Contents of the Project:1) Kiran Mazumdar Shaw1) Introduction2) Educational Qualifications & Personal life2) Industry Review of Biotechnology1) Introduction of Biotechnology.2) Biotechnology Industry in India3) Company Review of Biocon1) History2) Major Products of Biocon3) Profitability Position4) Strength of Employees5) Success of Biocon6) Controversy related to Biocon7) Achievements of Biocon8) Corporate Governance4) Analysis of Kiran Mazumdar Shaw
1) As an Entrepreneur2) Personality Traits3) As a Leader4) Awards5) Conclusion1) KIRAN MAZUMDAR SHAWIntroduction:Kiran Mazumdar Shaw is an Indian Businesswoman who was born on March 23, 1953 inBangalore. She founded the company Biocon in India in the year 1978. From what started asan Indian subsidiary company of the Irish parent company Biocon, today Biocon is theleading biotechnology company in India. She has been a huge factor in making the companyevolve from an industrial enzymes manufacturing company to a fully integrated bio-pharmaceutical company. Biocon today is no longer a subsidiary company and it is a fullenterprise of its own of which Kiran Mazumdar Shaw is a Chairman and the ManagingDirectori. Biocon is also India’s first biotech company. She has established two subsidiariesto Biocon named Syngene (a custom research organization) in 1994 and Clinigene (a clinicalresearch organization) in 2000 where she is the Chairman of both the companies.She is a huge promoter of biotechnology sector in India and is a member of the AdvisoryCouncil of the Indian government’s Department of Biotechnology where she has played agreat role in bringing the Indian government, industry and academia together for the growthof this sector in India. She is highly respected in the corporate world because of hertremendous work in biotechnology.Kiran Mazumdar Shaw is responsible for steering Biocon on a trajectory of growth andinnovation over the years. Within a year of its inception, Biocon became the first Indian
company to manufacture and export enzymes to USA and Europe. In 1989, Biocon becamethe first Indian biotech company to receive US funding for proprietary technologies. In 1990,she upgraded Biocon’s in-house research program, based on a proprietary solid substratefermentation technology. The commercial success of this program led to a three-foldexpansion by 1996 and Biocon entered the biopharmaceuticals and statins segments. In 1997,she undertook initiatives in human healthcare through a dedicated manufacturing facility.Under her leadership, Biocon is building cutting-edge capabilities, global credibility andglobal scales in its manufacturing and marketing activities. It has Asia’s largest insulin andstatin facilities as also the largest perfusion-based antibody production facilities. It wasincluded in ‘The best under a billion’ listing by Forbes in 2009. Her efforts in biotechnologyhave drawn global recognition both for the industry in India and for Biocon and she has beentermed India’s Biotech Queen by ‘The Economist’ and India’s mother of invention by ‘TheNew York TimeEducational Qualifications & Personal LifeKiran Mazumdar Shaw was born in Bangalore. She did her schooling from Bishop CottonGirl’s High School in Bangalore. She wanted to join a medical school but took up biologyinstead and completed her B.Sc. in Zoology with Honors from Bangalore University in 1973.She did her post graduation in Malting and Brewing from Ballarat College, MelbourneUniversity in 1975. Her father was also a brewer and she worked as a Trainee Brewer inCarlton and United Breweries, Melbourne and as a Trainee Malster at Barrett Brothers andBurston, Australia but when she returned to India she found out that daughters were notwelcome in India’s breweries. In India, she was unable to find a job because of her gender,hence she was planning to go abroad to have a career in brewing. She is married to aScotsman John Shaw, who is currently the Vice-Chairman of Biocon.iv
2) Industry ReviewIntroduction of Biotechnology:Biotechnology refers to the use of microorganisms such as bacteria or biological substancessuch as enzymes, to perform industrial or manufacturing processes. Biotechnology is beingused to produce drugs and synthesize hormones.Biotechnology is divided into three sub fields:-1) Red BiotechnologyRed biotechnology deals with genetically changed microorganisms being used formanufacturing products like insulin and vaccine for medical use. It is due to researchin red biotechnology that antibiotics for various infections have been developed andvaccines to bolster the bodies’ resistance to various diseases were developed. It hasalso been used in reproductive technologies like invitro fertilization, DNA profiling,forensics and transplantation technologies.2) White BiotechnologyWhite biotechnology deals with creating useful chemicals for the industrial sectorthrough organisms like moulds or yeast. This type of bio technology is also referred toas grey biotechnology. White biotechnology has proven to be of immense benefitenvironmentally in cleaning oil spills and in storing DNA samples of endangeredspecies for future research. It is also useful for removing excess nutrients in soil andwater and for detection of landmines.3) Green BiotechnologyGreen biotechnology also called agricultural biotechnology is to do with factorspertaining to agriculture. Green biotechnology is concerned with the geneticmodification of plants and animals to produce environmentally friendly species.
