 "More focus on market share: Kiran Mazumdar-Shaw")
Biopharma major Biocon has reported a good set of numbers. Kiran Mazumdar-Shaw, chairman and managing director, explains the strategy for the company to Praveen Bose. Edited excerpts:
What is the strategy behind your decision to rationalise the product portfolio in branded formulations?
We are rationalising this with a focus on driving greater profitability and developing the business as a speciality franchise. The approach is to focus on our niche areas of strength - diabetes, oncology, immunology, nephrology and a few others.
In doing so, we are bringing in a lot of focus on market share, brand building and profitability.
So, while the portfolio rationalisation has impacted our top line growth in branded formulations, we have seen a marked improvement in profitability of the business. In the past, we had a huge portfolio of products and in many of these, we were at the 40th, 50th position in brand rankings.
We took a conscious decision to change such a top line approach and went ahead and shed a lot of generalist brands.
I think this is paying off very well for us. Some of our top brands have grown (annually) in the range of 25-50 per cent, and a product like Canmab has grown even faster, albeit on a smaller base. We are also evaluating entering new speciality segments, in line with our niche focus.
With the Malaysian facility being commissioned now, will it help you address the problem of capacity constraint?
The Malaysian facility has been commissioned.
We are now in the qualification phase, where we expect to start seeing visits by various regulatory agencies. These would lead to approvals for market entry of the Malaysia-made products, first in emerging markets and, a short while after, into developed markets like the US and Europe.
The commercialisation of Asia's largest integrated insulins facility in Malaysia will substantially increase our manufacturing capabilities and enable us to service the growing global demand for insulins in EMs and prepare us for commercialisation in developed markets.
Geopolitical turbulence in the MENA (Middle East and North Africa) region has proved a challenge for Biocon for most of FY15. Have you been able to tackle the situation?
It is true that the region had been a source of challenge for us in the previous financial year. However, that is now behind us and we are confident of being able to mitigate the challenges in the current year. We have made a lot of effort to lower our dependence on markets in MENA and move to other EMs -- in Latin America, Southeast Asia and Eastern Europe. The recent approval for Biocon's Insulin Glargine in Mexico is an example of how our efforts towards shifting of sales to other markets are paying off. We expect approvals in other geographies to come through in the coming quarters.
What opportunity do you see in Mexico? Could the Mexican approval for Insulin Glargine provide you a gateway to other markets?
Biocon has been present in Mexico for over eight years and has expanded the insulins market substantially by initiating many more patients on to the insulin therapy through the affordable recombinant human insulin (rh-insulin). The approval for Insulin Glargine will enable Biocon to further expand this market in Mexico. Diabetes is a major health risk in Mexico, which ranks sixth globally with around nine million cases.
We believe Biocon's affordable and high-quality Insulin Glargine will help the Mexican government tackle this huge disease burden by helping bring down its per capita expenditure on diabetes. Our Insulin Glargine is the first to be approved by the Mexican health authority as per the biocomparable approvals pathway defined in 2012. Thus, we expect the approval to open the gates to other markets in LatAm.
Syngene (its subsidiary) is acquiring land in the Mangaluru SEZ. What are your plans for the facility?
Over the years, Syngene has built an integrated end-to-end discovery and development platform to service its partners across industry segments. It now intends to evolve from a contract research organisation into a full-fledged contract research & manufacturing services company, providing additional forward integration opportunities to clients. In line with this, Syngene has commenced the process of establishing a new commercial-scale facility in Mangaluru to manufacture novel small molecules for innovator companies in pharmaceutical, agrochemical and other industrial sectors.
What is the strategy behind your decision to rationalise the product portfolio in branded formulations?
We are rationalising this with a focus on driving greater profitability and developing the business as a speciality franchise. The approach is to focus on our niche areas of strength - diabetes, oncology, immunology, nephrology and a few others.
In doing so, we are bringing in a lot of focus on market share, brand building and profitability.
So, while the portfolio rationalisation has impacted our top line growth in branded formulations, we have seen a marked improvement in profitability of the business. In the past, we had a huge portfolio of products and in many of these, we were at the 40th, 50th position in brand rankings.
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We took a conscious decision to change such a top line approach and went ahead and shed a lot of generalist brands.
I think this is paying off very well for us. Some of our top brands have grown (annually) in the range of 25-50 per cent, and a product like Canmab has grown even faster, albeit on a smaller base. We are also evaluating entering new speciality segments, in line with our niche focus.
With the Malaysian facility being commissioned now, will it help you address the problem of capacity constraint?
The Malaysian facility has been commissioned.
We are now in the qualification phase, where we expect to start seeing visits by various regulatory agencies. These would lead to approvals for market entry of the Malaysia-made products, first in emerging markets and, a short while after, into developed markets like the US and Europe.
The commercialisation of Asia's largest integrated insulins facility in Malaysia will substantially increase our manufacturing capabilities and enable us to service the growing global demand for insulins in EMs and prepare us for commercialisation in developed markets.
Geopolitical turbulence in the MENA (Middle East and North Africa) region has proved a challenge for Biocon for most of FY15. Have you been able to tackle the situation?
It is true that the region had been a source of challenge for us in the previous financial year. However, that is now behind us and we are confident of being able to mitigate the challenges in the current year. We have made a lot of effort to lower our dependence on markets in MENA and move to other EMs -- in Latin America, Southeast Asia and Eastern Europe. The recent approval for Biocon's Insulin Glargine in Mexico is an example of how our efforts towards shifting of sales to other markets are paying off. We expect approvals in other geographies to come through in the coming quarters.
What opportunity do you see in Mexico? Could the Mexican approval for Insulin Glargine provide you a gateway to other markets?
Biocon has been present in Mexico for over eight years and has expanded the insulins market substantially by initiating many more patients on to the insulin therapy through the affordable recombinant human insulin (rh-insulin). The approval for Insulin Glargine will enable Biocon to further expand this market in Mexico. Diabetes is a major health risk in Mexico, which ranks sixth globally with around nine million cases.
We believe Biocon's affordable and high-quality Insulin Glargine will help the Mexican government tackle this huge disease burden by helping bring down its per capita expenditure on diabetes. Our Insulin Glargine is the first to be approved by the Mexican health authority as per the biocomparable approvals pathway defined in 2012. Thus, we expect the approval to open the gates to other markets in LatAm.
Syngene (its subsidiary) is acquiring land in the Mangaluru SEZ. What are your plans for the facility?
Over the years, Syngene has built an integrated end-to-end discovery and development platform to service its partners across industry segments. It now intends to evolve from a contract research organisation into a full-fledged contract research & manufacturing services company, providing additional forward integration opportunities to clients. In line with this, Syngene has commenced the process of establishing a new commercial-scale facility in Mangaluru to manufacture novel small molecules for innovator companies in pharmaceutical, agrochemical and other industrial sectors.