Global biotech industry

• 1973 – Cohen and Boyer perform the first successful recombinant DNA experiment, using bacterial genes

• 1975 – Method for producing monoclonal antibodies developed by Kohler and Milstein.

• 1980 - Modern biotech is characterized by recombinant DNA technology

- The prokaryote model is used to produce synthetic insulin and other medicine, in human form

• 1982 – Humulin is the first biotech drug to be approved by the Food and Drug Administration.

• 2002 - Rice is the first crop to have its genome decoded.

• 2003 – GloFish, the first biotech pet, hits the North American market. Specially bred to detect water pollutants.

• 2004 – November - Korean researchers treat spinal cord injury by transplanting multipotent adult stem cells from an umbilical cord blood.– December – A team of researchers at the University of Paris

develops a method to produce large number of red blood cells from hematopoietic stem cells, creating an environment that mimics the conditions of bone marrow.

• 2005 – – January – Researchers at the University of Wisconsin - Madison

differentiate human blastocyst stem cells into neural stem cells, and finally into spinal motor neuron cells

CEO KIRAN M SHAW

• 1953 – born in Bangalore, India• 1973 – B.Sc in Zoology• 1974 – Master brewer from Ballarat university in Melbourne• 1975-1977 – Trainee brewer in Carlton & United beverages• First Indian woman brew master• 1978 – Joined Biocon Biochemicals limited, Ireland• 1978 - Founded BIOCON India

Journey continues…..

• Collaborated with irish firm Biocon international• Kiran owned 70% and Biocon international 30% of equity• Started BIOCON India from her garage with initial capital of

$200• Started extracting enzyme (papain) from papaya & isinglass (fish

moss) • Export to irish firm• Application for loans was turned down by banks on two counts

– biotechnology was then a new word and the company lacked assets

• 2004 – Biocon went for an IPO which valued the company at $1.1 billion

Why entrepreneur???...

“There are no short cuts to success and there is no substitute for hard work”

• Strong determination• Confident• Willingness to take risk• Talented team• Spirit of adventure• Don’t afraid to fail

Present status of the biotech industry in India

• In 2009-10, the growth was 17 percent, with the biopharma sector - 12 percent, bioagri - 37 percent, bioservices sector - by 28 percent, and bioindustrial sector- 18 percent.

• In the global biotech market, Indian share about- 2%.• The consumption of biotech products in India was $ 4270 mn in 2010 . • The human and animal products segment of the industry alone, the

vaccines market alone is valued at US$ 230 million and is growing at 20 per cent.

• Setting up of The CENTRAL DEPARTMENT OF BIOTECHNOLOGY in 1985.by the Government.

• 15 Indian companies manufacturing 20 DNA recombinant products in domestic markets.

• More than half of the global requirement for hepatitis-B vaccine is supplied by a handful of Indian biotech companies.

Biocon Background• Biocon was founded in November 29th 1978• Focus from enzyme manufacturing to developments of

biopharmaceuticals• In 1989, Biocon became the first Indian biotech company

to receive US funding for proprietary technologies• solid substrate fermentation technology led to a three-

fold expansion by 1996 and Biocon entered the biopharmaceuticals and statins segments.

• 1st in India & 20th in the world in terms of revenue & market capitalization

• Joint venture between Leslie Auchincloss and Kiran Majumdar

Mission : to be an integrated biotechnology enterprise of global distinction

Essential to this mission is excellence in Intellectual asset creation through discovery, research

and development State-of-the-art manufacturing capabilities Internationally benchmarked quality and regulatory systems New medical insight through disease specific

clinical research Customer relationship through outstanding products

and services Human resource development through training,

mentoring and empowering Management of research and business partnership

HISTORY & MILESTONES• 29th November, 1978 – Biocon’s founding day• 1979 – 1st Indian company to export microbial enzymes to USA & Europe• 1993 – 1st company to receive ISO-9001 • 1994 - Syngene, a Biocon subsidiary, is India's first custom

research company in drug discovery• 1996 – success got 3 fold expansion. Biocon's proprietary bioreactor, the

PlaFractor, receives a US patent • 2000 – establishes Clinigene (clinical research organization)• 2002 – Clinigen labs first to receive CAP accreditation• 2003 – first to develop artificial human insulin• 2006 – inaugurates Biocon Biopharmaceuticals at Biocon park• 2010 – partnership with Malaysia’s BiotechCorp• 2011 - Biocon divests its stake in its German subsidiary, AxiCorp

GmbH, to the existing group of promoter shareholders

BIOCON AND ITS SUBSIDIARIESBIOCON LIMITED

Syngene International

Ltd (100%)

Clinigene International

ltd (100%)

Biocon BioPharmaceuticals

Pvt ltd (100%)

NeoBiocon FZ LLC (50%)

Biocon SDN. BHD (100%)

Biocon SA (100%)Biocon Research ltd (100%)

