What would you tell somebody who has some skill in them but they're not confident? See, I feel that if you have clarity of thought and vision and you are only focusing on executing that vision or that purpose, then I think you don't have self-doubt. You'll be very confident. But if you're not very clear and hoping that things will go right, then I know that when it goes wrong, you'll have a real problem. And that's when people start panicking.
Kiran Mazumdar-shaw, executive chairperson of Biocon Limited. In this episode, she shares her journey of building Biocon from a small startup into one of India's largest biotechnology companies.
Have you ever had a self-doubt?
Never. I've always been very self-assured because I've been very purpose-driven. So when you have a very strong purpose, I don't think you get self-doubt.
You said a very interesting thing. I think it'll be helpful for a lot of entrepreneurs. You said sometimes it's about getting the other person excited.
That is what entrepreneurship is. You have to get people excited about your idea. Telling the story right is the most important thing for any entrepreneur. And I think young entrepreneurs must learn how to do that.
When women actually show these traits of a little bit of let's say arrogance and power and confidence, do you think that is also being misunderstood by a lot of people? The moment a woman becomes a little more aggressive, she's looked at very unkindly and then she's trolled and you know all kinds of unpleasant comments are made about her. It's a strange world, you know, I don't care. Have you seen different attitudes of Indian investors versus investors in the west?
I think investors are investors. It's about show me the money. The only difference is that in the US they understand innovation much better. But if you just do innovation in India, there will be zero value for that innovation.
Why do you think we keep doing that to our scientists and our innovations? We reward reverse engineering much more than we reward innovation.
And why do you think so?
Because we're not risktakers.
What is the harshest truth about India which successful people know but they're publicly afraid to say?
Maybe if you ask me for the harshest truth, I think
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What should I know about your childhood which has shaped you into a person you are today?
Well, you know, I always say that I had a very charmed childhood,
Because I grew up in a very happy family. My father was a brew master at United Breweries. My mother was a housewife and I have two brothers. I'm the eldest in the family. We had a very cozy family, a very close-knit family. We used to go on holidays. My father was a golfer, so we went on golfing holidays. My father was also someone who was very gregarious and had a large number of friends all around the country. So we used to go all around the country for holidays. We had a very close Kashmiri friend, so we used to go to Kashmir quite often. My father was a very liberal thinker. The fact that he made me go and pursue brewing in Australia tells you what kind of a man he was. But I think we were a Gujarati family. My father and mother had come from Gujarat.
My father of course had gone to the UK to study brewing and he got this job at United Brewery. So that's how my parents came to Bangalore and I was born in Bangalore. But because of the fact that he had spent a large time in the UK on his own, I think he had a very different worldview.
Okay. And so when we came to Bangalore we were not sort of constricted to a very orthodox kind of lifestyle and we were very cosmopolitan in the way
Give me an example.
I mean basically my father was a very outgoing person. He loved to go and play bridge in his club and we would have barbecue parties at home and my mother used to work a lot in charitable kind of initiatives and she did a lot with the Irish nuns in Bangalore. So we grew up in that way and of course I went to Bishop Cotton Girls School and that's why I said it was a very charmed and happy childhood where there were no constraints, no restrictions. I think my parents trusted their kids and we grew up with very strong values because my parents had very strong values.
Like give me one value which you still hold.
You know I always tell this story that when I was applying for medical college when I grew up, I didn't get into medical school because it was very tough to get into medical colleges and I had only applied to a few. I was very disappointed that I hadn't been accepted by three of the medical colleges I had applied to. And so I went to my father and I said, 'Oh, by the way, Davangere Medical College has got a seat. It's on capitation basis, capitation fees basis, and it's only 10,000 rupees. Why don't you pay it and I'll get into that medical college?' And my father said, 'No, I will never pay a capitation fee.'
And I said, 'Why?' So he said, 'Kiran, always remember that money is not currency to buy favors but to make a difference. And whether you are my son or my daughter, I will never pay a capitation fee. You have to get in on your merit. And always remember, life is about building credibility based on merit.' So these words stayed with me a lot through my entire life. But he was that kind of a man. He wanted his kids to be honest and merit-based. Everything about meritocracy was very important to him.
No, he was a wonderful father.
So he never like just forced you into discipline. No or made you do certain things. Let you do whatever you wanted. But these were some of the principles he stood by.
You know, and that's what I mean. You don't have to be a strict disciplinarian, but you lead by example and my father was always that kind of a person.
So because he was your sort of an idol and you always
He was never my idol, he was my friend.
You know, my dad and I were very close friends because I actually pursued brewing which was his profession. So he and I bonded so much on that front. He was my mentor.
But did he ask you to join brewery?
