The Hindu Business Line : Biocon’s new research co to inherit key drugs

Bangalore, July 10 Biocon Ltd’s proposal to set up a fully-owned R&D company will mean that the new entity will inherit a major pipeline of potential therapies for cancer, diabetes among a dozen ongoing discovery programmes.

Among the innovation drugs and bio-similars under development that would go to the new entity, Biocon Research Ltd, are the ambitious oral or tablet insulin ‘IN105’; insulin and analogue; post-heart attack clot-busting streptokinase and reteplase; cancer-related BioMab EGFR, GCSF, BVX-20 and erythropoietin to treat anaemia in terminally ill patients.

Insulin, branded as Insugen, and BioMab are already in the market. Only the insulin analogue, glargine, is due to be approved by the domestic drug regulator, it is learnt.

Biocon’s officials had told analysts in April of a capital investment of Rs 125-150 crore this fiscal, mainly for “a dedicated R&D facility at the SEZ”.

Biocon Research — with a likely investment of Rs 70-80 crore — would be its sixth subsidiary after contract research arm Syngene, clinical research arm Clinigene, and joint ventures AxiCorp, NeoBiocon and Biocon Biopharmaceuticals.

Reasons

It is being spun out of the research division mainly for tax reasons, in particular for licensing in new markets. It is expected to have some of the existing R&D employees as well as new recruits. It will be tasked with the development and licensing of these and future R&D products and capture revenue from these streams.

The parent will retain the process/product development, manufacturing and domestic marketing of all its formulations. Biocon has already initiated part of its overseas marketing channels through NeoBiocon for the GCC countries and the German pharma and distribution company AxiCorp GmbH, in which it holds 70 per cent stake.

The company was carving out the research entity “with a view to achieving greater focus on its research programmers and as part of its normal operational activities. The creation of the new entity is underway and further modalities are being worked out”, it said in an announcement to the Bombay Stock Exchange this week.

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