Kiran Mazumdar-Shaw on Scale Economics

Biocon's path from enzymes to therapeutics is summarized in the biography as 'exponential'. From its garage origin the enzyme business scaled to a multinational biopharmaceutical enterprise that delivers world-class therapeutics globally, is India's largest insulin producer, and has pioneered the world's only Pichia-based recombinant human insulin — now available in over 40 countries. Mazumdar-Shaw is chairman and managing director throughout.

Biocon India was started in 1978 in the garage of Mazumdar's rented Bangalore home with seed capital of Rs 10,000. Indian FDI rules capped the foreign partner at 30%, leaving 70% in her hands — a constraint that effectively forced her to be the majority Indian entrepreneur rather than a country manager.

Within a year of founding, Biocon India was manufacturing enzymes and exporting them to the United States and Europe — Wikipedia notes it was the first Indian company to do so. Mazumdar used first-year earnings to buy an eight-hectare property for future expansion.

After seeking advice from Narayana Murthy of Infosys, Mazumdar-Shaw took Biocon public in 2004 — the first Indian biotechnology company to issue an IPO. The offering was oversubscribed 33 times and closed its first trading day at a market value of $1.11 billion, making Biocon only the second Indian firm to cross the $1-billion mark on Day One. Her stated reason for listing was to fund the research pipeline rather than to cash out.

Mazumdar-Shaw's 'affordable innovation' philosophy is framed by Wikipedia as her driving strategy. When the lovastatin patent expired in 2001, Biocon moved aggressively into statins and expanded to a portfolio of cholesterol-lowering drugs, signing long-term supply contracts to lock in a market base. Statins eventually generated over 50% of company revenue, taking Biocon from Rs 70 crore in 1998 to Rs 500 crore by the 2004 IPO year —.

Wikipedia describes Biocon as Asia's largest insulin producer and credits the company with pioneering a Pichia-derived recombinant human insulin now sold in over 40 countries. Major research areas today include cancer, diabetes and auto-immune conditions such as rheumatoid arthritis and psoriasis. Biocon directed roughly 10% of revenue into R&D as of 2014 — a higher proportion than most Indian pharmaceutical peers —.

WIPO Magazine opens by noting the press loves to title Mazumdar-Shaw the 'Biotech Queen from Bangalore', 'India's First Lady of Biotech', and the 'Mother of Invention'. The profile positions her as a torch-bearer for India's biotechnology industry and emphasizes that Biocon had just become only the second Indian company ever to cross the US$1 billion mark on its first trading day —.

Early in Biocon's history Mazumdar-Shaw was already showing what WIPO calls her instinct for finding market gaps. She recalls the satisfaction of producing and patenting novel products, such as a new enzyme to clarify tea. Even after Unilever acquired the Irish parent in 1989, enzymes remained core — and WIPO notes that today Biocon supplies around a quarter of the world market in pectinase, the enzyme that breaks down pectin in fruit juice.

In 1998 Mazumdar-Shaw and her husband John Shaw bought out Unilever's shareholding, making Biocon an independent entity. WIPO records that with subsidiaries Clinigene (clinical trials) and Syngene (contract research), the Biocon group employed about 1,500 people at the time of writing and ranked as India's largest biotechnology company. The Syngene arm would later be listed on BSE/NSE in 2015 with a market cap of Rs 23,000 crore.