The Biotechnology IndustryBefore 1970, biotechnology was used mainly in the agricultural and food processingindustries. Today, their area of expertise extends much further. Biotech companies view theirwork as an amalgamation of disciplines like genetics, biochemistry, embryology, molecularbiology and cell biology. This industry is about over 30 years old and is generating over $85billion in revenues. There are 8,550 companies worldwide, of which 1420 are publiccompany.According to Ernst & Youngs 2007 Global Biotechnology Report, the biotech industry madehistoric progress with strong product pipelines and product successes, record-breakingfinancing totals, unprecedented deal activity and impressive financial results. The globalbiotech revenues of the public listed companies in 2006 grew to $73.5 billion recording a 14percent growth over that in 2005 ($64 billion). Further, according to the report, all the leadingregions in the world recorded a strong double digit growth, with the US and Europe recording13 percent growth each and Canada registering 22 percent growth.The biotech industry can be classified into five different segments: Biopharma, Agri-biotech,Bioinformatics, Bio industrial and Bio services with each concentrating on a particular area.• Biopharma deals with the production of vaccines, therapeutics and diagnostics, whilethe end products of the biotech industry find two different kinds of buyers, the firsttype include private hospitals, governments, patients and the second type includeindustries like pharmaceutical.• Agri-biotech deals with hybrid seeds and transgenic crops, biopesticides andbiofertilizers.• Bio informatics deals with creation and maintenance of extensive electronicdatabases on various biological systems.• Bioservices market deals with clinical trial, contract research and manufacturingactivities.• Bio Industrial industry deals with enzyme manufacturing and marketing companiesand these enzymes are used in detergent, textile, food, leather, paper andpharmaceutical industry.Role of the Biotechnology Industry:• 200 plus vaccinations, products, therapies have been created by the biotechnologyindustry to combat cancer, autoimmune syndromes, diabetes, HIV/AIDS etc.• Biotechnology industry has developed several environment friendly products treatingelements which pollute the environment.• Biotechnology is also used in industrial houses for the optimum usage of the variousforms of energy.
• Biotechnology industry also plays a significant role in taking forensic science aheadby using methods relating to DNA fingerprinting.• Biotechnology companies use biological systems, living organisms or theirderivatives to make products for specific use. The general opinion about top biotechcompanies is that they spend billions of dollars in research and development, and dolittle else. With such large inputs, such companies must create novel technologies andproducts to stay solvent.Bio Technology Industry in IndiaIn India the Department of Biotechnology (DBT) was established in the year 1986 under theministry of Science and Technology This industry is one of the sunrise sectors in India. Interms of number of biotechnology companies, India was ranked at number three position afterKorea and Japan in the entire South-Easter Asia and Globally India is in the list of top 12biotech markets.Out of these Bio-pharma is the largest on that contributes 65% of the total revenue from thisindustry.At present there are more than 350 biotech companies in India providing employment forover 20,000 scientists. Most of the companies are located in the six major cities of Delhi,Mumbai, Pune, Chennai, Bangalore, Hyderabad and Ahmadabad. To keep pace with thecompetitive world, India has launched a comprehensive programme in biotechnology to makeuse of the resources available. In India Biotechnology is been used in a wide range ofeconomic activity ranging from environment, animal husbandry, medicinal and aromaticplants, bio fuels, aquaculture and products like silk and leather.Bio technology industry in India is the fourth largest adopter of biotech crop in the world,replacing Canada. India is gaining recognition in the field of clinical trial. A large number ofcompanies are providing research and development expertise to global pharmaceuticalcompanies. Many Indian Bio technology companies are also expanding overseas, for exampleBiocon has acquired 70 per cent stake of the German pharma company AxiCorp by Biocon isa case in testimony.Growth in the Biotech Industry in IndiaWith the growth in the customer base and more investments taking place in the biotechsector, Biotech Industry is expected to grow to around Rs. 4, 40,000 crores by the year 2020.The high demand for different biotech products has also opened up scopes for the foreigncompanies to set up bases and reap great profits. Some of the positive facts about the growthof the biotech sector in India are:• The biotech sector has crossed $1 billion• There has been a high growth of the Bio Agri sector in the country.• With the introduction of new technologies, the sector has grown to Rs 598 crore fromRs 330 crore
The government has also taken good steps to boost the biotech industry in the country, moreand more innovations have been made in this field to combine rich knowledge with skilledmanpower. A number of research laboratories have been set up in this regard to facilitate thegrowth of the sector. This has led to the innovation of various drugs for the production ofinsulin, blood clotting, human growth and so on. Life saving vaccines and enzymes have alsobeen manufactured.Challenges faced by the Indian biotech industryDespite having established drug development firms and renowned research expertise, theIndian biotechnology industry is facing a cash crunch. Inherent challenges facing the biotechoutsourcing business are the lack of appropriate infrastructure, issues arising under theIntellectual Property Rights (“IPR”) laws, product liabilities, ensuring exclusivity and theneed for increased industry-academia partnerships. Other issues that require attention includebut are not limited to: Exchange Control regulations; labour laws; contract terms andconditions; mechanisms for dispute resolution and the tax issues relating to withholding tax,transfer pricing and tax holidays/exemptions, etc.Key drivers of the Indian biotech industry- A number of biogenerics are slated to go off patent in the coming years, openingopportunities for Indian firms. Frost & Sullivan reckons that the US and Europe alone offerpotential to generate sales of $16.4 billion by 2011. Besides, the Indian market itself isquite large, thanks to changing economic demographics .- Our competitive edge comes from strong bio- manufacturing skills coupled with low-costbase, generating high capital efficiency.- It is now possible to establish that indigenously made biosimilar drugs are comparable tothe original products through pharmacokinetic, pharmacodynamic, and clinical studies. Aplus factor from Indias perspective.- Imminent introduction in the U.S. and Europe of a regulatory framework for approvinggeneric versions of biologicals considerably improves our sales and marketing prospectsSuggested measures for growth of biotech industry in India- To allow 100% FDI by automatic route in the biotech sector- Biotechnology should also get the “priority sector” tag for lending funds by banks for longgestation projects- To introduce fiscal measures that support incremental R&D investment- To desist from any price control measures- To strengthen human resources with an objective of meeting the industry demand in termsof specialized skills.