Syngene Clinigene Biocon Pre clinical discovery Clinical Research Commercialization• Chemistry - Medicinal chemistry - Regulatory affairs - Research Collaboration - Custom synthesis - Process R & D - Early phase Development - Product Development - Clinical supply Manufacture - Analytical Services - Medical Monitoring - Process Development - Polymer Chemistry - Clinical Data Management - Manufacturing• Biology - Molecular Biology - Bioanalytical Research - Regulatory Filing - Protein Sciences Laboratory - Cell line services - Central Laboratory - Marketing - Assay services - eADMET & PK studies - Integrated eClinical Services - Custom Manufacturing - Biologics - Licensing

PRODUCTS AND SERVICES

• Active Pharmaceutical Ingredients (APIs) Cardiovascular Agents: Rosuvastatin, Atorvastatin,

Provastatin Anti-obesity agents: Orlistat Ophthalmics: Latanoprost & Travoprost Peptides: Atosiban & Exenatode Anti-diabetic Agents: Acarbose & Plogitazon

• Biological Human Insulin : regular Insulin & Insulin NPH Monoclonal Antibodies Streptokinase

Revenue (in crores)2005 2006 2007 2008 2009 2010 2011

Sales

Bio pharmaceutical

557 603 728 787 1372 2036 2298

Enzyme 90 85 95 46 - - -

Research &

Technical66 100 163 220 237 332 473

Total 713 788 986 1054 1609 2368 2771

Other Income 15 5 4 36 64 37 43

Revenue 728 793 990 1090 1673 2405 2814

BIOCON REVENUE (in crores)

2005 2006 2007 2008 2009 2010 20110

500

1000

1500

2000

2500

3000

728 793990

1090

1637

2405

2814

Biocon’s income expressed as a percentage of Biocon’s total

84.6%

4.9%

4.8%5.6%

BiopharmaceuticalsEnzymeResearch ServiceOthers

Profit Before tax

2005 2006 2007 2008 2009 2010 2011

Profit Before tax (Rs. in Cr)

216 205 217 238 260 352 447

2575

125175225275325375425

216 205 217238 260

352447

Profit Before tax ( Rs. in Cr)

Net Profit

2005 2006 2007 2008 2009 2010 2011

Net Profit (Rs. In cr.)

198 174 200 464 93 293 368

2575

125175225275325375425475



SUMMARY OF BALANCE SHEETRs. In cr 2005 2006 2007 2008 2009 2010 2011

Current Assets 741 888 1069 1474 1511 1758 2039

Current Liabilitie

s249 261 275 300 437 580 1100

Current ratio 2.9 3.4 3.8 4.9 3.45 3.03 1.85

So Biocon has almost 3.33 crore of asset for 1 crore of liability, which shows good signal for investors and ability to diversify

SUMMARY OF CASH FLOWRs. In cr 2007 2008 2009 2010 2011

Net cash provided by operating activities 155 318 95 441 809

Net cash used for investing activities (199) (340) (232) (226) (242)

Cash flows from financing activities 51 23 137 (85) (262)

Net Change in Cash and Cash Equivalents 7 1 - 129 305

Foreign Currency Translation Reserve - - 2 (1) 6

Cash & cash equivalent at the beginning of the year 2 9 10 12 140

Cash & cash equivalent at the end of the year 9 10 12 140 451

Competitors

SWOT Analysis

• Strength: Low Price : Insugen price of $ 2.5 per 10 ml Debt free & cash rich status Rich & expanding new drug pipeline Biocon’s R&D expertise Biocon has a patent fermentation process

• Weakness: Statin (which lower the amount of cholesterol in blood)

dependent don’t have patent for statin molecules Limited clientele Revenue profile is highly concentrated

SWOT ANALYSIS

• Opportunity:Market potential : Statins market likely to grow at a rate of 18% in the next

year India has the most quantity & diversity type of diabetesGreat manufacturing capabilities Insulin injections are a painful processExpiration of patents worldwide

• Threats:-Regulatory riskCompetitive threatsRaw material & fuel costs are linked to global commodity pricesDollar depreciation rising personnel costs & increasing operational

overheads on account of oil & power Wockhardt already has launched insulin product in market so, Biocon has

to face serious competition

Earning per share

2005 2006 2007 2008 2009 2010 201105

101520253035404550

1813

16

44

612

23

Earning per share

Earning per share

The earning per share of BIOCON is almost stable giving around Rs. 19. This is good signal for going long and opportunity for investor

Analysis with competitor (earning per share)

Biocon Sun Pharma Cipla Wockhardt0

10

20

30

40

50

60

70

19

60

10

32

Earning per shares (Rs. In Cr.)

Earning per shares (Rs. In Cr.)

Analysis with competitors(Sales and net profit)

Biocon Sun pharma Cipla Wockhardt0

1000

2000

3000

4000

5000

6000

14701728

5128

3920

256

1128728

473

Sales Turnover (In cr.)Net Profit (Rs. In Cr.)

BCG matrix…..

BIOCON can be put in the BCG STARS as the company had very high growth opportunities and high market share.

Conclusion

• By analyzing financial data and strength of BIOCON we can conclude that financial of biocon is good and fundamental are showing a bright future for this company.

• Analysis also shows an upward trend in market value of this company.

• Investors can reap good profit from this company since in coming future pharmaceutical sector will be seeing tremendous changes.

Thank you

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