The Hindu : Business : Biocon to sell statins in the U.S. market this fiscal

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Wednesday, Oct 25, 2006
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Biocon to sell statins in the U.S. market this fiscal

Special Correspondent

Betting heavily on its cancer drug to prop up revenues

BANGALORE: Biocon is preparing to enter the U.S. market shortly for marketing its cholesterol lowering drugs Pravastatin and Simvastatin.

The company plans to start selling statins in the U.S. market this fiscal as the six-month exclusivity given to the U.S. firm TEVA for marketing statins ended recently.

Kiran Mazumdar-Shaw, Chairperson and Managing Director of Biocon, said the company expected improved margins on selling statins in the U.S. market when compared with Europe where it was subjected to acute pricing pressures in the recent past.

A company official said the worst was over in terms of statin prices. "We are going to stay in this business," he said.

The European statins market, where Biocon was one of the major players, has stabilised. "Once the market stabilises, a lot of players will exit and the prices will start moving upwards,'' the official said, adding that the company expected "good prices'' on statin sales in the U.S. market as well. Biocon was also betting heavily on its recently launched block-buster drug for head and neck cancers BIOMAb-EGFR to prop up its revenues significantly. It had priced the cancer drug 40 per cent less than similar drugs imported into India where over two lakh people were diagnosed with head and neck cancers. "The cancer drug will break even in three years and become a Rs. 100-crore drug soon,'' Ms. Shaw said.

Apart from India, the company had secured additional rights to market the cancer drug in South Africa and other African nations such as Kenya, Tanzania and Nigeria.Biocon Biopharmaceuticals, a 51:49 joint venture between Biocon and the Cuban firm CIMAB for making the cancer drug, is now in talks with HSBC, ABN Amro, Canara Bank and State Bank of India to re-finance the Rs. 65-crore funding given by Biocon at the market rate to the subsidiary for developing the drug.

Biocon had invested Rs. 25.50 crore as its share of the 51 per cent equity in the project, while CIMAB brought in technology worth Rs. 24.50 crore in lieu of its 49 per cent stake in the joint venture. The balance project cost of Rs. 65 crore was funded entirely by Biocon. It will have to pay tax on the interest received from the subsidiary on the funds advanced.

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