- To improve the Regulatory and IP infrastructure.Future Growth of the Indian biotech industryThe Indian Biotech sector is on a growth trajectory with the potential to deliver $5 billionrevenues by 2010 and $20 billion by 2020. If the National Biotech Strategy is successfullyimplemented, this ambition will be easily achieved. We need to focus on creating a strongeducational foundation in terms of higher and specialized education and on forging stronglinks between Industry and Academia.iiInternational BiotechCompaniesTop Indian BiotechCompaniesInternational BiotechCompanies in IndiaGenentech Inc. Biocon MonsantoAmgen Inc. Shantha Biotechnics PfizerGilead Sciences Inc. Bharat Biotech Astra ZenecaGenzyme Corporation Wockhardt UnileverSerono S.A Dr. Reddys Laboratories DupontBiogen Idec Inc. Serum Institute of India BayerMedImmune Inc. Zydus Cadila Eli LillyChiron Corporation Aventis Pharma Hoechst Roussel VetAmylin PharmaceuticalsInc. Reliance Life Sciences MilliporeInvitrogen Corporation Panacea Biotec Novozymes
3) Company ReviewHistoryWhile planning for a brewing career abroad, Kiran Mazumdar had a meeting with LesAuchincloss who had started a biotechnology company called Biocon in Ireland. He askedher to be his business partner and start Biocon in India. As she wasn’t having anyentrepreneurial background, she refused the offer. However, Les Auchincloss persuaded herto give it a try with a buy-back clause if the business failed, she finally accepted and spent sixmonths in Ireland and underwent training for the job.She started Biocon in 1978 in Bangalore with Rs. 10,000 as the initial capital as she facedcredibility challenges because of her youth, gender and her untested business model. Fundingwas a big problem for her as no bank wanted to lend finance to her. After failing to find anyfinancial institution to back her, she also found it difficult to recruit people for her start-up.She began operations out of the garage of a rented house with two employees. She facedseveral hurdles. Uninterrupted power, superior quality water, sterile labs, imported researchequipment, and advanced scientific skills were not easily available in India during the time.The company was operating in an environment with sub-optimal infrastructure andpersonally she was a 25-year-old first-generation woman entrepreneur without businessexperience. There was the risk of the business of biotechnology itself, an unknown businessin 1978.iiiBiocon’s first product to go to market was peptinpapain, an enzyme found in papaya which isused to prevent beer from turning hazy. Until 1983, the company blended enzymes andsupplied them to brewing, textiles, biofuels, animal feed and other such industries across theworld. In the mid-1980s with a loan of US $250,000 from ICICI Bank, Biocon was able tobuild a solid-state fermentation plant which helped in the growth of its R&D. ivIn 1989, the Irish Biocon was acquired by Unilever. In the 1990s, Kiran Mazumdar-Shawdecided to focus on biopharmaceuticals rather than enzymes. Unilever, which was a majorshareholder, did not want to be in the biopharmaceuticals business. John Shaw, the Scotsmanwhom Kiran Mazumdar-Shaw had married in 1998, used his savings to reclaim the entireBiocon stake from Unilever.v
Biocon ventured into the lucrative biopharmaceutical segment. They sensed a greatopportunity when branded drugs went off patent. They began to develop lovastatin, acholesterol-lowering drug whose patent expired in 2001. Biocon eventually began makingother forms of statins. The company’s revenue went up from Rs. 70 crore in 1998, to Rs. 500crore in 2004 when it went public.In 2007, Biocon made a strategic decision to divest its historic enzymes business toNovozymes A/S of Denmark. Today, Biocon has evolved from an enzyme company to a fullyintegrated biopharmaceutical company.vi viiIt is the first company globally to manufacture human insulin, Insugen®using a Pichiaexpression system. In 2006, Biocon launched BIOMAb EGFR®the first indigenouslydeveloped humanized monoclonal antibody for head-and-neck cancer.