No, he was the one that actually encouraged me to pursue brewing because after college I said, 'What should I do? I want to pursue something which has some kind of applied opportunity. I don't want to do just a PhD and do research, but I want to apply my knowledge to do something.' And he said, 'Oh, why don't you do brewing?' So I said, 'Why brewing?' So he said, 'No, it's a, you know, you're interested in biotechnology. You're interested in microbiology. You're interested in biology, chemistry. This is what brewing is about.' So I said, 'No, come on. It's not a profession for a woman.' I said to my dad. And my dad said, 'Gender has nothing to do with it. Remember, if it's science, if it's technology, why are you bringing gender into it?' And he was that kind of a man, so you can see his thought process.
And in fact, I went and did brewing in my brewing program in Australia. I topped my class. I came back and I couldn't get a job in India. So I went to my father and said, 'What did I tell you? Didn't I tell you it's not a profession for a woman? And you were the one who had this great idea of sending me to Australia and insisting I should pursue brewing, and now I can't get a job.' So he said, 'These breweries don't know what a big mistake they are making. You are one of the best brewers I know in the country.' And I had actually partnered him in commissioning a brewery when I came back from Australia. So I thought, 'Oh, great. You've got a great job just starting when I've come back.' And the thing was that I'd commissioned a brewery like any brewer. It was a 24x7 job where I had to go at all kinds of times to fix problems. I was doing things like lifting pipes, spanners. I was doing all that kind of work that you expect of a professional engineer. And at the end of the day when we commissioned the brewery, the owners of the brewery when I asked them, 'So I hope I got the job,' and then they looked down very sheepishly and they told me, 'We've hired someone else because this is not a job for a woman.' I said, 'What do you mean? I commissioned your brewery. You tasted my beer and you said it's great.' 'No, you are fantastic, but we can't take the risk of having a woman lead this brewery because it won't work. This is a very hostile environment. There's no woman in this brewery. We know that it'll be very difficult for us and for you to fit into this kind of an ecosystem. So I don't think we can hire you.' And that was the refrain I got from every brewery that I went to.
What do you think they were getting wrong?
I mean it was a different time and even today people are very hesitant to give a woman a job that's in charge of a manufacturing operation. So what they were, it was just a societal view of what women can and can't do.
That's it, just a societal view or was it something else?
I mean basically it stems from what society thinks of women. I just gave a talk yesterday when I went to Pune and I was talking to some journalists and I said, 'Look, it was about recognizing scholarships for women engineers which Bajaj has instituted, which I think is a great initiative. But I said to people, even today women entrepreneurs have a tougher job raising capital than male entrepreneurs because there is a stigma attached to a woman which is completely misplaced. I keep telling people, you keep saying women are not big risk-takers, women are not ambitious enough, women are not bold enough. I mean, come on, what have I proved? I've been the biggest risk-taker. I'm very ambitious. I've built a global enterprise. What more can I say? So I'm just saying that these are the kind of myths about women that have to be busted.'
Yeah. You know, I'll give you one stat on this from our field as well. So I was comparing last 3 years of data of all the Indian and international podcasters. The average number of clicks that you get on a male-based thumbnail of a male entrepreneur based thumbnail versus a women based thumbnail, the male is much higher. Like even the general public doesn't click on the thumbnails where they have women entrepreneurs. So you can clearly see the bias, right? It's not about that women entrepreneurs are not actually being successful or killing it. They all are like super successful women like you. Why do you think it's still there? Like general public is not clicking it. There's a gender bias and you still feel the same way which you probably felt 40, 50 years ago.
No, I think basically women are much milder and meeker. They don't want to boast and brag. Men love to do that, right? And the Gen Z love that boasting and bragging. I mean, look at the way they admire people who are arrogant, abusive, and boasting and bragging about what they've done. They love to hear that. Women are not capable of doing that. Women are far more humble, far meeker and milder in the way they project themselves. And to me, that's a strength. But most people think of that as a weakness. But is it like when women actually show these traits of a little bit of let's say arrogance and power and confidence? Do you think that is also being misunderstood by a lot of people?
Well, I think it's very unfair because the moment a woman becomes a little more aggressive, she's looked at very unkindly.
And then she's trolled and all kinds of unpleasant comments are made about her. So it's a strange world. I don't care. I'm not the kind of person who cares about it because the one thing I do know is that the podcast I did with Nikhil Kamath is very widely watched and I know that everyone has watched it and come to me and said how much they enjoyed it. So much so that even when I check into a flight, the guy behind the desk says, 'Ma'am, I watched your podcast, it was fantastic.' And I get a lot of young people coming and telling me that they really enjoyed my podcast and if it's something that they learned from that podcast, I'm very happy.
