Creating Emerging Markets Kiran Mazumdar-Shaw, Chairperson ...
Transcript of Creating Emerging Markets Kiran Mazumdar-Shaw, Chairperson ...
Creating Emerging Markets – Oral History Collection
Kiran Mazumdar-Shaw, Chairperson and Managing Director, Biocon
Limited
Interviewed by Tarun Khanna,
Jorge Paulo Lemann Professor, Harvard Business School June 4, 2018 in Boston, Massachusetts
Video interview conducted in English
The Creating Emerging Markets Oral History Collection is part of the collections of Baker Library,
Harvard Business School. The transcripts are made available for academic research and teaching.
Any other use - including commercial reuse, mounting on other systems, or other forms of
redistribution - requires permission of Harvard Business School. When use is made of these texts, it
is the responsibility of the user to obtain the additional permissions for requests to cite and to
observe the laws of copyright and the educational fair use guidelines.
Research Inquiries & Requests to Cite Oral History Collection: Please contact Rachel
Wise, HBS Archivist, [email protected] or Laura Linard, Director of Special Collections,
Preferred Citation: Interview with Kiran Mazumdar-Shaw, interviewed by Tarun Khanna,
Boston, MA, June 4, 2018, Creating Emerging Markets Oral History Collection, Baker
Library Special Collections, Harvard Business School.
Baker Library Special Collections
Baker Library | Bloomberg Center
Harvard Business School
Boston, MA 02163
617.495.6411
http://www.library.hbs.edu/hc
© 2018 Copyright Notice The Creating Emerging Markets Oral History Collection is owned by the President
and Fellows of Harvard College.
Interview with Kiran Mazumdar-Shaw
Interviewed by Tarun Khanna
June 4, 2018
Boston, MA
Video interview conducted in English
TK: Kiran Mazumdar-Shaw, thank you for joining me to participate in
this Creating Emerging Markets project.
KMS: Thank you, Tarun. Pleasure.
TK: I’d like you to start at the beginning of the what’s now the Biocon
journey or story, as you wish to call it, and reflect on the broad sweep of
these past 40 years. Perhaps starting back at the beginning—think about
the motivations for embarking on this journey, and then later think about
perhaps some epochal moments—some pivot moments when things really
changed. We can use that to start a conversation about what we can learn
from this journey.
KMS: So I’ve always called myself an accidental entrepreneur, because I
really never planned to start a business. I went to brewing school in
Australia. I came back thinking, “I’m going to pursue a career in brewing.”
2 Creating Emerging Markets
But I was in for a rude shock, because people in my own country didn’t
want to hire a woman in a brewing industry. And—
TK: This is brewing beer?
KMS: Brewing beer, yes. And of course, that was something I hadn’t
anticipated, because I thought I was going to be a very sought-after person.
Having qualified as India’s first female brew master and having done that
with flying colors, I thought, you know, it was going to be an easy ride for
me. But that was not to be.
So I think I was extremely despondent. I was very dejected. And I
was actually all set to go and pursue a brewing career overseas when an
accidental encounter with an Irish biotech entrepreneur changed my life.
Basically, he had heard about me because of my brewing days in Australia.
He tracked me down in India, approached me and said, “Hey, look, I’m
trying to set up a biotech company in India and I’ve heard about you, and
how would you like to partner me?”
Of course, my immediate response was, “I don’t think I’m the right
partner, because I’ve just been told that this country is not a place for
women in business or women trying to pursue any kind of career. I don’t
have money. I don’t have business experience. And so why would you want
me to partner you in such an important endeavor?”
So I actually tried to introduce him to very successful businessmen
in India, because I thought that was the more appropriate thing to do. But
3 Mazumdar-Shaw Interview
he somehow convinced me and he said, “Look, if you had the spunk to do a
brewing program in Australia, why can’t you have the spunk to start a
company in India?” And he kind of talked me into it, and so I said, “Okay,
I’ve got nothing to lose. Maybe I should take a stab at it.” And so that’s
how I started Biocon in 1978.
TK: This was in the late—yeah, 1978?
KMS: And so I often joke and I say, “Do you know that India’s largest
biopharmaceutical company was founded because of a gender bias?” So
that’s how I started Biocon in 1978. Of course, I knew very little about
running a business. I knew a little bit about enzymes, which was really the
technology and the technology platform that the Irish biotech company was
keen to establish in India. And I went, in fact, to Ireland for about six
months before I really started my venture in India—to really understand
what enzyme technologies were all about and how they were applied and
how industrial processes were adopting enzyme technologies and replacing
chemical technologies or mechanical technologies.
So it was a very interesting six months that I had in Ireland. When I
came back, I had to then start the company, and that was when I faced
another set of challenges—which included accessing capital, recruiting
people, and again building credibility for myself as a woman entrepreneur.
It was interesting because banks didn’t want to lend to me because they felt
4 Creating Emerging Markets
I was too young—because I was 25 years old. They felt I was high risk
because I was an inexperienced woman entrepreneur. And—
TK: So was it the inexperience, or was it the fact that you were a
woman?
KMS: Both. I mean, it made it worse because I was a woman. Thirdly,
they didn’t understand what I was trying to do, because this was the first
biotech startup, and they knew nothing about biotechnology. So I think I
was a huge financial risk in many ways. But somehow—I kind of talked to
various bankers, and I was able to convince at least one of them to give me
a credit line, and that’s how I started Biocon.
The second thing was then to look for people to hire, because I had
to start running a company. Again, I found that people wanted job security,
and they felt working for a woman entrepreneur—or for a woman-led
company—was not going to provide them job security. So I had a tough
time trying to find people to work for me. Finally, I got two retired tractor
mechanics to be my first employees, and I started getting a very sort of
crude factory established in a rented shed.
