BIOCON LTD: Building a biotech powerhouse

From bottom to TOP

BYManoj Dubey Kanishka Pathak Vikash Thakur Veer chhatarashal Akhilesh kumar Shadab Alam

Industry Outlook
The biotech industry in India is expected to show salubrious growth rates in coming years, and is projected to enjoy a CAGR of around 20% between FY2012 & FY2013, says RNCOS in its latest research report, "Booming Biotech Market in India". Future of the industry remains pleasantly buoyant despite the lack of venture funding and stringent regulations in the country.

Leading Players
Name Year of establishment Segment Revenue
(in million dollars)

Serum Institute of India Panacea Biotec

1966

Bio-pharma

1870

1984

Bio -pharma Bio-pharma/Bio serivces/Bioindustrial Bio-pharma Bio-agri

640

Biocon ltd Nicholas Piramal Novo Nordisk

1978

533.91

1988 1973

106.95 80.07

About BIOCON
The first and largest biotech company in India, started in 1978 formulating industrial enzymes provided by an Irish company.

Biocon retains its roots in the world markets for food and industrial enzymes.
It also has turned its fermentation technology to the manufacture of drugs, developing a pipeline of statins and winning U.S. FDA to market generic lovastatin for cholesterol reduction. Biocon also has created contract drug discovery, clinical trials, genomics and chemistry research units and sister companies. Biocon's Syngene unit has 150 scientists working on drug discovery, chemical synthesis, molecular biology. Biocon is ranked among the top 20 global biotechnology companies (Med Ad News). Biocon is the 7th largest biotech employer in the world (Med Ad News).

Mile Stones
1978 - Incorporated as JV-Biocon Biochemicals Ltd & Kiran Mazumdar-Shaw. 1979 - First Indian company to manufacture and export enzymes to USA and Europe. 1989 - Unilever plc. acquires Biocon Biochemicals Ltd. 1993 - Establishes Syngene International Pvt. Ltd. ,a Custom Research Company (CRC). 1996 - The commercial success of Biocon's proprietary fermentation plant leads to a 3fold expansion; enters biopharmaceuticals and statins. 1998 - Unilever agrees to sell its shareholding in Biocon to the Indian promoters. Biocon becomes an independent entity 2000 - Establishes Clinigene, India's first Clinical Research Organisation (CRO). 2003 First company worldwide to develop human insulin (Pichia expression system). 2004 Issues IPO which valued the company at $1.1 bn. 2006 - Inaugurates Biocon Biopharmaceuticals, India's largest multi-product Biologics facility ; India's first anti-cancer drug, BIOMAb EGFR. 2008 - Biocon acquires 70% stake in German pharmaceutical company, AxiCorp GmbH 2009 - Biocon launches BASALOGTM - long lasting basal insulin for Type 1 & Type 2 Diabetics.

Its subsidiaries
Syngene International Ltd (100%)
NeoBiocon FZ LLC (50%)

Clinigene International ltd (100%) Biocon Research ltd (100%)

Biocon SDN. BHD (100%)

Biocon BioPharmaceuticals Pvt ltd (100%)

Biocon SA (100%)

The Visionary
Born on 23 March 1953 in Bangalore Post grad. Zoology from Bangalore university 1972 Master brewer from Ballarat University in Melbourne 1975 Trainee brewer in Carlton & United Beverages in 1975-77 First Indian woman brew master Joined Biocon biochemical Ltd. Ireland in 1978 Dr. Kiran M. Shaw In 1978 founded Biocon India

After wards she never turned back and reached to the apex of BIOTECH industry in India ,Currently she is richest women in India.

Conti

Products
Enzymes
Industrial Food Feed

Drug Discovery
Products

Bio pharmaceuticals 80% turnover Statins major . product

Custom Research
Handled by Syngene Synthetic chemistry and Molecular Biology are tow areas covered

Clinical trials
Handled by Clinegen Focus on Phase I and Phase III trials

Problems
In initial Stages Financing regular operations Approached financial institutions, but turned down, coz: Biotechnology is a new word No assets for company Woman entrepreneur is a rare word Recruiting staff

Current (According to case study)Spread its business to research and development and drug discovery areas

SWOT ANALYSIS
Strength:
Low Price : Insugen price of $ 2.5 per 10 ml Debt free & cash rich status Rich & expanding new drug pipeline Biocons R&D expertise Biocon has a patent fermentation process

