India's Biocon posts Q4 profit fall as higher raw material costs bite

HYDERABAD (Reuters) - Indian biopharmaceutical company Biocon reported a decline in its fourth-quarter profit on Thursday, as soaring raw material costs overshadowed growth in its biosimilar business in key United States and Europe markets.

The company's consolidated net profit fell 56.6% to 1.36 billion rupees ($16.3 million) for the quarter ended March 31.

Its revenue from operations rose 16% to 29.47 billion rupees, boosted by a 12% increase in its biosimilars business.

Biosimilars are copies of costlier biological drugs used to treat major illnesses such as cancer, rheumatoid arthritis and psoriasis.

But raw material costs jumped more than threefold to 14.78 billion rupees.

Revenue from the company's generic drugs business fell 3.5%.

"Will continue to focus on multiple cost improvement initiatives," the company said in a statement, adding that the focus for fiscal 2025 will be towards launching new products and expanding its geographic reach.

Biocon intends to build upon its initial regulatory success in peptide and GLP-1-focused pipeline in strategic markets, it added. GLP-1 class of drugs aid in controlling blood sugar in patients with type 2 diabetes and are used commonly in obesity medicines.

Indian drugmakers, including Biocon, are working on versions of the popular weight-loss drug Wegovy, by Danish drugmaker Novo Nordisk . Global demand for these drugs have been skyrocketing, which companies such as Novo and Eli Lilly struggled to keep up with.

Biocon expects revenue from the weight-loss drugs market to be a significant contributor to its earnings in the next few years. It has been spending roughly 2.5 billion rupees ($30 million) a year on generics research and development with 40% dedicated to developing peptides, also meant for weight-loss drugs.

Shares of the Bengaluru-based company closed 2% lower on Thursday.

($1 = 83.4887 Indian rupees)

(Reporting by Rishika Sadam in Hyderabad and Kashish Tandon in Bengaluru; Editing by Eileen Soreng)