Biocon - The ultimate biosimilars play!

Hi All,

I have few basic questions:

  1. How would IPO of Biocon Biologics benefit existing shareholder ?

  2. After demerging Syngene and Biocon Biologics would would remain with Biocon ? I mean what would be the revenue source ?

  3. Would Biosimilar drug be able to take market share from existing players ? As in developed markets drugs are sold through prescription. Why would doctor jeopard his existing relationship with Innovator andIf innovator also drops price then ?


Profits down driven by large interest costs mainly.

Biocon has 2024 as the year of transition as the acquire viatris business. THE YOY numbers are not comparable so these Sales and EBITDA comparisons are not relevant, and they don’t produce x viatris numbers because it was not a truly separate business, rather a marketing and front office and client owner as product owner and Biocon was a contract manufacture partner.

PAT is also lower because of one time REBATE in US for Viatris client contact with a managed service provider for USD 20 M /INR 170 CR


Hi @harsh.beria93 , I find you as one of the investors who follows the Pharma sector and has a high allocation there. With the stunning Q2 Earnings growth of Biocon, and share price being attractive in terms of historical P/E, any comments on Biocon as a long term investment opportunity?

The Biosimilars market is expected to grow at CAGR of 25%

Biocon released its consolidated financial results for the fiscal second quarter ending on September 30, 2023:

  1. Revenue: The company reported consolidated revenue of Rs 3,620 Crore, which represents a substantial increase of 52% compared to the same quarter in the previous year.
  2. Core EBITDA: The Core EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) stood at Rs 1,100 Crore, marking a significant rise of 35% year-on-year (YoY).
  3. EBITDA: The overall EBITDA for the quarter was Rs 900 Crore, indicating a robust 68% YoY growth.
  4. Net Profit: Biocon reported a net profit of Rs 126 Crore for the quarter, reflecting an impressive surge of 168% compared to the same period in the previous year.
  5. Core EBITDA Margin: The Core EBITDA margin was at 32%, while the EBITDA margin stood at 25%.

These financial results are categorized into different business segments for Q2FY24:

  • Generics: APIs & Generic Formulations: The revenue in this segment was Rs 676 Crore, which represented a 4% increase compared to the same quarter in the previous year.
  • Biosimilars: Biocon Biologics Limited: This segment showed remarkable growth with a revenue of Rs 1,969 Crore, which is a substantial 97% increase YoY.
  • Research Services: Syngene: Revenue in this segment amounted to Rs 910 Crore, demonstrating an 18% growth YoY.

Income: Biocon made money from different parts of its business.

  • Generics: This part of the business made Rs 676 Crore in revenue, which is 4% more than last year.
  • Biosimilars: The biosimilars part did exceptionally well, earning Rs 1,969 Crore, which is a huge 97% increase from last year.
  • Research Services: The research services part made Rs 910 Crore in revenue, showing an 18% growth from the previous year.
  • Inter-segment: There was a 5% decrease in revenue from activities between different parts of the business.

Total Revenue from Operations: Biocon made a total of Rs 3,462 Crore from its various activities, which is a big 49% increase from last year.

Other Income: Biocon also made Rs 158 Crore from other sources, which is a big 145% increase from last year.

Total Revenue: In total, Biocon’s earnings for the quarter were Rs 3,620 Crore, which is an impressive 52% increase from last year.

R&D Expenses: Biocon invests in research and development.

  • Net R&D Expenses: The expenses for research were Rs 264 Crore, which is 9% more than last year.
  • Gross R&D Spend: The total money spent on research was Rs 278 Crore, which is 10% more than last year.

EBITDA: Biocon’s EBITDA, a measure of profitability, was Rs 900 Crore for the quarter, which is a 68% increase from last year. The EBITDA margin, a profitability ratio, was 25%, up from 22% last year.

Core EBITDA: This is EBITDA excluding certain expenses. It was Rs 1,100 Crore, which is a 35% growth, and it had a good operating margin of 32%.

Profit Before Tax: The profit before tax was Rs 238 Crore (excluding exceptional items), which is a 3% decrease from last year. The total profit before tax was Rs 214 Crore, which is a 6% decrease from last year.

Net Profit: The profit that Biocon made after all expenses was Rs 126 Crore, a big 168% increase from last year.


From a purely stock movement, Biocon has not done anything for the last couple of years. I am not able to understand why simply from the data which seems positive. Have been holding for several years - in fact it was the Biosimilar’s story that attracted me in the first place

Yes, you are right. I feel your pain sir


@Arka How to get a chart like the above? Which app/website/software do you use? Thx.

