this is case study about BIOCON industry. It is very useful for engineering and management students

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BIOCON INDIA GROUP
❖INDIAN PHARMACEUTICAL INDUSTRY
➢ Generic drugs form the largest segment
• With 70% of market share (in terms of revenues).
• India supplies 20% of global generic medicines market exports in
terms of volume,
➢ Skilled and Cost effective Labour
➢ Tax holidays & Tax deductions
➢ Research & Development, Clinical Trials, Manufacturing – presence in full
value chain
➢ Active Pharmaceutical Ingredients (API), nearly 85% come from China.
➢ FDI policy
• allows 100% FDI under automatic route in greenfield pharma.
• up to 100% (75% automatic & 25% govt. approval)FDI in brownfield
pharma.
❖INDIAN PATENT REGIME & DPCO
Political
Economical
Demograph
ic
Sociological
Physical
Technologic
al

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➢ Drug Price Control Order (DPCO)
➢ Indian Patent Act (1970)
• Process based patenting
• Prohibited patents for inventions related to food, medicine or
drug
➢ 1995 – 2005
• 2002 expanded to 20 year patent right
➢ The Patents (Amendment) Act 2005
• Product and Process based patenting
• Bans ever greening
• Patent laws in conformity with TRIPS (trade related intellectual
property rights)
• Exception to keep drug prices affordable
❖BIOCON GROUP

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❖CULTURE AT BIOCON “Earn as you Learn”

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❖REINVENTING BIOCON
➢ KIRAN MAZUMDAR-SHAW (CHAIRMAN & MD BIOCON)
Transparency
InnovationCollaboration
Syngene
(Chem & Bio
Res. )
Healthcare
Fermentation
Enzymes

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➢ Her ambition was to make Biocon one of the world‟s top-five biotech
companies in the near future.
➢ Biocon, the first Indian biotech company established in Bangalore, was a fully
integrated healthcare company that delivered innovative biopharmaceutical
solutions.
➢ Biocon leveraged India's globally competitive cost base exceptional scientific
people resource to invest in R&D programs, while providing custom & clinical
research services to international pharmaceutical & biotechnology majors
through their subsidiaries, syngene & clinigene.
➢ In November 1978, Kiran joined Biocon biochemical's Ltd, Ireland as a trainee
manager. In the same year, Biocon was formed with Rs 1 lakh seed capital as a
70:30 joint venture of the Irish company and Kiran Mazumdar, in small shed in
koramangala in the outskirts of Bangalore.
➢ Biocon Ireland was a major buyer of papaine, extracted from papaya, which was
abundantly grown in India.
➢ The company manufactured and exported papaine, a plant enzymes and isin
glass, a marine hydrocolloid, which were key products for the brewing industry.
➢ In 1979, Biocon was the first Indian company to manufacture & export enzymes
to USA & Europe.
➢ Kiran started focusing on a niche, enzymes manufactured by surface
fermentation. As a technology, surface fermentation was considered dated in the
west because it was more labor intensive and less controlled than submerged
fermentation.
➢ However, solid fermentation could give upto twenty times more yield and some
micro-organisms like fungi grew well in the solid state.
➢ Biocon decided to learn solid state fermentation but Biocon had no R&D of it‟s
own.
➢ In 1984, Biocon began focusing on research and development to develop novel
enzymes for the Biocon Group worldwide, through solid state fermentation
process technology referred to as ‘koji technology’.
➢ In early 1980’s, Kiran had met a student, Shrikumar Suryanarayan from IIT,
Madras, who wanted to buy enzymes from her for his project. Kiran gave him
the enzymes for free. After two year, he came back after obtaining Mtech from
IIT Delhi. Kiran offered him to R&D for Biocon. He accepted and designed the
first fermenter in Biocon. This new reactor could contain micro-organisms well.
Biocon named this new reactor Plafractor.
➢ The traditional method did not lend itself to automation and process control so
volume were low but the Plafractor allowed bulk production and critical
fermentations. Things could be added and taken out without disturbing the
fermentation process and it consumed less energy. Biocon’s mastery of solid
state fermentation was a good strategic weapon.
➢ US$250000 from ICICI Bank , Biocon was able to build a solid state
fermentation plant which helped in the growth of its R&D.

