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Biocon Case Study - Marketing

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Problem identification

• Should BIOMAb be launched with phase 2 results or wait for phase 3 results?

• Or should Biocon invest in phase 2 trials for other indications?

• Developing the product strategy, pricing options, channel and the major means of communication

Situation analysis

• Company:-

o Incorporated in 1978 as a JV between Biocon Chemicals, Ireland and Dr. Mazumdar-Shaw, an Indian entrepreneur

o Started as enzyme manufacturing company and later entered biopharmaceutical market by production of statins (FDA Approved).

o Subsidiaries – Clingine, Syngene International

o Expertise in fermentation process, leveraging its technology to enter biopharmaceuticals

o Developed proprietary drug for head and neck cancer accidentally and becoming the first Indian company to explore this oppurtunity

o Formed a JV with CIMAB to market BIOMAb in India

o Now planning to enter property drug market; Obtained IPO in 2004;

• New Product – BIOMAb

o In phase 2 trials results were 100% for chemo and radiotherapy in combination with BIOMAb.

o A chance to build new research and marketing capabilities.

o Lack of experience in marketing and selling oncology drugs.

• Competitor-

o Erbitux a treatment manufactured by Imclone system in US

 Distributed by Merck KGaA of Germany.

 Introduced in India in April 2006 for colorectal cancer.

 Merck expected formal approval from DCGI in late 2006 to use Erbitux for head and neck cancer.

 Had phase 3 approval.

 Biocon had advantage against Erbitux as it had 100% phase 2 results, it didn’t caused skin rashes and it could leverage its Indian origin

• Customer-

o Indian incidence of cancer rates for head and neck cancer were highest

 Propensity of lower income worker to chew tobacco and smoke cigarettes

 The health care system in India was majorly private

• efficient and costly.

• Nearly all of the patients paid out-of-pocket.

o Biocon expected patients would be self-paying and given the high price of cancer drugs wouldn’t be able to afford it.

• Context-

o Regulatory environment –

 Change in India patent law. Can retain the first mover advantage in India.

o Economic Environment –

 9% growth of economy in addition with awareness and education market was expected to increase.

o Technological Environment –

 Technological company was developing.

• Collaborators-

o CFA, Wholesaler, Retail/ Hospital Pharmacy and Doctors.

Problem – Analysis of Pros and Cons

• Market attractiveness: The sector for head and neck cancer is largely untapped until now which will provide a first mover advantage. 21% of cases and 27% of deaths worldwide from head and neck cancer occurred in India. Also, the Indian economy is increasing at 9% annually, so market size is expected to go up. Also, the annual population growth rate of 1.4% could increase the market potential in future.

• Cost Effectiveness: Fixed dosage of BIOMAb ( six doses) in contrast to Erbitux’s indefinite treatment plan will prove to be cost effective and provide a clearer picture of the cost involved to the patient at the time of prescription of the drug. And since 95% of the patients using this drug are estimated to be self-paying, hence this cost effectiveness will be a major advantage of BIOMAb.

• Pricing:

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