creating emerging markets kiran mazumdar-shaw, chairperson

Creating Emerging Markets – Oral History Collection

Kiran Mazumdar-Shaw, Chairperson and Managing Director, Biocon

Limited

Interviewed by Tarun Khanna,

Jorge Paulo Lemann Professor, Harvard Business School June 4, 2018 in Boston, Massachusetts

Video interview conducted in English

The Creating Emerging Markets Oral History Collection is part of the collections of Baker Library,

Harvard Business School. The transcripts are made available for academic research and teaching.

Any other use - including commercial reuse, mounting on other systems, or other forms of

redistribution - requires permission of Harvard Business School. When use is made of these texts, it

is the responsibility of the user to obtain the additional permissions for requests to cite and to

observe the laws of copyright and the educational fair use guidelines.

Research Inquiries & Requests to Cite Oral History Collection: Please contact Rachel

Wise, HBS Archivist, [email protected] or Laura Linard, Director of Special Collections,

[email protected].

Preferred Citation: Interview with Kiran Mazumdar-Shaw, interviewed by Tarun Khanna,

Boston, MA, June 4, 2018, Creating Emerging Markets Oral History Collection, Baker

Library Special Collections, Harvard Business School.

Baker Library Special Collections

Baker Library | Bloomberg Center

Harvard Business School

Boston, MA 02163

617.495.6411

[email protected]

http://www.library.hbs.edu/hc

© 2018 Copyright Notice The Creating Emerging Markets Oral History Collection is owned by the President

and Fellows of Harvard College.

mailto:[email protected]



http://www.library.hbs.edu/hc

Interview with Kiran Mazumdar-Shaw

Interviewed by Tarun Khanna

June 4, 2018

Boston, MA

Video interview conducted in English

TK: Kiran Mazumdar-Shaw, thank you for joining me to participate in

this Creating Emerging Markets project.

KMS: Thank you, Tarun. Pleasure.

TK: I’d like you to start at the beginning of the what’s now the Biocon

journey or story, as you wish to call it, and reflect on the broad sweep of

these past 40 years. Perhaps starting back at the beginning—think about

the motivations for embarking on this journey, and then later think about

perhaps some epochal moments—some pivot moments when things really

changed. We can use that to start a conversation about what we can learn

from this journey.

KMS: So I’ve always called myself an accidental entrepreneur, because I

really never planned to start a business. I went to brewing school in

Australia. I came back thinking, “I’m going to pursue a career in brewing.”

2 Creating Emerging Markets

But I was in for a rude shock, because people in my own country didn’t

want to hire a woman in a brewing industry. And—

TK: This is brewing beer?

KMS: Brewing beer, yes. And of course, that was something I hadn’t

anticipated, because I thought I was going to be a very sought-after person.

Having qualified as India’s first female brew master and having done that

with flying colors, I thought, you know, it was going to be an easy ride for

me. But that was not to be.

So I think I was extremely despondent. I was very dejected. And I

was actually all set to go and pursue a brewing career overseas when an

accidental encounter with an Irish biotech entrepreneur changed my life.

Basically, he had heard about me because of my brewing days in Australia.

He tracked me down in India, approached me and said, “Hey, look, I’m

trying to set up a biotech company in India and I’ve heard about you, and

how would you like to partner me?”

Of course, my immediate response was, “I don’t think I’m the right

partner, because I’ve just been told that this country is not a place for

women in business or women trying to pursue any kind of career. I don’t

have money. I don’t have business experience. And so why would you want

me to partner you in such an important endeavor?”

So I actually tried to introduce him to very successful businessmen

in India, because I thought that was the more appropriate thing to do. But

3 Mazumdar-Shaw Interview

he somehow convinced me and he said, “Look, if you had the spunk to do a

brewing program in Australia, why can’t you have the spunk to start a

company in India?” And he kind of talked me into it, and so I said, “Okay,

I’ve got nothing to lose. Maybe I should take a stab at it.” And so that’s

how I started Biocon in 1978.

TK: This was in the late—yeah, 1978?

KMS: And so I often joke and I say, “Do you know that India’s largest

biopharmaceutical company was founded because of a gender bias?” So

that’s how I started Biocon in 1978. Of course, I knew very little about

running a business. I knew a little bit about enzymes, which was really the

technology and the technology platform that the Irish biotech company was

keen to establish in India. And I went, in fact, to Ireland for about six

months before I really started my venture in India—to really understand

what enzyme technologies were all about and how they were applied and

how industrial processes were adopting enzyme technologies and replacing

chemical technologies or mechanical technologies.

So it was a very interesting six months that I had in Ireland. When I

came back, I had to then start the company, and that was when I faced

another set of challenges—which included accessing capital, recruiting

people, and again building credibility for myself as a woman entrepreneur.

It was interesting because banks didn’t want to lend to me because they felt


I was too young—because I was 25 years old. They felt I was high risk

because I was an inexperienced woman entrepreneur. And—

TK: So was it the inexperience, or was it the fact that you were a

woman?

KMS: Both. I mean, it made it worse because I was a woman. Thirdly,

they didn’t understand what I was trying to do, because this was the first

biotech startup, and they knew nothing about biotechnology. So I think I

was a huge financial risk in many ways. But somehow—I kind of talked to

various bankers, and I was able to convince at least one of them to give me

a credit line, and that’s how I started Biocon.

