Contents

Biocon: Global Ambitions with Indian Roots Indian Pharmaceutical Evolution

Biocon History Drug Development Process

Oral Insulin IN -105

Mgmt Concept in the Case & its effectiveness
Core Capabilities and weakness required for partnership Three Questions and Our Solution and Analyze their Strategic Alliance

Biocon: Global Ambitions with Indian Roots
Mission: “To be an integrated biotechnology enterprise of global distinction”

Value Creation along 3 axes:
Reducing therapy costs of chronic diseases. (diabetes, cancer & auto-immune diseases)

Strategic Research and marketing partnerships that provide global access

Leveraging the India advantage to deliver high value, licensable R&D assets

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Indian Pharmaceutical Evolution
• Patent and Design Act of 1911
Early 1910’s

After 1947

• Patent Act of 1970 • Drug price Capped • Local Companies impact • Process Development • Product Infrastructure Creation • Export Initiatives

19701990’s

Growth Phase

• Economic Liberalization 1990’s • Entry to World Trade Organization

• Decline Profitability in Generics Business Innovation • Discovery Research
Era

Biocon History
 Biocon India ---joint venture between Biocon Biochemicals Ltd. of Ireland and an Indian entrepreneur, Kiran Mazumdar-Shaw  first Indian company to manufacture and export enzymes to USA and Europe  Introduced Insugen  creates a buzz in the stock market  divested its enzyme business to Danish firm and set up a wholly owned subsidiary in Swizerland,Biocon SA ,which acquires a 71% stake in German pharmaceutical company, AxiCorp GmbH

1978-1988

1988-1999

1999-2009

2009-2013

 Unilever Plc. acquires Biocon Biochemicals Ltd. in Ireland & merges it with its subsidiary, Quest International, later divested the ownership  Biocon establishes Syngene International Pvt. Ltd. as a Custom research Company (CRC)

 Enhances Partnership with Mylan through Strategic Collaboration for Insulin Products  Partnered with CytoSorbents to Market CytoSorb® - A 'First-in-Class' Therapy for Sepsis Management  Entered into an option agreement with Bristol-Myers Squibb for Biocon's IN105,

Drug Discovery Process

IN-105 Program
IN-105 Oral Insulin: a conjugated insulin molecule that is orally delivered and targeted towards liver which is a central organ in glucose metabolism.

2012

2009

Strategic alliance with Bristol-Myers Squibb and signed option’ agreement

2005

• Got positive data from Phase II studies in India, Decide to move to phase III or not • Acquired Nobex’s intellectual property and start in-house research, IN-105 was borned

2003

2002

• Signed a formal agreement with Nobex to collaborate on the HIM2

• oral insulin – idea generation

IN-105 Program Progress

Biocon: Management Framework
Title in here Business Strategy
Focus on High-risk innovation

Organic design
( Low formalization, Low standardization, Flat organization, cross function team, Free flow of information)

Organization Design & Structure

Business units structure
( Small molecules, Bio Similar, Brand Formulations, Novel Molecules and Research Services)

Title in here
Organization Culture Entrepreneurial culture
Open communication, informal atmosphere, agility in decision making, synergy amongst functions

The Innovation Matrix: A Strategic Framework

Platform Innovation

Radical Innovation

Incremental Innovation

Architecture Innovation

Challenges for Biocon and IN-105
Phase III Investment Clinical Trials India Vs. US

Collaboration or Alone

• Positive data from Phase II studies. • High Risk Involved • Most Expensive Phase of the clinical trials

• Substantial cost of administrations, hospitals & doctor. • India – $2.2-$2.7 million U.S dollars for 500 patients.

• Need for faster clinical trials as IN-105 patent expires in 2025. • Guidance through regulatory processes and commercialization of the drug • Bridging capability gap

Capabilities & Collaboration Models
o Integrated Drug Discovery and Development o Syngene- Clinigene axis

Integrated Platforms

o State-of-the-art manufacturing capabilities o India’s largest Contact Research Organization (CRO) with 1,500 + scientists.

Niche Offerings

o Commercial scale production of NCEs o Formulation development

Evolving Services

o Dedicated/customized infrastructure o Risk sharing: Milestone based o Incubation: IP sharing

Customized models

Strategic Alliance
Go Alone
 Advantages o Positive Phase III results will elevate the valuation of the molecule o Valuation increases exponentially along the development curve

Go with a partner
 Advantages o Global Partner with capital infusion o Dedicated R & D Infrastructure o Guidance and speed during critical stages of trials o Increased probability of success  Disadvantages o Lower deal value at trial phases o Risks to IP protection o Differing operational structures may strain ability to deal with operational, or competitive issues

 Disadvantages
o Significant risk of failure o Insufficient funds o Uncertainty over manufacturing at a lower cost o Delay to market erodes peak sales value

Strategic Alliance
IN-105 Option Agreement: BMS (First-in-Class Oral Prandial Insulin)
Combines Biocon's novel asset and development experience with BMS’ novel drug development, regulatory & commercialization capabilities.

Biocon will continue global development of the molecule through Phase II via redesigned trials.

Partnership encompasses Financial, Strategic and Clinical Support throughout the development phase
BMS will have an exclusive option post phase II to further develop & commercialise the asset worldwide (excl. India) Biocon will receive licensing fee in addition to potential regulatory & commercialization milestones, when BMS exercises its option

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