India's premier biotechnology company Biocon Limited has achieved a major breakthrough in Europe by acquiring a majority stake in AxiCorp Pharmaceuticals, a leading German company.
Disclosing the deal at a joint news conference of the two companies in Frankfurt on Monday, Kiran Mazumdar-Shaw, the founder and managing director of Biocon, said that her company took over a 70 per cent stake in the company at a cost of 30 million.
It is a historic moment for Biocon, which has been quite successfully operating during the last 30 years, she said, adding, the acquisition 'heralds our foray into the European market'.
Mazumdar-Shaw left open whether Biocon will go in for a higher stake or will completely take over the company, which is located near Frankfurt and specialises in manufacturing and marketing a unique range of its own patent-free medicines as well as low-cost drugs from Europan Union nations.
Biocon's present focus is on building on its break into the German market.
"We will make the necessary investments in the future to achieve our goal," she said. The acquisition marked an important step towards Biocon's goal of becoming a global company.
India's most successful women entrepreneur said the two companies have a common vision of making available medicines at an affordable price and making possible national health systems which are financiable.
This can be achieved in Europe by uniting cost-effective research and development of Biocon and efficient management and marketing of AxiCorp, she felt.
AxiCorp expanded dynamically since it was founded five years ago and made a name internationally within a few years as a provider of low-cost medicines. It has the potential to join the leading names in the area, Mazumdar-Shaw said.
"We welcome AxiCorp as an autonomous company in the Biocon group of companies," she said.
She was convinced that Biocon's partnership with AxiCorp will enable her company cost-efficient production and marketing of a range of original medicines in Europe.
Initially, the two companies will focus on Biosimilars, patent-free pharmaceuticals which are produced with the same biotechnologically created substance and has the same effect as the original product.
Biocon has developed a strategy to produce high quality and low-cost Biosimilars such as human insulin and has become a world leader in this area, Mazumdar-Shaw said.
Human insulin will be the first product to be marketed and if Biocon gets the approval of national and EU health authorities, its sale could begin within the next 12 to 18 months.
Biocon has a range of other Biosimilars in its product range such as anti-cancer drugs, anti-bodies, immuno-suppresants, vaccines etc and their marketing will be considered later.
Biosimilars have a global market of $30 billion and it is rapidly expanding. The deal with AxiCorp will enable Biocon to gain a share of the European market, which is estimated to be around $10 billion.
Mazumdar-Shaw allayed fears that there will be loss of jobs in AxiCorp by relocating production facilities to India. On the contrary, her company's acquisition of the German company will create new jobs.
"Biocon is investing in the company because of great opportunities for both companies. Biocon will provide affordable pharmaceutical products to AxiCorp for marketing and this will create new jobs," she said.
"There is no need for any apprehension that jobs will be moved to India. We have invested in AxiCorp because of the company's entrepreneurial skills and are looking forward to building up the company as a leading company in Europe. This is a historic moment for the two companies," Mazumdar-Shaw said.
Dirk Ullrich, manager of AxiCorp said no top-level changes are planned in the company following the acquisition by Biocon and he and his co-manager Holger Gehlhar will continue to lead the company.
He was pleased that AxiCorp's partnership with the Indian company will make it possible to realise its aim of making available affordable medicine to all, which was set by the two when they jointly founded the company five years ago.
He was quite pleased that the company's new owner shared their view. AxiCorp, which is presently involved in the production and marketing of 180 different patent-free medicines and EU pharmaceuticals, employs at present 170 people.
It belongs to the group of fastest growing companies in Germany and achieved a turnover of 75 million in 2007.