The second thing was then to look for people to hire, because I had

to start running a company. Again, I found that people wanted job security,

and they felt working for a woman entrepreneur—or for a woman-led

company—was not going to provide them job security. So I had a tough

time trying to find people to work for me. Finally, I got two retired tractor

mechanics to be my first employees, and I started getting a very sort of

crude factory established in a rented shed.

TK: And at this time, what were you planning on producing and selling,

exactly?


KMS: So to begin with, I had two products—two readymade products,

which the Irish company was willing to buy. One was Papain, which was a

plant enzyme from papaya—which is a tropical fruit, as you know, which

grows abundantly in India. And the second was a fish collagen that was

extracted from fish that were found in tropical waters and fished very

abundantly—again, on the coasts of India. So I was supposed to extract the

collagen, which was called Isinglass. So those were my first two products.

TK: And there was a readymade buyer—the Irish company would buy it

from you?

KMS: Yeah. So I had basically a buyback guarantee from them, and that’s

how I was finally able to get a credit line from a bank. I had to—you know,

I had actually spent time in Ireland developing the processes, so all I had to

do was come back to India and get those processes implemented. That’s

what I had to use these few employees for, to begin with.

So it was tough in the early days, but then slowly but surely I started

developing the company. My next big aim was then to make microbial

enzymes, which was really what I wanted to do. And for that, of course, I

had to find R&D folk. I had to really start establishing a proper biotech

company, and I was really wondering at that time whether I would ever find

people to join me in this great journey.


TK: But just to clarify for our listeners, none of this is

biopharmaceuticals. This is industrial enzymes, for the most part—correct?

KMS: This was industrial enzymes. So I started with industrial enzymes,

and for 20 years I actually developed industrial enzymes. But I think what I

realized over time—as I was developing these industrial enzymes—was

that biotech is that is agnostic to what you make. So first of all,

fermentation science was very handy because I had learnt it in my brewing

science, which is what I applied for—microbial enzymes. And then added

to that was recombinant DNA technology to make certain types of

enzymes. So after about 20 years of making enzymes—and being very

successful at making enzymes—I managed to get a mindshare with a lot of

bright young scientists from IIT Delhi, and IIT Chennai and places like

them—

TK: These are the—India’s leading technology institutes?

KMS: Absolutely. They finally decided I was doing something very

exciting, and they joined me. Then we started developing these enzyme

technologies based on fermentation. Although for 20 years I developed

these industrial enzymes—which were very good and I was able to globally

market these enzymes—I think I came to a point when I said to myself,

“You know, what else can we do with these technologies? Should I only be

making enzymes?”


TK: But before we transition there, can you come back to your point

about the discrimination that you faced as a woman, in particular? Did you

find that that faded as you became more established as an enzyme

producer? In other words, were the credit lines now readily available,

talent available, etc.?

KMS: Obviously, when I started becoming successful as a company—

basically I started turning a profit after the second year, I think. I started

establishing my credibility with the banks first. And then, of course, the fact

that I was becoming known as a biotech startup—as a sort of a pioneering

entrepreneur—also played a role. I guess a lot of the prejudices and

skepticism that I faced as a woman entrepreneur just disappeared. And

since there were no other people in biotech, I guess I got a lot of attention.

TK: And all this while, it’s primarily or exclusively a Bangalore story. Is

that a fair statement?

KMS: It is. It always has been a very Bangalore-based story. And if you

remember, Bangalore was also becoming a tech hub at that time, because of

the IT services companies that were beginning to mushroom. And so

Biocon came up almost at the same time as these IT companies, and we

started becoming quite confident in our technology. I came to a point where

I felt I should do something else beyond enzymes, and that “beyond

enzymes” became pharmaceuticals. I felt that biopharmaceuticals was


going to give me a much faster growth trajectory than enzymes would give

me.

And you know, the other thing was enzymes was a very different

model. If I wanted to become big, I had to pursue a high-volume, low-value

commoditized kind of an enzyme space, whereas what I was doing was

specialty enzymes, which was high-value, low-volume and the market was

limited. So because of that, I was forced to reinvent my business saying,

“What else can I do?” I didn’t want to spend too much money setting up

these huge capacity enzyme facilities.

TK: For commodity enzymes?

KMS: For commodity enzymes. I said, “Can’t I do something else?” And

that something else became biopharmaceuticals. So I basically leveraged all

the technologies that I developed for enzymes and started making

pharmaceuticals instead. My first fermentation-based molecules were

statins, because they were produced—lovastatin and pravastatin are

produced by fermentation. So that’s what I started doing, and I became—

TK: And these are relatively simple molecules?

KMS: These are small molecules—

TK: Small molecules, yeah.


KMS: —as they’re called. But they’re still fermentation-based, and they’re

quite complex in that sense. I became successful with the manufacturing of

these products and selling the active pharmaceutical ingredients—or APIs,

as they are called, bulk drugs—to global markets, especially the U.S. and

Europe. I got USFDA approval for statins. So that got me off to a good start

applying that technology—

TK: So you weren’t marketing the statins directly to consumers. You

were selling them to other—

KMS: It was a B2B business. And then I—

TK: So what time period was this, Kiran?

KMS: This was just 1999, or thereabouts.

TK: Okay, so 20 years after you started. Right.

KMS: 20 years. ’98, ’99 was when I made the switch. And then I started

making immunosuppressants, which were also produced by fermentation.

