SAPM ASSIGNMENT

SREE MAHADEVAN S

B2355
PART -1

FUNDAMENTAL ANALYSIS

Economy Analysis
It includes both global economy analysis and country specific analysis.

Global Economy

Inflation

Globally inflation rates have been teadily increasing over the past 5 years, but a slight decrease
in the present year inflation, 3.58% from the previous years. It reflects the right amount of
infaltion for the economies to grow. The all-India general inflation rose to 3.05% in May 2019,
compared with 2.99% in April 2019. The corresponding provisional inflation rate for rural area
was 1.86% and urban area 4.51% in May 2019 as against 1.87% and 4.30% in April 2019.

Interest rates
The Reserve Bank of India lowered its policy interest rate by 25bps to 5.75 percent during its
June meeting and changed its monetary policy stance to "accommodative" from "neutral". the
RBI lowered its growth forecast to 7 percent for 2019/20 from 7.2 percent previously estimated;
and raised its retail inflation outlook for the first half of fiscal 2019-20 to a range of 3 percent to
3.1 percent from a range of 2.9 percent to 3 percent. India’s interest rates of 5.75% was aimed at
the sharp improving of economy while developed countries had lesser rates. America’s is at
2.5%, Australian (1%), British (.75%), Chinease (‘4.3%).Global economic growth is only
growing at 2.6% in 2019, at a loss from expected figure of 3.3. The advanced countries are rising
at 1.4%, while EMDE(Emerging Markets and Developing Economies) at 4.8%.

Echange rates

The Indian currencies are at a rise for the last years, India's forex reserves have raced lately. 1
Euro is at Rs. 76.82, Pound is at Rs. 83.74, US$ at Rs.68.853. Presently exchange rates are
looking positive sor the country.

Political stability

It measures the political tability and Absence of Violence/Terrorism measures perceptions of the
likelihood of political instability and/or politically-motivated violence, including terrorism and
other sort of violence. . The average value for India during that period was -1.14 points with a
minumum of -1.51 points in 2003 and a maximum of -0.83 points in 2017.
INTRODUCTION OF PHARMACEUTICAL INDUSTRY:

In the global scenario Indian pharmaceutical market is the world's fourth largest by
volume of drugs (8 percent of the global market) and thirteenth largest by value (less
than 1 percent of the global market .The prices of medicine are among the lowest in the
world. In the present scenario 70 percent of the Indian population doesn't have access
to drug therapy. According to the Pharma Handbook Per-capita consumption of drugs in
2018 was only $3.33.

But in spite of such strong positioning, Indian government's patent laws were but put on
trial when on 15 feburary,2017 (HINDUSTAN TIMES) the Swiss pharmaceutical
company Novartis accused the government of failing to comply with World Trade
Organization (WTO) rules after it refused to grant the company a patent on its cancer
drug Glivec. India signed up to the WTO's Trade Related Intellectual Property Rights
(Trips) patent regime when it joined the WTO in 1995.

It was later claimed by Novartis that the failure to acknowledge Glivec as an innovative
drug means that India is operating outside these regulations. But this was strongly
rejected by the Indian government, arguing that Glivec is an existing drug with only a
minor alteration.

One of the most interesting facts to be noted here is that only three foreign companies
break through the top 10 companies in India and the Midwest's own Abbott Labs is one
of those companies. But on the other hand only a little more than a third of the Indian
market is represented by the top ten companies. Strangely, though world market leader
Pfizer is not among them. The top Indian companies – Cipla, Ranbaxy, Sun Pharma
and Dr. Reddy's – have all initiated their international strategies by establishing offices
and operations in the U.S. Sun Pharma even has some Midwest roots as it has
acquired a substantial equity chunk of Caraco Pharmaceuticals in Michigan.
Some key changes recently made by the Indian government have altered the dynamics
of investing in India for pharmaceuticals companies:

1. In 2002, the Indian government allowed for 100 percent direct foreign ownership.

2. In January 2005, the Indian government implemented a 20-year product patent

protection policy.

