The trend of hiving off inhouse research and development (R&D) centres into new companies in the Indian pharmaceuticals industry has seeped into the biotech sector. Bangalore-based Biocon seems to be the latest firm with a plan to hive off its R&D arm into a new company. The company is learnt to be transferring all its molecules under-development into a new firm, which will be a 100%-subsidiary.
In the recent past, many large pharmaceuticals firms in the country have hived off their R&D businesses into new companies in order to attract strategic investments in the high cost-burdened drug development sector. Following Sun Pharma?s R&D hive-off, Wockhardt and Ranbaxy have announced the hiving-off their R&D arms too.
However, Kiran Mazumdar Shaw, CMD, Biocon, who confirmed the development, ruled out the possibility of raising funds by diluting stake in the new arm. ?The motive behind the hive-off strategy is to minimise the increasing tax burden to the company caused by our R&D activities,? she said. Refusing to disclose further details, she said, ?The new arm will be set up this year.? In 2007, Biocon had sold out its enzyme business to Danish firm Novozymes for $115 million.
The company has various molecules under development including a molecule for type II diabetes (phase IIa trial), for rheumatoid arthritis (phase IIb), for psoriasis (phase IIb), glioblastoma multiforme (phase IIb) and non-small cell lung cancer (phase IIb).
Biocon, which is keen on inorganic growth, is looking for acquisitions in the contract research space in the US market. Biocon?s biogenerics product-line includes recombinant human insulin (insugen), EPO (Erypro), G-CSF, and streptokinase.
