Hunt, CEO & Managing Director, Syngene")
Biocon arm Syngene International reported a profit after tax of Rs 115 crore (before exceptional items), up 4 per cent year-on-year (Y-o-Y) for the third quarter of the 2023-24 financial year as its revenue from operations surged 9 per cent to Rs 854 crore due to strong performance in development and manufacturing services vertical during the quarter.
Syngene International reported Q3FY24 earnings before interest, taxes, depreciation, and amortisation (Ebitda) stood at Rs 261, up 5 per cent Y-o-Y.
“Overall, our 9 per cent growth in the quarter was affected by reduced funding in the US biotech segment which impacted demand in our Discovery Services Division. Dedicated Centers and Development and Manufacturing Divisions performed well. We are starting to see early signs of funding levels stabilising and industry fundamentals for pharma outsourcing remain positive for the medium-to-long term,” said Jonathan Hunt, Managing Director and Chief Executive Officer, Syngene International Limited.
Additionally, the company concluded the acquisition of the biologics manufacturing facility from Stelis Biopharma and expects the facility to be operational from H2 2025. The acquisition of the facility was concluded at a revised gross value of Rs 617 crore, from the earlier gross value of Rs 702 crore. Once operational, the acquisition will add 20,000 litres of biologics drug substance manufacturing capacity to Syngene’s existing capabilities.
“In terms of our business strategy, we concluded the acquisition of the multi-modal biologics manufacturing facility from Stelis Biopharma Limited and we have embarked on repurposing the facility from vaccines to biologics manufacturing in preparation for revalidation. We expect the facility to be ready for operations in the second half of financial year 2025, subject to regulatory approvals,” added Hunt.
About a week ago, Syngene International’s share price declined by 3 per cent following UBS Global Research stock downgrade to sell.
The temporary slowdown in biotech funding in the US is likely to result in sustained but slower growth in the near term. Taking this into account, Syngene International anticipates full-year revenue growth at around double digits in constant currency compared with our earlier projection of mid-teens constant currency growth.
“Despite some external headwinds in the US biotech segment, general industry conditions are positive and our business model remains resilient. We will continue to invest in scientific capabilities and important enterprise projects. With strong operating cash flows, we expect these investments to be funded by internal accruals,” said Sibaji Biswas, Chief Financial Officer, Syngene International Limited.
Syngene International shares ended the day's trade on the Bombay Stock Exchange at Rs 686.05 apiece, down 1.47 per cent.