Yeah.
So I think you should not worry about what society thinks about you and how you're being viewed because it's going to be tough. For women, I always tell women, shut out the noise, have blinkers, and just focus on what you need to do because the moment you start listening to all this noise, it again gives you self-doubt and that's very dangerous.
Yeah. Do you have, have you ever had a self-doubt?
Never. I've always been very self-assured because I've been very purpose-driven. So when you have a very strong purpose, I don't think you get self-doubt because if your purpose is good and you know that you're on the right path, I really think you don't have that problem of self-doubt.
Tell me when you started, actually when before even you started, when you were just facing these rejections. Tell me about the last rejection. What were you feeling at that time?
You know, I was very frustrated. You can imagine. I said, 'What are these guys saying to me?' I mean, are they saying that women are not capable? And that's what they're saying to me, that they can't, I don't fit in, I don't belong, I'm a risk, they don't know how to deal with me. And I said, you know, it is very obvious to me that women have to fight for their place. And I got a job in Scotland.
And you know, I always say I'm an accidental entrepreneur because I was about to leave for Scotland when I met this Irish biotech entrepreneur Leslie O'Claus who tracked me down and said to me, 'Look, I want to start a company in India. I need a partner and you come highly recommended. So how about joining me in starting this?'
But how were you recommended?
He knew one of the people in Australia whom I had worked with as a brewer. Who had started his company in Australia. So when he was coming to India, he said, 'Oh, you should meet Kiran because I've worked with her and she's exactly the kind of person you need.' And my first reaction to him was, 'No, I don't think I'm the right person. No business experience. I don't have any money to invest. So why me? I don't think I'm the right person, but let me try and introduce you to a successful businessman who can be your partner.' But he had more faith in me than I had in myself. And he said, 'No, why are you undervaluing yourself? You come highly recommended and I trust my Australian colleague. You should give it a shot.' And I said, 'Yeah, but I've just accepted a job in Scotland.' And he said, 'Well, why don't you give this a shot and if you don't like it after a year or if you feel it's too challenging in a country like India, I'll find you a job.' So with that kind of assurance, I said, 'Okay, what do I have to lose?' So I took the plunge and instead of going to Scotland, I went to Ireland and I learned what this business was about. And when I look back on it, I said, 'Wow, that was quite a bold decision I made.'
And I came back and then of course another saga started which was about getting all the permissions in India. If you think ease of doing business even today is not so great, you can imagine what it was in 1978. It was at the height of the license raj and I had to keep going to Udyog Bhavan for this license to start my company. And I remember sitting in those corridors where all these touts would be going up and down and you just had piles of files in the corridors. And the touts would come and tell me and they would give me all kinds of numbers saying if you pay me so much, I'll get it for you. And I was saying, 'Oh my god, do I really want to start a company if I have to keep bribing people?' So I went into the secretary's room, the person who was in charge of licensing. I remember his name was Mr. Bishwas. I said, 'Mr. Vishwas, I am really in a bit of a fix and I don't know whether to start a company and forget about any notion of doing anything in India and just take up my job which I had been offered in Scotland, or do you think I should really still build a company in India?' He said, 'Why are you having these doubts?' I said, 'Because when I sit in your corridor waiting for you to call me, all these touts come and tell me I have to bribe to get my licenses. And I really don't know whether I can afford to bribe and whether I want to bribe because I want to build an honest company. So I don't know whether I should build this company in India.' And he was horrified when I was so frank. He said, 'Please don't listen to all these people. Please understand that you don't have to bribe anybody. I'll tell you what, from tomorrow don't sit in the corridor.' He told his, those days they were called peons. He said, 'I'll tell my person that the moment you come here, I'm giving you this desk and chair in this corner. You go and sit there and I will help you to write this application and don't worry, you won't have to bribe anybody.' And sure enough, I got my license in two weeks. They told me it'll take me years and months. I told him, 'They told me that it'll take months and years and some people have to wait forever and may not ever get it. So I'm really scared.' And he said, 'No, no, nothing of the sort.' In two weeks, I got it.
But what was the idea? What do you want to start at that?
I wanted to start a company making enzymes. That was the whole plan.
But why? Why enzymes? Did you do some market survey something?