Major Products of Biocon:Biocon’s products are based in four areas such as Diabetology, Cardiology, Nephrology andOncology. Biocon’s cardiology, nephrology, diabetology and oncology products includingBESTOR®, BASALOGTM, BioMAb EGFR®, STATIX®, NUFIL safeTM, INSUGEN®,TACROGRAFTM, ERYPRO safeTM, and MYOKINASETMare considerably less expensivethan other leading brands. Two of its novel programs on the verge of proof-of-concept stageare IN-105, which is the only oral insulin in the world to be in long duration clinical trials,and the T1h, a novel humanized monoclonal antibody (MAb), the only first-in-class novelMAb being tested in India for rheumatoid arthritis and psoriasis.viiiBiocon has a wide range of products under different categories as listed below:-Biopharmaceuticals:Active Pharmaceutical Ingredients (APIs)• Anti-Diabetic Agents• Anti-Inflammatory Agents• Anti-Oxidants• Cardiovascular Agents• Anti-Obesity Agents• Digestive-Aid Enzymes• Anti-Hypertensive Agents• Haemostatic Agents• Hepatoprotective Agents• Immunosuppressants• Gastro-Intestinal Agents• NutraceuticalsBiological:• Insulin• Streptokinase• EPO
PROFITABILITY:-Biocon Ltd’s profitability improved in the quarter ended September, as it benefited fromhigher sales and licensing income. During the quarter, sales of biopharmaceuticals rose by19% to Rs. 601 crore, with product sales rising by 16%, while licensing income doubled toRs. 23 crore. It has an alliance with US-based Mylan Inc. and receives license income basedon the progress of work. The first biosimilar product under this alliance has entered the pre-clinical trials phase, said the company.Biocon has also announced a $350 million (around Rs. 1,500 crore) licensing arrangementwith Pfizer Inc. pertaining to its insulin products. Its share price has risen nearly 10% sincethe announcement was made, explaining why the good results did not move the stock.Biocon’s revenue rose by 17% and its material costs rose by only 15%. But a decline in otherexpenses and slower growth in material costs enabled it to improve its operating profitmargin by 170 basis points. Its profit-before-tax rose by 26% but higher taxes lowered the netprofit growth to 20%.The company’s biopharmaceuticals business is doing well, with branded formulations’ salesup by 32% year-on-year in the first half of the year. It has started two new divisions ofimmunotherapy and comprehensive care. Its German subsidiary AxiCorp GmbH won somekey tenders for supplying generic drugs, and its sales rose by 30% to Rs. 523 crore in the firsthalf. Biocon’s biopharmaceutical division is expected to do well in the second half as well.On the research front, a key development is the company deciding to launch its oral insulinsimultaneously worldwide, which will involve carrying out US clinical trials. Earlier, thecompany was contemplating an India launch, followed by a roll-out in other markets. Thecompany believes the benefits of following this approach will be substantially higher. Itsresearch services business saw slow growth of 7% in the second quarter, which appears topartly be a result of an effort to focus only on value-added work.In the near term, the inflows from the Pfizer transaction will hold investor interest. Around$200 million will be in the form of an upfront payment, though it will reflect in Biocon’sprofit and loss statement in stages. It will use this money to fund its capital investments andregulatory filing fees, which would have otherwise put a strain on its finances. This willensure that Biocon can fund its growth without resorting to more borrowings. As ofSeptember, its debt levels have fallen by 17%. Biocon’s per share earnings, based onconsensus estimates, are expected to rise by 13% in fiscal 2011 and by 17% in fiscal 2012. Itsshare trades at around 26 times its fiscal estimated 2011 earnings. That appears justified,given the boost to its business from the Pfizer transaction, and its earnings so far having risenmuch faster.
Biocon Continues to Deliver Strong PerformanceBiocon Limited announces earnings for the half year ended September 30, 2010. Revenues atRs 1,360 crores; EBITDA at Rs 293 crores; PAT at Rs 166 croresCommenting on recent developments, Chairman and Managing Director Kiran Mazumdar-Shaw said, “This is an exciting time for Biocon. Our strategy of building and unlocking highvalue innovation in Biotechnology has seen us enter into a new phase of growth. The recentlyannounced global commercialization alliance with Pfizer is a validation of this approach. Allour core businesses have delivered robust performance for the first half of this fiscal and areexpected to sustain this level of growth for the rest of the year.”For Half-Year ended September 30, 2010• Total Income at Rs 1,360 crores. Up 24% YoY.• EBITDA at Rs 293 crores. YoY growth was 24%.• PAT at Rs 166 crores. YoY growth was 26%.• Operating Margin at 22%.• Earnings Per Share at Rs 8.5.• Headcount at 5,100+ employees.For three months ended September 30, 2010• Total Income at Rs 688 crores. Up 16% YoY.• EBITDA at Rs 153 crores. YoY growth was 21%.• PAT at Rs 89 crores. YoY growth was 20%.• Operating Margin at 22%.• Earnings Per Share at Rs 4.5The global bio-similars market is expected to be worth $19 billion by 2014. Bioconoutsourced Research and Development globally for the year 2009 which was worth $30billion. Between 2005-10, more than 2.200 high value R&D licensing and other deals weredone within the biopharmaceutical and pharmaceutical space. Net income increased 44% toRs. 24,048 million crossing the $ half billion mark. Profits grew 215% to Rs. 2933 million.Pharmaceutical Business exceeded Rs. 20,871 million in revenue and the Net R&Dexpenditure increased to Rs. 917 million, up 42% over 2008 and up 282% over 2005. Itacquired The Bulk Pharmaceutical Plant of IDL Specialty Chemicals Limited in this fiscalyear. Research services business crossed Rs. 2807 million.vii
STRENGTH OF EMPLOYEES:-Today, Biocon has world-class research outsourcing capabilities, US FDA-compliant bio-manufacturing facilities and a self-financed R&D pipeline. As we can see in the table below, Bioconhas been providing employment to the youth and employs about 4478 employees including thesubsidiaries.The hire Biologists, chemists, medical practitioners, pharmacologists, engineers,finance/legal/marketing analysts, HR generalists and general administrators. Around 6% of itsemployees have PhD degrees, 45% have a post graduate master’s degree, and 33% are graduates.Biocon also collaborates with educational institutes to make courses more industry oriented. It isregarded as the 7th largest employer among the top 100 global biotechnology companies.Success of Biocon:The Biocon India Group story began in 1978 when Leslie Auchincloss, owner of the smallIrish multinational company Biocon Biochemicals and Kiran Mazumdar founded BioconIndia - owned 70 per cent by Kiran and 30 per cent by the Irish company. The business wasestablished In Bangalore and Ms Mazumdar was appointed Chairman & Managing Director.In 1983 the company acquired 20 acres of land close to Bangalore city and moved itsoperation where it is presently located.In 1989 a new phase in the development of Biocon India opened when Biocon Ireland wasacquired by the Anglo Dutch giant - Unilever. Unilever thereby acquired the 30 per cent
