Biocon picks up majority stake in AxiCorp

India's premier biotechnology company Biocon has achieved a major breakthrough in Europe by acquiring a majority stake in AxiCorp Pharmaceuticals, a leading German company.

Disclosing the deal at a joint news conference of the two companies in Frankfurt today, Kiran Mazumdar-Shaw, the founder and managing director of Biocon, said that her company bought a 70 per cent stake in the company for ¤30 million.

The acquisition "heralds our foray into the European market," she said.

She left the issue for further stake increase open. The company is located near Frankfurt and specialises in manufacturing and marketing a unique range of its own patent-free medicines as well as low-cost drugs from the European Union nations.

"We will make the necessary investments in the future to achieve our goal of covering the European market," she said.

The acquisition marked an important step towards Biocon's goal of becoming a global company. India's most successful women entrepreneur said the two companies have a common vision of making available medicines at an affordable price and strengthening national health systems.

This can be achieved in Europe by uniting cost-effective research and development of Biocon and efficient management and marketing of AxiCorp, she felt.

AxiCorp has expanded dynamically since it was founded five years ago and made a name internationally within a few years as a provider of low-cost medicines. It has the potential to join the leading names in the area, Mazumdar-Shah said.

"We welcome AxiCorp as an autonomous company in the Biocon group of companies," she said.

She was convinced that Biocon's partnership with AxiCorp will enable her company cost-efficient production and marketing of a range of original medicines in Europe.

Initially, the two companies will focus on biosimilars, patent-free pharmaceuticals which are produced with the same biotechnologically created substance and have the same effect as the original product.

Biocon has developed a strategy to produce high quality and low-cost biosimilars such as human insulin and has become a world leader in this area, Mazumdar-Shaw said.

If Biocon gets the approval of national and EU health authorities for human insulin, its sale could begin within the next 12-18 months.

Biocon has a range of other biosimilars in its product range such as anti-cancer drugs, anti-bodies, immuno-suppresants, vaccines etc and their marketing will be considered later. Biosimilars have a global market of $30 billion and rapidly expanding. The deal with AxiCorp will enable Biocon to gain a share of the European market, estimated to be around $10 billion.

She allayed fears that there will be loss of jobs by relocating production facilities to India. On the contrary, her company's acquisition of the German company will create new jobs.

Dirk Ullrich, manager of AxiCorp said no top-level changes are planned following the acquisition.

He was quite pleased that the company's new owner shared their view of making affordable medicine for all.