Biocon plans Rs 400 crore expansion over 3 years

Biocon, the first Indian biotech company to go public, unveiled its Rs 400 crore expansion plan, spread over three years.

The company will invest Rs 50 crore, Rs 317 crore and Rs 40 crore on developing its facilities in financial years 2004, 2005 and 2006, respectively.

"We have embarked on a three-pronged strategy: enter into global supply arrangements, emerge as a strong generic player and launch branded formulations. A spate of patent expiries and change in government policies will drive demand in generics," Kiran Mazumdar-Shaw, chairman and managing director, said.

The company is also planning a production facility for Biocon Biopharmaceuticals "" a joint venture with a Cuban biotechnology company.

According to the company, it is required to make a $5.1 million (around Rs 22.5 crore) equity investment in Biocon Pharmaceuticals and gurantee debt financing for the joint venture for the balance of the investment.

Biocon's board has given a preliminary approval for financing capital expenditure of up to Rs 85 crore for the joint venture.

The proposed capital expenditure, according to the company, envisages augmentation of its fermentation, extraction and synthetic conversion capacities to meet the growing demand for statins"" a cholestrol lowering drug used for the treatment of cardiovascular diseases, and other active pharmaceutical ingredients.

The company plans to seek US FDA approval for its new facility for manufacturing its primary basket of products such as lovastatin, simvastin and pravastatin. The unit is expected to commence commercial production by the first quarter of 2005.

Biocon is investing around Rs 30 crore in a new purification facility for insulin. The company is ungergoing clinical trials in India for recombinant human insulin which it plans to introduce in the domestic market as a branded formulation in six months, subject to regulatory approvals.

A new fermentation unit for immunosuppressants is being developed, entailing an investment of Rs 4 crore and Rs 16 crore in 2004 and 2005, respectively.

The company is also setting up a custom research services laboratory on which it will spend Rs 9 crore in the current year and Rs 21 crore in the next financial year.