BIOCON, India’s largest biotechnology company, is in the midst of coordinating a series of moves aimed at taking it to the next growth orbit.
The key step among these is to list Syngene, its contract research subsidiary, by the first half of next fiscal. This fiscal, it also expects to complete building its first greenfield overseas manufacturing facility in Malaysia—billed as Asia’s largest integrated insulin manufacturing facility—though the process of plant validation and getting regulatory clearances will take much longer. The company, which last year launched a trastuzumab biosimilar targetting the R130 crore market for breast cancer treatment in India, says its R&D pipeline is progressing well. Two additional global biosimilar programmes entered clinical trials recently. It is also expecting some critical readouts from clinical trials of its oral insulin drug in the US. Biocon is partnering with American pharma company Mylan for the global development and commercialisation of generic versions of three insulin analog products.
In the near term, however, it has to manage growth on the strength of Syngene and the India-focussed branded formulations business while its R&D spends continue.
Biocon says it has shed nearly a third of its products in the branded formulations space over the past year as part of a strategy to increase profitability by focusing on specialty products and turning them into big brands. “Our focus now in branded formulations is about profitability, not just top line. We have actually shed a number of products,” said Kiran Mazumdar-Shaw, chairman and managing director of Biocon. “The biosimilar is a very integral part of our future business, these are very strong growth drivers for us initially in the emerging markets and tomorrow in the developed markets. These are investments we have to make because these are integral to our business model.” Biocon has indicated that it plans to spend 10% of its biopharma revenue on R&D.
Syngene’s October-December 2014 revenue has grown 20% year-on-year to R 220 crore. Biocon, which holds 85.54% stake in Syngene, has said it will now start the process of selecting bankers to manage an offer for sale to the extent of 10-15% stake by the first half of FY16. Syngene International’s director Peter Bains said that the contract research arm has a capital spend plan of around $200 million. “But of that, only about 40% is currently committed, where we have clear visibility of expansion opportunity or new capabilities and the other 60% is in plan but not yet committed, and we will look at the business visibility and triggers before we would commit that,” he said.