Unwavering Purpose
Chairperson’s AGM Speech 43rd Annual General Meeting
Friday, July 23, 2021, Bengaluru, India Kiran Mazumdar-Shaw Executive Chairperson
2 Dear Shareholders, As we con nued with our opera ons, we also focused on protec ng our people and ensuring It gives me great pleasure to welcome you their health and well-being. We invested in to the 43rd Annual General Meeting of implemen ng strict safety protocols and your company. regularly engaged with our people to keep them mo vated. The leadership team constantly The pharmaceutical and healthcare monitored the fast-evolving situa on and took industry's fight against COVID-19 data-driven decisions for opera onal planning across our facili es. intensified over the past year as fresh waves of infections hit many countries REALIZING THE BIOSIMILARS PROMISE around the world. As the pandemic left societies and economies in disarray, Our Biosimilars business revenue at Rs 28,002 million, recorded a growth of 21% in FY21. We biotechnology-led companies quickly commercialized our third biosimilar, Insulin developed diagnostics, vaccines and Glargine, in the U.S. and obtained regulatory therapies to tilt the battle in favor of approvals for key biosimilars Bevacizumab and humanity. Insulin Aspart in the European Union. Our biosimilars benefited 3.1 million pa ents during India has been at the forefront of this the year. crusade, producing cost-effective As the only company from India to have three vaccines at scale for millions of people. biosimilars commercialized in the U.S. and among At the same time, the country has the select few globally to have five biosimilars approved in Europe, we are confident of enabling continued to supply the world with affordable access to expensive biologic drugs for generic and biosimilar therapies to millions of pa ents globally. prevent and treat non-COVID health Our diverse por olio of products straddling threats such as cancer, diabetes, heart monoclonal an bodies for cancer and attacks, HIV infections, malaria, autoimmune diseases and rh-insulin and insulin analogs for diabetes as well as our con nued tuberculosis etc. commitment to quality and product safety, posi on us to deliver robust and enduring growth BIOCON GROUP ENDURES COVID-19 in the coming years. CHALLENGE The market poten al for biosimilars remains solid, with biologics worth ~USD 90 billion in The unwavering purpose of our company to put originator sales losing exclusivity over the next 'pa ents first' enabled us to sustain the supply decade. of life-saving medicines, worldwide. The confidence of investors in Biocon Biologics' We also took up the challenge to find solu ons growth story is reflected in the en ty's post- to support India's fight against COVID-19 by money valua on of ~USD 4.17 billion during the leveraging our deep scien fic exper se and last round of fundraising from Abu Dhabi-based large-scale manufacturing capabili es. From ADQ. We have thus far raised ~USD 330 million diagnos cs to therapies, from tes ng to from top global investors like True North, Tata vaccina ons, we did our best to make a Capital Growth Fund and Goldman Sachs. meaningful difference. 3 SERVING PATIENT NEEDS THROUGH class' an -CD6 monoclonal an body, GENERICS Itolizumab, which has a unique 'mechanism of ac on' in controlling The Generics business acted with agility to cytokine release syndrome (CRS). ensure supplies of much-needed generic APIs (Ac ve Pharmaceu cal Ingredients) and The Drugs Controller General of India formula ons from India to the rest of the (DCGI) granted Restricted Emergency Use world, belying fears of large-scale medicine approval to Itolizumab in July 2020 to treat shortages due to the pandemic. CRS in pa ents experiencing moderate to severe acute respiratory distress syndrome We supply sta ns, immunosuppressants, (ARDS) due to COVID-19. We are gathering narrow-spectrum an bio cs and other APIs addi onal data as part of the Phase 4 post to over 100 countries and were able to serve marke ng study for Itolizumab, which will our partners despite COVID-related further validate the poten al of this disrup ons. Revenues from the Generics therapy in COVID-19. During the business grew by 6% over the previous year devasta ng second wave, Itolizumab was to Rs 23,359 million, supported by double- deployed to treat over 20,000 COVID-19 digit growth in Generic Formula ons and a pa ents affected with severe disease. modest single-digit growth in APIs. Results from the Phase 2 clinical trial, In FY21, Generics Formula ons achieved a which established Itolizumab as a key milestone with the launch of Tacrolimus promising, safe and effec ve capsules, an immunosuppressant used to immunomodulatory therapy for COVID-19 treat organ transplant pa ents, in the U.S. with survival and recovery benefits, have We delivered ~2 billion sta n pills for the been published in a pres gious, peer- benefit of pa ents in the U.S. in FY21. reviewed scien fic journal in FY21.
