BIOCON: Building a Biotech

Powerhouse
Section D | Group 4

Biocon and the Biotech Industry

Originally made enzymes for breweries, today is the largest
Biotech Enterprise in India and 14th in the world with revenue
of $167 Mn
Certified by US FDA to sell generics in US & EU markets
Specialized in 4 areas enzymes, biopharmaceuticles,
custom research and clinical trials

Global Biotech Industry

Indian Biotech Industry

Drug manufacturing based on

chemistry reducing and giving way to
drugs based on biology
By 2025, bio-drugs to replace 70% of
conventional drugs
Designer drugs to gain ground

Turnover of industry crossed 1 Bn USD in

early 2005, 64% from Exports
280 companies enzymes to molecules,
migrants (eg-pharma) and startups
Bulk of revenues from generics
Indias global share in generics to go
from 4% to 33% in 2007 implying high
competition

Currently 78% of Biotech revenue

from USA

Biocon value addition

Enzymes
Global Enzyme market to grow at 6.5% (5 Yrs)
Fermentation a core skill, gives ability to
scale up industrial process and pursue
discovery led growth
Earmarked 100 Mn USD towards expansion of
fermentation facilities in 2005/06
Proportion of revenues to remain at 13-15%

Clinical Trials
Clinigene, a subsidiary set up in 2000- rapid
clinical research services at low prices
India advantages speed of patient
enrolment and shorter timelines
Clinical trials market expanding at 20%
Cost efficiencies and quality of documentation

Biopharmaceuticals
Currently 80% of Biocons turnover
Global drug companies outsourcing to
India/China- low cost producers
Global market for Statin (45% of
revenue) to fall from $ 22 Bn to $ 3 Bn
due to loss of patent protection
Biocon core competency molec. Biology

Custom Research
Syngene subsidiary to capture growing
business of research process outsourcing
Reduce R&D costs and shorten product
evaluation timelines
Two areas: Synthetic chemistry and
molecular biology ( AIDS, cancer and
arthritis)

The road ahead

Either, Stick to Biopharmaceuticals for revenue growth
Volume will grow manifold for statins API
Turnover expected to move up to $600 million by 2015
Added advantage of core competency in molecular biology
Or, Build competencies in the stage 10,11 & 12 of drug development
Syngene & Clinigene were already leading research endeavours
Partnerships were in place for the development phase
Lacked commercialization expertise

SWOT analysis Entering Drug

Discovery
Strength
Weakness
a).Molecular biology is their core competence
b).Consolidated skills in enzymes
c).US FDA Certified
d).State-of-the-art manufacturing capabilities
e).International benchmarks for their
regulatory systems
f).Low cost Clinical research
g). In-house R&D team and biodiversity
program to discover new biotech products

Opportunity
a). India preferred
destination in clinical
trials
b). 9 Million cancer cases
c). Venture capitalists were entering India
d). $ 82 Billion worth of global blockbuster
drugs facing patent expiry.
e).Enzymes market growing at 6.5%
f). India share of global generics market
increased to 33% from 4%.

a). Low availability of venture capital in

India
b). Mindset at Biocon to take risks
(Culture)
c).Outsourcing some of the stages
associated with drug discovery research
because they dont have the skills in
this area.
d).Little experience in commercialization

Threat
a). Implementation of the WTO patent
law
b). Increased competition in generics,
APIs for statins,
c). Substantially higher costs in drug
discovery
d). Riskiness associated with drug
discovery
e).Competition with European players

Implementation of the strategy

Innovation led strategy
Licensing and developing proven molecules
To prove as a reliable company show positive signs and demonstrable
results
Launch biogenetic insulin and monoclonal antibody
Fully integrated business model
Build biosimilar therapeutic protein franchise
Mergers/Strategic alliances with European partners to curb the risks
associated with drug failure

THANK YOU