Don't see immediate revenue impact from Quark deal: Biocon

She, however, did not put a number to incremental revenues that could result from the deal. “All biopharma projects have long gestation periods. So this is a mid-term bet for us.”

Below is the transcript of the interview.

Q: Your licensing pact with Quark Pharma, can you take us through what it means for you and what should investors expect in terms of impact on your profit and loss account in FY15?

A: The Quark Pharma deal is a important because siRNA technologies and therapeutics are becoming hot property. A lot of companies that are pursuing drug development in this area are getting very rich valuations, there is a lot of interest because investors believe this is a new class of drugs that will really revolutionize and address a large number of unmet needs.

This is a very coveted technology and the whole space at this point is very coveted. So from that point of view we have entered into a very interesting and unique partnership with Quark Pharma who are pioneers in siRNA technology.

It is a small company based out of California and Israel and it has some very high-end capabilities in siRNA technology.

It has a molecule in phase-two development – which means it has crossed some of the proof of concept hurdles. It is a very interesting therapeutic for glaucoma, a huge unmet need.

I would say that although the impact is not going to be next fiscal in that sense I think it does add to the valuation of our pipeline.

Q: Can you give us some idea of the financial transaction and some idea of when you will be able to milk benefits?

A: I cannot share the financials of the deal but it is very attractive for Biocon and in terms of when we can milk the benefits of this, I think this is about a drug development process and the market must understand that all biopharma drug development processes have a long gestational timeline.

The investments we are making today will reap high benefits in a few years’ time but not in the next fiscal for sure. So I think you are looking at this as a midterm bet and I think it is a huge opportunity for Biocon to play in this space because the technology is very coveted and this is a hot space.

Q: What have you made of the merger and acquisition (M&A) action that is heating up in the pharmaceutical sector and you have cash of about Rs 700 crore or so lying on your books, should we brace ourselves for any kind of inorganic acquisitions from Biocon in the near future?

A: Certainly I think India is a good hunting ground for various companies. There is a lot of interest from multinational companies as well as Indian companies because this is a time for consolidation because India is going to be a very attractive market but you do need scale, you do need to focus on brand-building and I think this is what is leading to this very active M&A activity.

As far as we are concerned, I think we are always ready to look at opportunities. I don't think at this point in time we are really using the cash kitty that we have to actively pursue large acquisitions because this money is being set aside for developing our very important pipeline of products as well as some of our capital investments that we need for expansion. So from that point of view, I don't think you can hear big news from Biocon.