Biocon lines up Rs 200 cr capex

Bangalore-headquartered biopharmaceutical company, Biocon Limited, has lined up a capital expenditure of Rs 150-200 crore for both manufacturing and to set up a research and development (R&D) facility during the current financial year .

The company would invest Rs 100 crore to set up an integrated R&D facility at Bangalore, Kiran Mazumdar Shaw, chairperson and managing director, Biocon, said at the three-day international congress on patient safety that began here today. The event is being organised by the Apollo Hospitals group.

Shaw said Biocon would hire 500-600 scientists for the R&D facility and invest $100 million to develop its insulin drug in the next 3-4 years.

The recent move of the National Pharmaceutical Pricing Authority allowing an increase in prices of 62 drugs that are mainly based on indigenously-manufactured insulin would benefit Biocon.

On the approval of an 18 per cent increase in price of its insulin drug from NPPA, Shaw said the impact of this could only be seen after the first quarter of this financial year.

“We are expecting the same percentage increase, around 18 per cent, in the sales margin,” she said. Biocon manufactures bulk drugs from indigenously-produced insulin, which is used in the treatment of diabetes, and a few drugs for tuberculosis.

“We need to go beyond cost-cutting as you cannot create 16 per cent margin out of nothing. It would have a long term impact on insulin, vaccine, anti-body production, research and development, and diagnostics,” she said. Biocon is looking at a product mix change this year, and also how to deal with product prices. The insulin is expected to be launched by Pfizer India this year.

The company would invest Rs 50 crore in API (active pharmaceutical ingredient) at Hyderabad in the next two years. It has already invested Rs 50 crore in its Hyderabad centre.