It also entered new partnerships to expand Equillium, our U.S.-based partner, reported commercial footprint to Singapore, Thailand encouraging developments on the clinical and Brazil. advancement of Itolizumab in trea ng acute gra -versus-host disease, lupus, We remain commi ed to inves ng in lupus nephri s, and uncontrolled asthma. building new capabili es and capaci es We are expec ng clinical data from all across func ons, including R&D, studies later in calendar year 2021. Manufacturing and Quality, and expanding our product por olio to deliver long-term, Boston-based Bicara Therapeu cs is sustainable growth in our Generics business. spearheading the development of novel bi- func onal fusion an bodies in immuno- oncology. Its lead program, BCA101, is in MAKING A DIFFERENCE WITH OUR Phase 1/2 clinical trials in the U.S. and NOVEL BIOLOGICS Canada. Bicara started opera ng as a standalone company under an independent management team in FY21 Realizing the acute need for an effec ve a er we ceded control to its Board and treatment for people hospitalized with Management. COVID-19 and those at risk of developing severe illness, we repurposed our 'first in
4 KEEPING RESEARCH PROJECTS ON To support the government's efforts to TRACK combat and contain the pandemic, Syngene has set up a Vaccina on Center to provide Despite a challenging year, Syngene free vaccina on for Biocon Group employees successfully delivered on its commitment to and their families. Through Biocon clients who depend on the Company for their Founda on's eLAJ smart clinics, we are now research and development needs. It delivered providing COVID-19 vaccina on for revenue of Rs 21,843 million, and an annual marginalised communi es. growth of 9%. Syngene also built on its integrated drug discovery and development por olio during the year, signing on new We remain committed to clients and renewing contracts scien fic and investing in building new manufacturing capabili es during the year. capabilities and strengthening our product portfolio to deliver TACKLING COVID-19 long-term, sustainable growth The Biocon Group was able to pivot very in our Generics business. quickly its capabili es to fight against COVID- 19 in FY21. PAYING TRIBUTE TO OUR COLLEAGUES We have a comprehensive por olio of LOST TO COVID-19 products for trea ng COVID-19 pa ents at different stages of the disease spectrum, The second wave of COVID-19 in India has including RemWin (Remdesivir) for mild to tragically impacted us and we have lost some moderate pa ents, ALZUMAb-L (Itolizumab) of our dear colleagues across Biocon, Biocon for moderate to severe pa ents and CytoSorb Biologics and Syngene. We express our for cri cal pa ents. deepest condolences to the bereaved families.
Biocon's Research Services subsidiary Syngene We understand we cannot compensate the manufactured Remdesivir under a license loss of a human life, however, we have taken from Gilead and distributed in India through steps to help their families rebuild their lives. Biocon Biologics and Sun Pharma to address Biocon Group has decided to pay the families pa ent needs for this life saving therapy. of the deceased, 50% of the employee's gross salary for two years, up to a maximum payout Syngene leveraged its deep scien fic exper se of Rs 50 lakhs. We will also extend the to develop various solu ons to support the educa on allowance support for two children na on's ba le against COVID-19. un l the age of 18. We will also assist with job Syngene, through its repurposed, high-end hiring for either the spouse or child, in one of laboratory, conducted 185,000 RT-PCR tests, our group companies, or help them find of which 90% were free of cost, in FY21. The employment elsewhere, depending on their Company also developed an ELISA (Enzyme- educa on and eligibility. The above support is Linked Immunosorbent Assay) an body in addi on to the Group Term Life Insurance tes ng kit for COVID-19. Currently, scien sts and other benefits applicable as per the at Syngene are engaged in developing an and Company's policy. We sincerely appreciate the valida ng several relevant assays for assessing contribu ons made by our dear colleagues immune response against SARS-CoV-2. and earnestly share the grief of their families.
