Businessexcellence ACHIEVING
O N L I N E
BIOCON
www.biocon.com
C O R P O R AT E B R O C H U R E
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here’s nothing very conventional about the way the Indian biopharmaceutical company Biocon has developed. Even its original structure—a joint venture in 1978 between the Indian entrepreneur, Ms Kiran MazumdarShaw, barely out of university at the time—and the Irish Biocon Biochemicals company is hardly textbook. But it did mark the start of a bio-revolution in India with Biocon evolving over the years from an enzyme-manufacturing company into a fully integrated biopharmaceutical enterprise.
The new buzz in the pharma industry is how best to capi rapid demand from newly a markets. As Jeff Daniels lea already well ensconced
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Biocon
Biocon
The full impact that Biocon was to have on India had to wait for some time. In the meantime, ownership of Biocon Biochemicals in Ireland, first passed to Unilever, where for a while it was incorporated into Quest International. Later still, in 1998, when Unilever sold a package of businesses in its specialty chemicals division— including Quest—to ICI, an agreement was made for Unilever to sell its shareholding in Biocon to Indian promoters, thus bringing Biocon home as an independent entity. After six years of private ownership, Biocon created a storm in the stock market when it floated a third of the stock in March 2004. On day one of its hugely oversubscribed launch, markets closed valuing Biocon at $1.11 billion—only the second time in history that an Indian company crossed the $1 billion mark on the first day of trading. Today, Biocon is a fully integrated healthcare company that delivers innovative biopharmaceutical solutions. Through separate subsidiary businesses that have been created to specialise on specific roles, Biocon’s business structure enables it to span the entire drug value chain, from pre-clinical discovery to clinical development and then on to commercialisation. Together, these interests provide multiple revenue streams which balance risk, encourage innovation and deliver products with accelerated growth. Biocon capitalises on India’s globally competitive cost base coupled with its own exceptional scientific people resources, pushing through its own in-house R&D programmes, while also providing custom and clinical research services to international pharmaceutical and biotechnology majors. 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 its first anti-cancer drug and several other promising discovery partnerships in progress, Biocon strongly advocates the development of affordable medicines. Syngene is Biocon’s custom research organisation, responsible for pre-clinical discoveries of new pharmaceutical products. It aims to provide high value development services, from target identification and validation to small molecule and library synthesis. With its reputation for meticulous
Biocon
Asahi Kasei Group We
the
Asahi
Kasei
Group,
through
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innovation and advances based in science and the human intellect, will contribute to human life and human livelihood. We will create new value, thinking and working in unison with the customer, from the perspective of the customer. We will respect the employee as an individual, and value teamwork and worthy endeavor. We will contribute to our shareholders, and to all whom we work with and serve, as an international, high earnings enterprise. We will strive for harmony with the natural environment and ensure the safety of our products, operations and activities. We will progress in concert with society, and honor the laws and standards of society as a good corporate citizen.
