CLSA retains sell rating on Biocon

Mumbai: CLSA has retained sell rating on Biocon following the company's second quarter results with an unchanged target price of Rs 210.

"Biocon’s 2QFY18 results were weak and impacted by API pricing pressure, production disruptions due to plant modifications and tender delays in EMs. Headwinds are likely to ease only by end FY18," said CLSA in a note.

Biocon on Thursday reported a Rs 69-crore consolidated net profit for the second quarter of fiscal 2017-18, a 53 per cent fall from the same period a year ago. The company's consolidated revenue from operations rose 2 per cent to Rs 969 crore in the quarter.

CLSA said that on biosimilars, plant-specific issues have led to setback in the USA and EU for lead products Trastuzumab and Pegfilgrastim.

Biocon is in the process of addressing these issues post which its filings could make progress, the report said.

"Inability to address regulatory issues could lead to commercialisation delays and impact Biocon’s first-mover advantage," said CLSA, cutting FY18-20 EPS estimate by 8-17 per cent.