 "Kiran Mazumdar-Shaw")
Amid uncertainties around potential tariffs by the United States (US) on pharmaceuticals, Biocon Chairperson Kiran Mazumdar-Shaw says her firm is well positioned to respond to them. In a video interview with Sohini Das and Aneeka Chatterjee, Shaw speaks about the company’s strategic vision on generics, glucagon-like peptide-1 (GLP-1) plans, etc. Edited excerpts.
How do you see the United States (US) tariffs playing out and how are you placed to face them?
It is difficult to speculate on the potential impact of those because the industry is waiting for clarity. Until specific announcements are made, it is premature to draw conclusions about how this might affect the sector, especially in relation to generics.
That said, as a company, we are assessing our global supply-chain strategy. We have a strong and growing presence in the US, including a generics facility in Cranbury, New Jersey. Syngene (a subsidiary) has invested in a biologics facility in Baltimore, and it is being considered a manufacturing base for biosimilars targeting the US market.
Additionally, our partnership with Civica, which has a local insulin-manufacturing base, supports our ability to mitigate potential tariff-related impacts.
We remain confident in our global footprint and are well positioned to respond once more details are available.
What is the update on the decision to merge Biocon Biologics with Biocon or list the biologics arm?
The board has appointed merchant bankers and advisors to take a final call on the way forward in value unlocking. As soon as the final decision is taken, we will then disclose it.
How are you planning to take advantage of the growing insulin and GLP-1 product demand globally?
The demand for insulin is surging, and we are in a unique position to cater to this rising demand. As you know, our drug product (for insulin) expansion in Malaysia is set to come on stream by the end of this year, and we will be able to use that for many opportunities that lie ahead, especially in emerging markets. So from that point of view, we are confident we’ll see a strong increase in our insulin business this financial year and beyond.
The insulin business requires large-scale capacity and economies of scale. Very few companies in the world, apart from the innovators, have that.
Now, combining that with GLP-1s, the generics business has made significant investment in drug substance and drug product, both API (active pharma ingredient) and finished dosage. That will start to play out in the coming years.
While Liraglutide is a near-term opportunity, the bigger opportunity is semaglutide, which is opening up in emerging markets and Canada next financial year. That is what we are focused on.
Given the growing excitement around GLP-1 drugs, is Biocon investing in expanding its device capacity to meet this anticipated demand?
The new facility Biocon has invested in includes both GLP-1 API and drug-product capabilities, extending to devices. We have built a large-scale drug-product facility equipped with device capabilities, specifically for GLP-1s. So, we are well prepared for the market opening and entry. In the first quarter, we had significant operating expenses, which affected earnings before interest, tax, depreciation and amortisation, and the profitability of our generics business — because we are preparing for the GLP-1 opportunity. That is where we’re directing our investment. We believe the return on capital (RoC) from these investments will be strong and quick.
Biotech funding in the early stage is facing challenges. How does that impact Syngene?
Syngene is well positioned as it has an interesting and integrated drug-discovery business under the banner of SynVent, which is regarded as a strong research partner, especially for many of the new models emerging in biotech.
You recently saw companies like Bristol Myers Squibb (BMS), Merck Sharp & Dohme, and others spinning out venture models where they partner many of their assets off balance sheet. That’s exactly where Syngene fits in. I don’t think we are seeing a slowdown. In fact, we have been working effectively with many of our partners, including mid-sized and smaller biotech companies that are venture-funded and that model is working well.
Yes, we did feel the impact when the biotech sector was going through funding challenges, which affected Syngene’s growth last financial year. But this year, we have retooled our strategy, and are beginning to see promising growth potential.
Are you comfortably placed with the raising of ₹4,500 crore or there are further plans in FY27?
Our balance sheet is strong. We will be retiring most of the structured equity investors, and with that, you’ll also see a significant add-back of the interest provisioning we’ve been making. Our business is poised for robust growth.
We do not foresee the need for a new fundraiser. However, we do plan to use some of our profits to reduce debt, not bonds, but primarily bank debt.
In your long career have you ever faced this kind of uncertainty in geopolitics and tariffs?
I do not think anyone has faced such unpredictability but that is something which all of us now need to learn to deal with.
As an entrepreneur, there will always be many challenges but one needs to be calm, sensible and look at it in an objective way.
