CASE STUDY PRESENTATION BIOCON: LAUNCHING A NEW CANCER DRUG IN INDIA

Sales Management (Term-6)

Monday, April 30, 2012

Naushina Virani Vishal Pathak Shariq Vignesh.R Saumya Biswas Purnendu Rout
1

Sales Management (Term-6)

Monday, April 30, 2012

GIST OF THE CASE

BIOCON India (incorporation 1978) was the first Indian manufacturer and exporter of ENZYMES to U.S and Europe.lateron developed expertise in FERMENTATION processes. Many R&D companies established by BIOCON. Then entered in to biopharmaceuticals and then statins and then moved to insulin. BIOCON shifted to proprietary drug i.e. BIOMAb(cancer drug). Challenges in front of BIOCON for launching BIOMAb1.Approval 2.new technology. 3.launching decision. 4.financial requirements. 5.marketing and selling.

Sales Management (Term-6)

Monday, April 30, 2012

Biocons Founding Year 1978 JV between Biocon Biochemical's and Dr.. Mazumdar Shaw 197 Biocon becomes the first Indian company to manufacture and export enzymes to USA and Europe 9 198 Unilever plc. acquires Biocon Biochemical's Ltd. in Ireland and merges it with its subsidiary 9 199 Biocon scales up its in-house research programme, based on a proprietary solid substrate fermentation technology, from pilot to plant level 0 199 Biocon establishes Syngene International Pvt. Ltd. as a Custom research Company (CRC) to address the growing need for outsourced R&D in the pharmaceutical sector 4 Biocon's proprietary fermentation plant leads to a 3-fold expansion. 199 6 Leverages its technology platform to enter biopharmaceuticals and statins Commissions its first fully automated submerged fermentation plant to produce specialty pharmaceuticals. 200 0 Establishes Clinigene 200 Becomes the first Indian company to be approved by US FDA for the manufacture of lovastatin, a cholesterol-lowering molecule 1 200 The first company worldwide to develop human insulin on a Pichia expression system 3 200 Creates a buzz in the stock market in March 2004 with its hugely successful IPO. 4 200 Signs a commercial agreement for supply of insulin API to Asia, Africa and the Middle East. 5 Inaugurates Biocon Biopharmaceuticals. 200 Announces a licensing agreement with Bayer HealthCare (BHC) for the exclusive marketing and trademark rights for 3 6 INSUGEN for the Chinese market.

Sales Management (Term-6)

Monday, April 30, 2012

BIOCONS BUSINESS STRATEGY

Developing Non-Infringing process Technology GENERIC BIOPHARMACEUTICALS (Short to Medium Term)

Focus on Drug Molecules coming off patent

Develop globally competitive process technologies.

COLLABORATIVE DEVELOPMENT/ INLICENCING (Medium to Long Term)

Develop products in collaboration with other partners

DISCOVERY (Long Term)

Discover and develop New Drug Molecules

Sales Management (Term-6)

Monday, April 30, 2012

BIOMAB (CANCER DRUG)

Monoclonal Antibodies that target Cancer cells a research by CIM Cuba Formed a Joint Venture with CIMAB (Canadian R&D Company) to develop and marketing of BIOMAb in India First proprietary drug to be launched by an Indian Company, specially aimed at head and neck cancer treatment. Requirements of BIOMAb $ 25 Million for Manufacturing plant, according to VP of Finance cost of goods 25% of Revenue R&D 15% of Revenue Marketing 25-30% of Revenue
5

Sales Management (Term-6)

Monday, April 30, 2012

MARKET POTENTIAL OF BIOMAB IN INDIA, 2007

Cancer Type Incidence Affordability No. of Patients Head and Neck 190,000 1% 1,900 Lung 39,205 1.85% 725 Colorectal 37,213 3% 1,116 Brain 22,150 2% 443 Pancreas 10,325 1.25% 130
6

CANCER KNOWN MEDICALLY AS A MALIGNANT NEOPLASM, IS A TERM FOR A LARGE GROUP OF DIFFERENT DISEASES, ALL INVOLVING UNREGULATED CELL GROWTH. IN CANCER, CELLS DIVIDE AND GROW UNCONTROLLABLY, FORMING MALIGNANT TUMORS, AND INVADE NEARBY PARTS OF THE BODY.

Types of cancer Blood Cancer Bone Cancer Brain Cancer Breast Cancer Eye Cancer: Respiratory Cancers Head and Neck Cancer

Sales Management (Term-6)

Monday, April 30, 2012

ACCORDING TO KIDWAI MEMORIAL INSTITUTE OF ONCOLOGY

WORLD: It is estimated that about 9 million new cancer cases are diagnosed every year and over 4.5 million people die from cancer each year in the world. INDIA: The estimated number of new cancers in India per year is about 7 lakhs and over 3.5 lakhs people die of cancer each year. Out of these 7 lakhs new cancers about 2.3 lakhs (33%) cancers are tobacco related. KARNATAKA: There would be about 1.5 lakhs cancer cases at any given time in Karnataka and about 35,000 new cancer cases are added to this pool each year.
8

Sales Management (Term-6)

Monday, April 30, 2012

ACCORDING TO WHO
More than 7.6 million of the 58 million died due to cancer in 2005. Cancer deaths excepted to rise 9 million in 2015, and 11.4 million in 2030. Cancer ,the second leading cause after heart disease. In 2003,more than half a million or 22% of all deaths due to cancer in united states.