3. Import duties on new drugs under development (clinical trials) have been
eliminated.

4. ICH good clinical practice regulations are now mandated.

The contract research organization (CRO) market in India is expected to grow

substantially from a level of $70 million in 2014 to $200 million by 2018 as a result of the
above changes. It doesn't hurt that doing clinical trials in India is between 50 percent
and 60 percent cheaper than in the U.S. Beside there is fertile ground for the study of
chronic diseases:

1. 34 million diabetics

2. 30 million with cardiovascular disease

3. 8 million epileptics
 Source: Pharma Marketing News 2017

THE SUCCESS STORY OF THE INDIAN PHARMACEUTICAL INDUSTRY:

(PEOPLE BEFORE PATENTS)

The colonial patent law of 1911 secured the Indian market to British industry. A large
majority of drugs were imported from abroad until the Patents Act 1970 brought a
turnaround. Early in the 21st century India has a highly efficient pharmaceutical
industry, blossoming thanks to the weak patent protection of medicines. It provides
essential drugs at affordable prices and creates considerable employment. Today over
90 percent of modern medicine consumed in India are produced locally. From 1 January
2005 India has been complying with the Trade Related Intellectual Property Rights
(Trips) of the World Trade Organization (WTO). The new rules of the game do threaten
India’s achievements.

The Indian pharmaceutical industry is a success story. It is also a potential employment

generator. More than 500 000 people are employed in this sector, in some 12 000 firms
out of which 2900 of them are large scale units. Besides a further 2.5 million jobs are
thought to be involved in the pre- and post-production sector. When compared to the
general price index, the drug prices have risen much less in the last 15 years so much
so that it still remains far below average. "W orldwide, India is a country of very low drug
prices while producing high quality medicines", Nihchal H. Israni, president of the Indian
Drug Manufacturers’ Association (IDMA), states proudly. The pharmaceutics self-
sufficiency exceeds 90 percent – in spite of the fact that the policy of open economy is
being pursued by India since 1991.

Now a question may arise as to what are the main factors that transformed the status of
the Indian pharmaceutical industry from a mere importer and distributor of drugs and
pharmaceuticals to an innovator driven by cost and effective producer of quality drugs.
The answer is strategic government policies that helped India in emerging as one of the
fast growing pharmaceutical industry in the world. To add to this with every passing year
trade surpluses and exports are also growing.

Industry revenues

For the first time ever, in 2016, global spending on prescription drugs topped $643
billion, even as growth slowed somewhat in Europe and North America. The United
States accounts for almost half of the global pharmaceutical market, with $289 billion in
annual sales followed by the EU and Japan. Emerging markets such as China, Russia,
South Korea and Mexico outpaced that market, growing a huge 81 percent.

US profit growth was maintained even whilst other top industries saw slowed or no
growth. Despite this, "The pharmaceutical industry is — and has been for years — the
most profitable of all businesses in the U.S. In the annual Fortune 500 survey, the
pharmaceutical industry topped the list of the most profitable industries, with a return of
17% on revenue."

Pfizer's cholesterol pill Lipitor remains the best-selling drug in the world for the fifth year
in a row. Its annual sales were $12.9 billion, more than twice as much as its closest
competitors: Plavix, the blood thinner from Bristol-Myers Squibb and Sanofi-Aventis;
Nexium, the heartburn pill from AstraZeneca; and Advair, the asthma inhaler from
GlaxoSmithKline.

IMS Health publishes an analysis of trends expected in the pharmaceutical industry in

20017, including increasing profits in most sectors despite loss of some patents, and
new 'blockbuster' drugs on the horizon.

Teradata Magazine predicted that by 2018, $40 billion in U.S. sales could be lost at the
top 10 pharmaceutical companies as a result of slowdown in R&D innovation and the
expiry of patents on major products, with 19 blockbuster drugs losing patent.

Market leaders in terms of revenue-

The following is a list of the 20 largest pharmaceutical and biotech companies ranked by
healthcare revenue. Some companies (e.g. Bayer, Johnson and Johnson and Procter &
Gamble) have additional revenue not included here. The phrase Big Pharma is often
used to refer to companies with revenue in excess of $3 billion, and/or R&D expenditure
in excess of $500 million.

COMPANY ANALYSIS

INTRODUCTION OF ORGANIZATION:

Biocon is India's leading biotechnology enterprise. Established in 1978, the company

today is an integrated biotechnology enterprise focused on the development of
biopharmaceuticals. The company serves partners and customers in over 50 countries.
Within the biotechnology space, the company ranks first in Asia in terms of revenues
and market capitalization and sixteenth globally.
The company is headed by Kiran Mazumdar-Shaw. Biocon went for an IPO in 2004.
Biocon became only the second Indian company to cross a market capitalization of one
billion U.S. $ on the first day of listing. Mazumdar-Shaw and her husband John Shaw
own over 60% of the company's stock.
Biocon Limited is a fully integrated biopharmaceutical company focused on
biopharmaceuticals, custom research and clinical research.

