BIOCON - from a suburban garage to the first Asian bio company

The story of the Number One Biotech Asian Woman Entrepreneur

«Biocon's Billion dollar market capitalization is an important milestone for Indian Biotechnology as it demonstrates the power of intellectual value. Our biggest achievement was gaining global recognition for the Indian Biotech sector through our very successful IPO.», says Kiran Mazumdar-Shaw, 53

Interview by Jorge Nascimento Rodrigues, editor of www.gurusonline.tv, March 2006

Kiran Mazumdar-Shaw has been considered the most influential person in bio business outside the United States and Europe, according to a online poll conducted by the Nature Biotechnology Journal in January this year. In 2005 she entered the Fortune list of 50 most powerful women in international business and she has been referred to as "India's mother of Invention" by The New York Times. She is the first Indian Business Women and the first biotech entrepreneur in Asia.

She graduated in zoology and got a master degree in malting and brewing and was supposed to follow the steps of his father, who was chief brew master. But, after a few years, she started Biocon India in 1978 with two people in her garage in the backyard of a suburban house in Bangalore without bank support and being a woman not from a rich family was a liability in the traditional Indian society. The small company born from a joint-venture between the Scottish businessman Leslie Auchincloss, the owner of the Irish Biocon Biohemicals, and Kiran, when she worked in the UK for a short period. It was the pioneer in India - biotechnology was even a complete new word in the business language in the country in the 1970's. Biocon India begun in 1978 by extracting two enzymes for exports - papain and isinglass, from papaya and a tropical catfish. The first used to make meat more tender and the second makes beer clearer.

In 1996 she decided to focus strategically the company on the development of biopharmaceuticals and in 1998 the company becomes independent from the foreign shareholders. In the last 10 years, Biocon become number one biotech company in Asia in terms of revenues and market capitalization and the 16th in the world biotech list. The company values $1 billion, after the IPO in 2004, and the total revenues last fiscal year amount $163 million, 16% of the biotech Indian industry annual revenues.

Biocon wants to be among the Top 3 biotech in the world in 2010 and expect to develop a potential blockbuster drug, that could take 2 to 4 years to hit the market. If successful it would be the first one to come from India.

Kiran is one of the enthusiasts of the biotech cluster in India, and particularly about the leadership of Karnataka State, whose capital is Bangalore. She heads the Biotechnology Vision Group. She forecast a $5 billion India bio industry in 2010 with 1 million employees, from the $1b and 25,000 people today. Karnataka State wants to be the bio hotspot and Bangalore the biotech city in India.

Links of reference:
Case study | Biocon website | Karnataka State

INTERVIEW

What was your most important decision that leveraged the future success of your company?

The turning point was when Biocon leveraged its technology platform to enter biopharmaceuticals and statins in 1996. We progressed from discovering novel fungal enzymes to researching recombinant technologies and human therapeutics. The foray into biopharmaceuticals was a crucial strategic move that propelled the company's growth into a different league. While Biocon focused on developing a strong fermentation base for the production of enzymes, the advent of Syngene, India's first Custom Research Company (a Biocon subsidiary), introduced new skills in chemical synthesis and recombinant technologies for drug development. This expertise allowed us to leverage our fermentation knowledge from enzymes to drug molecules.

«Biocon created a buzz in the stock market in March 2004 with its hugely successful IPO. Biocon closed Day One of listing on the bourses with a market value of $ 1.11 billion, to become only the second Indian company to cross the $ 1 billion mark on the day of listing.»

In brief, in the last 27 years, which where the main shifts in Biocon strategy?

1994: Biocon establishes Syngene International Pvt. Ltd. as a CRC to address the growing need for outsourced R&D in the pharmaceutical sector;

1996: The commercial success of Biocon's proprietary fermentation plant leads to a 3-fold expansion. Biocon leverages its technology platform to enter biopharmaceuticals and statins;

1998: Unilever inks a deal with ICI to sell its speciality chemicals division of which Quest International is a part. Unilever agrees to sell its shareholding in Biocon to the Indian promoters. Biocon becomes an independent entity;

2000: Clinigene, India's first clinical research organisation and a subsidiary of Biocon, is set up to pursue clinical research and development;

2004: Biocon created a buzz in the stock market in March 2004 with its hugely successful IPO. Biocon closed Day One of listing on the bourses with a market value of $ 1.11 billion, to become only the second Indian company to cross the $ 1 billion mark on the day of listing.