5 Our interna onal revenue contribu on grew to 81% in FY21 from 78% in FY20.
* Includes excep onal items and loss from discon nuing opera ons # Includes inter-segment revenue
6 FINANCIAL PERFORMANCE the pharmaceu cals industry, having worked in India, France and Sub-Saharan Africa for leading Despite a tough and unpredictable year, Biocon global pharma companies. delivered a credible financial performance with consolidated revenue growing 14% to Rs I do believe we have a strong leadership team in 73,603 million and hit the $1 billion mark. place now to drive the future growth of our EBITDA grew 8% to Rs 19,071 million, Biosimilars business and return the Company to represen ng an EBITDA margin of 26%. Net its high growth trajectory soon. I will also be Profit (before excep onal item and playing a more ac ve role as the Execu ve discon nuing opera ons) was at Rs 7,540 Chairperson of Biocon Biologics Limited. million. Our determina on to keep inves ng in I am also happy to welcome Prof. Peter Piot, science to stay a step ahead of the pandemic is Director of the London School of Hygiene & reflected in the 19% rise in our Gross R&D Tropical Medicine and the Handa Professor of spends to Rs 6,270 million in the year. Global Health, to the Board of Biocon Biologics Limited as an Independent Director. His The confidence of investors scien fic exper se and long experience in global in Biocon Biologics' growth healthcare will be invaluable for the Company. story is reflected in the The Board of Biocon Limited has appointed entity's post-money valuation Indranil Sen as the Chief Financial Officer of Biocon, in place of Anupam Jindal who resigned of ~USD 4.17 billion. from the posi on due to personal reasons.
DIVIDEND POSTPONED JOHN SHAW RETIRES AS On account of the uncertainty due to the VICE CHAIRMAN unprecedented second wave of the COVID-19 pandemic in India, Biocon's Board of Directors I would like to inform you that my husband, has deemed it prudent not to declare a John Shaw, Vice Chairman of Biocon, will dividend for FY21, in order to priori ze cash re re from the Board of Directors due to and maintain liquidity. health reasons, on the conclusion of today's AGM. He has been a key member of the STRENGTHENING THE MANAGEMENT Company's Board and management team since 1999, and has contributed majorly to The Board of Biocon Biologics appointed Dr. the transforma on of Biocon from a small Arun Chandavarkar as the Managing Director enzymes company to a globally recognized (MD) w.e.f. January 21, 2021 and entrusted him biopharmaceu cal company. Over the last 22 to steer the Company to the next level. years, he has played an important role in Shreehas Tambe was promoted from Chief building Biocon, ensuring the highest levels of Opera ng Officer to the posi on of Deputy corporate governance in the Company, as well Chief Execu ve Officer (CEO). as, in the financial and strategic development of the group. On behalf of the Board, I express We appointed Susheel Umesh as the Chief my deep apprecia on and gra tude to my Commercial Officer for Emerging Markets to husband John for his stewardship & guidance drive the Biosimilars business in these markets. and for the invaluable role he has played in Susheel brings over 30 years of experience in shaping Biocon.
7 8 ENVIRONMENTAL, SOCIAL & communi es -- have been ingrained in our GOVERNANCE Company's DNA since incep on, we are proud to present our first ESG Summary Report this Biocon's commitment to Environmental, Social year. and Governance is about health equity, purposeful employment and ethical business The ESG Summary Report has been prac ces. distributed to all our shareholders along with the Annual Report. Biocon has built its business culture on a bedrock of purpose, ethics and equity. A The ESG report presents efforts made and purpose-driven business philosophy has progress achieved by the Company in provided us with a compelling raison d'être to delivering on its commitments and seeks to embed social impact in all that we do. From address the growing interest and expecta ons our origins as a pioneering biotechnology of our global stakeholders across ESG enterprise that inculcated a research-driven domains. strategy to address eco-friendly, enzyme- Later this year, we will publish our first Global based solu ons in industrial processing to our Repor ng Ini a ve (GRI) aligned ESG Report, innova on-led healthcare solu ons that which will provide comprehensive insights provide affordable access to pa ents who into our Environment Social and Governance ba le cancer, diabetes and autoimmune performance over FY21. diseases, we are propelled with a sense of business responsibility that has both ethics PATIENT EQUITY and equity at its core. Biocon is proud of its stated mission of As a global corporate ci zen, we have pursued impac ng health equity through affordable business leadership on a pla orm of access to essen al and life-saving medicines. affordable access to essen al and life-saving We have augmented our commitment to medicines, which encompass generic and global health through several partnerships biosimilar drugs. Affordability has always been with health ini a ves sponsored by UNAIDS, a challenge to pa ents in low- and middle- Clinton Health Access Ini a ve (CHAI) etc. Our income countries (LMICs), as well as, to those '10 cents per day' insulin ini a ve is to enable that cannot afford insurance in many high- access to diabetes pa ents in LMICs. income countries. We have, over the past two decades, provided equitable and affordable access to millions of pa ents across the world, PEOPLE EQUITY be it life-sustaining immunosuppressants like Tacrolimus or breast cancer drugs like Underpinning our health equity ini a ves is Trastuzumab to Insulin and Insulin analogs for our commitment to an equitable and inclusive people with diabetes. workplace. We aim to make Biocon an equal opportunity enterprise, from recruitment to Our responsible business prac ces, which career and leadership development. We embed social impact in all that we do, would like to get to a 50:50 gender ra o by includes effec vely managing environmental, 2030 from a ra o of 83:17 currently. We social and governance (ESG) ma ers. While firmly believe that gender and diversity are the principles of ESG -- opera ng responsibly the hallmarks of progressive businesses. and sustainably and caring for people and
9 ENVIRONMENTAL EQUITY unceasing efforts to lower Greenhouse Gas (GHG) emissions over the long term, we use As an environmentally responsible company, every opportunity to increase renewable we go beyond statutory compliances to create energy across our opera ons through onsite responsible business prac ces with a focus on solar installa ons and by sourcing wind judicious use of natural resources. energy to offset grid supply. These efforts led to increase the share of ADDRESSING THE CLIMATE 'green power' to over half of our total energy EMERGENCY consump on for the year across Biocon and Biocon Biologics in India. We are commi ed to climate change Our carbon footprint reduc on efforts led us mi ga on, including ac ons to limit global to achieve cut CO2 emissions by ~102,600 warming and its related effects. As part of our tons in FY21.
