Biocon unit gets US FDA tentative nod for diabetes drug Sitagliptin

Biocon Ltd said on Tuesday its wholly owned unit Biocon Pharma has received tentative approval from the US Food and Drug Administration (US FDA) for Sitagliptin tablets in 25 mg, 50 mg and 100 mg strengths.The drug, indicated as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes, will expand the Indian drugmaker’s portfolio of vertically integrated products, Biocon said in an exchange filing.

The regulatory milestone comes as the Bengaluru-based company struggles with profit pressures. Earlier this month, Biocon reported a steep 95.2% year-on-year decline in consolidated net profit to ₹31.4 crore for the quarter ended June 30, well below analysts’ estimates of ₹102.3 crore, compared with ₹659.7 crore a year earlier.

Revenue from operations rose 14.8% to ₹3,942 crore, short of the ₹4,096 crore forecast in a CNBC-TV18 poll. Operating performance improved, with earnings before interest, taxes, depreciation and amortisation (EBITDA) rising 20.7% to ₹749 crore and margins expanding to 19% from 18.1% last year. However, they too lagged expectations of a 20.8% margin.

In June, global brokerage firm HSBC reduced its price target on Biocon Ltd. to ₹390 from ₹400, while maintaining its ‘Buy’ rating on the stock.

Out of the 18 analysts that have coverage on Biocon, 18 still have a ‘Buy’ rating on the stock, three say ‘Hold’, while five have a ‘Sell’ rating.

Shares of Biocon ended 0.4% lower at ₹358.60 on Tuesday, valuing the company at about ₹47,943.52 crore.