Biocon: Launching a New Cancer Drug in India

By Gurumehar Singh, Tanuj Arora, Deepanshu Sidhanti, Amber Gupta, Abhishek Bansal, R. Anirudh, Sawan Gupta, Karanvir Singh, Karanveer Singh Khosa, Prakhar Saxena

Evolution of Biocon
Was basically an Enzyme Manufacturer 1. Statins 2. Large molecules like Insulin 3. Proprietary drugs
Alliance with CIMAB Expertise in Mammalian Cell technology

Strategy and Positioning evolution

Enzymes Genpharm; 15-20% share of statin market in US and Europe Insulin captured 10% of Indian market and generated 25-30% of new prescriptions; priced at 20-30% less than competitors BIOMAb made alliance with CIMAB for selling proprietary drugs in India

BIOMAb Market
Head and Neck cancer - 28% of cancer incidences and 26% of total deaths. Currently Biocon is planning to launch the product in India. Around 1% (1900) of the total cancer patients were expected to be able to afford BIOMAb in 2007. The increasing population and growing economy would increase the market size for BIOMAb. In future, Biocon may look at launching the drug in other countries in Asia and Africa.

Launch Strategy
Third phase testing first mover not necessarily the winner
Eg: books.com vs. Amazon.com; latter is clearly the winner with 3 times sales

Product Portfolio Launch generic drugs first and then BIOMAb

Communication Program:
Support for families counselling etc. Train sales personnel

Launch Strategy (contd)

Channels Directly deliver the drugs to the Doctors which will help to cut down the channel margins and has significant economic benefit to the customer
SECONDARY RESEARCH: 7-10% margin ( Medical Reps)

Needs to be refrigerated all the time and should be handled carefully, local pharmacists will be adding very little value Since the number of cancer specialists in India is less, it is easier to reach them directly instead of the traditional option so 24X7 services are not required Patients dependent on opinions of doctors

Launch Strategy (contd)

Pricing
Fixed Cost Variable Costs Per unit Unit Contributio n Break Even No of Years Price No of Units

25000000
25000000 25000000 25000000 25000000

1050
1400 1750 2100 2800

450
600 750 900 1200

55556
41667 33333 27778 20833

6
5 4 3 2

1500
2000 2500 3000 4000

1900
1900 1900 1900 1900