Beyond Borders: Global biotechnology report 2010

Mazumdar-Shaw: The global recession hasn’t hurt the Indian
biotech industry. The overall Indian economy has been largely
insulated from the economic downturn, and the Indian biotech
sector has actually benefited from what’s happening in the rest of
the world.
Biotech and pharma companies in the West are under strain,
not just because of the financial crisis, but because of their R&D
pipeline challenges and the need to control costs amid stagnating
top-line growth. Since Western companies are finding it difficult
to create significant growth in developed markets, they are
increasingly looking at emerging markets. Other growth strategies
being pursued by big pharma include portfolio diversification
through products with lower regulatory timelines — generics,
biogenerics, devices, diagnostics and vaccines. And emerging
markets with lower cost profiles, such as India and China, are
beneficiaries of this fallout since they provide unique solutions to
many of these problems.
Ernst & Young: Could you discuss your activities and strategy in
your respective markets? What growth opportunities do you see
over the next five years and where do you see your company at
that point?
Mazumdar-Shaw: Biocon started its business transformation
about 10 years ago, from developing enzymes to developing
biopharmaceuticals. We now have a very risk-balanced portfolio
of products — a rare combination of small-molecule generic APIs,
insulin-based biogenerics and biosimilar monoclonal antibodies,
as well as novel drugs. Our biogeneric insulins offer a very large
market opportunity due to the dramatic growth rate prevalent in
diabetes. For biosimilars, we have partnered with US-based Mylan
“As Western companies continue to focus
on reducing headcount and R&D costs,
we anticipate … 20%-plus growth in our
services business.”
Pharmaceuticals. We anticipate building emerging markets first
and then following this by expanding to developed markets a few
years later.
Our services business is also strong. While the tremendous
pressure on pharma companies to reduce R&D costs has boosted
outsourcing, some CROs were badly affected by megamergers such
as Pfizer/Wyeth and Merck/Schering-Plough. Many outsourcing
agreements — some quite substantial — were frozen as companies
worked out their new organizational models. We have been lucky
that our largest customer, Bristol-Myers Squibb, has not been
distracted by any large transactions. As Western companies
continue to focus on reducing headcount and R&D costs, we
anticipate more growth in our services business. Unlike most CROs,
we have capabilities in both small molecules and biologics, and we
can realistically expect 20%-plus growth in our services business.
Jiang: The Chinese market is strategically very important for
Genzyme. We already have several products on the market, some
of which are doing very well. We are also building an R&D Center
in Beijing which will focus on diseases important for China and
other Asian countries. We have been providing some products on
a charitable basis for some time and we are now working with the
Government to achieve sustainable funding mechanisms for serving
patients in these areas.
In the next five years, I think we will have a significant number of
products registered and marketed in China. Our goal is to be the
market leader in the Chinese biotech space.
Ernst & Young: What are the biggest challenges and risks in
India and China today? What advice would you give Western
companies looking to set up local operations and/or partner with
local firms?
Jiang: The biggest challenge for Western companies is to really
understand the local market, including the local culture, available
resources, infrastructure and Government policies. The Chinese
market is not fully mature — R&D infrastructure is being built, and
resource-allocation mechanisms are significantly different from
what we are familiar with in the West.
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