holding in Biocon India owned by Biocon Ireland. As a result of this, Biocon India becamean associate of the multinational giant.In 1997 when Unilever put its Specialty Chemicals Division up for sale. it was purchased bylCI (Imperial Chemical Industries) in a global deal valued at $9 million. As a result, theshareholding In the Biocon India Group was transferred from Unilever to ICI ownership. Thisgave Ms Shaw the opportunity to negotiate with ICI as the articles of the various companiesin the Biocon Group gave pre-emptive rights to existing shareholders.Eventually her husband John Shaw purchased the entire shareholding of ICI in the variousBiocon India Group companies and joined the management team of the group. As a result ofthis transaction, the Biocon India Group Companies were owned and controlled by Ms Shawand her husband with key employees participating via various stock option schemes.An associate company or Biocon, Syngene International was established in 1994 to carry outdrug-based contract research as well as informatics- based software development for thepharmaceutical industry. Syngene International designs and manages research projects forcompanies with interests in pharmaceuticals and biotechnology. Syngenes strengths lie in theareas of molecular biology, synthetic chemistry and informatics.In August 2000, Clinigene International was established to conduct longitudinal clinicalstudies in select disease segments.The diversity and density of Indian patient populations was perceived to be a unique niche forClinigene to pursue a new approach in specialised clinical studies with a view to create newmedical wisdom.The objective was to create clinical data bases that can be used to identify new biomarkers aswell as other genotypic and phenotypic disease indicators. For this purpose Biocon has tiedup with Strand Genomics. Strand Genomics studies the trends and patterns in the data toidentify new biomarkers. Biocon has also entered into a joint venture with Shantha Biotech toproduce and market Human Insulin.Controversies:In the year 2008, villagers of the Hebbagodi region claimed that the company had polluted airand ground water, where the companys factory is located. They held a protest march and theangry villagers protested in front of the Biocon factory in Hebbagodi. K M Muniratnam, ahandicapped fisherman accused the company over the huge losses he had sustained over thelast 3 years, as the fish he reared in the lakes were dying due to chemical effluents from thefactory. He had taken the licence to fish in two lakes in the Hebbagodi region, but there hadbeen at least six occasions when the fish had died. The company had told K M Muniratnamthat theyll pay compensation, but he didn’t get anything. Hebbagodi residents complainedabout the contamination before, but no one took notice is what they claimed.A government analysis in 2007 showed industrial discharge was harming water quality.People were suffering from skin diseases, headaches, kidney problems. A government
assurance about starting a river water supply to these areas got the protestors to put off theirstrike.But the Biocon company officials replied that they were being unfairly blamed. The COO ofBiocon Arun Chandavarkar claimed that Biocon in no way was connected to quality of water.Bad smell had been a problem earlier but over the last two years, they claimed to have takenmany steps to reduce the odour.Biocon’s Methylcobalamin RowIn 2006, there was a lot of controversy surrounding Biocon Ltd, one of the leading biotechcompanies in India, for allegedly violating certain norms of manufacturing Methylcobalamin.The controversy was that Biocon had requested the Union Government for a license to importthe base material and manufacture Methylcobalamin (MeB12) in India.The company had also obtained license from the Karnataka government to manufacture thedrug in seven stages. On March 17, 2003, the Karnataka government had given license (No.46 A-MF 668) to manufacture the drug in seven stages. On January 17, 2006, the office of thedrug controller of Karnataka on a routine inspection found that Biocon was notmanufacturing the product in its Bangalore facility and that it was importing the drug fromChina. The state government then cancelled the license due to this.The Karnataka health minister during that year, R Ashok pointed out that the company hadnot manufactured the drug as per the seven stages and that government rule clearly states thatif there are any changes in the manufacturing of the drug, which was not according to thelicense, then the company had to obtain permission from the government. Else it violates theRule 18 (g) under Drugs and Cosmetics Act.Following the state governments notice to Biocon, the company admitted that they wereimporting the drug without the governments permission. The State Drug Controller wrote aletter to the Chief Drug Controller in Delhi on March 28, 2006 on this issue to take actionagainst the company.On February 10, 2006, Biocon got the license from the Central government to importMethylcobalamin. Kiran Mazumdar-Shaw, chairman and managing director, Biocon Ltdinformed, "Methylcobalamin is a form of Vitamin B12 and an internet search will indicatethat it is available internationally as a dietary supplement or nutritional supplement and is notregulated as a drug in many countries. The other common forms of Vitamin B12 arecyanocobalamin and hydroxocobalamin. However, in India, it has been regulated as a drugsince 2002."Biocon initially intended to manufacture the product starting from cyanocobalamin using amulti-step process for which it obtained a manufacturing license from the state drugcontrollers office. But competition from cheaper imports made this unviable. Hence, Bioconrevised its manufacturing process to begin from an advanced intermediate with fewermanufacturing steps without compromising the quality of the final product. However, therewas a regulatory oversight in not updating the manufacturing license to reflect the newmanufacturing process. During a routine inspection, the state drug controllers office noticed
this lapse and issued a show cause notice to Biocon. Biocon admitted the lapse and hence themanufacturing license for the product was cancelled.Biocon immediately stopped manufacturing the product and also stopped importing theadvanced intermediate. Biocon made a fresh application to the Central and state drugcontrollers office and has obtained a fresh license from both. This is how the issue was thenresolved.
