HYDERABAD/BENGALURU (Reuters) – Indian biopharmaceutical company Biocon reported a smaller-than-expected quarterly profit on Friday hurt by higher expenses.
The company’s consolidated net profit rose to 1.26 billion rupees ($15.13 million) for the quarter ended Sept. 30 from 469 million rupees a year earlier.
Analysts, however, had expected a profit of 1.77 billion rupees, according to LSEG data.
Total expenses surged 59% to 33.58 billion rupees, the company said. Biocon also increased spending on research and development in the quarter.
Revenue from operations jumped 49.3% to 34.62 billion rupees, boosted by growth in the mainstay biosimilars segment.
Biosimilars are copies of costlier biological drugs used to treat major illnesses such as cancer, rheumatoid arthritis and psoriasis.
Although the biosimilars segment – company’s biggest contributor, with North America being its key market – saw a 97.4% jump in revenue, it posted a loss of 152 million compared to a profit before tax of 778 million a year ago.
Biocon’s acquisition of U.S.-based Viatris’ biosimilars business last year, also aided the segment’s revenue growth.
Market research firm Global Market Insights estimates that the global biosimilars market is poised to grow over $122 billion by 2032 from a valuation of $35 billion in 2022.
Additionally, revenue from the generic drugs segment rose 3.7% to 6.76 billion rupees, while research services business climbed 18.5% to 9.1 billion rupees.
Generic drug makers are gaining from easing price pressure environment in the United States, from where they draw the bulk of their revenue, aided by new launches of their products.
Its larger peers Dr Reddy’s Laboratories and Cipla beat profit estimates for the second quarter on strong U.S. sales.
Shares of Biocon closed 0.15% higher on Friday ahead of the results.
($1 = 83.2980 Indian rupees)
(Reporting by Rishika Sadam in Hyderabad and Ashna Teresa Britto in Bengaluru; editing by Eileen Soreng)