Biocon Limited witnessed a 4.5% surge in its share price during Monday’s trading session, driven by a major milestone achieved by its subsidiary, Biocon Biologics. The US Food and Drug Administration (USFDA) has granted clearance to the company’s insulin manufacturing facility in Malaysia, signaling the resolution of significant regulatory hurdles.
Regulatory Update: Key Milestones Achieved
The facility, previously classified under “Official Action Indicated” (OAI) in October 2023, has now been upgraded to “Voluntary Action Indicated” (VAI) status. This change allows Biocon Biologics to proceed with product filings from the unit, marking a turning point for the company. The clearance follows an inspection conducted by the USFDA between September 15 and September 27, 2024, which covered:
- Drug Substance Manufacturing Unit
- Drug Product Manufacturing Unit
- Medical Device Assembly Unit
- Analytical Quality Control Laboratory
- Two Microbiological Control Laboratories
- Two Warehouses
Biocon’s Bengaluru facility had also received a VAI status from the USFDA in November 2024, further strengthening the company’s biosimilar launch pipeline.
Positive Brokerage Reactions
The recent regulatory clearance has led Bank of America Securities to revise its price target for Biocon. The brokerage has raised the target by 9% to ₹435 per share, while maintaining a ‘buy’ rating. This optimism stems from the improved compliance status of Biocon’s facilities in Malaysia and Bengaluru and the anticipated biosimilar product launches.
Revenue Projections:
- FY25 (H1): $1 billion
- FY26: $1.2 billion
The firm also highlights Biocon’s plans to focus on deleveraging and scaling its new product launches in the coming years.
Technical Analysis: What’s Next for Biocon?
Biocon shares opened at ₹370.50 on the BSE, reaching an intraday high of ₹376.95 and a low of ₹364.40. The stock is currently trading in a positive trend, with strong support at ₹360 and resistance in the range of ₹390-₹400.
According to Riyank Arora, Technical Analyst at Mehta Equities Ltd:
- Support Level: ₹360
- Resistance Levels: ₹390-₹400
- Trading Strategy: Buy on dips near ₹360-₹365 with a stop loss at ₹355. Potential targets are set at ₹390-₹400 and beyond.
- Indicators: Bullish volume and RSI suggest continued strength in the stock’s momentum.
Investor Outlook
Biocon’s recent achievements with the USFDA not only boost investor confidence but also position the company for robust growth in the biosimilars market. The clearance of its Malaysian facility, coupled with favorable projections from leading brokerages, highlights the company’s promising trajectory.
Stay updated with Biocon’s stock performance and market developments as the company gears up for its next phase of growth!
