‘Regulatory hurdles are slowing biotech. GEAC (Govt) takes own time…it had 5 chairmen in 1 year’

You’ve been doing business in a man’s world…

Well, I think it’s a very exciting field and (am) thrilled at being able to do something about this sector.

And you started just from the garage? With just Rs 10,000…

That’s right. I think that’s the thrill, of creating something like this from nothing. And I think the life sciences is one of the most exciting sectors to be in today…

And now Rs 550 crore already …and what are we looking at?

We aspire to be one of the top ten biotech companies in the world, and in that kind of a mission, I guess we would like to be a billion-dollar company before this decade is off.

But biotechnology is a new business, it’s not something that most understand very much.

Well, fermentation is the core technology that biotech is very dependent on. To really use a sort of layspeak… what is biotechnology… it is the technology that harnesses living organisms to produce products of commercial importance. And therefore, what this plant is doing at the moment is producing cholesterol-reducing drugs…

Like statin, as it is called?

Statin, lovostatin, pravastatin… and then we are also producing one of the dedicated fermentors, the common human insulin…

That, I believe, in some way is your cutting-edge wealth right now, because a couple of MNCs have the monopoly in that area…

Yes, absolutely. Novo and Eli Lilly dominate this market and we are trying to sort of enter into this space in a very confident manner.

But tell me how does it work? How does it differ from the insulin that people use in general?

Well, generally people in the past have relied heavily on animal insulin. As you know, insulin is the hormone that is very important for the human body to regulate the sugar metabolism or the glucose metabolism…

And India has the largest number of diabetics in the world.

Absolutely. We have 1/4th of the world’s diabetic population.

And some of that is also geographically concentrated in certain pockets of India? Like maybe Gujarat or…

Yes, there are certain regions. For instance, the Eastern region has a very high-level of diabetics…the Western and Southern regions…Well, actually India is kind of pretty geographically spread in the case of diabetics. As far as insulin is concerned, the big difference is that in the past we have relied heavily on animal insulin, that is insulin extracted from porcine and bovine, that is pigs and cows. But today biotechnology enables us to clone the human gene that codes for insulin, and using a ‘‘plug-and-play’’ technique we can insert this gene, in our case, into yeast…and the yeast produces human insulin.

So is what you are doing now giving some trouble to the MNCs who’ve been dominating this market? They have been charging a very high price…are you forcing them now to rationalise their prices a bit?

Well, as a pre-emptive measure, they have actually dropped prices. Of course, I don’t think we will use only price as a differentiator to compete with them. We will compete with them globally and that’s what our aspiration is.

So you actually want to go and fight for the international market? And you don’t have a patent issue here?

No, we have our own patents in this technology.

So, when this new insulin comes up, what does it do to the size and scale of your business?

We are very excited with this insulin opportunity because, as I mentioned, it is not just the domestic opportunity, which itself is a large one… the current size of the insulin market is about Rs 200 crore, but I believe this is a market that can be expanded to Rs 1,000 crore.

But do you have the scale to compete internationally? Don’t you think you need bigger turnover, bigger volumes to compete with Eli Lilly and the rest?

Well, you are absolutely right and that’s what we are doing. We are setting up a million-litre fermentation facility two kilometres away in another industrial estate. And that will be the largest fermentation facility of its kind in Asia. I might add that even this facility, in terms of insulin alone, would not be very small in a global context. Certainly not as big as Eli Lilly or Novo, but as big as the next rung of players.

So how do these companies look at you? Are they worried about you, envious of you, do they hate you…or do they want to acquire you?

I am sure a bit of everything. But as far as we are concerned I think we look at this as a global opportunity for partnering with large companies, for getting into global markets in a confident and aggressive manner. I think the important thing is not just building such facilities but having the ability to conform to the highest of international standards, which is what we’ve done. We have conformed to USFDA standards.

It must have been hard work building this huge plant. But it should be a nice feeling… you are soon going to be called the richest women in India?

