Biocon Limited THE ANNUAL REPORT 2020 Touching a billion lives through MANIFESTO affordable innovation 1 THE IMPACT MANIFESTO ANNUAL REPORT 2020 Biocon Limited Transforming lives through meaningful impact Sharp inequities in access have denied the benefits from advances in medical science to almost a third of the world’s population. Hefty price tags on life-saving drugs have created unbearable financial burden for patients in most of the world. Inadequate research spending has led to a fragile medical innovation ecosystem with serious repercussions on global preparedness for health emergencies. The vulnerability of healthcare systems worldwide to a global pandemic stands exposed. 2 THE IMPACT MANIFESTO ANNUAL REPORT 2020 Biocon Limited Biocon is leveraging its affordable innovation model to reduce disparities in access to safe, high-quality medicines, as well as, address the gaps in scientific research to find innovative solutions to impact a billion lives. Take a quantum leap in serving the needs of our patients through innovative solutions that go beyond the product. Transform patient lives through the introduction of therapies that improve treatment outcomes while enhancing their health and well-being. Dramatically improve patient survival and, if possible, cure hitherto incurable diseases through advanced targeted therapies. Put the care back in healthcare by pursuing a humanitarian path to ensure better patient care and outcomes while reducing costs through our ‘high-quality, low cost, high volume’ business model. ANNUAL REPORT 2020 THE IMPACT MANIFESTO 3 Biocon Limited The Biocon Manifesto We seek to leverage differentiated technologies to transform healthcare by ensuring access to affordable, quality assured, complex therapies that significantly improve patient outcomes and are available to all. Our roadmap for the future is to enable a healthier world. As a committed stakeholder of the global health agenda under the UN Sustainable Development Goals (SDGs), Biocon has drawn up a manifesto to deliver on its commitment to universal healthcare. 4 THE IMPACT MANIFESTO ANNUAL REPORT 2020 Biocon Limited accessibility Use our science, scale and expertise to enhance access to essential drugs for patients on the lowest rung of the economic ladder Uncover new medical insights aimed at expanding the scope of therapy to address unmet needs affordability Focus on the kind of innovation that adds the condition of affordability to accessibility Bring competition for expensive innovator medicines through our generics and biosimilars availability Build strategic global and regional partnerships to make high-quality biopharmaceuticals available to the maximum number of people Create a robust portfolio of ‘blockbuster’ drugs with the potential to benefit a billion patients assurance Demonstrate the highest levels of ethics, compliance and governance Assure continuous supply of high-quality products conforming to international regulatory standards ANNUAL REPORT 2020 THE IMPACT MANIFESTO 5 Biocon Limited Business Highlights At Biocon, we have concluded yet another in key markets. We also made strategic meaningful year, breaking new ground, investments, brought new partners on crossing new milestones and delivering board, entered new markets, received high-quality biopharmaceuticals to regulatory approvals, expanded production millions worldwide. capacity, added to our expertise and We made significant headway in the unlocked value for our stakeholders. commercialization of multiple products generics Crossed an annual revenue milestone of `20,000 million novel molecules for the first time Started global clinical trials for our first-in-class oral insulin molecule, Extended footprint to China Insulin Tregopil, in Type 1 diabetes through a licensing deal for 3 Generic Formulations Clinical trials initiated by partner Filed new Drug Master Files and Equillium to study our novel equivalents for multiple APIs anti-CD6 molecule, Itolizumab, in Lupus Nephritis and severe Asthma Started construction of a greenfield, fermentation-based Started a clinical trial in India manufacturing facility in Andhra to study Itolizumab in treating Pradesh, India to cater to moderate to severe patients with anticipated growth in APIs business COVID-19 complications 6 THE IMPACT MANIFESTO ANNUAL REPORT 2020 Biocon Limited biologics Touched the lives of 2.1 million patients Insulin Glargine (Australia) through through access to our biosimilars our partner Mylan Initiated value unlocking of Biocon Received regulatory clearances from Biologics through private equity both U.S. and EU regulators for investment for a minority stake, our Insulin Glargine manufacturing indicating an equity valuation of facility in Malaysia USD 3 billion Expanded R&D footprint