Business Growth Strategy - Biocon

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Evaluating the changing economic and market scenario and recommending a future growth strategy for a biotech company.

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Business Growth Strategy - Biocon

  1. 1. `` A CASE STUDY OF BIOCON LTD BUILDING A BIOTECH POWERHOUSE
  2. 2. `` EVOLUTION GLOBAL SCENARIO INDIAN SCENARIO GROWTH VECTOR ANALYSYS BIOCON LTD ASIA PACIFIC CHALLENGES SWOT ANALYSIS SWOT SUMMARY ROAD MAP
  3. 3. `` <ul><li>D ISCOVERY OF DNA TECHNOLOGY IN 1973 </li></ul><ul><li>BIO-DRUGS WOULD REPLACE 70 % OF CONVENTIONAL THERAPIES BY 2025 </li></ul><ul><li>4,416 BIOTECH COMPANIES WORLDWIDE IN 2004 </li></ul><ul><li>EMPLOYED 183,000 PROFESSIONALS </li></ul><ul><li>REVENUES OF $54.6 BILLION IN 2004 </li></ul><ul><li>WHY?????? </li></ul>EVOLUTION
  4. 4. `` EVOLUTION <ul><li>ALZHEIMER’S – 18 Mn </li></ul><ul><li>AIDS – 3Mn </li></ul><ul><li>MALARIA – 1 Mn </li></ul>
  5. 5. `` EVOLUTION <ul><li>PUBLIC & PVT EQUITY INVESTORS </li></ul><ul><li>42% INCREASE IN CAPITAL RAISED </li></ul>
  6. 6. `` GLOBAL SCENARIO
  7. 7. `` GLOBAL SCENARIO
  8. 8. `` GLOBAL SCENARIO <ul><li>MATURING US INDUSTRY </li></ul><ul><li>GENERATION OF INDUSTRY </li></ul><ul><li>- EUROPE </li></ul><ul><li>- CANADA </li></ul><ul><li>ASIA PACIFIC AGGRESSIVELY </li></ul><ul><li>CATCHING UP </li></ul><ul><li>ALLIANCES & ACQUISITIONS ($ 23 Bn) </li></ul><ul><li>GROWING REGULATORY CHALLENGES </li></ul><ul><li>- PRODUCT SAFETY </li></ul><ul><li>- EFFICACY </li></ul><ul><li>- QUALITY </li></ul><ul><li>- 4 th PERSPECTIVE (COST) </li></ul>
  9. 9. `` GLOBAL SCENARIO <ul><li>INVESTMENT IN SCIENCE </li></ul><ul><li>- PAPERS / NO OF PATENTS (USA LEADER) </li></ul><ul><li>- HIGH SCHOOL EDUCATION / INC IN PATENTS </li></ul><ul><li> ( CHINA-1 st / INDIA –2 nd ) </li></ul><ul><li>WEAKENING IP PROTECTION IN US </li></ul><ul><li>CHINA / INDIA STRENGTHENING IP PROTECTION </li></ul><ul><li>- NEED FOR ENCOURAGEMENT </li></ul>
  10. 10. `` ASIA PACIFIC <ul><li>EMERGING MARKETS </li></ul><ul><li>- CHINESE MARKET (INC FROM $12 Bn -$48 Bn) </li></ul><ul><li>- INDIAN MARKET (INC FROM $ 6 Bn -$ 15 Bn) </li></ul><ul><li>EMERGING INDUSTRIES </li></ul>
  11. 11. `` INDIAN SCENARIO <ul><li>TURNOVER $1BILLION IN 2005 </li></ul><ul><li>280 BIOTECH COMPANIES IN 2003 </li></ul><ul><li>THREE CATEGORIES </li></ul><ul><li>EMPLOYING 11,800 SCIENTISTS </li></ul><ul><li>COMBINED TURNOVER OF TOP 20 FIRMS - 64% </li></ul><ul><li>GLOBALLY COMPETITIVE COST BASE </li></ul>
