Biocon is proposing a market entry strategy into South Korea by forming a strategic alliance with LG Life Sciences. The key points of the strategy are: 1) South Korea was selected due to its strong biosimilars industry and supportive regulatory environment. 2) Biocon and LG Life Sciences will share risks and resources to gain competitive advantages like access to South Korea's sales and marketing networks and R&D capabilities. 3) The alliance will allow Biocon to enter the South Korean market faster with minimum risk and help understand the market better.

1. Market entry strategy
for
Mihir Pandit [PC-09]
Jigar Raval [PA-08]
Vipul Patil [PA-20]
Bhakti Shethia [PC-20]
Sneha Agarwal [QA-17]

2. OUTLINE
 Biocon-Snapshot
 Country Choice-Why South Korea?
 External Challenges :Drivers and Restraints
 Forecast trends
 Entry Mode Strategy
 Target market and Positioning
 Strategic Implementation
 Controls

3. BIOCON SNAPSHOT
VISION
Biocon is an emerging, global Bio-pharmaceutical enterprise that
is focused on developing affordable products and services for
patients, partners and healthcare system across the world.
Biocon is committed to:
• Reducing therapy costs of chronic diseases.
• Research and marketing partnership that provide global access.
• Leveraging the India cost advantage to deliver high value,
licensable R & D assets.
Source: http://www.biocon.com/docs/Biocon_H1FY1_MediaPrstn.pdf

4. COMPANY PROFILE
Source: http://www.biocon.com/docs/Biocon_H1FY1_MediaPrstn.pdf

5. COMPANY PROFILE
Source: http://www.biocon.com/docs/Biocon_H1FY1_MediaPrstn.pdf

6. PRODUCT PORTFOLIO
Source: http://www.biocon.com/docs/Biocon_H1FY1_MediaPrstn.pdf

7. PRODUCT PIPELINE
2 New drugs in late stage clinical trials
Source: http://www.biocon.com/docs/Biocon_H1FY1_MediaPrstn.pdf

8. CEO PERSPECTIVE: WHY SOUTH KOREA?
Focus on high growth product classes
Continuous monitoring of Biobetters
globally.
Scalable production facilities
Parallel product registration in developed
markets products launch quickly and
gain advantage.
Partnerships with CROs will help speed
up the drug development and
registration process.

9. COUNTRY CHOICE
Why choose South
Korea Biosimilar
market?
•Long history in manufacturing
biologicals
•A regulatory pathway for
biosimilars
Requires upfront investment
and infrastructure for the
development, much lesser
than biologics
Source: Frost & Sullivan analysis
Exports are expected to
contribute as much as 50% of
the total revenues.
•Government’s policy to promote the
biosimilars industry
•Korean Food and Drug Administration (KFDA)
•BLA (biologics license application)
By 2030, its total number
of retirees is forecast to be
approaching 40% of the
population.
http://www.icis.com/blogs/asian-chemical-connections/2012/11/south-koreas-demographicchall/#sthash.2x5UWyfc.dpuf
•Universal coverage of population through social
health insurance (SHI) since 1989
•High out-of-pocket payment, amounting to 35-40%
of total health expenditure
•Social insurance for long-term care, introduced in
July 2008

10. COUNTRY CHOICE
Rank Disease Deaths %
1 Stroke 38497 17.19
2 CHD 20496 9.15
3 Lung Cancer 16437 7.34
4 Diabetes Melitus 13766 6.15
5 Stomach cancer 12794 5.71
6 Liver cancer 11797 5.27
7 Suicide 11408 5.10
8 Road traffic
accident
7570 3.38
9 Colon cancer 7562 3.38
10 Liver disease 7406 3.31
Biocon’s Product portfolio is very suitable to penetrate market
Source : WHO health statistics

11. 20 20.4 20.8 21.8 22.9 24.1 26.0 28.1
30 30.6 31.2
33.1
35.1
37.2
40.9
45.0
5 5.1 5.2
5.4
5.6
5.9
6.2
6.6
6 6.2 6.4
6.9
7.4
8.0
9.0
10.1
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
2010 2011 2012 2013 2014 2015 2016 2017
Human Growth Hormone Erythropoietin Monoclonal Antibodies GCSF
COUNTRY CHOICE
Biosimilars Market: Revenue forecasts (Korea), 2010
Years
Revenues($million)
Source: Frost & Sullivan analysis
Biosimilar market is growing very rapidly and South korea in particular, with plan to become a
leading biosimilars player.

