Biocon India

In: Business and Management

Submitted By nadeemasad
Words 3948
Pages 16
November 4, 2008

Biocon India Group
Archana Kalegaonkar, Richard Locke, Jonathan Lehrich

“Earn as you learn.” For 25 years this unofficial philosophy had served Biocon well. Starting out in the enzyme business in 1978, the Bangalore-based firm had gradually expanded into the pharmaceutical industry. Expertise in manufacturing enzymes led to mass production of generic drugs, which in turn gave Biocon the experience to establish Syngene, a subsidiary contract research organization (CRO) serving the global pharmaceutical market. At each stage Biocon had built on both its recently developed capabilities and the political, biological, intellectual, and financial benefits of the Indian environment to move into new areas of opportunity. By early 2003, Biocon had parlayed earning and learning into a firm that boasted 800 employees and annual revenues of
US$75 million.
Yet the time had come to consider whether this growth model was reaching its limits. In the eyes of
Biocon India Group’s Managing Director, Kiran Mazumdar-Shaw, Biocon’s newest subsidiary,
Clinigene, seemed an ideal way to capitalize on the company’s technical strengths by offering services in clinical trials. There was concern, however, that Clinigene could also be an enormous distraction, consuming precious resources in an area in which Biocon had little direct experience.
Moreover, if Clinigene did prove profitable, its very success could be a Pyrrhic victory: the subsidiary could rapidly outgrow its parent and damage the company’s hitherto collaborative culture. The growth could even sidetrack Mazumdar-Shaw and Biocon’s directors into pursuing a possibly futile dream of creating one of the only fully integrated drug discovery and development companies in
India. Yet if Biocon chose not to pursue the promise of Clinigene, it might be trapped forever in the

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