BRIC, LatAm countries to drive Biocon's future growth

Bangalore-based biotechnology firm Biocon Ltd has posted a three-fold rise in its net profit during the fourth quarter on the back of sound growth in all verticals of its business. Kiran Mazumdar-Shaw spoke to Debasis Mohapatra on the company’s growth plans and other other issues.

What is your overall outlook of the market? Will Biocon be able to sustain the momentum this fiscal?
We posted very good numbers last fiscal and hope to maintain the growth momentum this year too. While our pharma business recorded a rise of 51 per cent last fiscal, contract research posted a 25 per cent growth. Drugs in different verticals, be it insulin, statins or immunosuppressants, are showing encouraging sales volume.

Which geographies will drive growth for Biocon in pharmaceutical space?
Presently, the US and Europe account for 50 per cent of drug sales with about 40 per cent contribution from the emerging market and rest coming from India. Our focus will be on the emerging markets of Brazil, Russia, China and Latin America to drive growth in future. Though domestic market shows a robust growth, the share in the total revenues will remain in the range of 10-15 per cent in the near future.

Biocon gives a lot of emphasis to biosimilars to fuel future growth. However, US healthcare bill has a provision of 12 years of exclusivity for biosimilars. Is it a matter of concern for you?
It is a matter of concern for all biosimilar players. We obviously wanted it to be less than 10 years. However, there are many opportunities in this space despite 12 years of the exclusivity provision. We hope that nobody will be able to enter US market before 2015 and by that time quite a number of products will come out of the 12-year exclusivity period.

Many of your peers in the pharma space are betting big on contract manufacturing to drive growth. This space has also expanded after approval of US healthcare bill. Why is Biocon not bullish on this space?
We will enter the contract manufacturing space but in very high end part of the business. We have specialised skills and would like to add value to that skill. As contract manufacturing is a very commoditised business with low margins, we like to have a mix of everything than only focusing on this segment.

What is your investment plans in the R&D space this fiscal? Any plans to raise your headcount this year?
Our investment last fiscal in R&D was Rs 125 crore and we expect it to be around Rs 200 crore this fiscal. On the hiring front, we plan to add 750-1,000 people this fiscal as part of our business expansion plans.