through Committed to enable universal the acquisition of R&D capital access to rh-Insulin at less than assets to set up a 60,000 sq. ft. 10 U.S. cents / day in low- and world-class integrated R&D middle-income countries in the facility in Chennai run-up to the insulin centenary Enhanced production capacity Expanded commercial footprint for Drug Substance and Drug of key biosimilars: Pegfilgrastim Product for key biosimilars through (Australia, Canada), Trastuzumab brownfield and greenfield projects (U.S., Australia, Canada) and research services Commissioned new research facilities in Bengaluru and Hyderabad Commenced qualification of API manufacturing facility in Mangaluru Extended biologics discovery and preclinical research capabilities in CAR-T therapy, an innovative cell-based approach to treating cancer Received Good Laboratory Practice (GLP) certification for viral testing facility from the NGCMA, making it India’s first and only GLP-certified viral clearance study service provider Repurposed a high-end laboratory to conduct RT-PCR tests for COVID-19 Partnered with Pune-based Mylab to supply reagents for use in its indigenously developed COVID-19 testing kits ANNUAL REPORT 2020 THE IMPACT MANIFESTO 7 Biocon Limited FY20 at a Glance Revenue Profit for the year* EBITDA Margin 65,286 7,482 27 � Million � Million % R&D Spend (Gross) Employees (Total) EPS 5,271 12,000+ 6.3 � Million � *includes exceptional items Business revenue mix Small Molecules Biologics Research Services 20,937 19,513 20,119 � Million � Million � Million 8% 2% Branded Others Formulation 31% Small Molecules 22% 78% Domestic Branded Formulations International 30% 29% Research Biologics 5,362 Services � Million Business Revenue Contribution Geographic Distribution #includes inter-segment revenue 8 THE IMPACT MANIFESTO ANNUAL REPORT 2020 Biocon Limited Contents 10 Chairperson’s Review 16 CEO’s Message 20 Financial FAQs 25 Financial Highlights 28 Board of Directors OUR BUSINESSES 34 Generics 42 Novel Biologics 44 Scientific Advisory Board 46 Branded Formulations 47 Biosimilars – Biocon 61 Research Biologics Services – Syngene 61 SUSTAINABILITY 69 Environment 72 People 75 Social Biocon Foundation Biocon Academy FINANCIAL REPORTS Scan the QR code to 87 Board’s Report download the Annual Report on your mobile device. 127 Management Discussion and Analysis 148 Corporate Governance Report 169 Business Responsibility Report 181 Standalone Financial Statements 243 Consolidated Financial Statements Visit us at: www.biocon.com Follow us on Twitter: @bioconlimited @BioconBiologics ANNUAL REPORT 2020 THE IMPACT MANIFESTO 9 Biocon Limited Chairperson's Review Kiran Mazumdar-Shaw Executive Chairperson 10 THE IMPACT MANIFESTO ANNUAL REPORT 2020 Biocon Limited On a mission to impact a billion lives Dear Shareholders, Biocon’s philosophy of affordable innovation to make life-saving medicines accessible to everyone, anywhere on the planet, has never been more relevant than it is today. We are in the throes of a global pandemic and the world is looking up to the healthcare industry to develop vaccines, treatments, diagnostics and products that will see it through the COVID-19 crisis. The novel coronavirus outbreak has demonstrated that if humanity is to survive as a species, it is imperative that there is equitable access to all essential health products and technologies without distinction of race, religion, political belief and economic or social condition. Universal access to quality healthcare for all is non-negotiable. In the fight against COVID-19, low- and middle-income countries (LMICs) seem to be faring better than wealthier, better-resourced, developed nations. With this change in dynamics, we are likely to witness greater reciprocity and sharing of best practices between LMICs and high-income countries (HICs) leading to genuine bi-directional partnerships. As well established business models are dismantled and long-held assumptions The novel dispelled, we could see healthcare being reshaped and democratized around coronavirus the planet. outbreak has The future will call for a new approach to prevention, screening, diagnosis, demonstrated therapy, monitoring and management of disease. Demand for therapies that that universal are patient-focused, data-driven and digitally enabled will increase. Patient care access to quality will move to non-clinical settings driven by technology and connectivity, even as healthcare accelerated adoption of digital therapeutics empowers patients with for all is point-of-care management. non-negotiable. Greater application of Artificial Intelligence (AI) and Machine Learning will make drug discovery and development more innovative, cheaper and faster. Efficient capacity creation and productivity optimization will be critical