The flourishing Pharmaceutical business of Iran Mazumdar-Shaw did not start in a laboratory, but in a hobertion with tin roof in Bengaluru, the city previously known as Bangalore and capital of the state of Karnataka, south of India. There, the 25 -year -old used the knowledge acquired studying beer elaboration in Australia to ferment enzymes for clients such as Ocean Spray’s blueberry juice. Originally, he wanted to be like his father, who was the main brewer of United Breweries, the great Indian company now owned by Heineken and famous for his Kingfisher beer. But it was 1978 and I didn’t find work. Nobody wanted to hire a woman as a brewery.
Distressed and disappointed, Mazumdar-Shaw gave new use to his studies: the manufacture of enzymes for industrial uses. In collaboration with an Irish entrepreneur, owner of a company called Biocon and with the intention of expanding to India, opened a business in that hot shed. “I consider myself an accidental entrepreneur,” he says.
The business was so successful that Unilever acquired it in the 1980s along with its Irish matrix. Mazumdar-Shaw continued to direct the unit from Bengaluru to 1998, when she and her late husband, John Shaw, repurchased Unilever’s participation for about 2 million dollars. It was a bargain: finally, in 2007, he sold the enzyme business to the Danish Novozymes for 115 million dollars.
By then, I already had more ambitious plans. In 2000, Biocon began to develop pharmaceutical products, starting with insulin. Insulin is a type of “biological”, that is, a drug derived from a living source, traditionally a modified version of the E. coli bacteria in the case of insulin (Biocon uses yeast). The company’s headquarters in India allowed him to manufacture these biological products at a cheaper price than the great Western pharmaceuticals.
Insulin is one of the simplest biological drugs, increasingly used to treat various problems, from cancer to immune system disorders. The most complex biological drugs, such as gene therapies and monoclonal antibodies, are difficult to manufacture and extremely expensive. A drug for children with spinal muscular atrophy, for example, costs more than two million dollars in a single dose treatment. It is a huge market, but it is impossible to determine its exact size. The biological drugs represented an expense of 324,000 million dollars at list prices in 2023, according to the IQVIA health firm. However, this figure does not include the important discounts that brand pharmacists usually offer to maintain their market share, which reduces what insurance and patients pay, but hides the total costs.
“These are very complex and expensive medications, and that is why it is important that companies like ours focus on affordable access,” says Mazumdar-Shaw while drinking a tea served by a butler in his apartment in Manhattan, adorned with landscapes of Scottish artists George Devlin and Archie Forrest.
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Know the multimillionaire brewer teacher of biological products from India
Mazumdar-Shaw, who is now 72 years old, began in the Indian market, but now sells medications worldwide and focuses more and more in the United States (EU) and Canada, which represent about 40% of their sales of biological products. He soon realized that finding a more economical way to manufacture such complex and vital medications not only made them more accessible, but also represented a good business.
At present, Biocon, which is quoted in the stock market in India, generates $ 1.9 billion in revenues with the sale of dozens of generic and biosimilar medicines. The company also conducts contract research for other companies through its Syngne subsidiary, which also quotes in the stock market. While the list of women who forged themselves of Forbes only includes American women, Mazumdar-Shaw would easily enter among the top 20 if it were American. It is one of the richest entrepreneurs in the world, with a fortune that Forbes estimates at 3.2 billion dollars.
Most of his empire lies in a private majority subsidiary called Biocon Biologics, specialized in biosimilar and that represents almost 55% of the income of the parent company. Similar to what are generic for chemical synthesis medications, these cheaper alternatives imitate biological medications. As with the genericians, companies such as Mazumdar-Shaw can develop biosimilars after the expiration of brand drug patents.
Although biosimilars are much more expensive to produce than generic, requiring more than 100 million dollars for their development, they can drastically reduce costs for patients. IQVIA estimates that biosimilar have saved the US health system 36,000 million dollars at catalog prices since 2015. With 118 more biological drugs that will lose the protection of their patents by 2035, the market of their cheapest imitators could be about to experience an boom.
