Biocon Stock Surges 8.5% Following Key Positive Developments

Shares of Biocon jumped 8.5% to ₹389 per share on January 7, 2025, marking the highest level seen since mid-September. The rally was driven by multiple positive developments, including regulatory approvals and encouraging market outlooks.
Key Developments Driving Biocon’s Stock Surge:
- Approval for Psoriasis Drug in Japan:
- Biocon Biologics, a subsidiary of Biocon, received approval from Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) for its biosimilar Ustekinumab BS (Ustekinumab), which is used for the treatment of Psoriasis Vulgaris and Psoriatic Arthritis.
- The approval came after a licensing agreement with Janssen Biotech and will allow Biocon to commercialize the drug in Japan through its partner Yoshindo Inc..
- Progress in Diabetes Care Project:
- Biocon Biologics’ Embedding Specialist Nurses in Diabetes Care project in Ethiopia made notable progress. This initiative, in collaboration with Diabetes Africa and St. Paul’s Hospital, aims to upskill nurses and enhance diabetes care nationwide.
- Upgrade from Jefferies:
- Jefferies, a global brokerage, upgraded its rating on Biocon stock to ‘Hold’ and set a new target price of ₹400.
- Jefferies also highlighted the positive developments regarding the regulatory approval of Biocon’s Bengaluru manufacturing unit. The USFDA granted the Voluntary Action Indicated (VAI) status to this unit, allowing operations to continue despite minor issues.
- In addition, the USFDA approval for Biocon’s Stelara biosimilar is expected to boost growth in the biologics segment, with the product set to launch in February 2025.
- Strong Recovery in Stock Price:
- Biocon’s stock price has recovered 87% over the past 22 months, climbing from ₹206 per share to the current level of ₹389.
- This recovery comes after a challenging period between January 2021 and March 2024, when the stock lost nearly 57% of its value. However, it is still 21% below its all-time high of ₹487 in December 2020.
Outlook and Market Reaction:
- Biocon’s stock remains strongly positioned due to regulatory approvals and the expected launch of key biosimilars. Despite the recent surge, analysts see further potential, especially with Jefferies’ upgraded target price and the USFDA’s favorable status for the Bengaluru facility.