Biocon to invest over $280 m in facility

Biopharmaceutical major Biocon, which is in the final stages of wrapping up the first phase of its  biopharma manufacturing and research facility at Bio-XCell Park in Malaysia’s Johor region, will invest over $280 million in the two phases of the project, said company Chief Operating Officer Arun S Chandavarkar on Monday.

“We started construction of the Malaysian project in mid-2012, and are now in the final stages of wrapping up Phase 1 of the project at a cost of $180 million, which does not include investments on research and development facilities. Including R&D, Phase 1 investments would exceed $200 million,” Chandavarkar said.

He said that once Phase 1 of the project is operational in the next few months, depending on matching capacity requirements subject to regulatory approvals, it will invest an additional $100 million in developing Phase 2.

It said that the facility, located in Nusajaya city west of Johor, is intended to be the largest integrated insulins production plant in Asia.

Biocon signed a Memorandum of Understanding for the project with Malaysia in 2010, followed by its subsidiary starting operations there in 2011.

Chandavarkar said that the company’s manufacturing operations had been unduly concentrated in Bangalore and the need arose to derisk its operations by looking at other locations, including overseas. “Since our products are marketed on a global scale, it made sense to have an overseas facility to extend our reach. Investments abroad are going to be crucial to our manufacturing plan,” he said.

He said Biocon is hoping to attract more local talent for its Malaysian operations. The Nusajaya facility employs 200 people 70 of whom are undergoing training in Bangalore.

Biocon, which invests 8-10 per cent of its annual profits into R&D, logged $100 million in revenues last year from its research services division.  The company is among the world’s largest producers of statins and immunosuppresants. Its flagship drug brands are Basalog, Insupen, BioMab EGFR and Abraxane. The company launched Cytosorb(sepsis management therapy) in the third quarter of 2013-14.

“Insulin made through recombinant DNA techniques is among our fastest growing segments. We are currently registered and approved in over 50 countries  for our insulin products. The focus will now be on European and US markets. However, insulin manufacture is infrastructure and capital intensive, and expansion on this front will require huge investments,” Chandavarkar said.

In the analog insulin space, it tied-up with Mylan Laboratories (which recently purchased the Agila Specialties division of Strides Arcolab) last year to develop five molecules.