Our Bureau

Mumbai , Oct. 21

DESPITE a reported fall in net profit for the second quarter, the stock of pharma company Biocon rose on Friday on expectation of stability in statins prices, a key product for the company.

In today's trading, the stock rose 5.46 per cent to Rs 529.25 on the BSE with volumes of 6.04 lakh shares; on the NSE, it closed at Rs 527.50, up 5.14 per cent, with volumes of 9.37 lakh shares.

For the September quarter, company net profit declined by 22.7 per cent at Rs 43.1 crore compared with Rs 55.8 crore recorded in the corresponding quarter of last year. However, its sales rose 7.8 per cent to Rs 200.6 crore (Rs 186 crore).

"Stability in statins prices in Europe, insulin scale up, big time statins opportunity in the US markets and launch of monoclonal antibodies in the Indian markets are the near term kickers," said Karvy Stock Broking. It said this should drive earnings growth by 38 per cent in the financial year 2007.

The profits of the company have been affected as statins prices have crashed in the last six months.

After the company's results, Ms Kiran Mazumdar Shaw, Chairman and Managing Director of Bicon, said: "Given the challenges in the European statins market, I am satisfied with our results. We are seeing strong growth in important parts of our business. We have many excellent growth drivers, which are beginning to bear fruit. We are confident that we will deliver healthy operating margins for the full year".

On the future outlook for the company, Karvy Stock Broking said the key driver for growth in 2007 would be the US statin markets. "Patent expiry in the US of Pravastatin and Simvastatin presents big time opportunity for the company," it said.

Biocon expects only couple of players to get the USFDA approval for the statins market and the price erosion won't be so severe as in Europe markets. Margins are expected to be good in the US markets, Karvy said.

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