My first big recombinant DNA product was insulin. You know, India was

at the epicenter of diabetes, and I thought to myself—I said, “Why are we

importing all our insulin? Why don’t I try and make recombinant human


insulin? I’ve got this DNA technology. Why don’t I apply it and see if I can

make insulin?” And I used a very proprietary yeast system to make insulin.

TK: So can you explain to people who are not as well versed in the

science—what’s the novelty in this approach compared to Eli Lilly and

Novo and others who are in the insulin business?

KMS: Yeah. So Eli Lilly uses a bacterial system—E. coli—and Novo uses

a Saccharomyces yeast to make insulin. I used Pichia, which is a very

different yeast system, which is a high-yielding yeast system—which I used

then to make insulin.

TK: And the intuition was yours or your scientists’—that this approach

would be successful? Because of some past experience in something?

KMS: So we were using Pichia fermentation for making an enzyme. We

were making a phytase enzyme using Pichia yeast. It was a very high-

yielding process. It was a very elegant process. And we said, “Hey, this

process can make insulin. I think we’re in business.” So we said, “Let’s try

and see if we can actually insert the insulin gene into the Pichia and see

whether it expresses the same way.” And we were lucky. It did. So we

started making recombinant human insulin using Pichia.


TK: Kiran, can you give some sense of—the way you’re describing it, it

sounds very quick that you were able to go from one to the other. But each

of these steps requires some patience, I would assume—

KMS: Investment.

TK: —some capital, risk tolerance. Can you comment on some of that,

for any of these transitions? I mean, take the insulin transition, for

instance.

KMS: So let me start with enzymes.

TK: Okay. Sure.

KMS: I mean, whatever’s said and done, it’s not as if to say that it was

easy. Even making enzymes was tough. Of course, with pharmaceuticals, it

was relatively easier than making enzymes—because with enzymes, the

moment you had an idea of what you wanted to do with that industrial

process, you had to go back to the drawing board. You could do a lot of

basic, predictable experimentation, I would say, because you knew what

you were doing. You would get an enzyme, and then you basically used a

lot of your time to improve the yields and improve the process and finally

get a purified enzyme.


We were getting very good at it, so we could actually look at any

application and say, “Okay, now let’s go and look at our repertoire of fungi

and bacteria and see which one of them can produce this product.” And we

would do that selection, come up with a rudimentary product, and then

improve it and get a pretty good product within a very short time. So every

year, for instance, we could produce maybe a couple of enzymes for

various industrial applications. And we—you know, it was investment, but

there was more predictability in the endpoint.

But when we moved to pharmaceuticals, obviously it was a far more

complex regulatory process. In the early days, it was okay because I was

still—it was still a “copy cat” kind of an approach, because I started with

molecules that had already been discovered, and I was making products

which—where I was just using a different technology—

TK: —to get the same results.

KMS: But I still wanted to differentiate myself from the Lillys and the

Novos, saying, “Can I be the third insulin company making insulin with

something else?” Because if you call Lilly an innovative company and if

you call Novo an innovative company, then I also want to be called an

innovative company—because I’m also using a different technology. So

that’s what I did. I didn’t mimic either Lilly’s technology or Novo’s

technology. In fact, today, we are the third largest insulin producer in the

world, and we are very proprietary in our insulin technology, because


nobody else uses Pichia to make insulin and insulin analogues—only we

do. So I think from that point of view, you’re seeing three companies with

three technologies. And I think we—you know, we were very reassured by

the fact that we could actually develop insulin in four years.

TK: So it took about four years?

KMS: It took us four years to take that technology from lab scale to plant

scale. But what was good was, because we were familiar with the

technology—because of the enzymes that we were producing at

commercial scale—I think we had that confidence to see it through quite

fast. And then, of course, we had to go through a whole clinical

development phase, which we had never done before. So it was a whole

learning process of running clinical trials, testing your product, making sure

that it works, making sure that you had all the quality systems in place to

ensure that the product was safe, efficacious, and did what it had to do. So I

think we went through a tremendous learning curve trying to make our first

drug product. Remember, the others were drug substances.

TK: APIs and so on? Yeah.

KMS: APIs. Whereas this was a drug product, which would be used by

humans.


TK: So going back to the simultaneous emergence of the IT industry—

most people would think that there is a cost advantage to doing this

research in India. So can you say a little bit about how much it cost you to

go through this four-year process of going from lab to plant scale for

insulin?

KMS: I think there is a definite advantage. There is a sort of a cost

arbitrage that you have in India, because the scientists are very talented—so

the talent pool that you’re dealing with is definitely very cost competitive

compared to the western world—plus the fact that we had good engineers,

who could put up these plants in a very inexpensive way. So combining the

two, I think we had a huge advantage in terms of cost.

And because of that, actually, in 1994, I also set up a research

services company called Syngene. This really was borrowing the idea from

software services saying, “Hey, if these guys can offer financial services,

why can’t I offer research services?” So that’s what we did. We set up

Syngene as a research service provider, and over time, it’s become a very

successful and large research service provider to global companies, mostly

pharma.

TK: And that was set up as a subsidiary of Biocon?

KMS: That was set up as a 100 percent subsidiary of Biocon.


TK: I see.

KMS: We took that public a few years ago.

TK: Yeah. So—but there were other challenges with getting the insulin

product to market, right? You mentioned doing the R&D and the clinical

trials—

KMS: Regulatory.

TK: —the regulatory hurdles that you had to deal with.

KMS: And then you had to have a cold chain. You had to have very

different supply chain logistics for enzymes—I mean, for insulin compared

to enzymes.

