Biocon case study

For the exclusive use of V. UPADHYAY, 2019. 9-508-026 REV: NOVEMBER 26, 2008 SUNIL GUPTA DAS NARAYANDAS Biocon: Launching a New Cancer Drug in India In summer 2006, Dr. Kiran Mazumdar-Shaw, CEO of Biocon Limited, was reviewing the phase-2 results of the new cancer drug, BIOMAb. The results were even more impressive than she had expected. Based on these data the company had filed for accelerated approval. Early indications suggested that the Drug Controller General of India (DCGI), the equivalent of the US Food and Drug Administration (FDA), would likely grant permission in the next few months to market BIOMAb in India. Mazumdar-Shaw knew the euphoria would be short-lived if Biocon failed to make good decisions in two critical areas. First, many senior executives believed that even if BIOMAb received accelerated approval from DCGI based on the phase-2 results, the firm should stay on track and continue phase-3 trials to gather more evidence of BIOMAb’s safety and efficacy. They maintained that for a small biotech company with no history in this area, it was critical to build strong evidence to compete against the large multinational companies. Others, though, favored an early launch, arguing against expending precious time and resources on further clinical trials and risk losing the first mover advantage. Second, various aspects of product launch strategy for BIOMAb had yet to be determined. This was Biocon’s first launch of a proprietary drug and Mazumdar-Shaw wanted to ensure that it was successful. She was anxiously awaiting recommendations from the BIOMAb marketing team on issues of product, pricing, sales force, channel, and communications strategies. Evolution of Biocon Biocon India was incorporated in November 1978 as a joint venture between Biocon Biochemicals of Ireland and Dr. Mazumdar-Shaw, an Indian entrepreneur. In 1979, Biocon became the first Indian company to manufacture and export to the United States and Europe enzymes for the food processing industry. In 1989, Unilever acquired Biocon Biochemicals in Ireland and held an equity share in Biocon India. From 1978 to 1997, during which time it was primarily an enzyme manufacturing company, Biocon developed expertise in various fermentation processes. ________________________________________________________________________________________________________________ Professors Sunil Gupta and Das Narayandas prepared this case with the help of Sara Simonds, Research Associate, and Prabhakar Kothandaraman, Interim Executive Director, India Research Center. HBS cases are developed solely as the basis for class discussion. Select numbers in the case have been disguised for confidentiality purposes. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2007, 2008 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. This document is authorized for use only by VISHAL UPADHYAY in Mktg 3000(online) Mktg Is Everything - Summer 2019 taught by Juan Montermoso, Santa Clara University from May 2019 to Sep 2019. For the exclusive use of V. UPADHYAY, 2019. 508-026 Biocon: Launching a New Cancer Drug in India Statins Syngene International, a subsidiary custom research company, was established by Biocon in 1994 to address the growing need for outsourced R&D in the pharmaceutical sector. In 1996, Biocon leveraged its technology platform in fermentation to enter biopharmaceuticals.1 Mazumdar-Shaw explained her rationale for entering this new business. During the mid-1990s we went through a visionary exercise. We recognized that although we were well known in enzymes, the market opportunity in this area was low. Even today, the global enzyme market is about $2 billion with an annual growth rate of 5%-10%. As a specialty enzyme company, the total addressable market for us is only about $1 billion. Even if we achieve a 10%-15% global market share, the maximum potential for us is only about $100$150 million. Add to it the commoditization of enzymes, and the profit potential looks limited.