TK: And at this time, what were you planning on producing and selling,
exactly?
5 Mazumdar-Shaw Interview
KMS: So to begin with, I had two products—two readymade products,
which the Irish company was willing to buy. One was Papain, which was a
plant enzyme from papaya—which is a tropical fruit, as you know, which
grows abundantly in India. And the second was a fish collagen that was
extracted from fish that were found in tropical waters and fished very
abundantly—again, on the coasts of India. So I was supposed to extract the
collagen, which was called Isinglass. So those were my first two products.
TK: And there was a readymade buyer—the Irish company would buy it
from you?
KMS: Yeah. So I had basically a buyback guarantee from them, and that’s
how I was finally able to get a credit line from a bank. I had to—you know,
I had actually spent time in Ireland developing the processes, so all I had to
do was come back to India and get those processes implemented. That’s
what I had to use these few employees for, to begin with.
So it was tough in the early days, but then slowly but surely I started
developing the company. My next big aim was then to make microbial
enzymes, which was really what I wanted to do. And for that, of course, I
had to find R&D folk. I had to really start establishing a proper biotech
company, and I was really wondering at that time whether I would ever find
people to join me in this great journey.
6 Creating Emerging Markets
TK: But just to clarify for our listeners, none of this is
biopharmaceuticals. This is industrial enzymes, for the most part—correct?
KMS: This was industrial enzymes. So I started with industrial enzymes,
and for 20 years I actually developed industrial enzymes. But I think what I
realized over time—as I was developing these industrial enzymes—was
that biotech is that is agnostic to what you make. So first of all,
fermentation science was very handy because I had learnt it in my brewing
science, which is what I applied for—microbial enzymes. And then added
to that was recombinant DNA technology to make certain types of
enzymes. So after about 20 years of making enzymes—and being very
successful at making enzymes—I managed to get a mindshare with a lot of
bright young scientists from IIT Delhi, and IIT Chennai and places like
them—
TK: These are the—India’s leading technology institutes?
KMS: Absolutely. They finally decided I was doing something very
exciting, and they joined me. Then we started developing these enzyme
technologies based on fermentation. Although for 20 years I developed
these industrial enzymes—which were very good and I was able to globally
market these enzymes—I think I came to a point when I said to myself,
“You know, what else can we do with these technologies? Should I only be
making enzymes?”
7 Mazumdar-Shaw Interview
TK: But before we transition there, can you come back to your point
about the discrimination that you faced as a woman, in particular? Did you
find that that faded as you became more established as an enzyme
producer? In other words, were the credit lines now readily available,
talent available, etc.?
KMS: Obviously, when I started becoming successful as a company—
basically I started turning a profit after the second year, I think. I started
establishing my credibility with the banks first. And then, of course, the fact
that I was becoming known as a biotech startup—as a sort of a pioneering
entrepreneur—also played a role. I guess a lot of the prejudices and
skepticism that I faced as a woman entrepreneur just disappeared. And
since there were no other people in biotech, I guess I got a lot of attention.
TK: And all this while, it’s primarily or exclusively a Bangalore story. Is
that a fair statement?
KMS: It is. It always has been a very Bangalore-based story. And if you
remember, Bangalore was also becoming a tech hub at that time, because of
the IT services companies that were beginning to mushroom. And so
Biocon came up almost at the same time as these IT companies, and we
started becoming quite confident in our technology. I came to a point where
I felt I should do something else beyond enzymes, and that “beyond
enzymes” became pharmaceuticals. I felt that biopharmaceuticals was
8 Creating Emerging Markets
going to give me a much faster growth trajectory than enzymes would give
me.
And you know, the other thing was enzymes was a very different
model. If I wanted to become big, I had to pursue a high-volume, low-value
commoditized kind of an enzyme space, whereas what I was doing was
specialty enzymes, which was high-value, low-volume and the market was
limited. So because of that, I was forced to reinvent my business saying,
“What else can I do?” I didn’t want to spend too much money setting up
these huge capacity enzyme facilities.
TK: For commodity enzymes?
KMS: For commodity enzymes. I said, “Can’t I do something else?” And
that something else became biopharmaceuticals. So I basically leveraged all
the technologies that I developed for enzymes and started making
pharmaceuticals instead. My first fermentation-based molecules were
statins, because they were produced—lovastatin and pravastatin are
produced by fermentation. So that’s what I started doing, and I became—
TK: And these are relatively simple molecules?
KMS: These are small molecules—
TK: Small molecules, yeah.
9 Mazumdar-Shaw Interview
KMS: —as they’re called. But they’re still fermentation-based, and they’re
quite complex in that sense. I became successful with the manufacturing of
these products and selling the active pharmaceutical ingredients—or APIs,
as they are called, bulk drugs—to global markets, especially the U.S. and
Europe. I got USFDA approval for statins. So that got me off to a good start
applying that technology—
TK: So you weren’t marketing the statins directly to consumers. You
were selling them to other—
KMS: It was a B2B business. And then I—
TK: So what time period was this, Kiran?
KMS: This was just 1999, or thereabouts.
TK: Okay, so 20 years after you started. Right.
KMS: 20 years. ’98, ’99 was when I made the switch. And then I started
making immunosuppressants, which were also produced by fermentation.
My first big recombinant DNA product was insulin. You know, India was
at the epicenter of diabetes, and I thought to myself—I said, “Why are we
importing all our insulin? Why don’t I try and make recombinant human
10 Creating Emerging Markets
insulin? I’ve got this DNA technology. Why don’t I apply it and see if I can
make insulin?” And I used a very proprietary yeast system to make insulin.