Well, that’s not something I am very pleased about being called. I think it’s more important for me to have created a very valuable organisation. I think that’s what drives me really. And it is this opportunity that this company has provided to thousands of scientists…

But you have created this wealth. You didn’t inherit it, nobody gifted it to you…

Absolutely. That’s what’s exciting…that companies like Biocon and Infosys were created by ordinary people with very meagre resources.

People who don’t come from traditional business families… with nothing inherited except enterprise, is it? A sense of innovation…

Yes, a sense of innovation and a passion to make a difference. I am a very proud Indian and I always wanted to create a world-class company which the country can be proud of, apart from myself.

It is companies like this that are adding to the feel-good factor. The spirit somehow that Indians can do it, and also Indians are doing it…

That’s what it is about. All these years, we in India had this feeling that you had to have inherited wealth to create large companies. And today it’s a common man…

Are you sharing some of your wealth with the people who work with you, like in IT? To that extent, is BT like IT?

Of course. It’s a very knowledge-driven business, it’s a people’s business and at Biocon 15 per cent of the stock is owned by the employees.

Fifteen per cent of your stock must be worth quite a bit now…

I hope so…

Tell me something about when you started… what got you into biotech? I believe you trained to be a brew-master?

Yes, I trained to be a brew-master, but I couldn’t find a job as a brew-master and that was what basically got me, in a very accidental manner, into biotech.

And like many of us in our generation you set out to be a doctor.

I got rejected by medical schools. That made me take up biology instead. And that led me to specialise in brewing. But once I got rejected even as a brew-master, I turned to biotechnology.

But why did you get rejected as a brew-master? That should be an interesting business?

Well, that was a gender-related issue. I think employers were hesitant to take me in, thinking that I will not be able to deal with certain issues like labour relations. I never thought they were right, but then those were certain issues that I had to come to terms with.

So how did Biocon come up? So little is known about Biocon… Infosys, Wipro are public stories.

Well, Biocon is not a public company so not too much will be known about it other than that we are a pioneering biotechnology company.

But it’s going to be a public company soon I suspect.

Yes, in the next few months. Biocon came about accidentally. I met the owner of the Irish company from where our name comes, he wanted to set up a joint venture in India and identified me as a potential partner. And I was at that sort of stage where I was being rejected as a brew-master, so I thought…

…After failing to get into a medical college, after failing to get a job as a brew-master…after getting a masters in brewing, isn’t it, in Australia? And what was the garage operation?

Well, life is strange. When I set up shop I had a rented house, you know. The garage sort of doubled up as my office. That was my beginning. I thought that I had to make the most of my available resources and I started with just Rs10,000 in the bank. Of course, my Irish partners were very supportive of what I was doing but I was also very proud; I didn’t want to take too much from them either. I used that garage for the first three years of my operations and then I moved into another rented office in town before we moved in here. And I can tell you that before we acquired this piece of property that we are walking through now, it was a very remote set-up. Infosys came after Biocon and this was quite a rural road with no telephones.

But that’s the way it is with biotechnology. The gestation period is much longer.

There is a lot of difference between biotech and infotech. People try to draw a lot of parallels but it is not really correct. BT is very capital-intensive, research-intensive with a very long gestational time-line. And the most important thing is it is very dependent on a regulatory framework, which IT is fortunately not.

But once you get it right, I suspect growth can be much faster, because then your products can go to a larger body of consumers.

Yes, you know, the challenge of biotechnology is to master a certain technology. We have mastered fermentation technology, and having laid that very strong foundation we are today at a real take-off stage.

Because, you are Rs 550 crore now, and you say you are looking at the billion-dollar mark maybe six or seven years from now. But if you look back at Infosys, it was about this size five years back and is now a billion-dollar company. So in biotech, I suspect growth can be much faster, now that you’ve got a few molecules or a few products and approvals that most Indian companies dream of… I believe your labs are now FDA approved?

