The year-long staged fundraise by Biocon Ltd for its subsidiary ended remarkably in January. Asia’s largest biotech closed the funding round with US$75 million from Abu Dhabi’s state-owned holding company ADQ, which valued Biocon Biologics at US$4.17 billion. The first private equity infusion that began a year ago with True North valuing the four-year-old company at US$3 billion showed that the consummate biotech entrepreneur, Kiran Mazumdar-Shaw, was ready to play by the tech valuation rules.
“I felt if tech companies with little to offer can create so much value, why can’t we create more value,” she says. Syngene, the contract research arm, was listed shortly after Biocon went public; and there was no time to change the business model and raise private capital before going public, she says. “But this time around, I felt we should do it in a way that sets the baseline, creates interest.”
Biocon has swung for the fence for the first time.
In January 2020, Biocon Biologics, which makes copies, or biosimilars, of biotech drugs, set a revenue target of US$1 billion by March 2022. Late last month, when it announced its December quarter results, part of that euphoria had already worn off. While the biosimilars business as a whole grew 11% year-on-year, a decent clip in a tough year, the billion-dollar target looked even more distant when the company said the Biocon Biologics CEO, Christiane Hamacher, was stepping down.
Reason? “Professional differences with the chairperson [Mazumdar-Shaw] on strategic priorities and vision for the company.”
Hamacher was the vice-president of business development at Swiss big pharma Roche before joining Biocon Biologics in March 2019. The 54-year-old CEO came to complement the 67-year-old founder-chairperson’s leadership. The US$40 billion biosimilars opportunity opportunity IQVIA Biosimilars in the United States 2020–2024 Read more is dominated by two kinds of formidable players—big innovator pharma like Amgen, Sanofi, Merck, and capacity-rich contract manufacturers like Samsung and Celltrion. Biocon Biologics is unique in being the only vertically integrated biosimilars company in the world; also, one that doesn’t have very deep pockets.
The market doesn’t wait for anyone to get ready, says Hamacher. “The time is now; the tender is now; exclusivity is now. If you don’t get entry into big markets, you don’t get scale. Your costs won’t go down. It’s a game of volume and speed; quality is a given. Everybody needs to understand speed is important; if you don’t bring it all, you don’t get it.”
Mazumdar-Shaw gets it, but she is hobbled by the size of her business. Biocon Biologics will close the year ending March 2021 with 30% growth and about US$400 million in revenue. “I’ve always cut my coat according to the cloth… Big pharma thinking is very different; it’s about setting up a certain infrastructure. But at Biocon Biologics, the business would not support that kind of infrastructure.