TK: And what about the marketing aspect of—

KMS: And then, of course, you had to set up a marketing enterprise to

basically market and distribute the products, at least in India to begin with.

Then we started taking this product, through partnerships, to other

countries, where we also became very successful. So we are very successful

in Mexico, for instance, Latin America, Southeast Asia.


TK: So in all these other countries, how does the insulin product

compare to—how is it positioned in the market compared to Lilly and

Novo?

KMS: Well, you’ll be interested to know that we have 100 percent of the

market in Mexico. We knocked out Lilly and Novo, because it’s a tender

market, okay? I mean, the government tenders insulin. That is the largest

part of the market. You still have a little—a few small retail business—but

the larger part of that business in Mexico is a tender market. So for a long

time, Novo used to dominate that market. Then when we came in, we

disrupted that market. Today we actually command 100 percent of the

tender business.

TK: So—but should we think of the insulin that Biocon sells as being

functionally equivalent to the insulin sold by Lilly and Novo?

KMS: Absolutely. It’s, in fact, what we would consider as a biosimilar

insulin.

TK: I see. But it’s priced cheaper than Novo and—

KMS: Yes. You know, in India, for instance, Novo and Lilly used to price

their product tenfold higher than what they’re pricing it today.


TK: Because of the competition now?

KMS: Because of the competition. They still have a pretty massive market

share, but obviously they’ve had to drop their pricing to compete with us.

And now today, we all sell the product almost at the same price.

TK: Same price? So let’s talk about some of these partnerships—

because that’s another transition that you went through to being a global

company. Maybe you can describe either the Mylan partnership or some

other ones that you’ve—

KMS: So actually, the first partnership that I had— was the Irish

partnership, which is how I started the company and you’re very right to

point out that partnering has been a forte of Biocon.—.

TK: That started you. Yeah.

KMS: It was a joint venture. The Irish company was acquired by Unilever

in 1989, and so I had this partnership with a huge global conglomerate,

Unilever, for almost ten years. That was a very important inflection point in

my journey, because, being a part of the Unilever enterprise, I had to

conform to their systems. So whether it was financial reporting systems,

quality systems, IP, manufacturing systems, you know—it made us realize

that we were amateurs and we had to suddenly professionalize. So in those


ten years, we became a very professional organization, thanks to Unilever.

And—

TK: But it was not constraining, also?

KMS: I think, you know, for me it was an opportunity. I saw this as an

opportunity to learn. I saw this as a unique opportunity to professionalize.

So we didn’t get daunted. We were like sponges, just absorbing everything

they were throwing at us. And I must say that that actually stood us in very

good stead, because when we went to the next stage—which was really to

look at pharmaceuticals and biopharmaceuticals, which was a much tougher

regulatory sector—it was this systems approach that helped us to climb up

that curve very fast.

TK: So that’s the first significant partnership?

KMS: Yes. Then of course, once we became known as a

biopharmaceutical company, we started developing antibodies. The first

two antibodies that we developed were actually not biosimilars—they were

novel antibodies, which I actually licensed from a Cuban research institute.

So that taught me how to take a new molecule to the market, but it was in

India. So I was able to very successfully do that, and in fact, we just

submitted and presented a very, very powerful set of data on this molecule,

Nimotuzumab, which was done in partnership with a very large cancer


hospital in India, called Tata Memorial. And we just presented at ASCO

this year on the very good data that we got.

TK: This is so interesting, because people in many parts of the world

don’t think of Cuba as being a repository of intellectual property, and I

think this example suggests that maybe we should be a bit more open about

where we look for ideas.

KMS: You know, I credit myself for looking at Cuba, because antibody

technology was a very coveted technology when I was interested in doing

it. This was in the year 2000, and I had nowhere to access that technology. I

actually read in one of the American journals, Genetic Engineering News,

that Cuba was quite interesting because they had done these wonderful

things in biotech. I mean, it was interesting to know that Castro—despite

everything and all the embargoes—decided to invest in biotech, because he

felt—

TK: That’s interesting.

KMS: —this would secure the future of Cuba. And he was right. So he set

up these high-end research institutes, and one of them was the Center of

Molecular Immunology, which was developing these very interesting novel

antibodies. So I—as I told you, I went to Cuba saying, “Let me see if I can

access this technology.” And I was able to. I actually went there. They were


willing to give me this technology because, you know, they needed money.

So they licensed the molecules. They gave me the technology. And that’s

how I started my whole antibody technology and expertise.

TK: And that remains a partnership or—

KMS: No. That was—

TK: That was a one-off?

KMS: That was a—I mean, I had a very brief partnership. I basically just

bought off everything from the Cubans, and then I sort of went on with it

on my own. But because of that knowledge that I had acquired, I decided

then to venture into biosimilars. Those were early days of biosimilars and—

TK: So what year is this now?

KMS: We had started working on biosimilars after our success with

Insulins but it was in 2009, actually, when I first entered into this

partnership with Mylan. And we started developing biosimilars. So we had

already started a few biosimilars, and Mylan was—

TK: And Mylan, of course, is a big generics—


KMS: Is a big generics company, yes. And they felt that the next area of

growth was going to come from biosimilars, because there were too many

people getting into small molecule generics. It was commoditizing—very

rapidly with too many competitors. So I think that they made the right

choice. They said, “I think we should get into biosimilars,” but they had no

clue how to make them, so they tracked us down.

