are very important for us in India”
—Stefan Borgas, CEO, Lonza Group,
Stefan Borgas, CEO,
Lonza Group, was recently in India to inaugurate Lonza
India’s new facility in Mumbai. Speaking exclusively to
BioSpectrum, Borgas revealed the company’s strategy to make
India a prominent player in Asia and the huge opportunities Indian
market has in store for them.
Lonza’s strategies for India, the emerging hub for
We look at the Indian market in an opportunistic way to outsource raw
materials and certain other products. With the inauguration of the new
facility in Mumbai, we are now moving on to the next level where we
will focus on Indian life sciences market.
Life sciences market is still very small in India but we are looking at
long term opportunities. India has a fantastic pool of intelligent and
energetic people and maybe in the future we will be looking out for
more sites in India. We will develop our activities over the course of
10-15 years and start research activities in three of our business
areas, including biosciences, where we make products which support the
researchers and biopharmaceuticals, where we offer services to the
biopharmaceutical industry. We want to make India the hub of Asia
within 5-6 years.
Is Lonza planning to
initiate any joint ventures with local companies in India?
Many discussions for joint ventures are going on at the moment. We are
looking at all options and are very flexible because we consider
ourselves as one little piece in a network of companies. We have our
specific competencies, we do have production capabilities and we can
make tools for researchers but there are so many things we do not know
about. That is why we believe that partnerships are very important for
us in India.
How is the life
sciences market scenario in the Asia Pacific region?
The life sciences market is growing in Asia. Japan and Singapore are
already a part of the developed markets. The Asian markets have
realized the importance of innovation. With so many brilliant brains,
Asia provides huge opportunity for innovation, not only for western
markets but also for local ones. Now people are realizing the need for
innovation to create new things that are much better than just copying
products, countries like Korea and Taiwan have shown this in other
industries but not yet in life sciences. Regulations play a very
important role in this development as the life sciences market deals
with health of the people.
What was the strategy
behind biosimilars deal with Teva? What were the criteria for selecting
Teva as a partner for the deal?
The biosimilars deal with Teva Pharmaceuticals is simply a continuation
of a 25-year-old relationship of Lonza with pharmaceutical companies
all over the world. In the past two years, we spoke to all the major
generic companies in the world, and we believe that Teva has strengths
which are complimentary to our capabilities. The deal focuses on a
limited number of biosimilars products, which Lonza wants to do
exclusively for Teva Pharmaceuticals. These products will in
no way be in conflict with any of our other customers. The deal is very
carefully crafted so that all the patents of Lonza will not be affected
that is why the deal is called a ‘limited
Despite the currency
fluctuations and other financial turmoil in 2008, Lonza showed a 13
percent hike in sales, what were the reasons behind the stability?
Our long term collaborations are considered as the main reason. Once we
start working with customers usually we do not see any sales for 2-3
years or even longer, but when business starts to come in then it does
not go away for 6-12 years. We give emphasis to long term business. In
the life sciences space the demand is usually stable.
What is the impact of
recession on life sciences sector?
In general sectors like biopharma don’t have much of a demand
problem. But there is an issue of funding start-up biotech companies
around the world; this demand is very much driven by the start-up
companies that are in need of funding. This dearth of financial backing
is also affecting India and other countries; because of this the
ongoing projects will get delayed. The second effect is felt in the
western countries, where there is a significant reduction in public
funding for healthcare research which has always been a driver of
Will recession affect
Lonza’s investment in 2009?
Recession will not be a setback for any of our investments. We have
carefully thought about this and from the investments side we have
decided not to slow down any of our initiatives. We are more careful in
larger scale acquisitions and we are eager in small scale acquisitions.
We are investing around Rs 2,473 crore this year for all our
How has the life
sciences industry matured over the years and how have the dynamics
We are seeing an evolution of partnerships and the maturing of the
industry over the past few years. In the beginning, companies looked
out for partners for special technologies where they did not have any
competency. Then they looked at third party partnership in order to
reduce costs and that is how the outsourcing industry started and now
in the next phase we are looking at the entire spectrum of the
development process because there is much more leverage there. So what
happened in the electronics 10 years earlier and automobiles industry
20 years ago is now happening in the life sciences industry.
Being in the business
for a long time, how do you view the contract manufacturing market in
this period of recession?
More consolidation will happen in the contract manufacturing market
with a significant focus on environmental protection. The Chinese were
the first one to drive in, now we will see India coming into this
field. Focusing on development will help companies to get stronger. On
the other hand weaker players may step out of the market and the
current economic and credit crunch will support it. We have seen a lot
of companies that have stepped out of this market in the last five
years. More clean up will happen inside the pharma companies as well.
Is Lonza planning to
set up manufacturing facilities in India?
Yes, we are planning to develop our labs and soon we will downstream
into manufacturing as well. We have a pipeline which supports these
What are the product
lines to be introduced by Lonza in India?
We have a lot of products in bioscience cell discovery division which
will help researchers in India to more effectively test drugs not only
on animal cells but also on human cells by giving much better
prediction models. Globally we have set ourselves in this technology
but it is not so well spread in India and Asia and this is one product
we want to introduce with a big focus here as in 2009-10
How would you compare
the growth of Lonza in India and China?
Lonza established its first production capacities in China in 1986.
China has had a more constant growth than India. China has the
advantage of having a centralized government structure, which supports
infrastructure and certain strategic industries. Owing to this
centralized government structure, investments of the Chinese government
happen in a more consolidated and faster manner. In India, I think the
development is more sustainable because we are looking at grassroots,
and India also has the advantage of education.