There were no market survey. But I had a ready customer in my Irish partners. They were ready to give me a buyback guarantee for what I was going to make in India. So I think it was very exciting because of course first it started with extracting pepsin which was a proteolytic enzyme from papaya which was growing abundantly in India and we had to take it from the papaya latex and then extract the whole enzyme from that which was quite a nice technology. But after that there was this fermentation technology that we developed for fungal enzymes. Now enzymes are catalysts which are used to basically convert processes into end products. So for example, you can use an enzyme to convert starch into sugar. You can use enzymes to convert sugar into alcohol. That's the organic processes or biochemical processes that you use. And enzyme technologies are very interesting because they are green technologies unlike the chemical technologies which are not green technologies, they're very polluting technologies. So to me, the concept of developing green technologies and replace polluting technologies was a great opportunity and a great purpose. Plus you had a ready customer. And I knew fermentation science, that's what I had studied. So it was using bacteria, fungi, yeast to do this. So it was very exciting and nobody had ever done it and I said, 'Wow, this is so exciting, I must do it.'
And of course, it was another big challenge because biotech, nobody understood this was a new sector. Even when I went to banks, they would say, 'We don't understand what you're trying to do. So what is your end product?' And I would say, 'Oh, it's either a liquid or a powder.' 'Yeah, how do we know?' But I said, 'It's very valuable liquid and very valuable powder because each gram, each kilogram is worth a lot. I can charge thousands of dollars per gram. That's how valuable these enzymes are.' And they would say, 'Yeah, but how do we know it's valuable?' I'd say, 'Well, because it does this, this, and this.' 'How why should we believe that it's so valuable and why should we believe that this technology is so important?' Very difficult at that time to convince them that what I was doing was unique, was pioneering, that India could benefit from it. It was like pulling teeth. I remember those days. I was considered high risk by the brewing industry who didn't want to hire me. I was considered high risk by banks also because they said, 'You're too high risk. You're only a young girl, 25 years old, with no business experience, trying to start this strange business called biotechnology and enzymes which we don't understand, and you don't have any collateral to offer us. So how can we lend you money?' And those days there was no venture capital or anything. It was all debt financing and credit lines and interest at 16 to 18%. So they would say, 'No, you're too high risk and we are scared that we won't get back our money.' So I had to go from pillar to post. I had to go from bank to bank asking them to believe me and get excited about what I was trying to do. But I just kept getting rejected there also. But I didn't give up. And there was one banker who was quite excited with what I was telling. So he said, 'Come to my office tomorrow. I'll give you a loan.' So he gave me a credit line.
Which bank?
So that actually got me started.
And why did he get excited?
I don't know. But I met him at a wedding reception. I still remember at Ashoka Hotel and someone introduced me as a young entrepreneur trying to start a biotech company. He said, 'Tell me what is this biotech, can you tell me?' So I sat with him on the fringes of that reception and I was telling him how exciting it is and how interesting it is and I just told him my version of what I was trying to do and he got quite excited. See, sometimes it's about telling the narrative and getting somebody excited. And if they get excited, then they want to help you. So I told him how tough it is for me to get a bank credit line or a loan. So he said, 'No, come to me tomorrow morning.' And sure enough, he gave me my credit line and that's how I got started.
You know, you said a very interesting thing. I think it'll be helpful for a lot of entrepreneurs. You said sometimes it's about getting the other person excited.
It's the right narrative. In fact, I told a young entrepreneur yesterday in Pune who said that she had a great idea and she still hasn't found anyone to invest in that idea. I said, 'It's about how you articulate your idea. Telling the story right is the most important thing for any entrepreneur. So if you can't tell it right, you'll have to find somebody who can tell it for you.' So in my case, I had to tell it myself and I didn't give up and I found somebody who listened to my story, got excited and decided to invest in me. That is what entrepreneurship is. You have to get people excited about your idea.
And what do you think gets people excited? Is it your own passion about the thing or your ability to simplify a complex thing and show them the big dream?
Well, not really. I mean it's really about the passion that you're displaying, making that idea very appealing and compelling and almost demonstrating how well you understand the idea. You can always talk about simplifying an idea, but simplifying the idea too much is also not good. So you have to keep some mystery about that idea which excites people, right? So I think that's what it's about and I think young entrepreneurs must learn how to do that.
Do you like when somebody comes to you with so much passion and tries to tell you a story which probably you don't understand fully. Do you still like it? Would you still invest in that?
No. If I don't understand, I'll ask them to explain it to me more because I want to know whether they understand it well. I'm an old hand at this because I've invested in a number of startups, but I want those startups to tell me exactly what they want to do. And so if I don't understand what they're doing, I ask them to explain it to me and explain to me why it's so interesting, why is it such a novel idea, why is it that they believe that no one else is doing it. That's the kind of questions I ask.
Interesting. Okay, coming back to your story. So you said enzymes and then you did enzymes till 2007?