They used to buy some of our APIs, so they knew us. And then one

day they said, “Why don’t we forge a partnership and make biosimilars?”

And I thought, “Well, that’s great, because it’s very expensive to develop

biosimilars.” So cost-sharing and profit-sharing was the model we followed

with Mylan. And this has been a very, very successful partnership, because

we were the first company globally to get a USFDA approval for a

biosimilar—trastuzumab—and just now, we’ve heard that we’ve got a

second approval from the USFDA for—

TK: Congratulations.

KMS: —for our pegfilgrastim biosimilar.

TK: And what are these targeted to? What disease or conditions?

KMS: Both are cancer, really.

TK: Both are cancer drugs?


KMS: Yeah.

TK: I see, okay. So partnerships have played a pretty important role.

KMS: And then following Mylan’s success, we’ve also now announced a

third partnership with Sandoz for the next round of biosimilars. Sandoz is a

division of Novartis, and they are also a very successful company.

TK: And the way these work is—are the geographic rights partitioned

off in some ways? Is that the model that’s used, for the most part?

KMS: Yeah. We have an understanding as to—it’s a profit share, and

basically the front end of marketing in certain markets is done by the

partner. For instance, Mylan and Sandoz both have the rights to the U.S.

and European markets. But in the rest of the world—I think we’ve carved

up the markets between Mylan and Biocon. And as far as Sandoz is

concerned, they’ve given us the entire rest of the world markets.

TK: I see. So if you reflect on the last ten years—let’s say 2008 to 2018,

compared to the earlier periods—and you think about Biocon then and

now, I just wonder about what’s different. I probably first met you 15 years

ago, or something like that. What’s different today about running a leading

biotech company from an emerging market?


KMS: So I think I’ve learned over time that, you know, it’s an

evolutionary process. You kind of do multiple things. You might be very

opportunistic at one point, but as things start attaining critical mass, you

need to then start being more strategic. So today, I have divided the

company into very distinctive business entities. So for instance, the

research services business, Syngene, has a life of its own now.

TK: It’s listed now. Right.

KMS: It’s a listed company. We’ve created a separate company called

Biocon Biologics for the biosimilars and biologics business, and the

original Biocon remains with the pharmaceutical APIs, and now generic

formulations as well. So it’s very well segmented now.

TK: And you have Clinigene also?

KMS: No, that’s part of Syngene.

TK: That’s part of Syngene? And that’s the clinical trials—

KMS: Yeah. So that’s a research services bundled offering. So we

basically created these autonomous business entities, each one of which

will be a listed entity with its own management, its own teams. I want them

to operate as standalone companies. That’s what I’ve learned over time, that


in emerging markets—you know, being in the emerging markets, you tend

to do things in a very opportunistic way. Because you’re all the time cash-

strapped, you’ve got to basically first look at your business and your

revenues, and then start investing in development.

For instance, I could have never afforded to develop biosimilars if,

A) I didn’t have that partnership with Mylan, and B) I didn’t have money to

invest in it from the profits that accrued to me from my biopharmaceutical

business coming out of the APIs. So all that profit is what I’ve used to

develop biosimilars. You tend to be opportunistic, saying, “Okay, I’ve got

to have both these businesses.” Now that the biosimilars businesses are

beginning to deliver, you can spin that off into a separate entity. And of

course, I still have also a very interesting novels portfolio, where I’m—

TK: Which is?

KMS: Developing very interesting products for cancer. I’m also trying to

develop the world’s first oral insulin.

TK: How is that going? That’s been—

KMS: Well, fingers crossed. It’s right now in advanced phase two trials.

TK: What is the technical challenge with oral insulin?


KMS: So the challenge is that insulin is a protein, and proteins are difficult

to deliver orally, because they just don’t survive the digestive tract—

because they’re broken down, being proteins. So we actually chanced upon

a technology that could basically stabilize a protein, by attaching certain

pegylated molecules to it, without losing its activity, and then we basically

made it into a formulation. So we’ve made it into a tablet with a permeation

enhancer thrown in, so when you swallow the insulin tablet, it goes straight

through your intestinal walls and gets delivered through your portal vein

into the liver, which is what you want.

TK: Which is what you want. Yeah.

KMS: Which is what you want. And so that’s the trial we’re doing. It’s a

prandial insulin, so it’s a mealtime insulin. Instead of taking a shot, you can

take a tablet.

TK: And this is very different from the—

KMS: Inhaled insulin.

TK: —inhaled insulin and things like that?

KMS: Yes. Yes.


TK: That’s a different mechanism? I see. Very interesting. So I want to

shift gears a little bit and go back to some of the, if you will, the contextual

constraints in a country like India. I think one of the things that’s very

remarkable and inspiring about this story is bucking the infrastructural

odds of building a science-based enterprise in what is essentially still a

very poor country. Can we talk about science and the way you think about

science in a country like India, going beyond simply accessing talented IIT

engineers?

KMS: Well, you know, the way I looked at science right from the very

beginning—my raison d’être for starting this company—was I said, “I’ve

got to create a research-led environment where I’m able to attract scientists

to come and do research instead of the usual sort of exodus that we see of

scientists going to other countries to do research.” So I said, “I want to

create an organization that can attract scientists.”

