Biocon aims to become the largest biosimilar company globally: Kiran Mazumdar-Shaw

Biocon Chairperson, Kiran Mazumdar Shaw

Riding high on the successful acquisition of the global biosimilar business of its partner Viatris, Biocon aims to position itself as the market leader in the category.

In an exclusive conversation with Moneycontrol, Biocon Chairman Kiran Mazumdar Shaw talks about the company’s Q3 results, growth and expansion plans, the impact of adulteration in drug manufacturing activities and much more.  Edited excerpts of the interview:

How would you rate the third-quarter results of Biocon? Anything specific you would like to highlight?

Biocon had a stellar quarter as this is the first time we have crossed Rs 3,000 crore at a consolidated level; this is also the first time we've crossed Rs 1,500 crore at the biologics business level. This is the first time we have crossed a core EBITDA of Rs 1,000 crore. Overall, I think the business is very robust and strong. Our core EBITDA margins have improved and jumped to 36 percent from 33 percent. The year-on-year growth has improved considerably by 35 percent, despite a jump of 144 percent in research and development (R&D) investment. We have also indicated that in the fourth quarter, we expect the biologics number to jump to Rs 2,000 crore levels, indicating a billion-dollar exit trajectory for the business. With new businesses kicking from the end of July in FY 24, we will see even stronger growth in biologics, which is a product market-based business.

What are the new products in the pipeline?

We are anticipating approvals for Aspart and Bevacizumab this calendar year, which will add to the business. There is a visible trajectory of growth in both the US and Europe. Europe actually has a market where all seven of our products are approved, and many of them will be launched this calendar year. We have also seen recent launches of our products like Bevacizumab in Australia, and Aspart launch in Canada. We see ourselves as being global market leaders when it comes to biosimilars in the next few years. This acquisition (Viatris) positions us well in a leadership position. Overall, I see that the Biocon business has solid and sustainable growth in the foreseeable future.

Watch: Kiran Mazumdar Shaw On Biocon Q3 Results, Viatris Deal & Drug Regulation In India

How crucial has the Viatris deal been for Biocon and how do you foresee your growth trajectory in future?

Viatris is a landmark deal for us because it gives us a forefront in global leadership. The acquisition was unique because we had a decade-long partnership with them. Currently, we are looking at integrating the acquired commercial engine so that we see ourselves as the largest fully integrated biosimilar company globally. Due to our large-scale investments so far, we expect to see incremental growth in future as well. It’s an exciting inflection point for the biologics business and the Biocon group.

How has inflation in Europe affected you?

Whilst we do feel the heat in certain segments such as catalysts, we don't feel the same pressure in immune-suppressants and now we are venturing into the peptide field, where we believe that we will be competitive and differentiated.

Also read: Pharma manufacturing needs a robust regulatory system

How do you see India as a market for expansion as compared to the rest of the world?

Honestly, the biggest opportunities are in APAC and MENA regions. India is a very crowded and competitive market, which has been exploited by too many players and biosimilars. We see ourselves as the largest biosimilar insulins company in the world. India needs to benefit from our efforts, and we hope that it will become an important market for us. Right now, we are present in India with glargine insulin and recombinant human insulin. But, our market share in many other markets is much larger.

In the Union Budget, Finance Minister Nirmala Sitharaman announced a program supporting research and innovation in the pharma sector. How do you see this development?

I think it's a welcome statement from the finance minister. We need to see what it entails because thus far, we have not seen any kind of granular details of what the scheme is about. So whilst it talks about centres of excellence and research incentives for the pharma sector, we are yet to see the details of the scheme. Until we see that, it's very difficult for me to comment, but obviously, it's a step in the right direction.

What should be the approach of the government to support R&D in the pharma sector? 

We have provided many recommendations to the government for such research incentive policies. The weighted tax deduction in R&D investments is a very good way of incentivising investment in R&D, which I think is something that the government ought to consider. We often say the pipeline is our lifeline. And without investing in R&D, we cannot future-proof our business. So we are caught in between this challenge of reducing R&D investments and then risking our future. The government needs to allow greater tax deduction so that basically we can invest more in R&D and not hit our P&L.

There have been recent instances of concerns about adulterations in the drugs made by Indian firms. How do you see such adverse events and what should be done about it?

There are such cases where the cough syrup that is supposed to have caused deaths in certain countries, as well as the recall of eye drops manufactured in the US. All these are extremely adverse events which affect the Indian pharmaceutical industry. The Indian pharmaceutical industry, by and large, is very compliant and committed to good manufacturing practices. It is for us to build a very robust regulatory system; we need to have a regulatory governance model that allows all companies to be under the watch of regulatory inspections, which make sure that companies that are not compliant cannot get away with it. I think when you look at adulteration and various drugs, of course, that's a very different matter. I'm not even looking at that, because that is a criminal activity. But the normal pharmaceutical manufacturing activity is very robust. But I think our regulators also need to be able to build that credibility for Indian industry, through their own approaches to regulatory control.