Which Biocon invention or pioneer manufacturing process gave you more satisfaction? If you would define Biocon, until now, for only one extraordinary moment, which one will be elected?

We were the first company in India to develop enzymes, statins and immuno-suppressants. We are the first Asian company to scale up Human Insulin to a global scale and today we are the first Indian company to develop antibodies at commercial scale. A landmark in the evolution of Biocon's successful R&D effort in Fermentation is the Plafractor, a patented hybrid bioreactor that incorporates advanced features of contained fermentation. Biocon's Billion dollar market capitalization is an important milestone for Indian Biotechnology as it demonstrates the power of intellectual value. Our biggest achievement was gaining global recognition for the Indian Biotech sector through our very successful IPO.

How do you define the uniqueness of the integrated innovation approach of Biocon?

Biocon's integrated business model offers expertise across the drug value chain to mainstream pharma companies seeking innovative technologies and potential drug candidates. This integrated approach offers comprehensive and effective solutions in new drug discovery, clinical research and commercialization. Syngene offers pharmaceutical majors multi-specialized custom research capabilities for critical early-stage development of new drug molecules. Clinigene provides differentiated clinical capabilities to rapidly and cost-effectively evaluate new medicine. Biocon extends its proprietary expertise in process development and multi-product manufacturing to co-develop & scale-up a wide range of drugs, from small molecules to recombinant therapeutics.

«With the new TRIPS compliant IP Rules in force the focus will change more for discovery research and in the long term Indian companies will be also playing according to the global rules - the R&D budget may also increase accordingly as that is the need of the day. There will be more of discovery research in the Indian companies leading to more and more novel drugs.»

Where would you like to see Biocon, say in 10 years time, with respect to the world market?

The next 10 years are going to be devoted to building cutting edge capabilities, global credibility and of course building global scale in our manufacturing and marketing capabilities. My goal is to make Biocon a global biotechnology enterprise and my dream is to see India as a global destination for biotechnology and other fields. We are already gearing up to attain global scale. We have Asia's largest Insulin facility. We will have one of the world's largest Statin facilities. We will have Asia's largest Monoclonal Antibody facility and in due course perhaps the world's largest antibody facility. Our ambition is to be among the top 3 Biotech companies globally.

To what extent following international patent obligations (that India recently adhered to) has affected the Indian drug industry?

Indian companies had not focused on new product research because of the lack of proper IP protection which in turn led to the thriving generic pharma business in India. With the new TRIPS compliant IP Rules in force the focus will change more for discovery research and in the long term Indian companies will be also playing according to the global rules - the R&D budget may also increase accordingly as that is the need of the day. There will be more of discovery research in the Indian companies leading to more and more novel drugs. In a short term perspective some Indian companies may opt for collaborative research and co-development of new molecules or the licensing of technologies/product for the Indian market.

Do you see Biocon developing an international blockbuster drug?

With Genentech as our benchmark, we aim to produce the first blockbuster drug to come from India.

Is Biocon investing in stem cell research? What is the next frontier of R&D in your industry?

At Biocon, Diabetes and Oncology are increasingly emerging as two important areas for disease research. India's 32 million diabetics, account for one-fourth of the global diabetic population. These numbers are estimated to grow to 57.2 million by year 2025. Biocon is committed to finding biotechnology solutions for customers worldwide. Our Oral Insulin program is both daring and potentially of blockbuster proportions if we succeed. Exploring new treatments in oncology are also critically important for Biocon given the high incidence of head and neck cancers worldwide. Our antibody based drug, Biomab, is being clinically evaluated for its efficacy in treating such cancers. Our research portfolio does not include stem cell research at the moment.

What can you comment about the acquisitions' strategy of Biocon regarding Europe?

Biocon's acquisition strategy in Europe will be based on acquiring Biotech companies with promising novel therapeutic products in early or mid stage development.

Do you forecast a merger with an international big Pharma?

Not at this time.

«India has a lot of intellectual property and has a great potential to be the R&D hub in Biotechnology. India will also be seen as the Contract research and manufacturing hub and this segment is estimated to be a $4 billion opportunity.»

