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We are increasingly gaining recognition as a strong insulin player in the emerging markets.Kiran Mazumdar-Shaw, CMD, Biocon
Biocon is in the process of transforming itself from a contract manufacturer into a biotech company that also offers complete research solutions. Kiran Mazumdar-Shaw, CMD, Biocon, talks about the company’s way forward, in an exclusive interview. Excerpts:
How do you see the new drug pricing policy changing Biocon’s India formulation business?
Biocon is a differentiated player with over 50 per cent of our brands being biologic drugs (created through organic processes instead of chemicals). Many among them are novel biologics.
If you look at our portfolio of products, we’re focussed on niche areas such as immunosuppressants, oncology, nephrology, dermatology and immunology. We have an anchor biotech product in each of these segments which makes our whole branded formulation business very differentiated and therefore fairly isolated from competition. In all these segments we were the first Indian brand. In some segments we are the only brand. For instance, Alzumab, our innovative psoriasis drug, is a unique product and there is no other anti-CD6 monoclonal antibody in the market.
Having said that, insulin has always been under price control and that has not changed. In insulins, though there are essentially five-six players, we are the largest Indian producer accounting for almost 10 per cent of the market. Thanks to the strong and fast-growing insulin franchise, we are now among the top 10 in the Indian diabetology segment. We are also increasingly gaining recognition as a strong insulin player in the emerging markets, placed fourth in this region.
So from an overall perspective we’ve not been significantly impacted like other companies which have a huge dependence on essential drugs for their branded portfolio. Hence our focus now is on increasing market share in all these product areas and being a leader in biopharmaceuticals. I think this is the most exciting part of Biocon’s branded formulation business.
What is the roadmap for the India business over the next three to five years?
We target revenue of a billion dollars for Biocon by 2018. India formulations should account for 20 per cent of the overall revenues. So, by 2018, the branded formulation revenues should cross Rs 1,000 crore from approximately Rs 350 crore currently.
What is the update on Biocon’s novel oral insulin programme in India?
When we completed large pivotal trials, we faced a setback due to poorly-designed trials. The selection of patients and the way we administered the drug was not optimal. When we conduct trials on early type-2 diabetics we need to be very careful. With a slight modification in the lifestyle the patient can easily manage the disease. Unfortunately, we did not factor this in. The moment the patients came into clinical trials, those who were on placebo started managing themselves very well and showed positive results.
The patients who were on the oral insulin did not have to change their lifestyle because they suddenly saw their glucose levels being controlled. Even though both the arms had a good reduction (in glucose levels), the placebo arm also had a reduction. Despite the placebo effect, in hindsight, the data was powerful and shows that the drug works well. Now that we understand how this drug works and what it does to patients, the trial design is being modified and we will be doing a few more trials.
Do we have plans to take your novel portfolio to other markets?
Our strategy is to develop these novel molecules in an inexpensive way and launch them in India. This way it becomes available to patients sooner. The intent is to generate extensive post-marketing data which will be very valuable for global partnership programmes. We have tied up with pharma giant Bristol-Myers Squibb (BMS) for the oral insulin molecule and are looking for partners for Itoluzimab.
How is Syngene shaping up and where do we see the business in the near future?
Research services (Syngene) has been a big success for us. We were the first research services company in 1994 and we’ve built a powerful skill base in discovery and development research. From being a commoditised fee-based service model we have diversified into high-end services which differentiate us from the rest.
Currently a large part of the business is about large contracts from clients such as BMS and Abbott. This makes it very sustainable. This apart we have fee-based services and milestone-based projects. Hence, our gross margins are very healthy at close to 30 per cent and of course, being an export-oriented business, a weak rupee is also helping.
Today, we are the fastest growing research services company in Asia and will continue to grow in excess of 20 per cent in the foreseeable future.
Could you elaborate on the medium-term growth drivers for Biocon?
Insulin in the emerging markets is a big growth driver for us. Similarly also the global development of Itolizumab could be a big opportunity. Branded formulations is also a very interesting opportunity as we keep adding products to our portfolio. Another emerging opportunity, which may be slightly long term, is our generic strategy for the US market. We will be filing our first ANDA (Abbreviated New Drug Development) for the US market by next year. We will be marketing the drugs on our own. But, it may take us at least two years or more to enter the market. And of course, our research services business continues grow at a robust pace.
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