TK: So can you explain to people who are not as well versed in the
science—what’s the novelty in this approach compared to Eli Lilly and
Novo and others who are in the insulin business?
KMS: Yeah. So Eli Lilly uses a bacterial system—E. coli—and Novo uses
a Saccharomyces yeast to make insulin. I used Pichia, which is a very
different yeast system, which is a high-yielding yeast system—which I used
then to make insulin.
TK: And the intuition was yours or your scientists’—that this approach
would be successful? Because of some past experience in something?
KMS: So we were using Pichia fermentation for making an enzyme. We
were making a phytase enzyme using Pichia yeast. It was a very high-
yielding process. It was a very elegant process. And we said, “Hey, this
process can make insulin. I think we’re in business.” So we said, “Let’s try
and see if we can actually insert the insulin gene into the Pichia and see
whether it expresses the same way.” And we were lucky. It did. So we
started making recombinant human insulin using Pichia.
11 Mazumdar-Shaw Interview
TK: Kiran, can you give some sense of—the way you’re describing it, it
sounds very quick that you were able to go from one to the other. But each
of these steps requires some patience, I would assume—
KMS: Investment.
TK: —some capital, risk tolerance. Can you comment on some of that,
for any of these transitions? I mean, take the insulin transition, for
instance.
KMS: So let me start with enzymes.
TK: Okay. Sure.
KMS: I mean, whatever’s said and done, it’s not as if to say that it was
easy. Even making enzymes was tough. Of course, with pharmaceuticals, it
was relatively easier than making enzymes—because with enzymes, the
moment you had an idea of what you wanted to do with that industrial
process, you had to go back to the drawing board. You could do a lot of
basic, predictable experimentation, I would say, because you knew what
you were doing. You would get an enzyme, and then you basically used a
lot of your time to improve the yields and improve the process and finally
get a purified enzyme.
12 Creating Emerging Markets
We were getting very good at it, so we could actually look at any
application and say, “Okay, now let’s go and look at our repertoire of fungi
and bacteria and see which one of them can produce this product.” And we
would do that selection, come up with a rudimentary product, and then
improve it and get a pretty good product within a very short time. So every
year, for instance, we could produce maybe a couple of enzymes for
various industrial applications. And we—you know, it was investment, but
there was more predictability in the endpoint.
But when we moved to pharmaceuticals, obviously it was a far more
complex regulatory process. In the early days, it was okay because I was
still—it was still a “copy cat” kind of an approach, because I started with
molecules that had already been discovered, and I was making products
which—where I was just using a different technology—
TK: —to get the same results.
KMS: But I still wanted to differentiate myself from the Lillys and the
Novos, saying, “Can I be the third insulin company making insulin with
something else?” Because if you call Lilly an innovative company and if
you call Novo an innovative company, then I also want to be called an
innovative company—because I’m also using a different technology. So
that’s what I did. I didn’t mimic either Lilly’s technology or Novo’s
technology. In fact, today, we are the third largest insulin producer in the
world, and we are very proprietary in our insulin technology, because
13 Mazumdar-Shaw Interview
nobody else uses Pichia to make insulin and insulin analogues—only we
do. So I think from that point of view, you’re seeing three companies with
three technologies. And I think we—you know, we were very reassured by
the fact that we could actually develop insulin in four years.
TK: So it took about four years?
KMS: It took us four years to take that technology from lab scale to plant
scale. But what was good was, because we were familiar with the
technology—because of the enzymes that we were producing at
commercial scale—I think we had that confidence to see it through quite
fast. And then, of course, we had to go through a whole clinical
development phase, which we had never done before. So it was a whole
learning process of running clinical trials, testing your product, making sure
that it works, making sure that you had all the quality systems in place to
ensure that the product was safe, efficacious, and did what it had to do. So I
think we went through a tremendous learning curve trying to make our first
drug product. Remember, the others were drug substances.
TK: APIs and so on? Yeah.
KMS: APIs. Whereas this was a drug product, which would be used by
humans.
14 Creating Emerging Markets
TK: So going back to the simultaneous emergence of the IT industry—
most people would think that there is a cost advantage to doing this
research in India. So can you say a little bit about how much it cost you to
go through this four-year process of going from lab to plant scale for
insulin?
KMS: I think there is a definite advantage. There is a sort of a cost
arbitrage that you have in India, because the scientists are very talented—so
the talent pool that you’re dealing with is definitely very cost competitive
compared to the western world—plus the fact that we had good engineers,
who could put up these plants in a very inexpensive way. So combining the
two, I think we had a huge advantage in terms of cost.
And because of that, actually, in 1994, I also set up a research
services company called Syngene. This really was borrowing the idea from
software services saying, “Hey, if these guys can offer financial services,
why can’t I offer research services?” So that’s what we did. We set up
Syngene as a research service provider, and over time, it’s become a very
successful and large research service provider to global companies, mostly
pharma.
TK: And that was set up as a subsidiary of Biocon?
KMS: That was set up as a 100 percent subsidiary of Biocon.
15 Mazumdar-Shaw Interview
TK: I see.
KMS: We took that public a few years ago.
TK: Yeah. So—but there were other challenges with getting the insulin
product to market, right? You mentioned doing the R&D and the clinical
trials—
KMS: Regulatory.
TK: —the regulatory hurdles that you had to deal with.
KMS: And then you had to have a cold chain. You had to have very
different supply chain logistics for enzymes—I mean, for insulin compared
to enzymes.