Neopharma to manufacture and market a range of biopharmaceuticals specifically for countries in the Gulf Cooperation Council. In 2008, Biocon acquired a 78 per cent stake in German pharmaceutical company AxiCorp at a cost of €30 million. AxiCorp markets paralleldistributed EU pharmaceuticals as well as its own generic brand ‘Axcount’ in a unique business approach which has brought significant cost savings to German health providers and patients in the under-patent pharmaceuticals market, as well as in the off-patent market. Through the AxiCorp acquisition, Biocon has access to a wide range of pharmaceuticals including generics, biosimilars, biologics and innovative pharmaceutical products in Germany and Europe. At other times, Biocon has elected to enter strategic partnerships, both with high tech ‘startup’ companies or long established names in order
“Biocon is a fully integrated healthcare company that delivers innovative biopharmaceutical solutions” protection of intellectual property, it provides customised solutions in the areas of synthetic chemistry and molecular biology to pharmaceutical and biotechnology majors worldwide. Clinigene covers the middle ground, specialising in phase I-IV clinical trials and studies, using well-characterised clinical databases in diabetes, oncology, lipidemia and cardiovascular diseases at Biocon’s state-of-the-art Bioavailability and Bioequivalence Centre—accredited by both the College of American Pathologists and NABL (National Accreditation Board for Testing and Calibration Laboratories). Biocon handles the commercialisation of products, for which it has gained a solid reputation with a formidable portfolio of biopharmaceuticals, led by Biocon’s cholesterol lowering star Statins. The ability to commercialise insulin, immunosuppressants and a range of biogenerics demonstrates highly advanced process development and manufacturing expertise. In recent years, Biocon has spread its wings internationally, starting in 2007 with a joint venture with Abu Dhabi-based pharmaceutical company
to exploit potentially rewarding new products. The list is far too long to itemise here but the following selection will provide a flavour of the variety of interests Biocon is developing. Biocon’s relationship with Amylin Pharmaceuticals, for example, is to jointly develop, commercialize and manufacture a novel peptide therapeutic for the treatment of diabetes. Sapient Discovery is an established leader in structure-guided drug discovery with a number of proprietary algorithms and capabilities for efficient protein structure based drug discovery. Sapient is working with Biocon and using its proprietary Genes-to-Leads, Fragments-to-Leads and X-ray crystallography technologies which are claimed to provide dramatic reductions in the time and costs associated with compound synthesis and screening. Sometimes these partnerships are created to better exploit generic drugs while at others, as is the case with US start-up company Iatrica, the collaboration is to co-develop an exclusive new class of immune-conjugates for targeted immunotherapy of cancers and infectious diseases. Iatrica is based in Baltimore and uses technology
Biocon
Pall Life Sciences Pall Life Sciences is the leading global provider of filtration, purification and separation products and technologies to the biopharmaceuticals market. These products and technologies are used from the earliest stages of discovery and development of new drugs, through production and delivery of therapies for the prevention, diagnosis and treatment of disease.
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supported by extensive protocols and technical reports, an industry-leading scientific and technical staff, and worldwide offices. Biocon utilizes Pall’s Centre of Excellence in Bangalore, India. The Centre drives process optimization innovations and houses a state-of-the-art proteomics laboratory, validation laboratory and a training facility to support Indian and regional customers.
developed at Johns Hopkins University. Alternatively, Biocon has chosen to use licensed technology to further its product portfolio as was the case when Biocon acquired the rights to manufacture Abraxis BioScience’s Abraxane approach to the treatment of breast cancer. Under the terms of the agreement, Biocon will have the right to market the drug throughout the Gulf States and the Indian sub-continent. To demonstrate its versatility and flexibility, you need look no further than the partnership it has with DuPont, which is working with Syngene on the development of new crop protection products. Biocon also works closely with a number of universities. For example, in conjunction with the Indian School of Business (ISB) the Biocon Cell for Innovation Management has been launched to promote innovation in business. The Cell, set up at the cost of 10 million rupees, operates under the aegis of the Centre for Leadership, Innovation and Change at the ISB, and helps organisations find answers to questions such as the gaps in a company’s ability to innovate, assessing the required understanding to manage and mitigate risks associated with innovation and how to produce high value, high quality, strategic innovation at low cost. To capitalise on the interest in biotechnology and biosciences research at the Deakin University of Australia, Biocon has helped establish the Deakin Research Institute in Bangalore and a joint development of a mammalian cell bio-processing facility at Geelong in the Australian state of Victoria. In an industry dominated by American and European giants, Biocon has nevertheless carved out a significant role for itself, ranking among the top 20 global biotechnology companies—making it, at one stage, the seventh largest biotech employer in the world. Biocon’s workforce presently totals around 4,750—expected to rise to 5,000 in the next quarter—of which, at the last analysis, 84 per cent were university graduates and more than half of these held postgraduate degrees or PhDs. With the average age of employees at just 29, the company is alive with energy and youthful enthusiasm. We started this profile of Biocon by remarking on its unconventionality. Perhaps the most striking example of this is the founder of the business herself. Born and educated in Bangalore—still the
Biocon
Millipore Millipore is a Life Science leader providing cuttingedge technologies, tools and services for bioscience research and biopharmaceutical manufacturing. As a strategic partner, we collaborate with customers to confront the world’s challenging human health issues. From research to development to production, our scientific expertise and innovative solutions help customers tackle their most complex problems and achieve their goals. Millipore Corporation is an S&P 500 company with more than 6,000 employees worldwide. For more information, visit www.millipore.com.