Today—you’ll be very interested to know, Tarun—the Biocon

campus that we have in Bangalore is home to perhaps one of the largest life

science clusters in the world. We have today, on one site, close to 7,000

bio-scientists working on various research programs. Of course, almost

4,000 of them can be attributed to Syngene, because they’re offering

research services to companies. But nevertheless, they are all housed in that

campus doing high-end research for the global pharma industry, even non-

pharma industries. And then we’ve got the remaining 3,000—scientists,

engineers, clinicians—all doing research-led work for Biocon. So it’s been


a very exciting journey for me because I was able to create this kind of

infrastructure. And it’s very high-end infrastructure.

Of course, like you would have seen in India, you drive on the

streets and you’ll remember, oh, this is a third world country. But the

moment you drive into an IT campus or a campus like ours, it’s world class,

because we’ve all invested in high-end infrastructure. Of course, these are

like islands—self-supported, self-sustaining infrastructural sites. But that’s

what it’s all about. You’ve got to generate your own power supply because

you can’t rely on the electricity supplied by the government. You’ve got to

make sure that everything you do is going to be done to world standards, so

the buildings that we make—again, we are all very focused on

sustainability, and therefore the building designs are very eco-friendly,

green buildings. Everything that you see anywhere in the world is also

something we do there.

So I think it’s a bit of a contradiction in terms, but then at the same

time, that’s how you’re able to attract the best of scientific talent. Today our

scientific talent is not just so strong—the Indian research laboratories and

the Indian engineering colleges—but we’re finding a lot of scientists

coming back from various parts of the world because they find it’s very

exciting.

TK: So that’s a commentary on how, over—

KMS: —40 years—


TK: —several decades, 40 years, you’ve had to compensate for problems

in the Indian environment—the roads, the power, etc. But what reflections

do you have on triggering change more broadly, outside of Biocon? Even if

we just take Bangalore—I mean you’ve been instrumental in creating or

mentoring ABLE, which is the Association for—

KMS: Biotech Led Enterprises.

TK: —Biotech Led Enterprises. What are your reflections on the success

or lack thereof of these attempts?

KMS: Yeah. So I think for a long time, I felt that—you know, we used to

keep talking about this missing link between academia and industry in

India. And it was truly a missing link. I always felt that, unless you allow

your academic faculty and professors to really pursue entrepreneurial

opportunities using what they’ve researched and leveraging their research

findings, you’re not going to get this industry connect. I think after a long

time, we are seeing scientist entrepreneurs. We are seeing incubators at

academic institutions.

That is what is going to change things because, as a country, we

have to hang our heads in shame that we spend less than one percent of our

GDP on R&D. And of that, the government spends only 0.6 percent on

R&D. The rest comes from the private sector. That’s very, very low for a

country like India. I mean, look at Korea—it spends four percent. The U.S.


spends close to three percent. And if you look at even Brazil and China—

they are spending two percent, two and a half percent of their GDP.

So to be spending 0.6 percent, and at best one percent—if you add

everything up, it is still woefully low. And the reason that it’s woefully low

is because we have the talent. If we didn’t have the talent, that would be

one thing. If you find other countries that don’t have the talent that India

has spending 0.1 percent or 0.2 percent on R&D, that’s excusable. But it’s

unconscionable that a country like India, with such a rich talent pool of

scientists—we’ve had, we’ve been leaders in natural science and things like

that in the past. We’ve got mathematicians, engineers, scientists—you

name it. And if you don’t invest in innovation and R&D, I think you’re

missing out on an enormous opportunity. I think this is where the

governments will be blindsided—having not really focused on this

particular area.

TK: My impression is that it’s been very difficult—not just in Bangalore,

but across the country—to get the government and all political parties in

India to see—and in fact, more than India, in most developing countries—

to see the wisdom of developing robust intellectual property rights and, as

you say, investing much more even in percentage terms. I don’t think

Bangalore has been an exception to that, other than the islands of

excellence that you pointed to.


KMS: No, I would say Bangalore is an exception to that now. Because in

the last two years, I’ve suddenly seen a new energy in Bangalore, where the

government itself seized on this opportunity. I think it was about job

creation more than anything else, because I think all governments today are

really obsessed with job creation.

Now how do you create new jobs? Suddenly, Bangalore is such a

tech city—did you know that Bangalore is going to overtake Silicon Valley

as the city with the maximum number of software engineers? We’re going

to cross two million in the next two years, and that’s going to be larger than

what Silicon Valley has. So with that kind of population base… Bangalore,

because of the fact that most of our population—I mean, it depends on who

you ask, but the population ranges between seven to ten million. And if you

think that half of that population is a very tech-savvy population—of which

two million themselves are software engineers—then you have the rest of

the engineers in other fields—the life scientists, the doctors, and what have

you. So Bangalore is an amazing ecosystem of very rich talent.

Now, the government in its frenzy of trying to create jobs suddenly

found that—hey, startups are a great way of creating jobs. So they created

this startup policy, and they started seeding ventures. So suddenly

Bangalore is just mushrooming with startups, and we’ve created almost a

million new jobs just in startups.

TK: So now, does Biocon work with these startups in some ways or—


KMS: Many, many of them, yes. In fact, we have wonderful life-tech

startups, and there are now some very interesting innovation hubs emerging

in Bangalore. Of course, apart from the tech hubs, we have all these

wonderful places like WeWorks and other tech hubs, which are doing

extremely well. Each one of them houses something like 1,000 startups. But

in the life-tech space itself, in Bangalore alone, today we have something

like 700 startups, okay?

And there are some really interesting innovation hubs. Some are at

academic institutions. Some are standalone hubs. But one of the most

successful ones—you’ll be happy to know—is at an academic institution.

