Pune, Sep 1, 2006: Serum Institute of India -- the Pune-based biotech company has topped the list of Top 20 Biotech Companies in the Fourth BioSpectrum-ABLE Survey of the Biotech Industry 2005-06 with total revenues in excess of $150 million, edging past the India's largest biotech company Biocon, the leader for the last three years. In an exclusive interview to BioSpectrum, Dr Cyrus S Poonawalla, Chairman, Serum Institute of India, shares his feelings on this development and the company's future course of action. 

 

What was your first reaction when you learnt that Serum Institute of India topped the “BioSpectrum-ABLE Survey, 2005-06” as India’s top biotech company?

 It was a pleasant surprise! I was expecting this to happen in 2006-07, but my immediate reaction was to play down the success and that is why we didn’t make too much hype out of this very exciting news. 

Serum Institute registered a growth of over 39 percent, as against a growth of three percent in 2004-05.

 

What were the factors that contributed to this kind of growth?
There are several reasons for this growth. To be honest with you, the growth was flat in 2004-05 because a lot of shipments were not executed due to various reasons. So it is natural that a part of that—which should have gone in that year to sustain a growth of about 10-15 percent—has came into this year. So this is an abnormal growth. I don’t want to take the credit by saying that we did a great job and that is why our growth is about 40 percent. This was one of the reasons.

 

There were a lot of postponements of consignments by our purchasers, possibly due to rescheduling of the dates of their campaigns. And to some extent, even the product. We also had our own share of constraints in sending out the shipments. It is a combination of both these factors, which led to this. And obviously, we are trying to see that this doesn’t happen again so that we have a steady growth line. A lot of efforts were put in this year to make sure that the shipments went out in time. So that is major motivating factor to recover the lost ground.

 

The second reason, I think, was that Biocon didn’t grow as much as it grew in the past few years. It registered about six percent growth. This drastically changed the balance in our favor.

 

Beyond that, we had launched a couple of products during the year in India like QVac, combination vaccine and Td vaccine. And we even stepped up the sales of rabies and a range of other vaccines in India.

 

The combination vaccine that we have launched last year in India, received the WHO pre-qualification only in the last week of July 2006. It is a major milestone for us as ours is the first Indian company to get pre-qualification for combination vaccine from WHO to supply to the UN agencies. We expect the UNICEF and other UN agencies to procure this from us, as this vaccine is in acute shortage worldwide. And only the big pharmas are offering it and at exorbitant prices.

 

There are so many global players who are into the manufacturing of DPT and Hepatitis B vaccines but they don’t have the pre-qualification from the WHO. It also took us nearly a year to get the pre-qualification from WHO. It is very cautious in giving the pre-qualification certificate. We launched our indigenously developed combination vaccine in India in July 2005 after we completed a rigorous process of following the clinical trials and have supplied a couple of millions of doses of the combination vaccine in India.

 

While some of them have the vaccines, others don’t. Nonetheless, I think, this product (combination vaccine) doesn’t interest them because of the low price realization and they were already aware that the Serum Institute has come out with this product. The big pharma is concentrating on combination vaccine (i.e., pentavalent vaccine), which will give them the value in dollars and not in cents. That is the bottomline.

 

The Chinese GMP is very poor and I am very much concerned about their biologicals. Only developing countries like India are allowing the products from China to enter their markets. China doesn’t allow the Indian vaccines into their market. We are freely allowing their products (vaccines) to come into India and invade our market. This is not a fair and proper-level playing field. The Indian government should take serious note of this so that there should a reciprocal flow of vaccines between the countries in the Asia Pacific region. For example, China is not allowing shipment of Indian vaccines into its territory, though Hepatitis vaccine from China is allowed to be imported into India. And the Chinese are unreceptive on this and use the stick of regulatory issues, to keep Indian products out.

 

The Serum Institute launched Q-Vac, combination vaccine, and Td-Vac, tetanus and diptheria vaccine, in 2005-06. Will Serum launch any new products during the current financial year 2006-07?

We are expecting to launch two products this year. The first one will be hemophilia’s influenza vaccine. It will be followed by pentavalent combination vaccine (DPT-Hib-HepatitisB) in early 2007. These two are going to be major growth drivers for us. We are also launching Percutaneous BCG vaccine for superficial bladder cancer.

 

For the pentavalent vaccine, we expect to capture a substantial market from the big pharma. We expect to launch the product at one-third of their price. You will be surprised to know that doctors are encouraging this product and they have indicated to us that we should launch our products just a little below the GSK’s price i.e., double the price of what we would like to launch, and that medical professionals and retail chemists should get huge margins from the manufacturer, a driving force for the product to be marketed. My objective is that my people should get our products at competitive prices and we expect to do better.

 

My marketing people say that we have to sail with the tide. And we slash the prices for supplies to the Indian government. Let us see what best can be done. The sale of these combination vaccines in India and abroad is only going to be through these immunization agencies. The sales from other markets are going to be rather marginal.