degrees from universities, leadership awards from business publications and numerous recognitions from various august business institutions. Despite the enormous workload of her role as chairman and managing director, the open door policy of Mazumdar-Shaw still remains—whether for the key management team that surrounds her or for the most recent campus recruit—a highly refreshing attitude. A commitment to continuous training programmes for internees and permanent staff alike brings out the best in her people from the very beginning of their employment at Biocon. And headaches aplenty there certainly have been in recent years for the chairman. As MazumdarShaw reported at the most recent annual general
“Collaboration is proving to be the most prudent and effective way to boost productivity, cut time to market and sustain growth” home of Biocon—Kiran Mazumdar-Shaw graduated in 1973 and studied beer brewing at the Ballarat Institute of Advanced Education in Australia before joining Carlton & United Beverages, originators of the famous Fosters brand. In 1978, Mazumdar-Shaw moved to Ireland and joined Biocon Biochemicals as a trainee manager. Within a year she had persuaded the Irish management to help her establish Biocon in India with the initial goal of extracting an enzyme from papaya. At that time, biotechnology was a completely unheard of science in India and not surprisingly, her first application for finance was turned down by banks. Nevertheless, over the years, the company grew under her stewardship and is today the biggest biopharmaceutical firm in India. When the business was floated in 2004, the issue was oversubscribed by over 30 times! Mazumdar-Shaw held onto 40 per cent of the stock, making her one of India’s richest women with an estimated worth of $480 million. Over the years, her inspirational leadership has won her countless awards and accolades. Barely four years after the start of her business career, she won Gold for Best Woman Entrepreneur, awarded by the Institute of Marketing Management. Since then she has been showered with honorary
meeting, 2010 has been a very challenging year for the global pharmaceutical industry. Sales have declined, research productivity has fallen off while development costs have spiralled at the same time that pricing pressures from national healthcare systems have squeezed margins. Growth has been hampered and the dynamics of the industry changed. But when markets experience churn, new opportunities often emerge. To take advantage of unfolding possibilities, companies need to have in place business strategies that are open to change. In this regard, Biocon has demonstrated it has developed a business model that is both flexible and risk balanced. Mazumdar-Shaw believes that the dependence on blockbuster drugs in niche developed markets is “suboptimal, expensive and economically unsustainable.” Instead she considers that the industry’s next growth story will come from emerging markets, through synergistic alliances and a diversified portfolio weighted towards generics and biosimilars. Nevertheless, innovation is expected to continue delivering exciting, new opportunities. She advocates risk sharing models based on co-development of novel drugs. She argues that research services capable of spanning discovery,
Biocon
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considers that many companies will be forced to view outsourcing or contract services as a means of achieving the advances they need. As the complexity and scope of Bicon’s own R&D increases, this will be the perfect foil for the other divisions, delivering meaningful synergies. Finally, Mazumdar-Shaw predicts rewards from a strong market development focus on India and emerging markets. And there is no shortage of emerging markets. As well as India itself, countries such as China, Brazil, Mexico, South Korea, Turkey and Russia are all home to a growing middle class with rising disposable income and with that, the seemingly irresistible onset of ‘affluent’ diseases. These markets are increasingly investing in healthcare and health insurance. Together, these nations will generate exponential growth for biopharmaceutical sales in years to come. Whether wanting to revive the research base, bolster the product pipeline or make inroads into new markets, biopharmaceutical companies such as Biocon are increasingly recognising the strength of, and need for, partnerships. Through licensing of advanced discovery programmes, marketing alliances and strategic research collaborations, it is possible to share the risks and costs associated with drug development by