Sales Management (Term-6)

Monday, April 30, 2012

SURVIVAL AND PREVENTION

According to WHO,40% of cancers could be prevented by life style changes such as quitting smoking and alcohol. Treatment Surgery Radiotherapy Chemotherapy Biological therapy

10

Sales Management (Term-6)

Monday, April 30, 2012

COMPETITORS

ERBITUX is the main competitor, developed in U.S for colorectal cancer and approved by USFDA in 2004. Available in 53 Countries Germany, US, India Worldwide sales in 2006 exceeded $ 1 Billion. In 2006 got approval from European Medicine Agency & USFDA for Head & Neck Cancer.

BIOMAbs advantages over competitor Phase-2 results shown 100% response BIOMAb did not produce skin rashes BIOMAb is first proprietary drug for Indian patients.
11

Sales Management (Term-6)

Monday, April 30, 2012

4 PS OF MARKETING
Product
Launch timing and market selection decisions linked with product portfolio

Place
BIOCONCFA--Wholesalers--retail---hospital pharmacy---doctor.

4 Ps Price
Affordable pricing which also meets corporate objective

Promotion
1.Through Oncologist. 2.providing information to patients regarding disease.

12

PRODUCT (LAUNCH TIMING & MARKET SELECTION DECISION)

Immediate launch of BIOMAb Advantages First mover advantage No competition during entry Launch a group of Cancer Generic First and BIOMAb Later Advantages Simultaneous launch Advantages

Sales Management (Term-6)

Monday, April 30, 2012

Opportunity to strengthen sales Sales representative are likely capabilities before the launch to get more face time with the of BIOMAb doctor Availability of phase three results will justify the launch of BIOMAb later

Disadvantages Biocon has limited sales capabilities and zero experience in selling and marketing oncology drugs

Disadvantages First mover advantage lost

Disadvantages It may dilute Biocons image as the first Indian company to launch a proprietary drug
13

Sales Management (Term-6)

Monday, April 30, 2012

PLACE

Channels:The product should be sold directly the Doctors, as direct selling will increase less amount of costs
Market size is not too large, so 24 x 7 services may not be required. Traditional Channel of Distribution:
Biocon Wholesale r Retail/hospital Pharmacy Doctor

If the product sold through above traditional channel of distribution, it will increase the cost to large amount.
14

Sales Management (Term-6)

Monday, April 30, 2012

PRICE
Price:

Price of the product should be competitive

Company should also focus on ROI, while deciding the pricing policy of the product.

15

Sales Management (Term-6)

Monday, April 30, 2012

PROMOTION

Marketing the Product.

Sales representatives of the company should educate the patients and their families. Sales reps should focus on explaining the product and usage. The contact time and frequency is at its highest during the treatment period.
16

Sales Management (Term-6)

Monday, April 30, 2012

17

Sales Management (Term-6)

Monday, April 30, 2012

BIOCONS PROFIT & LOSS FOR THE YEAR ENDING MARCH 31, 2006, 2005, 2004
Particulars Rs. In Thousands* Income Gross Sales Less: Excise Duty Net Sales Technical Licencing/Contract Research Fee Other Income 2006 2005 2004

6,824,047 5,309,108 378,423 290,284 6,445,624 5,018,824 1,474 6,382 56,911 156,513 9,256 6,931,835 6,603,611 5,034,462

7,246,713 371,789 6,874,924

Expe nditure Material Costs Employee Costs Operating and Other Expenses Interest and Finance Charges

3,790,109 3,441,546 2,553,672 420,600 420,935 352,847 867,009 673,189 498,934 16,887 19,931 15,677 5,094,605 4,555,601 3,421,130 2,048,010 1,613,332 182,521 140,200 1,606 1,670 180,915 138,530 1,608,734 1,865,489 1,473,132 1,608,734 208,633 Defferred Taxes Fringe Benefits 1,865,489 98,298 1,473,132 194,453 1,837,230 228,496

Profit B e fore De priciation and Taxe s Depreciation net of transfers Depreciation Less: Amount transferred from revaluation reserve

Profit B e fore Taxe s Provision for Income Tax Current Taxes

Ne t Profit for the Ye ar

60,141 42,197 33,623 5,130 1,334,830 1,724,994 1,245,056

18

Sales Management (Term-6)

Monday, April 30, 2012

Thank You

19