Biocon’s BIOMab- Launch, Price & Promotion

Team : Kurious Saikat Roy ( 10DM-197)Rudra Shankar Chowdhury ( 10FN – 097)

Biocon – A Timeline• 1978 - Started a joint venture between Biocon Biochemicals of

Ireland and Dr. Kiran Mazumdar Shaw.• 1979 – Becomes the first Indian company to manufacture and

export to the United States and Europe , enzymes for the food processing industry.

• 1989 – Unilever acquired Biocon Biochemicals and held an equity share in Biocon India

• 1978-1997 – Two decade long experience as an enzyme manufacturing company, resulting in expertise in various fermentation processes.

• 1994 – Syngene International established.• 2000 – Clinigene formed as subsidiary to conduct clinical trials of

drugs in India.• 2001 – Unilever dilutes its holding in Biocon.

BIOMab – An Overview

• It is a proprietary drug for head and neck cancer.• Conceptualized by CIMAB, the commercial branch of

Centre of Molecular Immunology (CIM).• Based on Monoclonal antibodies (Mabs) that could

specifically target cancer cells.• Already licensed to YM Bioscience of Canada for

distribution throughout Europe, North America and the Pacific Rim except China

• Licensed to Biocon to develop and market the molecule in the Indian sub continent.

Launch of BIOMab – SWOT AnalysisSTRENGTHS:• Pedigree of Biocon in the pharmaceutical industry.• Drugs designed by CIMAB ( marketed by CancerVax already

approved by the US government.• 70% of all Cancer deaths in low and middle income

countries due to scarce resource availability for prevention, diagnosis and treatment.

• 21% of cases and 27% of deaths worldwide due to head and neck cancer occurred in India.

• Most targeted cancer therapies are in early stages of development.

• Successful completion of Phase 2 trials with a patient response rate of 100 %.

Launch of BIOMab – SWOT Analysis

WEAKNESSES:• Limited knowledge about the intricacies of the new

technology.• Biocon is basically a microbial fermentation company with no

knowledge of dealing with mammalian cells.• Lack of knowhow about the manufacturing of the product and

significant investment requirements.• Lack of experience in marketing and selling oncology drugs.• Lack of relevant data about the launch and pricing of any

similar kind of product.• The economics pertaining to the launch of BIOMab are very

fuzzy depending on a host of factors that are difficult to pin down.

Launch of BIOMab – SWOT AnalysisOPPORTUNITIES:• Expected number of patients who could afford the drug are likely to

go up as the Indian economy is growing at a rate of around 9%.• About 20000 of the projected 190000 patients per year using

BIOMab will fall in the advanced stage category wherein the doctors will be keen to use BIOMab in conjunction with radio or chemotherapy.

• Although BIOMab’s potential approval would be for head and neck cancer off label usage for other indications will also be possible which is a common practice in India.

• Potential market could also be improved by educating end customers, targeting government & insurance companies and charging a lower price for BIOMab.

• India’s annual population growth rate of 1.4 % could also increase the market potential in the future.

Launch of BIOMab – SWOT AnalysisTHREATS:• Requirement of regulatory approval for a new drug,

something never before done by Biocon.• Indian Regulatory authorities’ unfamiliarity with the

approval of new drugs.• Neither the regulators nor the doctors in India are used to

doing clinical trials.• Surgery, radio and chemotherapy were established

treatments of cancer.• Erbitux developed by ImClone Systems, US for colorectal

cancer was already approved by USFDA and has already introduced in India for treatment of colorectal cancer.

LaunchAlternatives:• Launch BIOMab for Head and Neck cancer with Phase – 2

results.• Wait for the Phase – 3 results.• Invest in Phase – 2 trials for other indications.

Of the three alternatives waiting for the Phase -3 results to launch the drug for Head & Neck cancer is most appropriate.

Explanation:• Erbitux has already completed the Phase – 3 tests. Thus

launching BIOMab without similar kinds of tests will have an effect on its credibility.

LaunchExplanation Continued:• Trials for studying the long term side effects of the drug were

yet to be completed. Even a single case of bad side effects of the drug would seriously undermine the standing of the drug and the company alike

• Without proper proof about the effectiveness and safety of the drug it would not be possible to circumvent the skepticism of the doctors prescribing the drug.

• Minimal amount of trials might not be enough to convince oncologists to prescribe BIOMab over Erbitux.

• Even if Erbitux is launched before BIOMab, Biocon could always catch up by competitive pricing and with the USP of being home grown

PriceAlternatives:• Setting the price equal to or higher than Erbitux i.e.

4000$ - 5000$• Setting it at a low price range of 1000$Of the two alternatives a price point comparable to

Erbitux is most appropriate.Explanation:• The two tier price structure does not comply with

the corporate objective of the company.• A price higher than that of Erbitux would be

expensive for most of the target customers.

PriceExplanation Continued:• A low price however would also raise questions about the drugs

credibility as it’s a common psychology to link price with the quality of a product.

• Even if the price is on slightly higher side it was still cheaper in the long run as other conventional methods of cancer treatments were much more expensive.

• BIOMab also has the advantage of having been tried on a six dose treatment plan where as Erbitux was tried on a continuous treatment basis which further reduces the long the long term cost implications of BIOMab.

• Even if the higher price proves to be a deterrent to the sales it can always be adjusted later. But if a lower price is set now then increasing it at a later point of time would be very difficult without having an adverse effect on sales.

ChannelAlternatives:• Directly through doctors• Through the traditional pharma channel.Of the two alternatives distributing the drug directly through doctors is most

appropriate.Explanation:• Lack of required infrastructure at all pharmacies for storing such a

specialized drug might be a constraint.• Being a specialty drug wholesale distribution of the drug won’t be necessary

and as such the traditional route adds much less value• Even if doctors prefer to procure the drugs from known pharmacies Biocon

should be able to use its clout to influence doctors to procure the drug directly from them.

• Biocon might initially face problems in following this route of distribution but once the drug has a substantial standing it would be able to negotiate effectively with the doctors on ways to minimize its responsibility in the transportation of the drug.

Marketing CommunicationAlternatives:• Only target the doctors.• Celebrity Endorsements.• Targeting patients and their families along with the doctors.Of the three alternatives targeting patients and their families along with the

doctors is most appropriate.Explanation:• Cancer being a life threatening disease patients and families do have an

interest in the treatment provided and also in certain cases it is necessary to acquire their consent before administering any kind of treatment. As result the patient and the family might play an important role to play as an influencer while selecting BIOMab.

• Celebrities might not have an impact on the decision as it’s a life threatening disease. But a celebrity who has a history of Cancer survival might go a long way in promoting the drug.