BANGALORE: Biotech major Biocon is selling its enzymes business to Denmark-based Novozymes for $115 million. The transaction, subject to shareholder and regulatory approvals, is expected to be completed by the end of the third quarter of 2007.
The move will enable Biocon to focus on its core bio-pharmaceuticals business, including APIs, biologicals and proprietary molecules (both commercialised and under development).
Biocon CMD Kiran Mazumdar-Shaw told ET, “The contribution of the enzymes business has been declining & stagnant and growing the segment would have required lot of investment from us. We were investing already in the biopharma segment which can deliver more than enzymes business. So we felt that this was the right time to exit.”
The share of enzymes business has been declining for Biocon. In 2006 fiscal, it saw sales of Rs 85 crore, accounting for 12.4% of its topline. The business grew to Rs 95 crore in FY07 but its contribution dipped to 11.5%.
The enzyme business includes a broad range of industrial enzymes, food additives and process aids. The business will be integrated into Novozymes South Asia while production and formulation will continue at the Biocon site under lease and service agreements with Novozymes.
The funds raised by the firm will be used for potential acquisitions, licensing and IP deals, according to Ms Mazumdar-Shaw.
Meanwhile, Biocon has registered revenue of Rs 272 crore in Q1 of fiscal 2007-08, a 28% growth over Rs 212 crore in the same period of last fiscal. Net profit stood at Rs 53 crore for the quarter against Rs 39 crore in Q1 of FY07, a growth of 36%.
Sequentially, there’s been a marginal dip both in revenues and net. Attributing it to the rupee appreciation, Ms Mazumdar-Shaw said, “Around 60% of our sales are in dollar denominations. So we have seen an impact between 6-7% on the current numbers.”
She added that apart from hedging all its contracts, the company is taking some measures like trying to realise higher revenues from topline, increasing rates for both products and services to manage the appreciation impact better.
According to the Biocon CMD, if the rupee appreciates by another 10%, then no amount of measures can negate the impact.
The move will enable Biocon to focus on its core bio-pharmaceuticals business, including APIs, biologicals and proprietary molecules (both commercialised and under development).
Biocon CMD Kiran Mazumdar-Shaw told ET, “The contribution of the enzymes business has been declining & stagnant and growing the segment would have required lot of investment from us. We were investing already in the biopharma segment which can deliver more than enzymes business. So we felt that this was the right time to exit.”
The share of enzymes business has been declining for Biocon. In 2006 fiscal, it saw sales of Rs 85 crore, accounting for 12.4% of its topline. The business grew to Rs 95 crore in FY07 but its contribution dipped to 11.5%.
The enzyme business includes a broad range of industrial enzymes, food additives and process aids. The business will be integrated into Novozymes South Asia while production and formulation will continue at the Biocon site under lease and service agreements with Novozymes.
The funds raised by the firm will be used for potential acquisitions, licensing and IP deals, according to Ms Mazumdar-Shaw.
Meanwhile, Biocon has registered revenue of Rs 272 crore in Q1 of fiscal 2007-08, a 28% growth over Rs 212 crore in the same period of last fiscal. Net profit stood at Rs 53 crore for the quarter against Rs 39 crore in Q1 of FY07, a growth of 36%.
Sequentially, there’s been a marginal dip both in revenues and net. Attributing it to the rupee appreciation, Ms Mazumdar-Shaw said, “Around 60% of our sales are in dollar denominations. So we have seen an impact between 6-7% on the current numbers.”
She added that apart from hedging all its contracts, the company is taking some measures like trying to realise higher revenues from topline, increasing rates for both products and services to manage the appreciation impact better.
According to the Biocon CMD, if the rupee appreciates by another 10%, then no amount of measures can negate the impact.