TK: And what about the marketing aspect of—
KMS: And then, of course, you had to set up a marketing enterprise to
basically market and distribute the products, at least in India to begin with.
Then we started taking this product, through partnerships, to other
countries, where we also became very successful. So we are very successful
in Mexico, for instance, Latin America, Southeast Asia.
16 Creating Emerging Markets
TK: So in all these other countries, how does the insulin product
compare to—how is it positioned in the market compared to Lilly and
Novo?
KMS: Well, you’ll be interested to know that we have 100 percent of the
market in Mexico. We knocked out Lilly and Novo, because it’s a tender
market, okay? I mean, the government tenders insulin. That is the largest
part of the market. You still have a little—a few small retail business—but
the larger part of that business in Mexico is a tender market. So for a long
time, Novo used to dominate that market. Then when we came in, we
disrupted that market. Today we actually command 100 percent of the
tender business.
TK: So—but should we think of the insulin that Biocon sells as being
functionally equivalent to the insulin sold by Lilly and Novo?
KMS: Absolutely. It’s, in fact, what we would consider as a biosimilar
insulin.
TK: I see. But it’s priced cheaper than Novo and—
KMS: Yes. You know, in India, for instance, Novo and Lilly used to price
their product tenfold higher than what they’re pricing it today.
17 Mazumdar-Shaw Interview
TK: Because of the competition now?
KMS: Because of the competition. They still have a pretty massive market
share, but obviously they’ve had to drop their pricing to compete with us.
And now today, we all sell the product almost at the same price.
TK: Same price? So let’s talk about some of these partnerships—
because that’s another transition that you went through to being a global
company. Maybe you can describe either the Mylan partnership or some
other ones that you’ve—
KMS: So actually, the first partnership that I had— was the Irish
partnership, which is how I started the company and you’re very right to
point out that partnering has been a forte of Biocon.—.
TK: That started you. Yeah.
KMS: It was a joint venture. The Irish company was acquired by Unilever
in 1989, and so I had this partnership with a huge global conglomerate,
Unilever, for almost ten years. That was a very important inflection point in
my journey, because, being a part of the Unilever enterprise, I had to
conform to their systems. So whether it was financial reporting systems,
quality systems, IP, manufacturing systems, you know—it made us realize
that we were amateurs and we had to suddenly professionalize. So in those
18 Creating Emerging Markets
ten years, we became a very professional organization, thanks to Unilever.
And—
TK: But it was not constraining, also?
KMS: I think, you know, for me it was an opportunity. I saw this as an
opportunity to learn. I saw this as a unique opportunity to professionalize.
So we didn’t get daunted. We were like sponges, just absorbing everything
they were throwing at us. And I must say that that actually stood us in very
good stead, because when we went to the next stage—which was really to
look at pharmaceuticals and biopharmaceuticals, which was a much tougher
regulatory sector—it was this systems approach that helped us to climb up
that curve very fast.
TK: So that’s the first significant partnership?
KMS: Yes. Then of course, once we became known as a
biopharmaceutical company, we started developing antibodies. The first
two antibodies that we developed were actually not biosimilars—they were
novel antibodies, which I actually licensed from a Cuban research institute.
So that taught me how to take a new molecule to the market, but it was in
India. So I was able to very successfully do that, and in fact, we just
submitted and presented a very, very powerful set of data on this molecule,
Nimotuzumab, which was done in partnership with a very large cancer
19 Mazumdar-Shaw Interview
hospital in India, called Tata Memorial. And we just presented at ASCO
this year on the very good data that we got.
TK: This is so interesting, because people in many parts of the world
don’t think of Cuba as being a repository of intellectual property, and I
think this example suggests that maybe we should be a bit more open about
where we look for ideas.
KMS: You know, I credit myself for looking at Cuba, because antibody
technology was a very coveted technology when I was interested in doing
it. This was in the year 2000, and I had nowhere to access that technology. I
actually read in one of the American journals, Genetic Engineering News,
that Cuba was quite interesting because they had done these wonderful
things in biotech. I mean, it was interesting to know that Castro—despite
everything and all the embargoes—decided to invest in biotech, because he
felt—
TK: That’s interesting.
KMS: —this would secure the future of Cuba. And he was right. So he set
up these high-end research institutes, and one of them was the Center of
Molecular Immunology, which was developing these very interesting novel
antibodies. So I—as I told you, I went to Cuba saying, “Let me see if I can
access this technology.” And I was able to. I actually went there. They were
20 Creating Emerging Markets
willing to give me this technology because, you know, they needed money.
So they licensed the molecules. They gave me the technology. And that’s
how I started my whole antibody technology and expertise.
TK: And that remains a partnership or—
KMS: No. That was—
TK: That was a one-off?
KMS: That was a—I mean, I had a very brief partnership. I basically just
bought off everything from the Cubans, and then I sort of went on with it
on my own. But because of that knowledge that I had acquired, I decided
then to venture into biosimilars. Those were early days of biosimilars and—
TK: So what year is this now?
KMS: We had started working on biosimilars after our success with
Insulins but it was in 2009, actually, when I first entered into this
partnership with Mylan. And we started developing biosimilars. So we had
already started a few biosimilars, and Mylan was—
TK: And Mylan, of course, is a big generics—
21 Mazumdar-Shaw Interview
KMS: Is a big generics company, yes. And they felt that the next area of
growth was going to come from biosimilars, because there were too many
people getting into small molecule generics. It was commoditizing—very
rapidly with too many competitors. So I think that they made the right
choice. They said, “I think we should get into biosimilars,” but they had no
clue how to make them, so they tracked us down.
