Biocon Ltd.: Building a Biotech Powerhouse 517and European markets. With $82-billion
worth of global blockbusters facing patent
expiry by 2006, the generics industry was set
to grow. India’s share of the global generics
market was expected to increase to about 33
percent in 2007, from four percent in 2004,
according to a study by London-based
Global Insight.^4 The economics of the mar-
ket were so attractive that every biotech play-
er—big and small—was seeking a foothold in
generics. The biopharmaceuticals space, in
which Biocon had built a niche, was thus
becoming more crowded and competitive
day by day. Low prices, integral to a generic’s
business, made it impossible for Biocon to
secure revenue breakthroughs, in tune with
its global aspirations, through the generics
route alone.^5
Moreover, the regulatory environment
that had made generics such an attractive sec-
tor in India was also changing. The govern-
ment of India had introduced a full-fledged
patents regime in compliance with the World
Trade Organization agreement on intellectu-
al property.^6 In the past, the Indian govern-
ment had granted patents for the process of
manufacturing a drug, not for the drug itself.
Process patents (as opposed to the product
patents prevalent in North America) had
allowed Indian companies to produce gener-
ic versions of drugs patented in other coun-
tries. Having found a profitable revenue
stream in producing copycats while the
patents were still running their course else-
where in the world, the Indian drug compa-
nies had prospered. But under the new
regime, manufacturing and marketing a
patented drug was prohibited. A generic ver-
sion was allowed only after the expiry of the
product patent, typically after about a
decade.
While the generics space was becoming
more competitive, new opportunities were
opening for Indian firms interested in drug
discovery. With all major drug companies
under pressure to drive down costs,^7 the
major players were looking to specialist firms
located in India and China, such as Biocon,
as economical sources of input for research
and clinical development.BIOCON AND MAZUMDAR-SHAWKiran Mazumdar set up Biocon in 1978.
After receiving a postgraduate degree in
zoology from Bangalore University in 1972,
she went to Balart College of Melbourne
University of Australia for a diploma in
Malting and Brewing. When she returned to
India in 1975, she found, to her dismay, no
employment prospects for a female brewer. A
few years into contractual jobs, she secured a
referral to the founder of Ireland-based
Biocon Biochemicals Limited (BBL), a man-
ufacturer and exporter of enzymes for the
brewing industry worldwide. Joining the
company as a one-person affiliate based in
Bangalore and upgraded later as a minority
stockholder, Mazumdar-Shaw observed BBL
being acquired successively by Unilever plc
and ICI Ltd. Unlike her Irish partner, she
held onto her stock until she branched out on
her own in 1978, forming Biocon India.
During the first decade and a half,
Mazumdar-Shaw focused on building a core
competence in the largely neglected area of
solid state fermentation. Under her leader-
ship, Biocon secured a U.S. patent for a reac-
tor it developed, known as plafactor. The
patent gave the company exclusive global
rights to use and license the technology for
the manufacture of drugs involving genetical-
ly engineered micro-organisms in a solid-
state fermenter.
Mazumdar-Shaw (who preferred to be
addressed as “chairman” in all business corre-
spondence, instead of the politically correct
“chairperson”), offered the following reflec-
tion on her career path:
I did not, like most professional women exec-
utives, run into a glass ceiling. I started right
at the top—or was it the bottom?—as an
entrepreneur. What I ran into was a concrete
ceiling. No man was willing to work for me.
My accountant left at the first sign of anoth-
er job because he presumed that a woman