Biocon to form a subsidiary for R&D

"Biocon would form a wholly-owned subsidiary company for research and development in this financial year. The company doesn't want to spin off as a separate firm because the management feels that R&D is still an integral part of the company," a source close to the development said.

Biocon's R&D team is working for developing products for diabetes, cardiovascular, inflammation, oncology and endocrinology.

The firm has four molecules and it would be transferring all of them to the subsidiary company, the source said.

In the last couple of years, Indian pharma majors like Ranbaxy, Sun Pharma, Wockhardt, Glenmark and Nicholas Piramal have split their generic and R&D businesses into two separate firms.

According to pharma analysts, spinning off the R&D into a separate firm would help in reducing the risk profile of the generic business of the company.

At present, domestic pharma companies go for a tie up with foreign firms while developing a drug.

Before a drug is developed, it goes through four phases of trials. At most, Indian players do trials up to phase II beyond that they partner the molecule out with a foreign firm.

The group, Biocon, would be investing Rs 250 crore in this fiscal for its expansion and to get more space in Latin America, Gulf and Asian markets, the source said.

Of the Rs 250 crore, Rs 150 crore would be for Biotech and the rest for group companies.

Biotech is actively looking for acquisitions, too, and it would be up to a maximum of $15 million, the source said.

Biocon shares on Friday closed at Rs 485.65, up 0.06 per cent.