Biocon Research Reports By Nirmal Bang & Morgan Stanley

When should markets start paying for its pipeline? Now, in our view – Although the global biosimilar story has more questions than answers at this point, these will be addressed by market forces, regulators and courts in the years to come. In the meantime, we see BIOS as a strong re-rating story given that markets have hardly priced in its biosimilar pipeline (19.8x F17e EPS, which is mostly its non-biosimilar base business). We have a detailed valuation case study in this report – Celltrion (up ten-fold in seven years to a US$10bn market cap on a 40-50x P/E) – and compared it to BIOS, with a current market cap of US$1.4bn. The comparison is relevant to assessing when markets start to discount the bio-similar pipeline.

Morgan-Stanley-Biocon-Report

Biocon-Initiating Coverage-10 June 2016