Bangalore: Biotechnology company Biocon Ltd said it reached an agreement to acquire a 70% stake in German pharmaceutical company AxiCorp GmbH for €30 million (Rs173.4 crore).
“This is the first step in Biocon’s entry into the European market,” Biocon chairperson and managing director Kiran Mazumdar-Shaw announced on Monday.
“This is one of the very few acquisitions that will not see jobs moving to India, but will create jobs in Germany.”
Going places: Biocon chairperson Kiran Mazumdar-Shaw. (Photo: Hemant Mishra/ Mint)
AxiCorp, which had revenue of €75 million in 2007, will enable Biocon to market and distribute its range of products including generics, biosimilars and other biopharmaceuticals in the latter’s pipeline.
Biocon has begun the registration of its human recombinant insulin with the European regulatory agency EMEA. The German market for insulin is about €950 million and the European market is anywhere between €4-5 billion, according to Dirk Ullrich, general manager of AxiCorp.
“This is an important acquisition in Indian life sciences industry as, unlike in the past, where companies have acquired technologies or products, Biocon’s acquisition is for marketing and distribution,” said Bala S. Manian, founder of ReaMetrix, a diagnostics and contract research start-up. AxiCorp is strategically placed in the European market as it markets parallel-distributed EU pharmaceuticals (purchased from different markets and sold at cheaper rates in Europe), patent-protected drugs as well as its own generics. “This is a unique distribution channel,” said Manian, who thinks it is not possible to organically grow this sort of a distribution network.
The acquisition is also important as EMEA is beginning to open doors to biosimilars, at a time the US regulatory agency Food and Drug Administration is still unclear about the regulatory pathway.
It also helps Biocon in launching its oral insulin in that market, which the company is currently testing. It intends to launch the product by 2010.