Biocon Biologics' shares soared 5.4% to an intraday high of Rs 338.60 on the BSE today After Biocon Biologics' Bengaluru facility was designated as Voluntary Action Indicated (VAI) by the U.S. Food and Drug Administration (FDA) on Sunday.

"Biocon Biologics' facilities at Biocon Park, Bengaluru, India, have been classified by the U.S. Food and Drug Administration (FDA) as Voluntary Action Indicated (VAI)," the company said in a statement submitted to stock exchanges.

The company stated that the scope of the inspection included six distinct biologics manufacturing units, which included two drug product manufacturing plants and four drug substance manufacturing plants, in addition to five analytical quality control laboratories, four microbiology laboratories, and two warehouses.

With the FDA's approval for the Bengaluru unit, investors' attention is now focused on regulatory clearance for Biocon's Malaysia unit.

In terms of quarterly performance, Biocon's net profit plummeted by 84 percent year on year in Q2, to Rs 27.1 crore from Rs 172 crore the previous year. Operational performance also suffered, with the EBITDA margin falling to 19 percent from 21 percent year on year.

Despite these obstacles, the company's revenue increased by a modest 4% to Rs 3,590.4 crore from Es 3,462 crore the previous year. Goldman Sachs, which maintains a 'buy' recommendation on Biocon with a price target of Rs 350, underlined the unanticipated margin pressure, citing lower gross margins and less operating leverage.

Nuvama Institutional Equities noted that Biocon's H1 FY25 performance was modest as expected, but it remains confident about a turnaround in H2 FY25. The brokerage focuses on Biocon's biosimilar pipeline and GLP-1 possibilities, with research services projected to benefit from CDMO tailwinds.

Furthermore, Nuvama identified medium-term rating triggers for Biocon, including the completion of USFDA inspections at its Malaysia and Bengaluru plants, as well as the imminent launch of biosimilars such as aspart, bevacizumab, and ustekinumab.