I was pursuing enzymes and enzymes technology well up to 2007. I exited enzymes but I was developing enzymes right up to that point. But at the end of around 1995-96, I started looking at our business and saying, 'Look, we've got so many technologies. I like to challenge myself. I like to reinvent my business repeatedly.' So I said, 'Why are we only making enzymes? Can we not look at making something else?' And at that time the idea came to me, 'Why can't we look at pharmaceuticals? Because if we've got these interesting technologies, can we develop some pharmaceuticals based on fermentation science?' And so of course the first products we developed were statins because they were developed with fermentation, fungal fermentation which we were very good at. So I said, 'Let's apply some of the fungal fermentation platforms and see can we make statins.' And it worked. Then came the big breakthrough because I looked at insulin and I looked at India and I said, 'India is the diabetes capital of the world. We're importing all our insulins and 90% of them are animal-derived insulins, only 10% is recombinant human insulin which is based on biotechnology, and no one can afford it because it's so expensive compared to animal insulin. And we know that animal insulin is an inferior insulin because it is immunogenic to humans. So why can't we try out one of our recombinant DNA technologies that we have used to develop enzymes to develop insulin?' And so we had a proprietary recombinant DNA technology based on a very special yeast called Pichia. And I said, 'Let's try it.' And of course we had that eureka moment when we saw insulin being produced. I said, 'Oh wow, we can make insulin now.' So we developed India's first recombinant human insulin in 2004.
And now you're the third largest insulin maker in the world. Right.
Yes. And on a very proprietary platform. Even today our IP on insulin is as strong as the innovator companies. So I'm very proud of that. We solved India's problem. Of course after we developed the insulin, nobody ever uses animal insulins and we actually disrupted the market. We forced the insulin companies which were dominating this market from the west to drop their prices.
At what price were they selling before you? 10 times more.
Give me a rough number at that time.
I tell you, recombinant human insulin used to be sold at 1,000 rupees a vial.
I mean we brought down the price to 100 and at some stage we even brought it down to 50, but initially we brought it down to 100.
Yes. And then they all also brought it down to 100. They were forced to.
Yeah. Which means they could have sold it at 100 but they were making extra margins because there were no competitors. So you were the first ones to do that in the world. So because of you, today in the world, the insulin is cheap.
Yeah. I mean, you said it.
I'm very proud of that. And that is what then gave me the idea that look, we've disrupted this space and we've expanded access to millions of patients around the world. If we can do that for insulin, we should do it for every product we develop. And then cancer became a big area for us because I realized that was the same problem in cancer. I lost my best friend to cancer and she needed these new therapies, these new biologic therapies. And she was paying something like 2.5 lakhs per dose. And she was quite a wealthy person, a very well-to-do professional, but even she had to sell her property to afford the treatment. So I said, 'What is this? What is happening? Why are we paying so much for these drugs?' And I said, 'Can't we make them cheaper?' And that's how I started making biosimilars because these are like copies of these biologic drugs which are so expensive, so complex. These are what we call protein therapeutics. Because these are proteins which are part of our system, our living systems that operate in different ways. Monoclonal antibodies, it's a part of your immune system. Your antibodies fight unwanted things in your body. So they fight cancer. But they are very expensive.
That's like immunotherapy.
This is what is called immunotherapy. Antibody technologies were very expensive, very complex, very difficult to develop. So I said, 'Look, nothing has been impossible for us to do and we have great scientists.' So I told my scientists, 'Let's develop this antibody for this breast cancer which my friend died of and see if we can develop it and make the product as close to the original drug as possible.' That's why it's called a biosimilar. And at that time when we started developing it, there were no regulatory pathways for biosimilars. But I said, 'If you follow the science, probably the pathways also will follow the science.' And I was right. So we started developing this antibody ahead of others and we became the first company in the world that was approved by US FDA in 2017 as the world's first US FDA approved biosimilar trastuzumab for breast cancer patients. That was a big milestone for us and a very proud milestone.
I'm going to ask you to interrupt here and ask you a very simple definition of what is biosimilar and what is generic pharma.
That's a good question. So let me put it this way. There are two classes of drugs. One is what we call as small molecules which are nothing but chemically synthesized drugs. So an aspirin for instance is a chemically synthesized drug. A statin is considered to be a small molecule. So the size of these molecules is very small. That's why they're called small. And when you start looking at protein therapeutics, proteins are very large. If you compare a protein molecule to a small molecule, it's many orders of magnitude larger and more complex than a small molecule. So when you make a chemically synthesized molecule, it's very easy to draw out its structure because it's basic chemistry. So you can draw out the molecular structure very easily. But when you start looking at proteins, the whole structure is so different because proteins are amino acids. It's about how you configure those amino acids and how the shape of the protein is very complex and you have to get the whole shape of the protein right because it also folds. Small molecules don't fold, but a protein folds to get a certain configuration. So these protein-based molecules would be biosimilars. If you make a copy of a small molecule, it's called a generic. And if you make a copy of a large molecule, which is these protein therapeutics, they're called biosimilars because they're called biologics. So that's really the difference and it's very difficult to make biosimilars because it's very difficult to copy proteins. So it's really innovation at the highest level. Because when you look at a protein, it has to be produced by a living cell. It's not about synthesizing it in a bioreactor. It's about making a mammalian cell culture or even if you look at insulin and peptides, it's about using a yeast or a bacteria to make these proteins. So that's why it's called a biologic and it's a biotechnology product.