They used to buy some of our APIs, so they knew us. And then one
day they said, “Why don’t we forge a partnership and make biosimilars?”
And I thought, “Well, that’s great, because it’s very expensive to develop
biosimilars.” So cost-sharing and profit-sharing was the model we followed
with Mylan. And this has been a very, very successful partnership, because
we were the first company globally to get a USFDA approval for a
biosimilar—trastuzumab—and just now, we’ve heard that we’ve got a
second approval from the USFDA for—
TK: Congratulations.
KMS: —for our pegfilgrastim biosimilar.
TK: And what are these targeted to? What disease or conditions?
KMS: Both are cancer, really.
TK: Both are cancer drugs?
22 Creating Emerging Markets
KMS: Yeah.
TK: I see, okay. So partnerships have played a pretty important role.
KMS: And then following Mylan’s success, we’ve also now announced a
third partnership with Sandoz for the next round of biosimilars. Sandoz is a
division of Novartis, and they are also a very successful company.
TK: And the way these work is—are the geographic rights partitioned
off in some ways? Is that the model that’s used, for the most part?
KMS: Yeah. We have an understanding as to—it’s a profit share, and
basically the front end of marketing in certain markets is done by the
partner. For instance, Mylan and Sandoz both have the rights to the U.S.
and European markets. But in the rest of the world—I think we’ve carved
up the markets between Mylan and Biocon. And as far as Sandoz is
concerned, they’ve given us the entire rest of the world markets.
TK: I see. So if you reflect on the last ten years—let’s say 2008 to 2018,
compared to the earlier periods—and you think about Biocon then and
now, I just wonder about what’s different. I probably first met you 15 years
ago, or something like that. What’s different today about running a leading
biotech company from an emerging market?
23 Mazumdar-Shaw Interview
KMS: So I think I’ve learned over time that, you know, it’s an
evolutionary process. You kind of do multiple things. You might be very
opportunistic at one point, but as things start attaining critical mass, you
need to then start being more strategic. So today, I have divided the
company into very distinctive business entities. So for instance, the
research services business, Syngene, has a life of its own now.
TK: It’s listed now. Right.
KMS: It’s a listed company. We’ve created a separate company called
Biocon Biologics for the biosimilars and biologics business, and the
original Biocon remains with the pharmaceutical APIs, and now generic
formulations as well. So it’s very well segmented now.
TK: And you have Clinigene also?
KMS: No, that’s part of Syngene.
TK: That’s part of Syngene? And that’s the clinical trials—
KMS: Yeah. So that’s a research services bundled offering. So we
basically created these autonomous business entities, each one of which
will be a listed entity with its own management, its own teams. I want them
to operate as standalone companies. That’s what I’ve learned over time, that
24 Creating Emerging Markets
in emerging markets—you know, being in the emerging markets, you tend
to do things in a very opportunistic way. Because you’re all the time cash-
strapped, you’ve got to basically first look at your business and your
revenues, and then start investing in development.
For instance, I could have never afforded to develop biosimilars if,
A) I didn’t have that partnership with Mylan, and B) I didn’t have money to
invest in it from the profits that accrued to me from my biopharmaceutical
business coming out of the APIs. So all that profit is what I’ve used to
develop biosimilars. You tend to be opportunistic, saying, “Okay, I’ve got
to have both these businesses.” Now that the biosimilars businesses are
beginning to deliver, you can spin that off into a separate entity. And of
course, I still have also a very interesting novels portfolio, where I’m—
TK: Which is?
KMS: Developing very interesting products for cancer. I’m also trying to
develop the world’s first oral insulin.
TK: How is that going? That’s been—
KMS: Well, fingers crossed. It’s right now in advanced phase two trials.
TK: What is the technical challenge with oral insulin?
25 Mazumdar-Shaw Interview
KMS: So the challenge is that insulin is a protein, and proteins are difficult
to deliver orally, because they just don’t survive the digestive tract—
because they’re broken down, being proteins. So we actually chanced upon
a technology that could basically stabilize a protein, by attaching certain
pegylated molecules to it, without losing its activity, and then we basically
made it into a formulation. So we’ve made it into a tablet with a permeation
enhancer thrown in, so when you swallow the insulin tablet, it goes straight
through your intestinal walls and gets delivered through your portal vein
into the liver, which is what you want.
TK: Which is what you want. Yeah.
KMS: Which is what you want. And so that’s the trial we’re doing. It’s a
prandial insulin, so it’s a mealtime insulin. Instead of taking a shot, you can
take a tablet.
TK: And this is very different from the—
KMS: Inhaled insulin.
TK: —inhaled insulin and things like that?
KMS: Yes. Yes.
26 Creating Emerging Markets
TK: That’s a different mechanism? I see. Very interesting. So I want to
shift gears a little bit and go back to some of the, if you will, the contextual
constraints in a country like India. I think one of the things that’s very
remarkable and inspiring about this story is bucking the infrastructural
odds of building a science-based enterprise in what is essentially still a
very poor country. Can we talk about science and the way you think about
science in a country like India, going beyond simply accessing talented IIT
engineers?
KMS: Well, you know, the way I looked at science right from the very
beginning—my raison d’être for starting this company—was I said, “I’ve
got to create a research-led environment where I’m able to attract scientists
to come and do research instead of the usual sort of exodus that we see of
scientists going to other countries to do research.” So I said, “I want to
create an organization that can attract scientists.”