10 WATER MANAGEMENT challenges, Founda on staff coordinated tes ng, tracking and vaccina ons for COVID- During the year, we made substan al capital 19 in these districts. Our eLAJ clinics recorded investments to upgrade to the latest pa ent ~61,000 pa ent visits during the year. advancements in wastewater treatment. A The Founda on also inaugurated the new new 600 KLD capacity zero liquid discharge, buildings it helped construct for the effluent treatment plant, based on advanced Government Higher Primary School in membrane bioreactor technology, was Huskuru, Bengaluru, and Government Higher installed in Bengaluru for an investment of Rs Primary School in Sira, Tumkuru. Over 500 80 million in FY21. This has led to 400,000 students will have access to be er learning liters of incremental water savings per day due to well-equipped new buildings. across Biocon and Biocon Biologics in India.
BIOCON FOUNDATION DIGITAL GOVERNANCE – Our Corporate Social Responsibility reflects THE WAY FORWARD our ESG goals, from our environmental efforts in lake revival, our efforts in enabling Biocon is inves ng in building a robust digital employability through the Biocon Academy architecture that will support data pla orms and inves ng in digital health ini a ves and data networks across organiza onal through our eLAJ smart clinics in primary func ons. ESG is at the core of Biocon's digital health. transforma on wherein we aim to enhance quality and compliance, augment produc vity The eLAJ Smart Clinics opera ng at the 20 through enhanced opera onal excellence and government-run primary health centers enable data integrity through technology-led (PHCs) and three Biocon Founda on-operated data transparency. Digi za on, we firmly health centers con nued to provide believe, has the ability to build higher outpa ent services across seven districts of standards of governance and deliver greater Karnataka in FY21. Despite pandemic-related levels of trust to all stakeholders.
Biocon's commitment to Environmental, Social and Governance is about health equity, purposeful employment and ethical business practices.
11 LOOKING AHEAD
In the face of the biggest health calamity faced by humanity in a century, Biocon kept its commitment to its pa ents and partners in FY21.
We hope that with increasing vaccina on coverage the social and economic situa on in India will improve. We look forward to an overall improvement in business sen ment.
On the back of investments made so far, we expect to drive revenue growth in our Biosimilars, Research Services and Generics businesses in FY22. We will con nue to focus on expanding our product por olio, strengthening the development pipeline and accelera ng capacity enhancement. We will invest in skilling our workforce to prepare for a digital future.
Access to essen al and life-saving medicines is an ethical issue. The COVID-19 pandemic has exposed both the inequity and the ethical and moral failure of the world's governance system. The unconscionable disparity between rich and poor na ons in access to vaccines mirrors the enormous health inequity when it comes to medicines. At a me when the world sadly acknowledges inequitable access to vaccines, we hope that our purposeful business philosophy embedded in health equity and access resonates with our partners and every stakeholder.
I would like to thank our esteemed shareholders, partners and other stakeholders for con nuing to repose their faith in us. While the pandemic will bring many further challenges, our unwavering purpose of ensuring equitable access to healthcare gives us the confidence to build a stronger, be er Biocon for the future.
Thank You.
Kiran Mazumdar-Shaw Execu ve Chairperson
12 Our belief that the top priority in a public health crisis is to protect human lives, led all employees of Biocon, Biocon Biologics and Syngene to relentlessly contribute towards ensuring continuity of operations
Kiran Mazumdar-Shaw Executive Chairperson
13 Biocon Limited 20th KM, Hosur Road Electronic City PO, Bengaluru 560 100. India T +91 80 2808 2808 www.biocon.com E: [email protected]