Compliance culture should be driven from the top in pharma companies: Kiran Mazumdar Shaw

Interview with chairperson, Biocon

Indian drug companies need to develop a strong compliance culture to avoid adverse action from US Federal Drug Administration (FDA) and other regulators, says Biocon chairperson Kiran Mazumdar-Shaw. Her comments came after Syngene International listing on Tuesday with a 24 per cent premium to its offer price and with a market value of Rs 6,200 crore. In an interview with Aneesh Phadnis and Dev Chatterjee, Shaw talks about Syngene's future plans. Edited excerpts:

Syngene has received very good response from the investors today... Are you surprised with the market reaction to Syngene listing?

I was secretly hoping it would get this kind of response. When there was an overwhelming response to the issue, there was expectation that there will be a spurt on the listing day. The initial public offering (IPO) had received very good response from the investors from all over the world which gave us the confidence that the listing will be good.

The good response to Syngene comes at a time when Indian drug companies are under regulatory scanner and recently the European Union banned 70 drugs that underwent trials at an another Indian facility. How are you ring-fencing your company?

We are proud of compliance culture at both Biocon and Syngene. At Syngene, we had five FDA inspections in the past year and there was no adverse observation. Just two weeks ago, there was a surveillance audit in the clinical trials division. The FDA officials told us this audit will typify FDA audits as they are concerned about compliance. The inspection was done for two weeks and there were no adverse observations. They complimented us on our compliance. Compliance is a cultural issue and has to flow down from the top. If the compliance culture is missing at the top it may lead to problems later. Our clients are delighted as we have received a clean chit from the FDA.

With Biocon and now Syngene with a market value of Rs 6,200 crore, you have two listed entities in India… What is your next big idea?

Biocon does have an ambitious novel molecules business, which is exciting, and, going forward, we may park the entire programme into a different company. The firm has already introduced two novel biologics for anti-cancer therapy and psoriasis.

Syngene has been planning to set up a new manufacturing plant in Mangalore… Will you use the proceeds of the IPO for this plant?

Our clients are relying on Syngene for process and product innovation. The natural extension is the contract research and manufacturing services model. Right now, we are supporting clinical development process. If they make it to the market, we have to scale up technology and processes. We expect the Mangalore facility to come up in two years. Our investment will be about $100 million. The proceeds of the IPO will be used by Biocon for biosimilar development and capital expenditure.  We need to expand in antibodies and we have the manufacturing space in Bangalore for expansion.