Awards and AchievementsBiocon has the following awards and achievements to its credit2010:Bio-Excellence Award for Outstanding Achievement in the Healthcare Sector at BangaloreBio2009:- Among Top 20 Indian companies in Forbes ‘Best Under A Billion’ list- Bio-Excellence Award for Outstanding Achievement in the Healthcare Sector at BangaloreBio- Bio-Excellence Award for outstanding achievement in the Biotech Service Sector atBangalore Bio for Syngene IDMA ‘Best Patent of the year’ award- BIOMAb EGFR®voted ‘Bio-Spectrum Asia-Pacific Product of the year’, 2008- BioSingapore Asia Pacific Biotechnology Award for Best Listed Company2008:- Ranked among the top 20 global biotechnology companies (Source: Med Ad News, June2008)- 7th largest biotech employer in the world (Source: Med Ad News, June 2008)2007:‘BioServices Company of the Year’ for Syngene, BIOMAb EGFR®wins ‘Product of theYear’, BioSpectrum Awards2006:Best IT User Award in the Pharmaceutical Sector, NASSCOM2004:- Indias first and No. 1 biotech company with a global ranking of 16 (Source: Biospectrum,July 2004)- Indias top 5 Life Sciences companies (at close of trade as on July 30, 2004)- Best Reinvention of HR Function Award, Indira Group, Mumbai- Best Employer of India Award, Hewitt2003:- Bio-Business Award for bio-entrepreneurship, Rabo India- Express Pharma Pulse Award for excellence in the pharmaceutical industry2001:- Biotech Product, Process Development and Commercialisation Award, Department ofBiotechnology, Ministry of Science and Technology, Government of India2000:- Technology Pioneer Recognition, World Economic Forum 1985:
- Export Performance Award, Karnataka State Financial Corporation (KSFC)- National Award for Best Small Industry, Government of IndiaFirstsSet up in 1978, Biocon is Indias first biotech company• First Indian biotech company to receive US funding for proprietary technologies(1989)• Sets up Indias first clinical research organization, Clinigene (2000)• First Indian company to be approved by US FDA for the manufacture of lovastatin, acholesterol-lowering molecule (2001)• First company worldwide to develop human insulin on a Pichia expression system(2003)• Biocon enters the stock market with its IPO and becomes only the second Indiancompany to cross the $1-billion mark on the day of listing (2004)• Launches India’s first cancer drug, BIOMAb EGFR®(2006)• First Indian company to manufacture and export enzymes to USA and Europe• India’s largest producer and exporter of enzymes• Releases country’s first 24-hour diabetes drug, Glargine (2009)• First biotech company to receive ISO 9001 certification in India• Syngene is country’s first custom research company in drug discoveryiv
CORPORATE GOVERNANCEBiocon Foundation provides essential primary healthcare services to individuals and familiesin target communities by means acceptable to them through their full participation and atcosts that they can afford. They have established Arogya Raksha Yojana (ARY) Clinics.Delivering on its commitment to affordable healthcare, Biocon Foundation has been settingup ARY Clinics in areas where large numbers of people are enrolled with the ARY healthmicro insurance program. These Clinics have been set up to make primary healthcarefacilities more accessible and more affordable for surrounding communities. Supporting theARY micro insurance program, the Clinics will guide member patients to network hospitalsand help them avail of the benefits due to them.Each Clinic is equipped with:• a full-time doctor• an ARY pharmacy stocking subsidized generic drugs• a Laboratory offering basic diagnostic tests, at discounted rates• a Mobile Medical Service to enable the clinic doctor and staff to travel to and provideconsultation at remote villages.The Foundation currently runs seven clinics in both urban and rural settings. In Bangaloretheir clinics are located at Austin Town, Huskur, Hennagara and K.R.Puram. The rest of theclinics are in Mandya, Chickballapur and Bagalkote districts of Karnataka.In 2008-09, the Arogya Raksha Yojana through its clinics had treated around 22,000 patientsand had assisted many with minor and major surgeries through the ARY health insuranceprogram. The ARY Clinic in Kaladgi, Bagalkote was an anchor point during theFoundation’s flood relief effort in the aftermath of the devastating floods that hit NorthKarnataka in October 09Health CampsGeneral and specialized health camps are conducted in remote areas where good medicalfacilities are not available. These camps provide cardiac, neurological, ophthalmic,orthopedic, gynecological and general health checks. Three to four camps are held everymonth in collaboration with Narayana Hrudayalaya and other network hospitals. Every campis attended by an average of 300 people.In Oct 2009, the team from Biocon Foundation’s Health Program held numerous healthcamps in the various flood hit villages in Bagalkote district of North Karnataka. The teamsalso collaborated with the Government doctors and Public Health Center’s to ensuremaximum reach and effectiveness.. Through these health camps our doctors were able toreach and help more than 5,000 people.
