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On Thursday, Investec (LON:INVP) began coverage on Biocon (NSE:BION) Ltd (BIOS:IN), a leading biopharmaceutical company, issuing a Buy rating and setting a price target of INR400.00. The new assessment by Investec suggests a positive outlook for the company’s shares based on several growth factors and strategic advantages in the pharmaceutical industry.
Biocon is recognized for its potential to capitalize on the global biosimilars market, particularly in the United States. The company has also seen growth in its Generics (Gx) business, with a focus on GLP-1s, and in its Services business. A recent notable achievement for Biocon was the successful inclusion of its product Yesintek, a biosimilar to Stelara, in the Pharmacy Benefit Manager (PBM) formularies, which is expected to be a significant positive for the company.
The firm highlighted Biocon’s recent product launches in the US and EU markets, including biosimilars and other pharmaceutical products such as lira in the EU and dasatinib. The report also points to upcoming approvals for a range of products, including bAspart, bevacizumab, lira in the US, and sema in the Rest of the World (RoW), which are anticipated to contribute to the company’s growth and enhanced profitability.
Investec’s valuation of Biocon takes into account the sum-of-the-parts (SOTP) method, considering the combined value of Biocon’s subsidiaries Syngene, its Generics business, and its biosimilars. The planned restructuring mentioned by the firm is also expected to play a role in reducing the company’s debt, aligning with its growth trajectory.
Biocon’s strategic positioning and the recent developments in its product portfolio and market presence provide a basis for Investec’s favorable rating and the price target set for the company’s shares. The Investec report concludes with a strong endorsement to initiate with a Buy rating, reflecting confidence in Biocon’s future performance in the pharmaceutical sector.
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