12. ENVIORNMENT
1. 35% R&D biosimilar Investment in 2012 while
in chemical drug development accounted for
just 12 %.
2. Tailored consulting programme by KFDA
3. “Columbus” Project in 2011
4. Out of 36 biosimilars 47% are Mab included in
korean pipeline.
5. Global leader with 17 mAb portfolio by 9
korean co.
6. Paradigm shift away from imitation towards
innovation by focus on biobetters.
Regulatory enviornment Operating environment
1. New pricing system
2. Pharma industry competitive
enhancement plan:
3 criteria:
Four benefits from govt:
1. Drug price benefit
2. Tax system support
3. Financial support
4. R&D support

13. • Chalebols: Business conglomerate like Samsung and
LG
• Samsung to invest 389 million in biosimilar
devlopment.
• Extreme pressure on local generics.(limited resources)
• EU-FTA: July 2011
• US-FTA March 2012
• Tariff abolition
• Strengthen IPR protection
• Current negotiation with ASEAN countries and other
countries.
• Korean govt planning to invest 1 trillion won.
• Democratic union party if elected-renegotiate .
Local Industry and FTA’S
ENVIORNMENT

14. EXTERNAL CHALLENGES:

15. DRIVERS:
1. Strong experience + Active
government support
2. Accessibility +Cost
3. Focus on high growth G-CSF
&Mab
4. Early mover advantage
5. Strategic partnership: Korean
Biosimilars co. +foreign co.
6. Exmple: Samsung+ Quintiles
RESTRAINTS:
1. Large capacities for approval
(FDA/EMEA/PMDA)
2. Deep pockets.
3. Cost Effectiveness Major
threats in Asia
4. Ambiguity in nomenclature.
5. Reluctance by physicians
EXTERNAL CHALLENGES:

16. Forecast assumption
1. Market volume
2. Biosimilars penetration
3. Biosimilars market share
4. Economy indicators
Revenue forecast discussion
Among four segments
1.Erythropoitins : Example:
Espogen by LG life science
2.Human growth hormone:
Example: Euotropin
FORECAST TRENDS

17. ENTRY MODE STRATEGY
Source: http://www.imshealth.com/ims/Global/Content/Home%20Page%20Content/IMS%20News/Biosimilars_Whitepaper.pdf

18. ENTRY MODE STRATEGY
Current Scenario: Innovation is not an easy game and my business
model proves it can be done through partnering. One problem with
India has been that we are not good at innovation. My model has
been about partnering for innovation. - Kiran Mazumdar Shaw
New Proposition : Strategic alliance with LG life science ltd as an entry
mode strategy.
Vision : To become a "top-tier life sciences company
with world-class new drugs"

19. Main aim: Risk sharing &
Increasing competitive strengths
• To enter the South Korean market
• Health profile of South Korea
• Extensive sales & marketing network
• R& D resources & know-how
• Emerging as a global top brand in the
diagnostic field
• To add to the existing product
portfolio
RATIONALE FOR
SELECTION

20. ENTRY MODE STRATEGY
COMPETITIVE ADVANTAGE
OF ALLIANCE
HURDLES
 Fast entry into the foreign
market
 Minimum risks
 Better understanding of the
host country
 Access to new technology
 More efficient production &
innovation
 Price – plays a key role
 Competition with local
Biosimilars
 Huge promotional
investment
 Changing regulatory policies
 Conflicts of control

21. TARGET MARKET
Aging korean population demanding affordable therapy for
diabetes, cancer & Cardiovascular diseases
 Large pool of patients
 Prevalence of diabetes- 8%, Incidence of disease – 0.4%
per year
 Insulin therapy
 Huge demand for affordable products
 Non-small Cell Lung Cancer drug market
 Majority of patients in stage III or IV at the time of
diagnosis

22. POSITIONING
Commodity Differentiated
BIOSIMILARS
• Payer driven
• Acute treatment
• Price driven
• Lower risk of
immunogenic reaction
• Fully understood mode
of action
• Chronic treatment
• Limited competition
• Higher risk of
immunogenic reaction
• Mode of action not
clear
• Influenced by multiple
stake holders

23. PLACEPROMOTION
STRATEGIC IMPLEMENTATION
PRODUCT PRICE
• Tailor go-to-market approach
• To local dynamics, both in terms of
sales force model and marketing
offering
• Target Therapy areas
• Build trust and network development
• Human Insulin
• Insulin Lispro
• Monoclonal Antibodies
• Oncology products
• Specialty and primary care products
• lower cost biosimilar drugs
•Value based pricing
•Payer Strategy
• South Korea
• Export drugs to Asia and developed
countries (EU, USA) through LG’s
distribution network

24. CORRECTIVE ACTIONCOMPARE ACTUAL Vs PLANNED PERF.
CONTROLS
SETTING STANDARDS MEASURING ACTUAL PERFORMANCE
• Build lasting, collaborative relationships
with our customers
• To check the above, consumer
satisfaction and feedback website
• Doing what’s right – for patients,
customers and employees
•Transaction strategy to balance and grow
portfolios
• Identification and evaluation of investment
opportunities
• Financial Report
• This is the point of decision making
• A thorough understanding of highly
complex and dynamic healthcare
systems
• To be done quarterly initially and take
proactive actions
•In case of failure ,send a specialized
team to assess the situation(risks and
benefits of continuation).
• Quality system design and optimization
• GCP, GLP, GMP and cGMP compliance
and risk mitigation

25. PUBLIC OPINION
India- Global leader in
Biosimilars