Biocon builds strategy to fight price erosion

Biocon has devised a differentiated strategy to ward-off statin price erosion in Europe.

As part of this strategy, the company plans to bank on statin capacity creation, emerging opportunities in biosimilars in Europe, and enter the oral insulin (under development) business and biologicals through MABs (monoclonal antibodies).

Confirming this Kiran Mazumdar-Shaw, chairman and managing director, Biocon Limited, while announce the company's first quarter results, said, "The new growth drivers -- Insulin, immuno suppressants and branded formulations -- are building the bio-pharmaceuticals business in a more robust manner and thereby reducing the dependence on statins."

In the last few quarters, the company has faced severe capacity constraints. To face this price erosion in statins, "The company is creating capacity and this will come on stream in the later half of this fiscal and is expected to contribute to overall growth," said Kiran Mazumdar-Shaw.

New facilities are set to address US patent expirations of pravastatin and simvastatin in mid-2006 which will open up significant opportunities for Biocon starting Q4 FY 2006, she added.

With regard to insulin, Biocon plans to exploit its Pichia based recombinant human insulin Insugen by taking it to major global markets. Insugen is under registration in over 20 countries in Europe, West Asia, Latin America and few Asian countries, she said.

In MABs the company has made progress in developing oncology drugs. "This is expected to develop into global opportunities in the next 2-3 years," she added.

Biomab, an anti EGFR anti-body used in the treatment of cancer is in the final stages of phase IIb clinical trials and the company expects to file for fast track approval in India by the year end.

The new research contracts bagged by contact research company Syngene and clinical research entity Clinigene are expected to deliver additional growth this year.

Biocon's contract research services involving Syngene and Clinigene have clocked 35 per cent growth at Rs 19 crore in FY Q1 2006 as compared to Rs 14 crore in FY Q1 2005.

As for the contract services of the company, during the first quarter, Syngene signed up new contracts which are expected to generate additional revenues in the coming quarters.

The recently concluded strategic partnership with SCIREX+, a US based contract research organisation is also expected to generate additional business for Clinigene this year, said Kiran Mazumdar-Shaw.