Yes, our facilities are now FDA approved, but I think what is more important is to really focus on global opportunities, on installing very large capacities.

It’s very inspiring at one level. But at another level it’s also very unusual to see a women entrepreneur who started something talk of scale, talking so big. Tell me, is it an advantage or a problem being a woman pioneer with no background, no inherited money of this scale and a completely new idea?

I must say that I’ve never faced a hurdle or a setback being a woman. I also had the good fortune of having a great team of people working with me and building this company.

From Rs 550 crore, if you are looking at becoming a billion-dollar company — that is Rs 5000 crore company — what are the hurdles or roadblocks that you think your company or businesses like this will face? Let me put it differently: if from a Rs 1000-crore business in India, biotechnology has to become a Rs 10,000-crore business in 10 years, what are the hurdles it must overcome?

First and foremost, there are infrastructure hurdles. There is the need to set up high quality and uninterrupted infrastructure.

Like you said, you had to set up your own power and water supply and things…

Regulatory hurdles are slowing down the sector. At the moment, we are dependent on a regulatory framework that is extremely cumbersome, which is very slow, there is an apex body called the GEAC…

Genetic Engineering Approval Committee?

Yes. It is taking its own time about regulatory approvals. It is headed by bureaucrats who don’t have a scientific understanding…

…Are they the people who look at genetically modified seeds?

Yes. And they come under the Ministry of Environment. We believe in the industry, their role should be restricted to the release of genetically modified organisms into the environment and not on the commercial approval of products.

Do you get blocked by GEAC and others quite a lot?

I think more so now than before. In fact, the GEAC has approved only one genetically modified crop, that is Bt cotton.

And that too in some states…
That too in some states…they have taken seven years for this approval process and after that we haven’t seen a single…

But what happens when you talk to the chairman? Is the chairman an IAS officer?

There have been five chairmen appointed over a period of one year.

Five chairmen of GEAC in one year? All IAS officers?

All IAS officers. And unfortunately, it’s very frustrating. So, you know, this is where something needs to be done…

So none of them would even have had the time to study the basic issues, forget understanding genetics.

I mean, forget studying, understanding genetics is more important. These are the kind of issues that the industry is grappling with. How do we get a regulatory reforms put into place at great speed?

Give me some specific examples of how research innovation got blocked…

For instance, right now, as a biotech company, we need to import a number of microbes for our research work…bacteria, fungi…at the moment that’s the first hurdle. We have to get GEAC approval to just import these…

Did you talk to people higher up? Did you talk to Dr Joshi, did you get a slightly sympathetic hearing?

Well, I must confess I haven’t had a detailed discussion with Dr Joshi but for the first time he has actually called for a meeting where he wants to listen to…

If these issues are not resolved, this industry is going to stop in its tracks…

This industry will not reach its full potential if the government doesn’t recognise these hurdles and clear the way.
n Kiran, the other thing is I know that you are a strong supporter of the idea that India, given its large pool of population and diversity of disease, should actually open up for international drug research… How does it work? As a layman I will ask, are you saying that Indians should be offered as guinea pigs to the drug manufacturers of the world?

That’s a very old argument. We don’t need to look at it that way at all. I think the important thing is to conduct these clinical trials under a very ethical framework. And the way you can do it is, for instance, restrict these trials to the literate population…

Because that is one charge. That in India you’ll get poor patients, you’ll offer them Rs 100 a day and get their thumb marked on any form…

Well, I don’t think you should go for such patients. For instance, we are about to complete our clinical trials on human insulin, and one thing we have done is we have focused on a patient population that is literate, that is well-informed, where we have got an informed consent from the patient… You have to create very ethical norms on which you are going to do clinical trials.

And unless you do this, you and the entire industry cannot grow the way it can grow otherwise…

Yes, I think there has to be a very deep sense of a moral conscience, ethics and good governance and good transparency in what you are doing. And once you establish those key parameters, India can be very responsible in the way it is looking at these kind of opportunities.