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➢ In 1989, the Irish Biocon was acquired by Unilever. In mid 1990s, Kiran
Mazumdar-Shaw decided to focus on biopharmaceuticals rather than enzymes.
But Unilever, a major shareholder, did not want to be in the biopharmaceuticals
business. At that time, John Shaw, whom Kiran had married in 1998, used his
savings to reclaim the entire Biocon stakes from Unilever.
➢ In 1997, Biocon merged with Helix Biotech Ltd which was incorporated in
1989 as a Pharmaceutical Biotechnology Company.
➢ In Nov 1993, Biocon established Syngene International ltd as a custom research
company to address the growing need for outsourced R&D in the
pharmaceutical sector.
➢ Biocon becomes the first Indian company to be approved by US FDA for the
manufacture of lovastatin, a cholesterol-lowering molecule. Biocon’s
proprietary bioreactor, Plafractor is granted US 2001 & world wide patent.
➢ In late 90‟s Biocon establishes Clinigene, India’s first clinical research
organization to pursue clinical research & development.
➢ Biocon had an impressive track record of commercialization capabilities.
Biocon also marketed a basket of branded formulation in India; like INSUGEN,
BIOMAB EGFR and EPO. Biocon launched India’s first anti-cancer drug
BIOMAB EGFR.
➢ With the successful commercial launch of the first anti-cancer drug and several
promising discovery partnerships in the clinic, Biocon envisioned scaling new
heights in frontier science and achieving new milestones in affordable medicine.
❖HUMAN CAPITAL
➢ The ability to attract and motivate good people was a key factor behind biocon’s
success.
➢ People like suryanarayan were all long timers , hand picked by kiran
Mazumdar, they grew with the company and could not think of working for any
other company.
➢ Biocon has entrepreneurship ,drive ,and scientific talent in abundance.
❖INORGANIC GROWTH
➢ Biocon emerged as an integrated biotechnology enterprise with presence in
biopharmaceuticals, enzymes , custom research , clinical research.
➢ Biocon was India’s largest biotechnology company in terms of revenues.
➢ The partnership with Cuban institute CIMAB results to launch the India’s first
anti-cancer drug (BIOMAB-EGFR).
➢ In 2004,they entered into a strategic partnership with vaccine to discover fully
humanized antibodies focused on cancer, inflammation.
➢ The collaboration combined vaccinex’s unique capabilities to discover fully
human monoclonal antibodies using its proprietary antibody discovery