“Even in the United States, the adoption of biosimilars is growing much more because the costs of medical care are getting out of control, and any measure that is taken to control them will be fundamental,” says Mazumdar-Shaw, adds: “We have a huge opportunity to build a very large business.”
Consider one of the company’s most recent medications: a cheaper alternative to Stelara, the successful treatment for autoimmune diseases, which was Johnson & Johnson’s best selling last year, generating more than 10 billion dollars in revenue. Before reimbursements, it costs more than $ 25,000 per dose and is designed to administer every eight weeks in patients with Crohn’s disease and every 12 weeks in patients with psoriasis. Yesintek of Biocon, launched in February, fulfills the same function for just under $ 3,000 per dose, approximately 90% less than Stelara.
In total, the company of Mazumdar-Shaw has launched nine biosimilar medications, including one that mimics Humira, the abbvie medication for rheumatoid arthritis (whose sales reached a maximum of 21,000 million dollars in 2022), and another similar to Herceptin, the genentech medication against breast cancer, which launched in 2017 after a friend was diagnosed I had difficulty paying for treatment. Herceptin cost almost $ 90,000 at its maximum point in 2019, according to a study published in JCO Oncology Practice. Seven of Biocon’s biosimilar medicines have been approved for use in the US.
Biocon Biologics competes with Sandoz, based in Basel, Switzerland (10,000 million dollars in revenues), Samsung Bioepis Koreans (with sales of 1.1 billion dollars) and Celltrion (with about 2.5 billion dollars in revenue), and even with important pharmacists such as AMGEN, whose biosimilar for Stelara recorded 150 million dollars in revenue in the first quarter. Its market share is especially high in emerging markets, where many of its biosimilars reach 80 %. The US market is more complex, but it is so large that even a 10 % or 20 % share in a drug of great success can be worth hundreds of millions.
A reason why the United States is so difficult is that pharmacists must convince guardians after American bambalins – the administrators of pharmaceutical benefits – that it is worth including their medications in the lists of approved medications, known as forms. With its production concentrated in India and Malaysia, Biocon must also deal with potentially high Trump tariffs (currently threatened with 25%) on pharmaceutical products manufactured abroad.
“There are many reasons why we have seen that the commercialization of biosimilar is more difficult than desired,” says Benjamin Rome, a health policy researcher at the Harvard’s Faculty of Medicine, and adds: “The prices of genericians are much more transparent. There are practically no discounts or manipulation.”
But Mazumdar-Shaw has a history of overcoming challenges and ignoring conventional wisdom. When he decided to produce insulin in India 25 years ago, he faced a market that only imported animal insulins. Although human versions were better and available, they cost approximately ten times more. “I said: ‘This is crazy,” he recalls. “Just because we can’t afford human insulin, we have to use animal insulin, so let me do something about it.” At that time, Biocon still manufactured industrial enzymes and had no experience in the medication manufacturing business. But in four years, he developed the first human insulin of India, which made millions of diabetics who needed insulin treatment obtained better medications. “That was what gave me the reason for being to focus on biopharmaceutical products,” he says.
Currently, Biocon has 20 drugs in oncology, immunology, diabetes and ophthalmology, marketed or developing worldwide. He also presented his first Biosimilar of LPG-1 for diabetes and obesity in the United Kingdom and provides for his arrival in the US when popular medications such as Ozempic expire their patents.
Mazumdar-Shaw is confident to be able to market a drug every year in the US or Europe from now to 2030. Biocon plans to launch a biosimilar of Eylea, the successful regeneon drug for eye diseases (10,000 million dollars in sales in 2024), at the end of this year. Wait to split Biocon Biologics and turn it into an independent public company in the next 18 months.
“I think we are in a humanitarian task,” he says, “and I think we are contributing our grain of sand to achieve affordable access, which is what we want.”
This article was originally published by Forbes Us.
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