Today—you’ll be very interested to know, Tarun—the Biocon
campus that we have in Bangalore is home to perhaps one of the largest life
science clusters in the world. We have today, on one site, close to 7,000
bio-scientists working on various research programs. Of course, almost
4,000 of them can be attributed to Syngene, because they’re offering
research services to companies. But nevertheless, they are all housed in that
campus doing high-end research for the global pharma industry, even non-
pharma industries. And then we’ve got the remaining 3,000—scientists,
engineers, clinicians—all doing research-led work for Biocon. So it’s been
27 Mazumdar-Shaw Interview
a very exciting journey for me because I was able to create this kind of
infrastructure. And it’s very high-end infrastructure.
Of course, like you would have seen in India, you drive on the
streets and you’ll remember, oh, this is a third world country. But the
moment you drive into an IT campus or a campus like ours, it’s world class,
because we’ve all invested in high-end infrastructure. Of course, these are
like islands—self-supported, self-sustaining infrastructural sites. But that’s
what it’s all about. You’ve got to generate your own power supply because
you can’t rely on the electricity supplied by the government. You’ve got to
make sure that everything you do is going to be done to world standards, so
the buildings that we make—again, we are all very focused on
sustainability, and therefore the building designs are very eco-friendly,
green buildings. Everything that you see anywhere in the world is also
something we do there.
So I think it’s a bit of a contradiction in terms, but then at the same
time, that’s how you’re able to attract the best of scientific talent. Today our
scientific talent is not just so strong—the Indian research laboratories and
the Indian engineering colleges—but we’re finding a lot of scientists
coming back from various parts of the world because they find it’s very
exciting.
TK: So that’s a commentary on how, over—
KMS: —40 years—
28 Creating Emerging Markets
TK: —several decades, 40 years, you’ve had to compensate for problems
in the Indian environment—the roads, the power, etc. But what reflections
do you have on triggering change more broadly, outside of Biocon? Even if
we just take Bangalore—I mean you’ve been instrumental in creating or
mentoring ABLE, which is the Association for—
KMS: Biotech Led Enterprises.
TK: —Biotech Led Enterprises. What are your reflections on the success
or lack thereof of these attempts?
KMS: Yeah. So I think for a long time, I felt that—you know, we used to
keep talking about this missing link between academia and industry in
India. And it was truly a missing link. I always felt that, unless you allow
your academic faculty and professors to really pursue entrepreneurial
opportunities using what they’ve researched and leveraging their research
findings, you’re not going to get this industry connect. I think after a long
time, we are seeing scientist entrepreneurs. We are seeing incubators at
academic institutions.
That is what is going to change things because, as a country, we
have to hang our heads in shame that we spend less than one percent of our
GDP on R&D. And of that, the government spends only 0.6 percent on
R&D. The rest comes from the private sector. That’s very, very low for a
country like India. I mean, look at Korea—it spends four percent. The U.S.
29 Mazumdar-Shaw Interview
spends close to three percent. And if you look at even Brazil and China—
they are spending two percent, two and a half percent of their GDP.
So to be spending 0.6 percent, and at best one percent—if you add
everything up, it is still woefully low. And the reason that it’s woefully low
is because we have the talent. If we didn’t have the talent, that would be
one thing. If you find other countries that don’t have the talent that India
has spending 0.1 percent or 0.2 percent on R&D, that’s excusable. But it’s
unconscionable that a country like India, with such a rich talent pool of
scientists—we’ve had, we’ve been leaders in natural science and things like
that in the past. We’ve got mathematicians, engineers, scientists—you
name it. And if you don’t invest in innovation and R&D, I think you’re
missing out on an enormous opportunity. I think this is where the
governments will be blindsided—having not really focused on this
particular area.
TK: My impression is that it’s been very difficult—not just in Bangalore,
but across the country—to get the government and all political parties in
India to see—and in fact, more than India, in most developing countries—
to see the wisdom of developing robust intellectual property rights and, as
you say, investing much more even in percentage terms. I don’t think
Bangalore has been an exception to that, other than the islands of
excellence that you pointed to.
30 Creating Emerging Markets
KMS: No, I would say Bangalore is an exception to that now. Because in
the last two years, I’ve suddenly seen a new energy in Bangalore, where the
government itself seized on this opportunity. I think it was about job
creation more than anything else, because I think all governments today are
really obsessed with job creation.
Now how do you create new jobs? Suddenly, Bangalore is such a
tech city—did you know that Bangalore is going to overtake Silicon Valley
as the city with the maximum number of software engineers? We’re going
to cross two million in the next two years, and that’s going to be larger than
what Silicon Valley has. So with that kind of population base… Bangalore,
because of the fact that most of our population—I mean, it depends on who
you ask, but the population ranges between seven to ten million. And if you
think that half of that population is a very tech-savvy population—of which
two million themselves are software engineers—then you have the rest of
the engineers in other fields—the life scientists, the doctors, and what have
you. So Bangalore is an amazing ecosystem of very rich talent.
Now, the government in its frenzy of trying to create jobs suddenly
found that—hey, startups are a great way of creating jobs. So they created
this startup policy, and they started seeding ventures. So suddenly
Bangalore is just mushrooming with startups, and we’ve created almost a
million new jobs just in startups.
TK: So now, does Biocon work with these startups in some ways or—
31 Mazumdar-Shaw Interview
KMS: Many, many of them, yes. In fact, we have wonderful life-tech
startups, and there are now some very interesting innovation hubs emerging
in Bangalore. Of course, apart from the tech hubs, we have all these
wonderful places like WeWorks and other tech hubs, which are doing
extremely well. Each one of them houses something like 1,000 startups. But
in the life-tech space itself, in Bangalore alone, today we have something
like 700 startups, okay?