  12. 12. `` BIOCON <ul><li>INCEPTION - 1978 </li></ul><ul><li>LARGEST BIOTECHNOLOGY ENTERPRISE </li></ul><ul><li>14 TH LARGEST BIOTECHNOLOGY COMPANY GLOBALLY </li></ul><ul><li>$167 MILLION TURNOVER OF MARCH 2005 </li></ul><ul><li>GOAL </li></ul><ul><li>TO ACHIEVE ANNUAL REVENUES OF $1 BN </li></ul><ul><li>ONE AMONG TOP 3 BIOTECH COMPANIES BY 2010 </li></ul>
  13. 13. `` STRATEGY <ul><li>INNOVATION-LED STRATEGY </li></ul><ul><li>L ICENSING AND DEVELOPING PROVEN MOLECULES </li></ul><ul><li>SHOWN POSITIVE SIGNS AND DEMONSTRABLE RESULTS </li></ul><ul><li>TO ACHIEVE ANNUAL REVENUES OF $1 BILLION </li></ul>
  14. 14. `` STRATEGY <ul><li>BIOGENETIC INSULIN & MONOCLONAL ANTIBODY LAUNCH </li></ul><ul><li>FULLY INTEGRATED BUSINESS MODEL </li></ul><ul><li>BUILD BIO-SIMILAR THERAPEUTIC PROTEIN FRANCHISE </li></ul>
  15. 15. STRATEGIC ALLIANCES <ul><li>WITH 20 COMPANIES AROUND GLOBE </li></ul><ul><li>AXICORP 2008 </li></ul><ul><ul><li>- ACQUIRE 70% STAKE OF GERMAN PHARMACEUTICAL </li></ul></ul><ul><ul><li>- MARKETS OF GERMANY & EUROPE </li></ul></ul><ul><li>IATRICA, 2008 </li></ul><ul><ul><li>- CO-DEVELOP IMMUNO-CONJUGATES FOR CANCERS AND INFECTIOUS DISEASES </li></ul></ul>
  16. 16. <ul><li>DEAKIN UNIVERSITY, 2007 </li></ul><ul><li>- FOCUS IN BIOTECHNOLOGY & BIOSCIENCES RESEARCH </li></ul><ul><li>NEOPHARMA, 2007 </li></ul><ul><li> - Market Biopharmaceuticals in GCC Countries </li></ul><ul><li>NOBEX CORP USA </li></ul><ul><li> - ORAL PEPTIDE FOR CARDIOVASCULAR DISEASES </li></ul><ul><li> - ORAL INSULIN </li></ul><ul><li>VACCINEX USA </li></ul><ul><li>CIMAB CUBA </li></ul><ul><li> </li></ul>STRATEGIC ALLIANCES
  17. 17. `` CHALLENGES <ul><li>GENERIC COMPETITION </li></ul><ul><li>GLOBAL PRICING PRESSURE </li></ul><ul><li>RISING CLINICAL DEVELOPMENT COSTS </li></ul><ul><li>GENOMIC MEDICINE – SMALLER MARKET SIZE </li></ul>
  18. 18. `` CHALLENGES <ul><ul><li>PRODUCT COMMERCIALISATION </li></ul></ul><ul><ul><li>PARTNERING / GO ALONE DECISIONS </li></ul></ul><ul><ul><li>PATENT CHALLENGES & DELAY IN REGULATORY APPROVALS </li></ul></ul><ul><ul><li>APPRECIATION OF INDIAN RUPEE </li></ul></ul><ul><ul><li>LOSS OF KEY PERSONNEL </li></ul></ul>
  19. 19. ``
  20. 20. ` INTERNAL- STRENGTH <ul><li>CONSOLIDATED SKILLS IN ENZYMES </li></ul><ul><li>DERISKED BUSINESS MODEL </li></ul><ul><li>US FDA CERTIFIED </li></ul><ul><li>MKT LEADER IN INDIA </li></ul><ul><li>CORE COMPETENCE IN MOLECULAR BIOLOGY </li></ul><ul><li>LOW COST CLINICAL RESEARCH </li></ul><ul><li>DEVELOPMENT OF ORAL INSULIN </li></ul>
  21. 21. `` INTERNAL - WEAKNESS <ul><li>STATINS- 80% BIOCON TURNOVER (45% REVENUES) MKT REDN FROM $22Bn - $3Bn </li></ul><ul><li>CAPACITY BUILD UP IN CRO </li></ul><ul><li>LEAST EXPERTISE IN FINAL STAGE </li></ul><ul><li>MARKETING </li></ul>