So when you look at from the outside for a common man, it almost feels like all the pharma companies are sort of same because India is now generic pharma factory of the world.
Exactly. So they are making small molecules and it's very easy to make small molecules. That's why there are too many of them. And we are the only biosimilars company in India.
Oh, there's no other biosimilar company.
I mean there are companies trying to make biosimilars but no one has been able to develop a portfolio of biosimilars for global markets. Many of them have tried to develop biosimilars and the furthest they've gone is India, but they haven't been able to take it to the more regulated markets. Tell me, tell me this skill, teach me this skill of actually being early. Because in 1978, biotech was not even a thing in India. You started that. Then biosimilars still is probably not a very big thing in India. You aced it in the world. In the world now and you aced it then before insulin actually became a global headline and people wanted to reduce it by 10 times. You did it. You always were early and you were taking these long bets. What is this key? What are you seeing which other people are not?
I think it's in my DNA in the sense that I've always wanted to lead, not follow. So whatever I've done, I don't want to copy someone else. I don't want to be a me-too in that sense. When I look at pioneering the biotech sector, that was my starting point. Saying, 'Oh wow, it's exciting to think that I'm the first biotech company in India, the first biotech startup I would say because I started in my garage.' So that was very exciting for me. And then when I moved from enzymes to biopharma, even there I was the first one to develop statins. In fact, we have a global dominance in statin production. So it's like that Intel inside. You'll probably see that almost every statin tablet, one in two statin tablets in the
World would at least have our API, you know, that's how big we thought. So we started looking at things very differently. Most Indian companies join the bandwagon. Like if someone has done this, okay, we'll also do that. So they're waiting for someone to do something and then they'll all do it. So it becomes like a herd mentality. I've always wanted to move out of the pack. So I'm saying, now how can I be different? How can I do something which nobody else is doing? And that's how I've chosen my opportunity.
But that can get you wrong so many times, right? How can you be right?
No, but these are logical choices, right? I mean, if you think about it, insulin was a need. And I said, let's develop recombinant human insulin because India needs it, right? You can't be wrong about that, right? It's not like you're taking wild bets. Then you think about biosimilars. Now biosimilars logically would have to have a market in the future. Maybe it was not there when I went into it, but logically I knew that a time would come when the world needed biosimilars. So I just judged that anticipation right and I did it.
And there must be so many people who are trying to do the same thing, right? How are you able to get it cheap, get it right, and get it before?
Because our whole innovation model is based on that.
The company thesis and principles alike.
Yeah. So we constantly focus on that. I mean, I started another company, a startup recently for cell therapy, which is a CAR-T therapy. And again, the whole hypothesis was this therapy costs a million dollars per patient in the west. How can we ever afford that, right? And I know that this is a lifesaving therapy. I mean, this is for end-stage cancer patients who suffer from leukemia, lymphoma, and myeloma, who have a death sentence already written. And you save them and give them a new life. I mean, what kind of... Isn't it an amazing therapy? But can you afford to spend a million dollars in a country like India? You can't. So I said, let's really take that up as a challenge. And I started a company called Immunil and I told all the scientists, our challenge is to make it affordable and accessible. And today we offer that for less than $50,000. We are still wanting to make it cheaper, but where is 1 million and where is $50,000? Now we have, you know, we made it accessible because it's like EMIs, we allow them to pay in installments. But imagine having a new lease of life. Yeah. But still it's very... I can tell you, it is such a gratifying feeling because every time I go for a conference, I call patients who have benefited from it. They come and touch my feet and they say, 'Ma'am, you saved my life.' I said, 'Don't ever touch my feet. This is what we owe to all of you.' So, you know, I'm just saying this is the joy of doing something cutting edge, of focusing on a purpose which is about access and affordability.
You know, talking about focus, I was reading there are a lot of large insulin companies in the world after the GLP-1 drug. They almost, it's like they almost don't even want to make insulin pens anymore. They're like moving away from it. And you're getting... But you also say that you want to become the insulin company in the world, right? Why? Why do you want to keep doing that and not do GLP?
Why? Why do you want to keep doing that and not do GLP?
