INORGANIC GROWTH

INTRODUCTIONKIRAN MAZUMDAR-SHAW (CHAIRMAN & MD BIOCON)Her ambition was to make Biocon one of the worlds 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.

CONTINUEDIn 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.CONTINUEDKiran 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 its 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 .CONTINUEDIn early 1980s, 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. Biocons mastery of solid state fermentation was a good strategic weapon.

CONTINUEDUS$250000 from ICICI Bank , Biocon was able to build a solid state fermentation plant which helped in the growth of its R&D.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.

CONTINUEDBiocon becomes the first Indian company to be approved by US FDA for the manufacture of lovastatin, a cholesterol-lowering molecule. Biocons proprietary bioreactor, Plafractor is granted US 2001 & world wide patent.In late 90s Biocon establishes Clinigene, Indias 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 Indias 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 CAPITALThe ability to attract and motivate good people was a key factor behind biocons 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 GROWTHBiocon emerged as an integrated biotechnology enterprise with presence in biopharmaceuticals, enzymes , custom research , clinical research.

Biocon was Indias largest biotechnology company in terms of revenues.

The partnership with Cuban institute CIMAB results to launch the Indias first anti-cancer drug (BIOMAB-EGFR).

CONTINUEDIn 2004,they entered into a strategic partnership with vaccinex to discover fully humanized antibodies focused on cancer, inflammation.The collaboration combined vaccinexs unique capabilities to discover fully human monoclonal antibodies using its proprietary antibody discovery technology and biocons 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.CONTINUEDBiocon 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 , Indias largest multi-product biologics facility at biocon park, Indias largest integrated biotechnology hub, comprising an integrated cluster of research laboratories and manufacturing facilities spread across 90 acres in Karnataka industrial areas development board.

CONTINUEDIn 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.

CONTINUEDBiocon 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.CONTINUEDIn 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 INDUSTRY IN INDIA 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 INDIARich Bio-diversityVaried 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.

CONTINUEDIncreasing 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 GazingKiran 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 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