AsianScientist (Apr. 29, 2011) – Bangalore-based Biocon Ltd., India’s biggest biotechnology company, will divest a majority stake in AxiCorp GmbH for $58 million. Biocon purchased a 70 percent stake in the German firm in 2008 for about $30 million.
This comes after an alliance Biocon made with drug maker Pfizer Inc. in October 2010 to sell its insulin portfolio worldwide.
The 78 percent stake sale is expected to be completed by May, said Kiran Mazumdar-Shaw, chairman and managing director of Biocon.
“The rationale of acquiring AxiCorp was to commercialize Insulin and Glargine in the German markets,” said Mazumdar-Shaw. “The alliance with Pfizer now allows us to do the same without AxiCorp. With the change in approach, we will unlock a huge profit generation potential, because the quality of AxiCorp earnings was not comparable to Biocon earnings.”
The stake sale will help Biocon shore up its margin as a 16 percent price rebate imposed on drug makers by the German government in August led to a steady decline in AxiCorp’s operating income.
Biocon on Thursday also reported a 25 percent rise in net profits and an 8 percent increase in Q4 sales. Driven by strong biopharmaceutical sales, Biocon’s net profits rose to Rs. 101 crore and its revenue rose to Rs. 717 crore. AxiCorp contributed about 35 percent of Biocon’s revenue.
All of its domestic branded formulation businesses, including statins, insulins and immunosuppresants, saw healthy growth.
Biocon is investing Rs. 200 crore in R&D and manufacturing in the current year. The firm will also invest $161 million in its Malaysian facility and hire 1,000 new workers in 2012.
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Source: Biocon Ltd..
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