  22. 22. `` EXTERNAL - OPPORTUNITY <ul><li>$ 82Bn WORTH GLOBAL B’BUSTERS FACING PATENT EXPIRY </li></ul><ul><li>INDIA SHARE OF GLOBAL GENERICS MKT INC TO 33% FROM 4% </li></ul><ul><li>ENZYMES MKT GROWING AT 6.5% </li></ul><ul><li>OUTSOURCING TO REDUCE COST </li></ul>
  23. 23. `` EXTERNAL - OPPORTUNITY <ul><li>INDIA PREFERRED DESTINATION FOR CLINICAL TRIALS ($70Mn-20% Gr) </li></ul><ul><li>177 Mn(G) / 45Mn(I) DIABETIC PATIENTS </li></ul><ul><li>9Mn CANCER CASES </li></ul><ul><li>ENTRY OF VENTURE CAPITALISTS </li></ul>
  24. 24. `` EXTERNAL - THREATS <ul><li>RISK IN DRUG DISCOVERY </li></ul><ul><li>GENERICS MKT B’ING OVERCROWDED </li></ul><ul><li>STRICT IP REGULATOTY LAWS </li></ul><ul><li>LOW COST CHINESE COMPETITORS </li></ul><ul><li>INTENSE COMPETITION IN CRO </li></ul>
  25. 25. `` SWOT ANALYSIS THREATS RISK IN DRUG DISCOVERY GENERICS MKT B’ING OVERCROWDED STRICT IP REGULATOTY LAWS LOW COST CHINESE COMPETITORS INTENSE COMPETITION IN CRO WEAKNESS STATINS - 80% BIOCON TURNOVER(45% REVENUES) MKT REDN FROM $22-3Bn CAPACITY BUILD UP IN CRO LEAST EXPERTISE IN FINAL STAGE MARKETING OPPORTUNITY $ 82Bn WORTH GLOBAL B’BUSTERS FACING PATENT EXPIRY INDIA SHARE OF GLOBAL GENERICS MKT INC TO 33% FROM 4% ENZYMES MKT GROWING AT 6.5% OUTSOURCING TO REDUCE COST INDIA PREFERRED DESTINATION FOR CLINICAL TRIALS ($70Mn-20% Gr) 177 Mn(G)/ 45Mn(I) DIABETIC PATIENTS 9Mn CANCER CASES VENTURE CAPITALISTS STRENGTH CONSOLIDATED SKILLS IN ENZYMES DERISKED BUSINESS MODEL US FDA CERTIFIED MKT LEADER IN INDIA CORE COMPETENCE IN MOLECULAR BIOLOGY LOW COST CLINICAL RESEARCH DEVELOPMENT OF ORAL INSULIN
  26. 26. `` SWOT SUMMARY E X T E R N A L E N V I O R N M E N T INTERNAL FACTORS STRENGTHS WEAKNESS T H R E A T S O P R T N T Y SEARCH BUILDUP CRO CAPACITY TO BE ABLE TO MEET ANTICIPATED DEMAND (UTILISE VENTURE CAPATILISTS) EXPLOIT UTILISE MKT LEADER STATUS/ FDA CERTIFICATION TO INCREASE GLOBAL MARKET SHARE FAST TRACK DEVELOPMENT OF ORAL INSULIN MAINTAIN SKILL LEVEL IN ENZYMES FOR CONSOLIDATION AVOID LOOSING CRO MARKET TO COMPETITORS BY FAST TRACKING CRO CAPABILITY CONFRONT LOW COST COMPETITORS/ RISK BY MAINTAINING BOTH CORE COMPETENCE IN MOLECULAR BIOLOGY AND LOW COST CLINICAL RESEARCH
  27. 27. `` GROWTH VECTOR ANALYSIS EXISTING MARKET (USA) EXPANDING MARKET (EUROPE & CANADA) NEW MARKET (CHINA & INDIA) PRESENT PRODUCTS IMPROVED PRODUCTS FUTURE PRODUCTS BIO-FUELS ORAL INSULIN CANCER DRUGS GENERICS (4% - 33%) UPGRADE MANUFACTURING CAPABILITIES INDUSTRIAL ENZYMES CRO ORAL INSULIN CANCER DRUGS STATINS (SHRINKING EXISTING MKT) ENZYMES INDUSTRIAL ENZYMES CRO ORAL INSULIN CANCER DRUGS ENZYMES GENERICS FORM ALLIANCES
  28. 28. ``

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