This is on Stockedge Sir

True. Appears to be very attractively valued when one looks at sum of parts (three biz) valuations
Syngene - Listed
Generic - Look at Concord Biotech
These two itself should justify current valuations. Biosimilars seems to be free.

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With such a well researched stock, Market not showing much love to Biocon is because of multiple reasons. My personal views on the key reasons:

  1. Mountain of debt to finance the Viatris biosimilar acquisition. Biocon has still not clarified on how it intends to reduce the debt especially with the current high interest rate scenario hurting them all the more…may be market is anticipating that there will be further equity dilution to comply with debt payment timelines
  2. Delay in launches of long anticipated biosimilars like Aspart, Bevacizumab etc.
  3. Limited success with Hulio biosimilar launch
  4. Continued price erosion on many of the biosimilars (this is industry wide problem, similar to how it played out in Generics in past few years)
  5. Holding company discount and muted performance of subsidiaries

There is more, but I would stop here…Many of us (including myself) bought into the narrative of Biosimilars and then saw the stock price correcting further or doing nothing over last 3-4 years. While the potential is still there, it is not converting into reality and that is why market does not want to give it any premium…Would request anyone planning to buy into Biocon to study concall over last 6-8 qtrs and they will find answers themselves…It is complex business (especially in the main market of US)

Disclaimer: No recommendation, please do your own due diligence…I exited some time back with losses…if situation improves in future, will relook at it…


Hello The Seeker …

Sorry to see you exit… Frankly if you are a seeker you should keep the faith …

Many thanks


Well, Most of the investors fell prey to the rosy narratives of being a first mover in a niche area with a visionary approach.

The problem is that not much deep dive was attempted on part of individual investors to evaluate the actual commercial/biz performance of those niche products commercially.

Even if we keep debt for acquistion apart giving mgmt a benefit of doubt or the grace period to excel in knitting a niche biz, the actual products for which all these concessions r being given needs an evaluation.

The problem with biocon is that the biosimilar products are niche in india and they r 1st mover but when it comes to the sales area i.e. US, they r not so niche and they have to compete with many established players with fat wallets.

The outcome of all this is their r 8~10 players competing for the mkt share.

The result is huge price erosion upto 50% to grab mkt share.

But the irony with Biocon is that even if they r the cheapest but still they are not in top in mkt share

So, something is really not working on the commercial realization of products the way it ought to be .

Result of all this not syncs well for long term margins and revenue front.

Mkt somehow works on actual profits at the end then the narratives.

Ogivri is biocon

Ogivari eroded 45% in 2 years

It got 9% mkt share in 2 years

The nearest cheap competitor got 44% mkt share in 2 years
Eroded 40% in 2 years

Biocon was 1st to get approval
2 years down the line it eroded 45% with 9% mkt share

Ye sirf ek biosimilar ka example hai.
This is siruation when only 5 players r there
Imagine when 10~15 player will be there.
After 2~4 years
How much we will erode ?

How much mkt share we expect ?

-70% * 20% = opportunity size ?


Thanks for sharing this perspective, most of the databases I have seen points to much higher price erosion in biosimilars (upto 70-80%) rather than only 50%. I also try to keep track of their US market shares at different points of time.

Pegfilgrastim (Fulphila) market share

Trastuzumab (Ogivri) market share

Insulin Glargine (Semglee) market share

Basically, they have struggled to get beyond 15% market share sustainably. For context, Indian generic cos generally get 30%+ market shares in small molecules, and thats when economies of scale start kicking in. Lets see if Biocon can improve this going ahead.

Sorry but this is incorrect, in India Zydus has a larger biosimilar portfolio than Biocon. Biocon has never focused on Indian market.

Disclosure: Not invested (no transactions in last-30 days)


Yes i know zydus is better positioned in indian mkt but it never focused on US mkt because of issues i mentioned above.

My point was w.r.t US mkt biosimilar scenerio.
Although in 1st cut rosy stories it’s touted as a niche area which gives impression of monopolies and high margins and so on so on.

The fact is that pharma has changed a lot from 2007 when indian companies are plucking the low hanging fruits.

Now even biosimilars are converting into commodity at a fast pace although not same pace like generics.

But the situation is challenging and its difficult to have all the ingredients which were there in 2007.
Less competition and hence less erosion
Higher margins
Scale of economy * Higher margins for substantial time
Golden era of indian pharma.

In my view, we will have growth duration in coming years where biosimilars will play the same role as that of generics in 2007.
But how much margins * scale of economy * mkt share is a key area to watch/forecast.