And there are some really interesting innovation hubs. Some are at
academic institutions. Some are standalone hubs. But one of the most
successful ones—you’ll be happy to know—is at an academic institution.
It’s called C-CAMP, and it is an incubator at the National Center for
Biological Sciences. Right now they’re running out of space. They have to
quadruple the amount of space they have because they are just full of
startups and they’re bursting at their seams.
TK: Was this the one started by Vijay Raghavan and Taslim—
KMS: Yes.
TK: Taslim—
KMS: Saiyed—I mean Taslim, yes.
32 Creating Emerging Markets
TK: Yeah, that’s wonderful to see. Wonderful to see. And has the
intellectual property regime developed commensurate with this?
KMS: Well, what’s going to really drive intellectual property are these
startups. I think every one of the startups wants IP, because that’s the only
way they are going to grow. That’s the only way they’re going to attract
capital. And it’s sad, but many of these very, very innovative companies—
even though they start up in India—when they have to go for their next
round of funding, they find it very difficult. So they establish a presence in
the U.S. and attract venture funding—even though a lot of the back office
work or the actual research work is done in India. So then they start having
a U.S. face.
TK: Yeah, so that points to a pretty significant limitation, right? Which
is the informed capital who can evaluate—
KMS: So the government is doing its bit by giving the seed capital, the risk
capital. But what is not happening is the ecosystem where the VCs need to
take over—that will only happen when you see a few success stories. VCs
today still prefer a more low-risk, predictable business. And remember,
there’s a huge tech world out there, which is much lower risk and much
more predictable. So why would you want to invest in a life-tech company
when you’ve got umpteen choices in the tech sector? Every other day, you
hear some app being developed, or some AI company being formed, or
33 Mazumdar-Shaw Interview
some analytics company suddenly taking root. So I think those appeal much
more to the VC community than a gestational business like life tech.
TK: Yeah. I mean, look at a country like Israel, right? The government
has really backstopped the bearing of risk, so to speak, so that the investors
who come in know that there is a floor to what they might lose. And my
sense is that, in most of these countries, the governments are coming to
terms with that. But it’s a slow process.
KMS: It is. I think the sooner India understands the power of innovation,
the better we will be as a country. Because I think one of the big
opportunities in India—for any innovator or any innovative company—is
the myriad of challenges that we face. Every one of them can have an
innovative solution and a business proposition.
TK: And a company, yeah. So let’s talk a little bit about gender again,
because you started your story by recounting some of the extra odds that
you had to get over. I read somewhere that 30 percent of your scientists are
women, which is incredible. It should be 50 percent, but you’ll get there.
Can you talk about how you’ve seen that changing in India—the role of
women in science and companies or anywhere else?
KMS: Yes. So you know, when I started the company, I had a sort of a
two-pronged objective. One was, of course, for scientists to feel excited
34 Creating Emerging Markets
about pursuing a career in India—a research career in India. And the second
one was for women—I wanted women to be pursuing careers. I thought I
could provide them that safe haven for them to get interested in pursuing
careers.
After 40 years, I feel I’m—I haven’t quite achieved that second
objective. Because although 30 percent of my researchers are women, and
I’m seeing more women get into that fold—and I’m sure that, in another
few years, I’ll get to that 50 percent level—I still find that, in the rest of our
organization, I find it very, very difficult to get women to lead—
TK: Outside of R&D?
KMS: —outside of R&D. So for instance, manufacturing, finance,
admin—those kind of things. Okay, you will get a few women, but I want
women in leadership roles. I’m not getting them. Even specialized roles like
regulatory quality—these are roles that you should find women doing. And
yet I find it very difficult to get people. You know, since you’re playing in a
global kind of arena, you want people with experience and expertise, and
there are very few women who actually fit that kind of a role. So I would
like more women to play that role. And yet I know that in the past—when I
actually started Biocon—the head of quality was a woman, the head of HR
that I had was a woman, the head of even one part of my manufacturing
was a woman. So there are very strong women.
35 Mazumdar-Shaw Interview
TK: It’s possible, right.
KMS: But they’re few and far between. And therefore, when I’m looking
for this high-end talent—even though I order my HR folk to make sure that
they give preference to women—there are very, very few women to choose
from.
TK: To pick from, yes. It almost feels like one has to start earlier in the
value chain of developing talent.
KMS: Yeah, so I just—so that’s something that I’m hoping for in the
future. And at least we’ve started something under our corporate social
responsibility—we’ve started the Biocon Academy.
TK: Okay, so what’s that?
KMS: It’s like a finishing school—so I’m taking a lot of young, raw talent
and shaping these students to be industry-ready. And there, I find that 70
percent of the students we pick are women. So I’m hoping that they will
change things as we move along.
TK: And they will go not just to life science careers?
KMS: This is largely for life sciences—
36 Creating Emerging Markets
TK: Primarily life science careers?
KMS: Yes, many—they’re being grabbed by all the life-tech companies.
TK: I see. So Kiran, one thing you haven’t mentioned at all is Boston
and MIT—but you’re here all the time. So tell me the role that this
ecosystem has played in the evolution of Biocon.
KMS: So Boston, of course, over the years has become the mecca of
biotech. It is the undisputed leader of biotech in the world. And I think what
makes it special is the academic power that you have there. MIT, Harvard,
Broad Institute—you name it. You’ve got all these great academic
institutes—iconic academic institutes—all housed in Boston. And of course
they have spawned off a large number of biotech ventures. So you can’t see
a better bridging of academia and industry than in Boston, and I think
anybody and everybody who wants to do something good in biotech has to
be in Boston. I mean, I see every big pharma wanting to have a research
presence in Boston, and that tells you what it’s all about. I have been
involved with the Koch Institute for—
TK: At MIT, yeah.