Subsidiary Companies:

Syngene International Limited is a custom research organisation offering synthetic

chemistry and molecular biology services for early stage drug discovery and
development.

Clinigene International Limited is a clinical research organization offering Phase I-IV

clinical trials and studies for novel/generic molecules to international pharmaceutical
majors.

Biocon Biopharmaceuticals Private Limited (BBPL) is a joint venture with CIMAB to

develop and market a range of monoclonal antibodies and cancer vaccines.

AxiCorp GmbH is a Friedrichsdorf (Germany) based pharmaceutical marketing

company and is amongst the fastest growing in Europe. Biocon Limited acquired a
majority stake in AxiCorp GmbH (70%) in February, 2008.

NeoBiocon FZ LLC is a research and marketing pharmaceutical company based in

Abu Dhabi. Incorporated in January 2008, NeoBiocon is a 50:50 joint venture with Dr.
B.R.Shetty, Managing Director of NeoPharma, Abu Dhabi.
Intellectual Profile of 3600+ Personnel

Biocon, Syngene and Clinigene together employee approximately 3600 qualified

personnel - from biologists, chemists, medical practitioners, pharmacologists,
engineers, finance / legal / marketing analysts, HR generalists to general administrators.
5% of our employees have PhD degrees, 41% have a master’s degree in science and
the remaining are graduates with a bachelors degree in science, commerce or arts.
15% of Biocon employees are women (across the group). The employee attrition last
quarter was 7% and last year it was over 20%. The average age of the employees is 29
years

Biocon has rapidly developed a robust drug pipeline, led by monoclonal antibodies and
several other molecules at exciting stages in the biopharmaceutical value chain. With
the successful commercial launch of our first anti-cancer drug and several promising
discovery partnerships in the clinic, we remain committed to scaling new heights in
frontier science and achieving new milestones in affordable medicine.

The Innovation Matrix: A Strategic Framework

To navigate the challenges of innovation in the next decade company adopted a well-
defined strategic framework that will transform scientific discoveries into advances in
human healthcare and generate incremental value for shareholders.
The Innovation Matrix is a four-dimensional endeavour which extends into the realms of
the known and the unknown. Creativity in the known realm builds on existing knowledge
and can result in two types of innovation: INCREMENTAL and EVOLUTIONARY.
Creativity that challenges unknown boundaries and creates new knowledge is
EXPERIMENTAL and TRANSFORMATIONAL in its impact. A portfolio that covers
allfour spheres enables Biocon to sustain innovation in the short, medium and long term

HISTORY OF ORGANISATION

November 29, 1978

Biocon India is incorporated as a joint venture between Biocon Biochemicals Ltd. of
Ireland and an Indian entrepreneur, Kiran Mazumdar-Shaw . It was the Biocon’s
Founding Day - the start of a biorevolution in India

1979
Biocon is the first Indian company to manufacture and export enzymes to USA and
Europe
1989

Unilever plc. acquires Biocon Biochemicals Ltd. in Ireland and merges it with its
subsidiary, Quest International
Biocon is the first Indian biotech company to receive US funding for proprietary
technologies

1990
Biocon scales up its in-house research programme, based on a proprietary solid
substrate fermentation technology, from pilot to plant level

1993
Biocon's R&D and manufacturing facilities receive ISO 9001 certification from RWTUV,
Germany

1994
Biocon establishes Syngene International Pvt. Ltd. as a Custom research Company
(CRC) to address the growing need for outsourced R&D in the pharmaceutical sector

1996
The commercial success of Biocon's proprietary fermentation plant leads to a 3-fold
expansion
Biocon leverages its technology platform to enter biopharmaceuticals and statins

1997
Biocon spearheads initiatives in human healthcare through a dedicated manufacturing
facility

1998
Unilever inks a deal with ICI to sell its specialty chemicals division of which Quest
International is a part. Unilever agrees to sell its shareholding in Biocon to the Indian
promoters. Biocon becomes an independent entity
2000
Biocon commissions its first fully automated submerged fermentation plant to produce
specialty pharmaceuticals

Biocon establishes Clinigene, India's first Clinical Research Organisation (CRO) to

pursue clinical research and development

2001
Biocon becomes the first Indian company to be approved by US FDA for the
manufacture of lovastatin, a cholesterol-lowering molecule

Biocon's proprietary bioreactor, PlaFractor™ is granted a US 2001 and world-wide

patent

2002
Clinigene's clinical laboratory is the first in India to receive CAP accreditation

2003
Biocon is the first company worldwide to develop human insulin on a Pichia expression
system

2004
Biocon creates a buzz in the stock market in March 2004 with its hugely successful IPO.
Day 1 on the bourses closes with a market value of $1.11 billion, making Biocon only
the second Indian company to cross the $1 billion mark on the first day of listing.