There has been tremendous progress in the treatment strategies for various diseases, whichwere once considered inoperable. Unfortunately, most Indians cannot afford the cost of hightechnology healthcare. For example, India requires a 2.5 million heart surgeries a year, buthas the capacity to do only about 80,000-90,000. India also has a very high incidence of headand neck cancer, which can be cured if diagnosed early and proper treatment is given.EDUCATION:-In the area of child education, Biocon Foundation has collaborated with Pratima Rao, aprominent educationist and Macmillan India, a leading educational publisher to inculcate alove for math and self reliance in learning through innovative mathematics text books -‘Chinnara Ganita’.The project covered 11,000 children in Grade 1 & 2 in its first year and 15,000 children fromGrade 1 to 4 in the second year in rural districts of Karnataka.Because of Biocon Foundation’s effort to increase access and exposure to learningopportunities from children, the Aata Pata Wadi project was launched in 2009 with its firstAata Pata Wadi (after school resource center) in Thithimati in Kodagu district of Karnataka.The aim of these centers is to provide an open and fun learning environment for children,many of who come from marginalized communities thus enabling them to nurture theirinterests, learn new skills and awaken their spirit of enquiry.Objectives:• To provide access to computer aided leaning• To emphasize experiential learning and extracurricular activities• To boost language skills• To provide life skills educationTo encourage talent and support academics, Biocon Foundation has initiated a grant fortalented and deserving students of the Guha Centre for Genetic Engineering andBiotechnology, University of Kolkata.Kiran Mazumdar Shaw’s view about corporate social responsibility:- “I sincerely believethat it is important to give back to society - the very society that has allowed us to attain theheights we have. At Biocon, our efforts extend beyond the realm of biotechnology throughour community-support initiatives and corporate citizenship programmes. We recognise ourresponsibility to India - her health, education and environment. Our particular focus is onchild welfare as we realise the importance of investing in children, to positively impact theirfuture. Biocon Foundation has been established with the aim of identifying and implementingprojects that will impact the social and economic scenario in the country. The main focusareas of the Biocon Foundation are providing quality healthcare and health education for thebetterment of Indian society.”
4) Analysis of Kiran MazumdarShawAs an EntrepreneurKiran Mazumdar Shaw, the chairperson of Biocon started her own business with justRs.10,000 in hand and a degree in Brewery, and went on to become the richest womanentrepreneur in India though she actually became an entrepreneur by accident. Mrs. Shawwanted to start her Brewing industry and in spite of her degree she established Biocon in1978 which lead to the foundation of India’s Biotech industry. But still she had to overcomedifficulty as banks refused to provide her loans due to the lack of assets and as she was awoman entrepreneur which was a rare phenomenon. Above all, Biotechnology industry was anew field at that point of time.She has become the Poster Girl for Indian women entrepreneurs, and also a source ofinspiration to many others, though she had a number of failures, she still became a successfulleader. In India, Kiran Mazumdar Shaw is a motivator of all aspiring women entrepreneurs.Personality TraitsAccording to us, a combination of several factors such as Determination, Confidence andMotivation led her to build up a valuable organisation. Let us look at these traits in detail andlet us see how they have been factors for the success of Biocon.Determination:Initially when Kiran Mazumdar Shaw approached financial institutions, they refused it as: Company had no assets. Woman entrepreneur was a new word. Biotechnology was a new concept to Indians.In that stage also her determination to build up Biocon didn’t turn down. As a leader she usedto set possible goals like production of enzymes and antibodies from fermentation andresearch process.Confidence:Her confidence level is clearly seen through her activities as she started her business inrelatively new and innovative field, even when banks refused loans to Kiran, she still wentagainst all odds as a belief that women can be entrepreneurs. The confidence of Kiran iscommendable when comparing that with the challenges that she faced. These challenges have
evolved with the growth of Biocon. Initial challenge that she faced was her young age, hergender and the nature of unfamiliar business. There was no inflow of fund as banks refused togive loans. Once she overcame all these, she had to face technological challenges to build aBiotech business in a country like India which was not so good in infrastructure at that pointof time. The high-tech biotech industry was dependent on high quality, power, hightechnological lab, equipments etc.Now the challenges have moved on to maintain quality, about growth, managing a largecompany and managing investor expectations like other CEO’s.Motivation:In Biocon, employee feedbacks are being regularly asked so as to motivate them and it willfurther help them to excel in their field. In Biocon, performance checks are done annually andimplemented at the end of the financial year. It helps to measure employee performance andalso helps to reduce grievances. They also conduct Behavioural training, leadershipprograms, and also provide with compensation packages. Due to all these HR policies, therate of attrition is less than 1% in Biocon. She has set up a mission for her to build pride intoher workplace and also into her country.Work place principles which helped her to keep employees motivated are Excellence,Integrity, Accountability, Organizational Pride, Fairness,Learning, Informality in work place,Elegant and refined working environment.Socially Responsible:Along with the growth of Biocon she also involved her support in various communityprograms and corporate citizenship initiatives with a focus in the areas of healthcare,education, and environment. The Biocon Foundation in 2004, setup “Arogya Raksha Yojana”which is a unique health initiative for rural India.In her effort to protect the uniqueness of her hometown Bangalore, she has been involved invarious city improvement programs like the Bangalore Agenda Task Force (BATF).Risk Taker:Kiran Mazumdar Shaw is a risk taker, and it can be seen from the beginning of Biocon itself.She has also proved it when she had done her Post-Graduate in brewery which had neverbeen touched by a woman in India. Further when she failed to continue her career inBrewery, she was directed towards Biotechnology industry which was a new business toIndians. But due to her confidence and determination she was able to be India’s richestwoman.Other risks which she had taken in her organization were: Beacon’s R&D programme was rapidly advanced Took the risk to produce Oral Insulin an Anti - CD6 Monoclonal antibody.