No, no, we are doing GLP-1s as well, but GLP-1s is going to be like a commoditized product because so many people are jumping onto that bandwagon. All the generic companies are doing it. Who's going to make insulin? And insulin is a lifesaving therapy for type 1 diabetics and many late stage type 2 diabetics. You need insulin. Can't do without insulin. So who's going to make it? So I think it's important that companies like ours take on that responsibility for the world. But do you think GLP-1 is that next magic drug of the world which is like truly one of the best inventions?
You know the jury is out there because we don't know the long-term side effects of this drug. It's a great drug. I think for diabetics it's certainly a very important drug and for very obese people it is certainly a very good drug, but it's being used as a vanity drug and I don't think it should because long-term use of a drug which is not really required by you, I don't think you should really do it because it changes your whole metabolism.
Right, so it's... you're not functioning normally. Now, why do you need to do that if you're not well? So, you know, why fix something that's not broken?
Right? That's the sort of analogy you give.
So, if you're a normal healthy person and all that you have to do is to control your diet and do some exercise, why wouldn't you try and lose weight that way? And I've done it. I mean, I know I've lost 10 kilos in the last six months because I felt I was overweight and I knew that I need to be healthy and one of the things is you can't afford to be obese. I mean, I was not obese but I didn't want to be overweight either. You can do it.
Yes, it's tough, you know. You can't eat sweets, you can't eat fried food. You can't snack. You can't eat carbs too much. But I think it's important for everyone to be a little disciplined.
You know, and all young people are anyway working out. So I find a lot of people are taking the easy way out and saying, 'Forget it, I want to eat everything. I don't want to exercise. I'll take GLP-1s.' You know, but GLP-1s function in a way where it changes your entire digestion, right? It doesn't happen normally.
Why do you want to do that if you're healthy? I can understand that if you're diabetic and you need to control your diabetes, GLP-1s are great, especially if you don't want to get into insulin therapy. Similarly, if you're very obese, there are lots of very obese people and you need to lose weight and it's for health reasons, sure, you should do it. But if you're not that obese and you just want to lose weight, why would you want to do it?
True. But people love shortcuts. People love convenience.
And when you use drugs for vanity, I feel it is dangerous.
But a lot of people do that. They just for at the end of the day, it's like I want to take the shortcut. I don't want to do the hard.
Correct. But let's see what happens because these are all new drugs already. People are talking about muscle loss, right? Why would you like to lose your muscle when you're young and losing muscle is very dangerous?
Right. And so I'm just saying that's one of the very serious side effects.
But you are launching GLP-1 in the US, not in India.
No, no, we launched liraglutide, which is the early stage GLP-1 in Europe, US, and UK.
It was... you know, in India, semaglutide was coming, which is the next generation GLP-1. So we said it's going to be a blood bath there. So we make semaglutide, but we decided not to do it in India because of extreme competition.
True. True. And do you feel India is as difficult and competitive a market in the world of medicines as it is in the west?
No. India is a very interesting market. You know, this is one of the few countries that allows branded generics. So when you call branded generics, brands sell, right? And so if a certain brand clicks, you can charge a premium. And make good money out of it. But when you say good money, it's still a generic. So you're not able to make that kind of money. But at the same time, I think Indian companies are very good at generics. And when there is a large opportunity like GLP-1, you have at least 20 companies making GLP-1s and then there's market competition.
I read in the news 42 were launching on day one.
Correct. Like 42 different companies. And there will be a shakeout and probably about 10 of them will do well, but they will still have to market at a very low price point. Which brand do you feel in India from a consumer brand point of view, like a generic branded drug, must have seen really good results or money opportunity because the brand clicked? No, it's like Dolo, right? Dolo clicked, they made a lot of money. So it's like that. I mean, it's phases. There are phases. I'm just giving you that as an example. But, you know, Dolo, Crocin, these are well-known brands, right? But how many people make paracetamol? But these two, whenever you go to a shop, you don't say 'Give me paracetamol.' You say 'Give me one Dolo, give me a Crocin.' That's what you say.
Yeah. And do they command a premium for this?
I mean, to a certain extent, it's not a huge premium, but they command a premium. But the more important thing for brands is not so much the premium but how much they can sell. So they make up by the volume of demand because if you look at the paracetamol market and look at which brand is selling the most, the pricing may not be hugely different, but the market share is very different.
Yeah. Give me an example. On an approximate basis, I want to understand. 100 rupees. Okay, you're like 100 rupees for a generic drug. If a medicine is getting sold at 100 rupees at a medical counter, how much is it made for? I'm talking about a generic drug. Let's say paracetamol.