It’s called C-CAMP, and it is an incubator at the National Center for

Biological Sciences. Right now they’re running out of space. They have to

quadruple the amount of space they have because they are just full of

startups and they’re bursting at their seams.

TK: Was this the one started by Vijay Raghavan and Taslim—

KMS: Yes.

TK: Taslim—

KMS: Saiyed—I mean Taslim, yes.


TK: Yeah, that’s wonderful to see. Wonderful to see. And has the

intellectual property regime developed commensurate with this?

KMS: Well, what’s going to really drive intellectual property are these

startups. I think every one of the startups wants IP, because that’s the only

way they are going to grow. That’s the only way they’re going to attract

capital. And it’s sad, but many of these very, very innovative companies—

even though they start up in India—when they have to go for their next

round of funding, they find it very difficult. So they establish a presence in

the U.S. and attract venture funding—even though a lot of the back office

work or the actual research work is done in India. So then they start having

a U.S. face.

TK: Yeah, so that points to a pretty significant limitation, right? Which

is the informed capital who can evaluate—

KMS: So the government is doing its bit by giving the seed capital, the risk

capital. But what is not happening is the ecosystem where the VCs need to

take over—that will only happen when you see a few success stories. VCs

today still prefer a more low-risk, predictable business. And remember,

there’s a huge tech world out there, which is much lower risk and much

more predictable. So why would you want to invest in a life-tech company

when you’ve got umpteen choices in the tech sector? Every other day, you

hear some app being developed, or some AI company being formed, or


some analytics company suddenly taking root. So I think those appeal much

more to the VC community than a gestational business like life tech.

TK: Yeah. I mean, look at a country like Israel, right? The government

has really backstopped the bearing of risk, so to speak, so that the investors

who come in know that there is a floor to what they might lose. And my

sense is that, in most of these countries, the governments are coming to

terms with that. But it’s a slow process.

KMS: It is. I think the sooner India understands the power of innovation,

the better we will be as a country. Because I think one of the big

opportunities in India—for any innovator or any innovative company—is

the myriad of challenges that we face. Every one of them can have an

innovative solution and a business proposition.

TK: And a company, yeah. So let’s talk a little bit about gender again,

because you started your story by recounting some of the extra odds that

you had to get over. I read somewhere that 30 percent of your scientists are

women, which is incredible. It should be 50 percent, but you’ll get there.

Can you talk about how you’ve seen that changing in India—the role of

women in science and companies or anywhere else?

KMS: Yes. So you know, when I started the company, I had a sort of a

two-pronged objective. One was, of course, for scientists to feel excited


about pursuing a career in India—a research career in India. And the second

one was for women—I wanted women to be pursuing careers. I thought I

could provide them that safe haven for them to get interested in pursuing

careers.

After 40 years, I feel I’m—I haven’t quite achieved that second

objective. Because although 30 percent of my researchers are women, and

I’m seeing more women get into that fold—and I’m sure that, in another

few years, I’ll get to that 50 percent level—I still find that, in the rest of our

organization, I find it very, very difficult to get women to lead—

TK: Outside of R&D?

KMS: —outside of R&D. So for instance, manufacturing, finance,

admin—those kind of things. Okay, you will get a few women, but I want

women in leadership roles. I’m not getting them. Even specialized roles like

regulatory quality—these are roles that you should find women doing. And

yet I find it very difficult to get people. You know, since you’re playing in a

global kind of arena, you want people with experience and expertise, and

there are very few women who actually fit that kind of a role. So I would

like more women to play that role. And yet I know that in the past—when I

actually started Biocon—the head of quality was a woman, the head of HR

that I had was a woman, the head of even one part of my manufacturing

was a woman. So there are very strong women.


TK: It’s possible, right.

KMS: But they’re few and far between. And therefore, when I’m looking

for this high-end talent—even though I order my HR folk to make sure that

they give preference to women—there are very, very few women to choose

from.

TK: To pick from, yes. It almost feels like one has to start earlier in the

value chain of developing talent.

KMS: Yeah, so I just—so that’s something that I’m hoping for in the

future. And at least we’ve started something under our corporate social

responsibility—we’ve started the Biocon Academy.

TK: Okay, so what’s that?

KMS: It’s like a finishing school—so I’m taking a lot of young, raw talent

and shaping these students to be industry-ready. And there, I find that 70

percent of the students we pick are women. So I’m hoping that they will

change things as we move along.

TK: And they will go not just to life science careers?

KMS: This is largely for life sciences—


TK: Primarily life science careers?

KMS: Yes, many—they’re being grabbed by all the life-tech companies.

TK: I see. So Kiran, one thing you haven’t mentioned at all is Boston

and MIT—but you’re here all the time. So tell me the role that this

ecosystem has played in the evolution of Biocon.

KMS: So Boston, of course, over the years has become the mecca of

biotech. It is the undisputed leader of biotech in the world. And I think what

makes it special is the academic power that you have there. MIT, Harvard,

Broad Institute—you name it. You’ve got all these great academic

institutes—iconic academic institutes—all housed in Boston. And of course

they have spawned off a large number of biotech ventures. So you can’t see

a better bridging of academia and industry than in Boston, and I think

anybody and everybody who wants to do something good in biotech has to

be in Boston. I mean, I see every big pharma wanting to have a research

presence in Boston, and that tells you what it’s all about. I have been

involved with the Koch Institute for—

TK: At MIT, yeah.

