The $450-million biopharma company, Biocon, is aiming to touch the $1-billion revenue mark over the next five years. Kiran Mazumdar-Shaw, chairman and managing director of Biocon, tells Ajay Sukumaran that demand from the emerging markets, particularly for insulin products, would drive much of the growth. Edited excerpts:
Over the next five years, what would you see as challenges to get to your target of $1 billion in annual revenue?
Basically we are much more confident of delivering on a $1-billion topline than what we would have been a few years ago because there were a lot of regulatory uncertainties. We don’t have a very clear perspective of what the regulators will finally approve in many of the very regulated markets.
But having said that, we are now seeing that rest-of-the-world markets or emerging markets are very lucrative, these are the fastest growing markets. Everyone is focussing on the US and Europe, but they are the slowest growing markets.
Insulin is becoming a very important product for us. One thing we have seen is that after parting ways with Pfizer, our insulin business has surged. That’s because we were actually not able to grow those businesses because Pfizer was not really pursuing those markets. Once Pfizer went, it gave us the option to pursue those markets and we are suddenly seeing a huge growth in insulins.
Basically, now we are finding that we are short of capacity. We are constrained right now by capacity, not by the market. If we had the capacity, the insulin business would be even larger. Once our Malaysia plant comes on stream, it will allow us to address very interesting opportunities.
So the bulk of that demand would come from emerging economies?
Yes. Even if we get into the US and Europe it would take us at least another five years beyond 2018 to really get a big impact from the developed market. Even if you look at 2018, the bulk of the business will come from emerging markets such as Brazil, Mexico, parts of Latin America, South East Asia, Eastern Europe, Russia and China. Those are the big markets. Africa is a big market, we have just launched our product in Kenya.
What’s the plan to expand capacity?
We have a phase 2 plan, which, of course, we will execute once trigger point arrives.
Your research and development expenditure has increased 54% year-on-year in the first half of FY13. Will it grow at this rate