Biocon is a shining example of a developing country like India entering into an area, which is considered knowledge intensive. Do you think India could be the next hi-tech and science powerhouse of the world?

India is one of the 5 emerging Biotech Leaders in Asia - Pacific according to a recent E&Y study. India is currently ranked 3rd in the region based on the number of biotech companies (96), trailing behind Australia (228) and China, including Hong Kong (136). India's position as a biotech player is assuming greater eminence as we continue to build critical mass in terms of skills and capabilities. An analysis of events clearly indicates that Indian biotech companies are getting their fundamentals firmly in place, business models are maturing, and product commercialization capabilities are improving. India has a lot of intellectual property and has a great potential to be the R&D hub in Biotechnology. India will also be seen as the Contract research and manufacturing hub and this segment is estimated to be a $4 billion opportunity. But we need to build capabilities to address this segment. We feel that there should be a lot more interaction between industry and academia. The Indian biotechnology sector needs to build the capabilities for different sectors, as it has done for vaccines. We should build capabilities in clinical trials and discovery research.

To manufacture a drug how much cheaper is it to do trials and R&D in India than in Europe or the US?

India also has the advantage of having a large pool of highly:
· Trained physicians,
· Nurses, and technical personnel;
· Numerous world-class medical facilities;
· Broadly developed information technology infrastructure;
· A favorable IPR environment after signing the WTO

Do you think possible to implant other R&D facilities around the world, outside India?

India has a global advantage in R&D. in terms of delivering high value innovation at low cost. Biocon, however, clearly recognizes the need to source novel innovation like we have done with our innovation partners Vaccinex, Nobex, Bentley, CIMAB and others.

Do you intend to transform Biocon in a multinational company?

That is certainly the vision ahead.

BIOTECH FIRST LADY PROFILE
(Adapted from Vikipedia)

Ms Kiran Mazumdar-Shaw was educated at the Bishop Cotton Girls School and Mount Carmel College at Bangalore, India. After obtaining a B.Sc. Honours degree in Zoology from Bangalore University in 1973, she joined the Ballarat University in Melbourne, Australia and qualified as a master brewer in 1975 to become India's first woman Brew master. Her father encouraged her in this profession, as he himself was a master brewer in India. Her professional career started with the position of trainee brewer in Carlton & United Beverages in 1974. During 1975-77, she worked in technical positions in the regions of Kolkata and Vadodara. In 1978, she went abroad and joined as Trainee Manager with Biocon Biochemicals Limited in Ireland.

Collaborating with the same Irish firm, she founded Biocon India in her garage in 1978 in Bangalore. The initial operation was to extract an enzyme from papaya. Her application for loans was turned down by banks on three counts - biotechnology was a new word yet; the company lacked assets and most importantly, women entrepreneurs were still a rarity in India. On account of the last reason, she faced problems in recruiting as well.

Kiran Mazumdar Shaw has held several honorary and advisory positions. A partial list is as follows: Chairperson and Mission Leader of CII's (Confederation of Indian industry) National Task Force on Biotechnology; Member, The Prime Minister's Council on Trade & Industry in India; Board member, BVGH (Bio-Ventures for Global Health); Member, Board of Science Foundation, Ireland; Member, Board of Governors, IIM Bangalore; Chairperson, Karnataka's Vision Group on Biotechnology Member; Advisory Council of the Government's Department of Biotechnology; Vice-President, Association of Women Entrepreneurs of Karnataka (AWAKE) .
She was termed India's Biotech Queen by The Economist and Fortune, and India's mother of invention by The New York Times.

Some of the major awards won by her are: Padma Bhushan(2005); Honorary Doctorate from Manipal Academy of Higher Education (MAHE) (2005); Lifetime Achievement Award from Indian Chamber of Commerce (2005); Honorary Doctorate of Science, from Ballarat University (2004); The Economic Times Business Woman of the Year Award (2004); Whirlpool GR8 Women award for Science and Technology (2004); Australian Alumni High Achiever Award from the IDP Australian Alumni Association (2003); Ernst & Young Entrepreneur of the Year Award in Healthcare & Life Sciences Category (2002); Woman of the Year from the International Women's 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).