“Biocon capitalises on India’s globally competitive cost base coupled with its own exceptional scientific people resources” preclinical and clinical development will win out thanks to their ability to contain R&D costs. If this is the case, Biocon is uniquely positioned to capitalise on its superior technology base, proven research teams and highly productive manufacturing. Biocon has identified four strong and differentiated growth drivers. Firstly, it expects demand for its portfolio of biosimilar insulin and insulin analogs and the basket of biosimilar monoclonal antibodies to continue strongly, thanks to the prevailing health of the Western world and the way it is being copied in the East. It also sees considerable opportunities for customised research services as delivered by Syngene and the high productivity clinical research delivered by Clinigene. With escalating R&D costs and the long path to new medicine, Biocon
leveraging complementary skills and combining capabilities along the drug value chain. In Biocon’s opinion, collaboration is proving to be the most prudent and effective way to boost productivity, cut time to market and sustain growth. Biocon is among those farsighted biopharmaceutical companies that have been mindful of change, agile to adapt and intuitive about opportunities for growth. Its strategic location in the heart of a ‘pharmerging’ market (industry jargon for an emerging pharmaceutical market) has enabled it to fully capitalise on its low cost base. Long before it became a widely held strategic need, Biocon has advocated affordable innovation. It invested in world class research outsourcing capabilities, US FDA compliant bio-manufacturing facilities and a self-financed R&D pipeline while the
Biocon
“In an industry dominated by American and European giants, Biocon has nevertheless carved out a significant role for itself, ranking among the top 20 global biotechnology companies� global industry was still grappling with strategies to mitigate escalating drug development costs. A forward looking biosimilar strategy was already in place prior to the industry realising its potential to sustain expensive discovery and become a powerful source of revenue. So today, as the industry restructures to seize opportunities, Biocon could perhaps lead the way as a model, risk balanced company well positioned to harness the biopharmaceutical emergence. Patents for first generation biological products will begin to expire from 2014 onwards, opening the door for biosimiliars which have been estimated to be worth $19 billion. With products such as Insugen Basalog and BioMAb, Biocon has already demonstrated it has the technical and operational expertise necessary to take innovative and
affordable insulin and MAb products to the market. The proof of the pudding is in the eating and in July this year the company reported 52 per cent higher net profit year-on-year at 723 million rupees for the first quarter ended June 2010 against 475 million rupees during the corresponding period last year. Among insulins, immunosuppressants, statins and branded formulations, representing the core of the business, net sales increased by 37 per cent. Biocon has also taken a number of steps closer to its ambitious global aspirations. In Europe, the EU regulator has cleared the phase III clinical trials of its biosimilar insulin and the company will soon begin patient recruitment. In the US, another important milestone has been reached with the revolutionary oral insulin
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pill programme, IN105, entering phase I trials for Type-1 diabetes. The company plans to commercialise this molecule through a global partner and will begin licensing discussions towards the end of this year when it has more detailed data from the trials. To demonstrate the balanced structure within Biocon, despite its emphasis on generics and biosimilars, in the latest reported quarter, its branded drugs for diabetes, cancer, renal disorders and cardiology also did well, notching up a 28 per cent sales growth year-on-year. Finally, in September, two new divisions were launched, to market a range of dermacare, immunotherapy, pain relief, anti-infectives and comprehensive care products aimed at hospital intensive care units; yet more evidence of Biocon’s unconventional ability to adapt to new opportunities. www.biocon.com
BIOCON
www.biocon.com