You know, there is something called an MRP, which is the maximum retail price, and that also captures the GST which of course is reduced now. So I would say the actual realization to the manufacturer can be anywhere between 40 to 50% of that, and 40 to 50% will be including COGS, the cost of goods.
Okay, so about 50 rupees is going to the manufacturer, 50 rupees is then the marketing distributor, but then they have a cost to bear because what is their margin? They are selling a product with all the cost of goods, operating costs. So ultimately you have to see how much they make. It depends, it varies from drug to drug.
And what would be for a biosimilar sort of drug?
No, biosimilars, if you put that kind of frame of reference, it's a similar kind of thing but the value of the biosimilar is much higher. It's not 100, it'll be thousand. So for that same thousand, if you then start to capture much more on a biosimilar than on a generic. But even on that, the 50% would come to... it depends on what biosimilar it is, how many market competitors. It's very difficult to give you an idea. You asked me about generics in India, I'm saying that. But if I look at biosimilars, you can't use the same logic because it all depends on what's the market competition, how many companies are producing it, what are the various formulations available. So it's very complex. It's not that simple.
What I'm trying to understand is because there's so much complexity in making a biosimilar and it's so difficult, what kind of premium would this command in the market versus a generic?
No, there's no such thing as premium. Premium is decided by competition. If there are only two or three competitors, obviously you can charge that so-called premium.
And what kind of premium in a two-three comp?
No, what I mean is what is a discount you'll give to the originator. That's what it is. When a product genericizes and you take the product to global markets, the price discounting that happens, it can crash to 99% sometimes.
Because of competition. The price can drop to as much as 99%. If there's not that much competition, it can drop to about 60, 70, 80%. So it all depends. So even in biosimilars, it's the same logic. If you have just two competitors in biosimilars, you can keep the discounting low. But if you have more than 10 people competing for that same space, then your competition comes down much lower. So the discounting is higher.
Okay. Don't tell me the drug, but tell me from the Biocon group, the highest amount of percentage which you have made on a drug and the lowest you have made on a drug.
I think we've done quite well because it balances out. There are some biosimilars where the discounting is much lower. It could be just about 25, 30% discounting, and in some it could be 40, 50, 60% discounting, but it's never 90%.
Okay. So you were never in the category of 90%. You never got into that market?
Not even in insulin though.
No, insulin is a different business. But we are competing with the originators and we are supplying at the same price. So there's no real discounting.
Have you ever had a near-death experience in Biocon?
No, I mean, near-death meaning?
Like what's the closest you've come to dying?
I mean, in the early stages when I had taken a loan to build this building. I took a loan from Karnataka State Financial Corporation. Then what happened was you had the Asian Games, so Asian Games was taking away all the cement and steel. So instead of building this building in one year, it took me three years. So if you take a loan and it takes you three years to build the building, obviously then it's a financial constraint. You can't produce anything for three years. So I was having problems paying my loan back. So I remember suddenly I saw my name in the papers saying Biocon default. A lot of companies, not just me, some 10 companies had defaulted and if they don't pay their dues by such and such a date, we are auctioning their assets. So I saw my name there also. I said, 'Oh my God, what's happened? What's happened?' I went running to KSFC. I said, 'What have you done? How can you do this? You know that we are all going through problems with all this government delays. I can't pay you back your installments only because of that.' So the guy said, 'Relax, relax. These are standard things we have to put out. I'll reschedule your loan. Don't worry.' But that was the only time I had a bit of a shock.
So you always had a backup, or all your plans always worked out?
Calculated risk. See, any entrepreneur doesn't bet the whole house. You normally take a calculated risk and say, 'Look, let me be very honest. I took a calculated risk on the Viatris acquisition. The biggest pharma deal at that time was almost three and a half billion dollars, 3.35 billion. And that was a big bet to make. And what happened was that I had planned to raise a certain amount through private equity and a certain amount through debt. But what happened was that suddenly the world changed, free money was not available anymore. So everybody wanted structured equity, which is nothing but another word for a different form of debt. So my assumption that I could get free money or that I could get VCs to invest straight equity into the company and I could afford this particular acquisition turned out to be very different because I suddenly had to rely on structured equity which was nothing but another word for debt. And then I had a huge debt burden. I knew I could pay it, but it became an unnecessary burden. And then the whole market reacted very badly, saying there's a huge debt equity problem with Biocon and you've taken on a big debt and we don't like it because we were debt-free before that. So that was a difficult time because it was difficult to convince the market that we could afford the debt. But they are very biased when it comes to how they look at debt. If a large company is too big to fail, they will accept any amount of debt. But when a small company like ours that's been debt-free takes on even small debt, 'Oh my God, what have you done?' So it's a little bit of a strange attitude that investors and markets have.
Did you ever doubt yourself at that point?