Biocon Limited announces the launch of INSUGEN®, the new generation bio-insulin,
manufactured in Asia's largest human insulin plant.

2008
Biocon signs a commercial agreement for supply of insulin API to Asia, Africa and the
Middle East.

2010
Biocon inaugurates Biocon Biopharmaceuticals, India's largest multi-product Biologics
facility at Biocon Park

Biocon inaugurates Biocon Park, India's largest integrated biotechnology hub,

comprising an integrated cluster of research laboratories and manufacturing facilities
spread across 90 acres in KIADB (Karnataka Industrial Areas Development Board)
industrial estate.

Biocon announces a licensing agreement with Bayer HealthCare (BHC) for the
exclusive marketing and trademark rights for INSUGEN® for the Chinese market.

Biocon launches India's first anti-cancer drug BIOMAb EGFR™.

2012
Biocon and Abu Dhabi based pharmaceutical company Neopharma sign an MOU to
establish a JV to manufacture and market a range of biopharmaceuticals for the GCC
countries (Gulf Cooperation Council). .

Biocon announces the launch of its Nephrology Division and a comprehensive portfolio
of renal therapy products.

Syngene enters into a research partnership with Bristol-Myers Squibb and completes
the ground breaking ceremony of new research facility at Biocon Park.

Biocon presents the results of Phase 1 studies on its oral insulin product, IN-105 at the
European Association for Study of Diabetes (EASD) meeting held at Amsterdam.
2014
Biocon acquires a 70% stake in German pharmaceutical company, AxiCorp GmbH for a
consideration of €30 Million

Biocon and Abraxis Bioscience launch ABRAXANE in India for treatment of Breast
Cancer.

Biocon is ranked among the top 20 global biotechnology companies (Med Ad News).

Biocon is the 7th largest biotech employer in the world (Med Ad News).

2018
Biocon's Syngene partners with Sapient Discovery to expand integrated drug discovery
offerings

Biocon's Syngene and DuPont Crop Protection Forge Alliance Partnership

Bristol-Myers Squibb and Biocon's Syngene open new R&D Facility at Biocon Park

Biocon launches BASALOG - long lasting basal insulin for Type 1 & Type 2 Diabetics

Products & Services

“Biocon’s impressive range of products and partnered services continue to build a

robust pipeline of biosimilar and discovery-led biologicals programs in oncology,
nephrology, diabetes and autoimmune diseases”
Through partnerships and alliances, Biocon has strategically moved up the value chain
from supplying pharmaceutical bulk actives to developing proprietary molecules and
branded formulations. Differentiation and a high degree of innovation distinguish all
products and services.

Biopharmaceuticals

Biocon is among few companies in the world with a diverse scientific skill base and
advanced manufacturing capabilities for the development and commercialisation of
biopharmaceuticals. It offers a range of products from fermentation derived small
molecules to recombinant proteins and antibodies.

Management

Ownership Pattern

CATEGORY OF NO. OF TOTAL NO. TOTAL NO. OF TOTAL SHAREHOLDING AS A % OF SHARES PLEDGED OR
SHAREHOLDER SHARE- OF SHARES SHARES HELD IN TOTAL NO. OF SHARES OTHERW ISE ENCUMBERED
HOLDERS DEMATERIALIZED AS A % OF NUMBER OF
FORM
(A+B) SHARES
AS A % OF AS A % OF TOTAL
(A+B+C) NO. OF SHARES

(A) Shareholding of Promoter and Promoter Group

(1) Indian

Individuals / Hindu Undivided 2 477,250,596 477,250,596 40.31 39.77 - -

Family

Central Government / State - - - - - -

Government(s)