KMS: —since its very early days, before it was even built. And I basically
instituted a postdoctoral fellowship program in oncology, hoping that
37 Mazumdar-Shaw Interview
Indian researchers would actually go through this multidisciplinary
approach that MIT and Koch Institute have in these areas like oncology—
which really combines bioengineering and immunological sciences, and
makes it such a different kind of an approach to disease understanding. And
I thought, “Well, if I get young Indians to come and do postdoctoral theses
and fellowships at Koch Institute, and if I pay for that—and if at least some
of them come back to India and start labs—that would be a great way of
learning and osmotically transferring some of this kind of thinking into
India.”
And I’m happy I’ve done that, because I’ve done it for the last five
years, and I’ve already seen at least one of them come back to India and
start a bioengineering lab at the Indian Institute of Science in Bangalore.
Two of them have also come back and started labs in other parts of India.
So I think at least from that point of view, it’s slowly turning out to be a
good experiment, where some of these people are coming back. And on the
other hand, it’s also a great way of connecting with Boston and Koch
Institute, so I think that’s been really, really rewarding for me. And because
of my association with Boston, I invested in a number of startups in Boston.
Sangeeta Bhatia, who’s also at Koch Institute, started up a small very
interesting, innovative company. I helped her with that. And I just think
Boston is a great place. I myself—now I’m thinking of setting up a small
research group in Boston, because of the kind of work we are doing in some
of these areas. So within the next six months, I think we should be up and
38 Creating Emerging Markets
running with our own little presence in Boston—in one of these
accelerators, or whatever you call it.
TK: Yeah, I hear you throw a stone and you’ll hit an accelerator—that’s
how fertile it is. That’s wonderful. So I’ve covered most of the bases.
What—are there any other things you’d like to share?
KMS: So you know, I’d like to talk about one thing, which is that, as an
entrepreneur, I’ve always wanted to be very different. I’ve always wanted
to differentiate. I’ve always wanted to be very innovative. And I’ve always
dreamt of taking innovation from India to the world. I’ve always thought
that, “Oh, India has this great opportunity to do things very cost-
competitively and, you know, how do I build India’s image as an innovator
as well?” And so one of the drugs that I brought from—licensed from
Cuba—I actually reworked on that asset. I came up with a very, very nice
novel asset, created a new IP, and then I thought let me take this—
TK: What was the product?
KMS: It’s a checkpoint inhibitor for autoimmune diseases—
TK: I see, wonderful. Yeah.
39 Mazumdar-Shaw Interview
KMS: —which is a very novel concept. And I brought it to the Indian
market. It’s a great drug. And I thought, “Oh, now I want to take it to the
U.S.” But I realized that, you know, India has no credibility in the U.S.
when it comes to innovation. So I realized that, in order to really create that
stamp of innovation, you have to give it an innovated-in-the-U.S. kind of
stamp. So finally, I partnered with a small biotech company in the U.S., and
now they are going to lead the way forward. They’re doing an excellent job.
I must say that the way they are thinking about the asset and the way they
are developing the asset—even though I knew about some of the things that
we could do—the way they do it is very, very meaningful. And at least
when it does come to the market, I would feel satisfied that most of the
work was done in India and at least we were able to see this product make it
to a global market like the U.S., and it’ll give me a tremendous sense of
pride. But I think we must innovate from India and we must see many,
many more innovative products coming out of India. I want someone to
look at Bangalore at least in the same way they look at Tel Aviv.
TK: I had a potential buyer of a company that I created once say to me
that, “Because you created this machine learning company in India, it’s
worth X. If it was in Tel Aviv, it would be 1.5X. If it was in Silicon Valley, it
would be 2X”—
KMS: Exactly.
40 Creating Emerging Markets
TK: —which I think is a measure of the India discount, in some sense.
But in a sense, you’re pointing to a really large systemic challenge.
Individually, an entrepreneur—even somebody as visionary and successful
as you—can compensate by providing the air conditioning and everything
else that’s needed to compensate for the [institutional voids] outside. But
systemically, we’re going to need much more public policy to kick in, and
the government to get smart, and so on and so forth. So that’s a road that’s
still ahead for most of us.
KMS: Yeah. I just hope the government gets it, you know, because I think
I’ve always been a big proponent for science and technology, and I just feel
that this is such an important area—
TK: I agree.
KMS: —that ministers who are given that responsibility to lead Science &
Technology should be high-caliber people who feel that this is one of the
most important ministries in the country. That’s not the feeling today. In
fact, when the present Science & Technology Minister was moved from
Health Ministry to Science & Technology, it was considered a demotion.
And I would have thought, “Wow, if I was that person, I would think it’s
actually a promotion.” That’s how important science and technology has to
be in the scheme of things for a country like India.
41 Mazumdar-Shaw Interview
TK: That’s a real commentary on the state of affairs. On the other hand,
I’m glad that Vijay Raghavan is now—
KMS: Yes. I’m very happy that he’s the principal scientific adviser. And I
think he can do a lot. I think there is beginning to be a focus on science and
technology, but we need to invest a lot more. I think it’s one thing to talk
about what you want to do, but ultimately it’s about—
TK: Action.
KMS: —action and the investment dollars.
TK: Well, it’s an exciting, amazing story. And thank you for sharing—
KMS: Thanks, Tarun.
TK: —a little bit of the 40 years and the social transformation that I
hope it ultimately continues to trigger, as it already has.
KMS: Thanks.
TK: Thank you, Kiran.
KMS: Thanks a lot.