Biocon buys out Cuban firm in JV, hopes to break even in 5 yrs

Biocon Ltd, the Bangalore-based biotechnology company, is taking full ownership of its subsidiary, Biocon Biopharmaceuticals Pvt Ltd (BBPL) by buying the remaining 49 per cent stake held by its Cuban joint venture partner, CIMAB SA. Biocon declined to spell out the price of this stake, but asserted that it would not impact its bottom line in this quarter.

CIMAB SA is a global player focused on the commercialisation of biopharmaceutical products, specially monoclonal antibodies and other recombinant proteins, for the diagnosis and treatment of cancer and other diseases related to the immune system. Biocon’s partnership with CIMAB SA resulted in the launch of a monoclonal antibody ‘BIOMAb’ for the treatment of head and neck cancer. Biocon also successfully commercialised ERYPO ( Erythropoietin), a hormone that promotes the formation of red blood cells in the bone marrow, in India.

CIMAB picked up the 49 per cent stake in 2006. The venture manufactures monoclonal antibodies, which is used to suppress cancerous cell in a human body. BBPL has been a drag on Biocon’s revenue and posted a loss of Rs 5.1 crore in 2008-09 financial year. Biocon CMD Kiran Mazumdar-Shaw hoped that with this consolidation, this subsidiary would achieve breakeven in the next three-five years. “Though the Bangalore facility manufactures products for our Cuban partner, it is not a financially sustainable entity. So, both the parties decided to enter into such arrangement as a result of which Biocon will get enough manufacturing space for bio-similars,” Shaw added.

She said Biocon’s increasing importance on biosimilars had prompted such decision and the entity would continue to support CIMAB in its manufacturing needs. Biocon, with many novel drugs research programmes, will continue to collaborate with its Cuban partner in future.

“Our collaboration with our Cuban partner will continue in the field of novel drugs like Anti-CD6 and cancer drugs,” Shaw said. Biocon, she noted, was also looking out for acquisitions in both domestic and overseas markets. It recently tied up with Malaysia’s Biotechnology Corporation to explore opportunities in biotechnology space in that country.