Bodies Corporate - - - - - -

Financial Institutions / Banks - - - - - -

Any Others (Specify) - - - - - -

Sub Total 2 477,250,596 477,250,596 40.31 39.77 - -

(2) Foreign

Individuals (Non-Residents 3 13,553,916 13,553,916 1.14 1.13 - -

Individuals / Foreign
Individuals)

Bodies Corporate - - - - - -

Institutions - - - - - -

Qualified Foreign Investor - - - - - -

Any Others (Specify) 1 237,211,164 237,211,164 20.04 19.77 - -

Sub Total 4 250,765,080 250,765,080 21.18 20.90 - -

Total shareholding of 6 728,015,676 728,015,676 61.49 60.67 - -

Promoter and Promoter
Group (A)

(B) Public Shareholding

(1) Institutions

Mutual Funds / UTI 21 36,066,177 36,066,177 3.05 3.01 - -

Financial Institutions / Banks 9 15,062,412 15,062,412 1.27 1.26 - -

Central Government / State - - - - - -

Government(s)

Venture Capital Funds - - - - - -

Insurance Companies - - - - - -

Foreign Institutional Investors - - - - - -

Foreign Venture Capital - - - - - -

Investors

Qualified Foreign Investor 208 197,188,588 197,188,588 16.66 16.43 - -

Nominated investors (as def. - - - - - -

in Ch. XA of SEBI (ICDR)
Regulations)

Market Makers - - - - - -

Any Others (Specify) 4 378,430 378,430 0.03 0.03 - -

Sub Total 242 248,695,607 248,695,607 21.01 20.72 - -

(2) Non-Institutions

Bodies Corporate - - - - - -

Individuals - - - - - -

Individual shareholders - - - - - -
holding nominal share capital 0
up to Rs. 1 lakh

Individual shareholders 141,907,939 141,773,812 11.99 11.83 - -

holding nominal share capital 191,529
in excess of Rs. 1 lakh

Qualified Foreign Investor - - - - - -

Any Others (Specify) 5,993 65,293,506 62,672,236 5.52 5.44 - -

Sub Total 197,522 207,201,445 204,446,048 17.50 17.27 - -

Total Public shareholding 197,764 455,897,052 453,141,655 38.51 37.99 - -

 (B)

Total (A)+(B) 197,770 1,183,912,728 1,181,157,331 100.00 98.66 - -

(C) Shares held by - - - - - - -

Custodians and against
which Depository Receipts
have been issued-m

(1) - - - - - -

(2) - - - - - -

Sub Total 1 16,087,272 16,087,272 1.36 1.34 - -

Total (A)+(B)+(C) 197,771 1,200,000,000 1,197,244,603 100.00 100.00 - -

Ratio Analysis

Name Ratio Good/Not Good Description

Current Ratio (x) 1.30 Bad The current ratio is a liquidity ratio that
measures whether a firm has enough
resources to meet its short-term
obligations. It compares a firm's current
assets to its current liabilities, and is
expressed as follows: The current ratio is
an indication of a firm's liquidity.
Quick Ratio (x) 1.66 Good In finance, the quick ratio, also known as
the acid-test ratio is a type of liquidity ratio
which measures the ability of a company to
use its near cash or quick assets to
extinguish or retire its current liabilities
immediately
Dividend Yield (%) 14.08 Good The dividend yield or dividend-price ratio of
a share is the dividend per share, divided
by the price per share. It is also a
company's total annual dividend payments
divided by its market capitalization,
assuming the number of shares is
constant. It is often expressed as a
 percentage.

Debt Equity Ratio 0.00 Good

(x) The debt-to-equity ratio is a financial ratio
indicating the relative proportion of
shareholders' equity and debt used to
finance a company's assets. Closely
related to leveraging, the ratio is also
known as risk, gearing or leverage.
Return On Asset 5.31 Good The return on assets shows the
(%) percentage of how profitable a company's
assets are in generating revenue. ROA
can be computed as below: This number
tells you what the company can do with
what it has, i.e. how many dollars of
earnings they derive from each dollar of
assets they control
Return On Equity 12.74 Good6 In corporate finance, the return on equity is
(%) a measure of the profitability of a business
in relation to the equity, also known as net
assets or assets minus liabilities. ROE is a
measure of how well a company uses
investments to generate earnings growth.
PART -2

TECHNICAL ANALYSIS

Last trading day (data)

Line chart (with 50 day SMA)

Candle chart (with 50 day SMA)

MACD (12,26)