Biocon Ltd.: Building a Biotech Powerhouse 521Commercialization. Relative to the compa-
ny’s other activities, Biocon had the least
expertise in this final stage of drug discovery
and development. Investments were being
made in creating the manufacturing capacity
for industrial scale-up. Commercialization
would also require compliance with manu-
facturing standards, deployment of a sales
force, and development of expertise in mar-
keting and promotions aimed at physicians
and end-customers.
STRATEGIC CONCERNS IN
NOVEMBER 2005
Mazumdar-Shaw was confident that she
could turn Biocon into a top-10 biotechnol-
ogy firm, with sales exceeding $1 billion per
annum, by 2015. To this end, the company
was involved in a number of activities rang-
ing from enzyme production to drug discov-
ery. As Mazumdar-Shaw contemplated these
activities, she knew that there would be some
questions about whether the company was
spreading its resources too thinly across dif-
ferent stages in different sectors.
Mazumdar-Shaw also knew that in order
to generate a major percentage of Biocon’s
revenues from proprietary drugs, she would
have to stretch or build the company’s capa-
bilities. Biocon had operated for a long time
in the realm of commodities, characterized
by business-to-business sales. Making the
transition to drug discovery and develop-
ment would involve developing competence
in several key areas: building a portfolio of
promising drug candidates to move through
the development pipeline, project manage-
ment skills to facilitate this process, regulato-
ry compliance, manufacturing, and market-
ing. The need to develop capabilities in these
areas would place greater demand on
Biocon’s financial resources, yet without
these investments it was unlikely that
Mazumdar-Shaw would realize her vision of
building Biocon into a top-tier biotechnolo-
gy company. Said Mazumdar-Shaw:
A biotech business is a marathon race in
which a CEO manages potential more than
performance. Balancing the demands of
research with the demands of the bottom line... that is the challenge for a CEO.
As she contemplated this challenge and
the upcoming board meeting, she began to
think about the pros and cons of her aggres-
sive vision for Biocon and the action plan
that she would need to present to the board
in order to sustain their support for her
vision.
NOTES- All dollars in U.S. currency.
- The Indian biotechnology ambience, characterized
by low availability of venture capital (VC), made it
imperative for entrepreneurs to sustain business
risks entirely on their own. It was unlike the situa-
tion in North America, for example, where entre-
preneurial risk was minimal, and a dedicated VC
firm would often fund several start-ups, betting on
one of them becoming a blockbuster. - Supriya Bezbaruah, “Seeds of a Revolution,” India
Today,August 9, 2004. - Manjeet Kripalani, “India: Bigger Pharma,”
BusinessWeek online, April 18, 2005, http://www.busi-
nessweek.com/magazine/content/05_16/b392906
8.htm, referenced December 25, 2005. - In spite of being the world’s fourth largest drug
producer by volume, India’s pharma revenues were
low because of low-end prices. For example, the
total value of India’s drug sales (including exports)
was $6.5 billion in 2004, less than the $8 billion
revenue received by Pfizer from a single block-
buster product, Lipitor, in the same year. - The Patents (Amendment) Act 2005 was enacted
by the federal government on April 5, 2005. - Richard Balaban et al., “Beyond the Blockbuster,” a
research report prepared by Mercer Management
Consulting, http://www.amanet.org/PharmaFocus/good_
company/mar_04.htm, referenced October 19,
- Rolly Dureha, “Trailblazing Trials,” Biospectrum,
January 6, 2005, http://www.biospectrumindia.com/con-
tent/careers/10501061. asp, referenced December
26, 2005.