Weakness:
Statin (which lower the amount of cholesterol in blood) dependent dont have patent for statin molecules Limited clientele Revenue profile is highly concentrated

Conti
Opportunity:
Market potential : Statins market likely to grow at a rate of 20% in the next year India has the most quantity & diversity type of diabetes Great manufacturing capabilities Insulin injections are a painful process Expiration of patents worldwide Regulatory risk Competitive threats Raw material & fuel costs are linked to global commodity prices Dollar depreciation rising personnel costs & increasing operational overheads on account of oil & power Wockhardt already has launched insulin product in market so, Biocon has to face serious competition

Threats:-

Market share

Financials

Current Ratio

Asset turnover ratio

Asset Turnover Ratio
1.4

1.2

0.8 Asset Turnover Ratio 0.6

0.4

0.2

0 2007 2008 2009 2010 2011

Net Profit Margin

Net Profit Margin(%)
50 45 40 35 30 25 20 15 10 5 0 2007 2008 2009 2010 2011

Net Profit Margin(%)

Earning per share

 From the ratio analysis we can say that the firm has a favorable financial status to spread its business to research and development and drug discovery areas

BCG ANALYSIS

BIOCON can be put in the BCG STARS as the company had very high growth opportunities and high market share.

Strategies
No commodity production in beginning due to lack of infrastructure Diversification rather than expansion Formed Helix (antibiotic prod.) Formed Syngene, Clinigene (R&D in fermentation) Biocon Quest to produce drugs in mass. Strategic alliances with 20 companies around globe. Eg AXICORP , DEAKIN UNIVERSITY Fully integrated business model Enzymes produced & sold as industrial intermediaries Customer (staying with buyers processing line helping them obtain desired result from the enzyme) Created an image of a reliable company able to give highly competent technical products & support

Major Competitors
Cadila Healthcare Divi's Lab Lupin Ltd. Glenmark Pharma GlaxoSmithKline Phar Aurobindo Pharma Dr. Reddy's Labs Fortis Healthcare Sun Pharma. Cipla

CSR
Arogya Raksha Yojana (ARY) Healthcare Initiatives Primary Health Education & Implementation Infrastructure: constructing school buildings (including a performance stage, ooring, classrooms),creches, sanitary facilities and water supply connections. Under phase I of the sanitation program, 700 toilets have been built in Huskur.

Current Status
India's Biocon expects to launch psoriasis drug by end FY13 MUMBAI, July 26 - Biocon, India's top listed biotechnology company, expects to launch Itolizumab, a drug to treat psoriasis, by end of the current fiscal year India's Biocon Q1 net up 12.5 pct July 26 - Three months ended June 30 , Net Profit 788.0 vs 700.5 Total Income 5,926.0 vs 4,635.2 Results are consolidated. NOTE: Biocon Ltd is India's top-listed biotechnology company. Ampio signs deal with Biocon unit on sexual dysfunction drug REUTERS - Ampio Pharmaceuticals Inc signed a deal with Syngene, a unit of Bangalore-based Biocon Ltd , to produce its experimental drug for premature ejaculation and erectile dysfunction, sending its shares up 23 percent. Biocon to develop nutrition products for India REUTERS - Abbott Laboratories has partnered Indian biotechnology company Biocon Ltd to develop nutrition products for India, as the U.S. drugmaker steps up its push to tap a potentially big market. Biocon Q4 beats forecast, shares rise An expected licencing income helped Biocon, India's top-listed biotechnology company, post better-than-expected quarterly profit and lift its shares more than 4 percent, but it said the global business outlook remained uncertain. Pfizer scraps insulin deal with Biocon Pfizer Inc , the world's largest drugmaker, has scrapped a deal to sell insulin products made by Biocon Ltd , leaving India's biggest biotechnology company without a partner to sell the drugs in key markets such as the United States.

Why Dr. K.M. Shaw is an Entrepreneur

DETERMINATION
No man was willing to work for her. Accountant left at the first sign of another job. She started her Business in relatively new and innovative field. When bank refused loans to Kiran, she went against all odds as a belief that women can be an entrepreneur. Focused on R&D and innovative strategy to produce new products. Made her employees to think innovative Company had no assets. Biotechnology was a new concept to Indians. Woman entrepreneur was a new word.

CONFIDENCE

INNOVATION

RISK TAKER

THANK YOU