These two are the leading discoveries in the field of research programs.
Innovative:Kiran is an innovator in all sense, in creating a successful company, developing innovativeideas, new products, etc. Also she has a clear vision and prefixed objective for herorganisation and to achieve those objectives, she encouraged her employees to thinkinnovative and keep on researching.Some of the products of Biocon are: INSUGEN R: It is useful when Oral agents fail to control blood glucose levels orwhen therapy with Insulin. BIOMAB-EGFR: This is used in head and neck cancer. RAPACAN: This is used for the prevention of rejection and rescue therapy forrejection in renal transplantation.As a LeaderWe say that Kiran Mazumdar Shaw is a transformational leader as she has similar personalitytraits like that of other transformational leaders such as Richard Branson of Virgin group,A.G. Lafley CEO of Proctor & Gamble. Kiran Shaw had a vision of her own and she neverfollowed the footsteps of others or never bothered about what others think or say about her.She also possesses the ability to bring the changes or transform her organisation, and she alsohas influential power to motivate and encourage her employees to think innovative andresearch.Eg. As the book Introduction to Organisational Behaviour by Robins, Judge, Sanghi;describes A. G. Lafley as a transformational leader as he has brought flexibility and creativityto a slow growing company and also the innovations which helped them to achieve the no. 1stposition from the 5thposition in United States for their brand and doubled the salesworldwide. Whereas Mrs. Shaw started her business with the initial capital of Rs 10,000 andat present the company is worth Rs. 1.79 crore. From this we can observe that she wasdetermined about her company’s success and also has taken number of risks and continuedinnovating new products. As a result Biocon has become the number 1 biotech company inIndia. ixKiran Mazumdar Shaw has transformed Biocon from an enzyme company to a fullyintegrated biopharmaceutical company therefore on this basis we say that Mrs. Shaw is atransformational leader.
Achievements of Kiran Mazumdar ShawKiran Mazumdar Shaw is an entrepreneur who has the potential to take risk and she succeeded inturning Biocon as India’s largest biotechnological firm. She has won many awards and honours. Someof the major awards and prizes are: She is the list of 100 most powerful women (by Forbes, 2010) Nikkei Asia Prizes- Regional Growth by Nikkei Inc. (2009) Express pharmaceutical leadership summit award for dynamic entrepreneur (2009) Businesswomen of the year by Economic Times (2009) Honorary Doctorate from university of Abertay Dundee UK.(2007) Wharton Infosys Business transformation Award (2006) Padma Bhushan (2005) Honorary Doctorate from Manipal Academy of Higher education –MAHE (2005) Life time Achievement Award from Indian chamber of Commerce (2005) Honorary Doctorate of Science from Ballard University (2004) The Economic Times Business Women of the year (2004) Whirlpool GR8 women award for science and technology (2004) Australian Alumni High Achiever Award from the IDP Australian AlumniAssociation (2003) Ernst & Young Entrepreneur of the Year Award in Healthcare & Life SciencesCategory (2002) Woman of the Year from the International Womens Association, Chennai (1998–1999) Padma Shri (1989) Outstanding Young Person Award by Jaycees (1987) Rotary award for the Best Model Employer (1983) Outstanding Contribution Award (AWAKE) (1983) Gold for Best Woman Entrepreneur, Institute of Marketing Management (1982)
Conclusion:We would like to conclude our project by mentioning the words of Kiran Mazumdar Shawherself. This is what she has to say:“Life is about the very difficult journey. But it’s those difficulties that make it veryinteresting, very exciting. If you had smooth sailing all the way I think life will bevery boring. But it’s those challenges that overcoming those challenges that gives youa sense of confidence to move on. So my advice to young people is Don’t Give Up.Life and entrepreneurship is about failures, but learn from these failures. Becausefailing is big experience, big learning. It makes you stronger, it makes you veryconfident when you actually overcome that failure. You know, Yes it’s demoralisingand demotivating if you keep failing and if you keep making same mistakes over andover again then there is something radically wrong, but by failing and pickingyourself up and then succeeding believe me that failure is a big big deal in itself. Ihave done it and I belong to it all the way.” but its most failure that they made verystrong because every time I picked myself up and then succeeded. It’s those failuresthat I remember which they really made me very strong.”x
ihttp://www.moneycontrol.com/news_html_files/news_attachment/2010/Biocon.pdfiihttp://www.mariosalexandrou.com/definition/biotechnology.aspiiihttp://www.hindu.com/mp/2010/04/27/stories/2010042750410100.htmivhttp://www.outlookmoney.com/article.aspx?88528vhttp://www.forbes.com/forbes/2004/1018/088.htmlvihttp://en.wikipedia.org/wiki/Bioconviihttp://www.technologyreview.in/biomedicine/23610/viiiAnnual Report 2009-2010 (http://www.biocon.com/docs/AR10-BIOCON.pdf)ixIntroduction to Organisational Behaviour by Robins, Judge, SanghixSource Youtube