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technology and biocon’s proven expertise in clinical research & biologics
manufacturing.
➢ In 2005,bicon signed a product licensing agreement with bentley pharmectiucal
inc. for its intranasal spray formulation for insulin administration.
➢ In 2004,they entered into a strategic partnership with vaccinex to discover fully
humanized antibodies focused on cancer, inflammation.
➢ The collaboration combined vaccinex’s unique capabilities to discover fully
human monoclonal antibodies using its proprietary antibody discovery
technology and biocon’s proven expertise in clinical research & biologics
manufacturing.
➢ In 2005,bicon signed a product licensing agreement with bentley pharmectiucal
inc. for its intranasal spray formulation for insulin administration.
➢ Biocon also entered into a long term supply of agreement with bentley under
which biocon provided bentley and its licensees, with a competitive
supply of insulin for worldwide markets. The terms of agreement assured
bentley commercial supply of insulin for worldwide markets.
➢ Biocon also signed a MOU with the Karolinska institute, sweden to collaborate
in research-education initiatives.
➢ In 2006,biocon inaugurated biocon biopharmaceuticals , India’s largest multi-
product biologics facility at biocon park, India’s largest integrated
biotechnology hub, comprising an integrated cluster of research laboratories and
manufacturing facilities spread across 90 acres in Karnataka industrial areas
development board.
➢ In 2007, biocon and Abu Dhabi –based pharmaceutical company neopharma
signed an MOU to establish a joint venture to manufacture and market a range
of biopharmaceuticals for the gulf corporation council countries.
➢ Biocon also signed a MOU with deakin university.
➢ Biocon acquired a 70% stake in german pharmaceutical company ,Axicorp.
➢ Axicorp was a specialized marketing and distribution company established in
2002,it marketed parallel distributed EU- pharmaceutical as well as its own
generic brand “axcount”.
➢ This acquisition enabled Biocon to market and distribute a range of
pharmaceutical including generics, bio-similars ,biologics and innovative
pharmaceutical products in Germany and Europe.
➢ In the same year Biocon entered a strategic partnership with IATRICa , inc. to
co-develop an exclusive new class of immunoconjugates for targeted
immunotherapy of cancers and other infectious disease.
➢ IATRICa was a privately held biotechnology company engaged in the discovery
and development of novel targeted immunoconjugates for prevention or
treatment of cancer and infectious disorders.
❖ BIOTECHNOLOGY IN INDIA

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➢ Biotechnology has transformed many parts of the chemical industry, agriculture
and medicine.
➢ The consumption of biotech products in India was expected to quadruple within
a decade.
➢ The human and animal segment of the industry alone was growing by at least
20%.
➢ In 1999, Indian Biotech Industry contributes to 1.5% of the global biotech
industry.
➢ In India 800 Companies were operating in all sectors of biotechnology, but only
25 were working in the modern biotech sectors.
❖ADVANTAGES OF BIOTECH INDUSTRY IN INDIA
➢ Rich Bio-diversity
➢ Varied Species of flora and fauna.
➢ Varied climatic zones.
➢ Large population and varied demography.
➢ Largest agriculture sector.
➢ World class information technology.
• Vast pool of talented and skilled man power.
• English as the accepted business language.
• Lower operational costs and technologies.
➢ Increasing Government support for bio technology industry.
✓ Government is implementing a national Biotechnology Development
Strategy (NBDS) and establishing a national Biotechnology Regulatory
Authority (NBRA) .
✓ 100% FDI in biotechnology sector.
✓ Special tax benefits.
India had proved its competency in selected areas of biotechnology
such as bioprocess engineering ,skills in gene manipulation of microbes
and animal cells, capacity in downstream processing and isolation
methods, and its competence in recombinant DNA technology of plants
and animals.
❖CRYSTAL GAZING
➢ Kiran Mzumdar Shaw steered the company through several reinventions, first
moving from being an enzymes maker to stains and when prices crashed &
chinese competition intensified, she shifted focus to bio-pharma. Now she is

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focusing on three main businesses-Biocon, Syngene & Clinigene and the
company as a major biopharma company.
➢ Kiran Mazumdar Shaw is aware that the real opportunity lies in the US and
Western Europe, where hundred of billions of dollar are spent on
pharmaceuticals every year. However she also realizes that such markets are
difficult to enter as regulatory charges are high and there are many large
competitors, much larger than Biocon.
❖BEST WAY TO EXPAND
➢ Short term :
• Passively-aggresively expand Clinigene with a 2-year window of plans.
➢ Long term :
• Biocon should look beyond Clinigene in the long term for expansion, and
focus on innovation and build upon its core competencies.
• Look out for Strategic Partners in developed countries to boost the
revenues.
• Partnering with incubators and research centers
• Consciously try to build a brand
❖OVERVIEW
➢ Biocon looking at new avenues of expansion
• animal studies and clinical trials segments ??
➢ Broad questions in growth strategy :
• How to expand for growth
• Extent of expansion
➢ Dilemma : to expand Clinigene or not?
• Verticalization
• Defocus core competencies
• Long term effects of such strategy