KMS: —since its very early days, before it was even built. And I basically

instituted a postdoctoral fellowship program in oncology, hoping that


Indian researchers would actually go through this multidisciplinary

approach that MIT and Koch Institute have in these areas like oncology—

which really combines bioengineering and immunological sciences, and

makes it such a different kind of an approach to disease understanding. And

I thought, “Well, if I get young Indians to come and do postdoctoral theses

and fellowships at Koch Institute, and if I pay for that—and if at least some

of them come back to India and start labs—that would be a great way of

learning and osmotically transferring some of this kind of thinking into

India.”

And I’m happy I’ve done that, because I’ve done it for the last five

years, and I’ve already seen at least one of them come back to India and

start a bioengineering lab at the Indian Institute of Science in Bangalore.

Two of them have also come back and started labs in other parts of India.

So I think at least from that point of view, it’s slowly turning out to be a

good experiment, where some of these people are coming back. And on the

other hand, it’s also a great way of connecting with Boston and Koch

Institute, so I think that’s been really, really rewarding for me. And because

of my association with Boston, I invested in a number of startups in Boston.

Sangeeta Bhatia, who’s also at Koch Institute, started up a small very

interesting, innovative company. I helped her with that. And I just think

Boston is a great place. I myself—now I’m thinking of setting up a small

research group in Boston, because of the kind of work we are doing in some

of these areas. So within the next six months, I think we should be up and


running with our own little presence in Boston—in one of these

accelerators, or whatever you call it.

TK: Yeah, I hear you throw a stone and you’ll hit an accelerator—that’s

how fertile it is. That’s wonderful. So I’ve covered most of the bases.

What—are there any other things you’d like to share?

KMS: So you know, I’d like to talk about one thing, which is that, as an

entrepreneur, I’ve always wanted to be very different. I’ve always wanted

to differentiate. I’ve always wanted to be very innovative. And I’ve always

dreamt of taking innovation from India to the world. I’ve always thought

that, “Oh, India has this great opportunity to do things very cost-

competitively and, you know, how do I build India’s image as an innovator

as well?” And so one of the drugs that I brought from—licensed from

Cuba—I actually reworked on that asset. I came up with a very, very nice

novel asset, created a new IP, and then I thought let me take this—

TK: What was the product?

KMS: It’s a checkpoint inhibitor for autoimmune diseases—

TK: I see, wonderful. Yeah.


KMS: —which is a very novel concept. And I brought it to the Indian

market. It’s a great drug. And I thought, “Oh, now I want to take it to the

U.S.” But I realized that, you know, India has no credibility in the U.S.

when it comes to innovation. So I realized that, in order to really create that

stamp of innovation, you have to give it an innovated-in-the-U.S. kind of

stamp. So finally, I partnered with a small biotech company in the U.S., and

now they are going to lead the way forward. They’re doing an excellent job.

I must say that the way they are thinking about the asset and the way they

are developing the asset—even though I knew about some of the things that

we could do—the way they do it is very, very meaningful. And at least

when it does come to the market, I would feel satisfied that most of the

work was done in India and at least we were able to see this product make it

to a global market like the U.S., and it’ll give me a tremendous sense of

pride. But I think we must innovate from India and we must see many,

many more innovative products coming out of India. I want someone to

look at Bangalore at least in the same way they look at Tel Aviv.

TK: I had a potential buyer of a company that I created once say to me

that, “Because you created this machine learning company in India, it’s

worth X. If it was in Tel Aviv, it would be 1.5X. If it was in Silicon Valley, it

would be 2X”—

KMS: Exactly.


TK: —which I think is a measure of the India discount, in some sense.

But in a sense, you’re pointing to a really large systemic challenge.

Individually, an entrepreneur—even somebody as visionary and successful

as you—can compensate by providing the air conditioning and everything

else that’s needed to compensate for the [institutional voids] outside. But

systemically, we’re going to need much more public policy to kick in, and

the government to get smart, and so on and so forth. So that’s a road that’s

still ahead for most of us.

KMS: Yeah. I just hope the government gets it, you know, because I think

I’ve always been a big proponent for science and technology, and I just feel

that this is such an important area—

TK: I agree.

KMS: —that ministers who are given that responsibility to lead Science &

Technology should be high-caliber people who feel that this is one of the

most important ministries in the country. That’s not the feeling today. In

fact, when the present Science & Technology Minister was moved from

Health Ministry to Science & Technology, it was considered a demotion.

And I would have thought, “Wow, if I was that person, I would think it’s

actually a promotion.” That’s how important science and technology has to

be in the scheme of things for a country like India.


TK: That’s a real commentary on the state of affairs. On the other hand,

I’m glad that Vijay Raghavan is now—

KMS: Yes. I’m very happy that he’s the principal scientific adviser. And I

think he can do a lot. I think there is beginning to be a focus on science and

technology, but we need to invest a lot more. I think it’s one thing to talk

about what you want to do, but ultimately it’s about—

TK: Action.

KMS: —action and the investment dollars.

TK: Well, it’s an exciting, amazing story. And thank you for sharing—

KMS: Thanks, Tarun.

TK: —a little bit of the 40 years and the social transformation that I

hope it ultimately continues to trigger, as it already has.

KMS: Thanks.

TK: Thank you, Kiran.

KMS: Thanks a lot.

creating emerging markets kiran mazumdar-shaw, chairperson

Documents