Person of the Year

The 'King of Sports' and a vaccine maker

From a 20-man operation, the Serum Institute of India has grown to become the country's leading vaccine manufacturer boasting of revenues to the tune of Rs 555 crore. A man of few words and a man who lets his work speak for itself...that's Dr Cyrus S Poonawalla for you

A horse! a horse! my kingdom for a horse – King Richard III

Ask the dapper Dr Cyrus Poonawalla whether he would have done the same. And he gesticulates – a horse head shaped gold ring glinting on his finger. Rings of smoke fill the well-designed board meeting room reflecting his passion for horses. The trademark cigar is in place. So are his priorities.

"Horse racing is agony and ecstasy. At the Serum Institute, the agony is much less and there is a sense of satisfaction for having done something for the masses."

Owner of the Poonawalla Stud Farms, he sponsors the richest juvenile race in the country - - the Poonawalla Breeders' Multi Million.

For someone who finds himself in print for his passion for cars - the president's six-door Mercedes, a fleet of stretch limousines and Rolls Royces, he maintains a low profile on the vaccine front.

BioSpectrum caught up with him at Serum Institute of India Ltd, on the outskirts of Pune for an exclusive interview to find out more about his journey through the 'License Raj' system.

Reasons for commencing Serum Institute
"During my college days I had an active interest in the family breeding establishment now known as Poonawalla Stud Farms, inherited from my father Soli A Poonawalla. Obviously I took great interest as horse breeder and race owner and administrator. Horses are a passion for me. However, in the 1960s when I decided to go in for a career, it was clear and obvious to me that in a socialist country like India, the "King of Sports' has no place of future as an economically viable business career to pursue."

"I was looking for something to do for the masses. In fact, I built a prototype for a sports car during my college days. But that was too ambitious a project to launch," he recalled puffing away his cigar.

"A thought was suggested by Dr Balakrishanan, a veterinary surgeon who was a consultant to our breeding farm. Why not put a laboratory to manufacture tetanus, antitoxin serum and anti snake venom serum since the source of raw material was from the discarded resources of plasma. These life-saving materials were in shortage in the country. The talk trigged into a concept which culminated into a small biological unit to manufacture serum with capital of around Rs five lakh or even less than that. "

"To start with, our operation was very small with less than 20 staff. I contacted a retired director of Haffkine Institute, Mumbai – the first biotechnology institute in the country- through our family doctor Dr Jal Mehta. I was fortunate enough to get scientists from Haffkine Institute, who were experienced to develop these biological products. So a complete indigenously built small-scale unit was born in 1966, which commenced the manufacturing in late 1967."

Hurdles
The road to establishing the unit was not smooth. He faced many challenges in terms of finances and from the government. Commenting on the problems Dr Poonawalla, who started Serum Institute with his brother Zavary Poonawalla with the support from Dr Jal Mehta, S R Mundra and PK Sholapurwala noted, " I faced tremendous challenges during the socialist period. Securing permission for construction, power, and drug licensing - all were new to us. With no help or support from the government authorities, it was really a very challenging part of my career, which commenced with little in my pocket to take care of such situations."

"After the first product 'tetanus antitoxin' was launched in 1968 we were able to grow and take finances from banks," observed Dr Poonawalla. Then Serum rolled out many other products -- anti serum vaccines, diphtheria, tetanus and pertussis vaccines. It was a sort of rise upwards for Serum Institute and there was no looking back. All these products are in short supply and India was completely depending on UNICEF and imports. With the entry of Serum Institute and making of these biotechnology products (vaccines) by Serum Institute, India became self-sufficient.

Similarly the company's charter was defined by the conditions prevailing at the time: an acute shortage of tetanus antitoxin in the country and the practice of importing and retailing vaccines at high prices. Serum Institute aimed at total indigen-ization to make India achieve self –sufficiency in life saving drugs at affordable and effective prices.

Price is a key factor
"Price has been a major factor. It governs my vision even today from both socialist and humanitarian grounds. India needed these immunobiologicals desperately to protect the interest of patients who were dying without these products. This is in direct contrast to racing which is my passion and is the other side of my life."

Making a strong point on the price factor, which never came in the growth of the company, he said, "We always kept the prices at low level. What we have done and even today we have maintained the prices at much lower level as the products are in shortage in the market."

"One product later, we worked on another. Naturally the team grew. We plough back all profits into the company. I never issued dividends for atleast 30 years till recently. So the company became independent from all financial requirements and became a debt free company," adds Dr Poonawalla.

"I may confess that there were very low overheads as land and other infrastructure that belongs to the farm was made available to my family. We did not have high overheads. No advertisement costs as the products were in great demand and till today we kept a very low profile and low overhead administrative costs compared to other biotechnology companies in the country, "said Dr Poonawalla.

However, the major breakthrough for Serum Institute's products and company came after a long struggle in 1994 when it received the accreditation from World Health Organization (WHO) and pre qualified to supply for the United Nations agencies such as UNICEF and PAHO (Pan American Health Organization). Thereafter, there was a meteoric rise in the turnover of Serum Institute.

Serum Institute also financed a film called 'Snakebite' in 1986, which received international film festival awards. Serum was recognized as the largest producer of measles and DTP vaccines in the world in 1999. A year later, it added another feather to its cap by becoming the only company in the world to have one out of every two children vaccinated with its products.

" We have the largest sale of measles vaccines and leader in DPT and MMR vaccines in the world with manufacturing capacity of 170 million doses per year for DPT and 300 million doses per year for MMR vaccines. We have already the met the total demand of the Indian market. There is no additional demand left for these two group of vaccines. Presently, we are focusing on other range of products like Hepatitis vaccines, Rabies vaccine, BCG, TB vaccines.

On overseas market
Around 85 percent of revenues of Serum Institute are from overseas markets, chiefly UNICEF and WHOM organizations and remaining 15 percent come from India. The products are available in over 138 countries across the world. The major customers are UN agencies like UNICEF, PAHO and WHO, which mainly meet the demand in South American countries, Egypt, Africa, Caribbean countries.

Sharing his thoughts on entering the regulated market, Dr Poonawalla said, "We have to go through local partners. Instead of trying to look at new markets we are interested in launching newer products in the existing markets where we are well-established and are well known, so that we can increase our product range rather than increasing the pace. Most of these are healthcare products of pediatric range. That means we need so many more vaccines. We want to cover more range of vaccines. That itself will be of immense potential."

Serum Institute continues to share its philosophy of care across many more shores. Its millennium endeavor is to produce vaccines that would be administered to up to 75 percent of the new-borns of the world.

"We have an ambitious project at Pune wherein we are investing Rs 200 crore. It is expected to be completed during the next financial year. The facility will manufacture combination vaccines mainly for pentavalent vaccines (DPT HepB and Hib), which is most sought after by the Global Alliance of Vaccine Initiative, a world body funded by Bill Gates Foundation, UNICEF, WHO, World Bank."

To tackle competition from local as well as multinationals the Serum Institute has chalked out a road map for the next three years. "The road map is very clear. We want to become a world leader in pentavalent vaccines and also want to enter the regulated markets like USA and Europe market where the product is sold at 10 times of the price what we get from UNICEF. We also want to become strong in anti cancer products in India and US market, as a lot of products will become off patents in USA. We are already manufacturing several anti cancer products. Now we are putting up a state of art facility for this, " he said.

Dr Poonawalla is determined to retain the family control over the company. His only son Adar, who shares his passion for horses and cars and believes in professional management, has joined his father's vaccine manufacturing business.

Adar Poonawalla informed that they would first take anti cancer drugs /products to the US markets and later on the vaccines.

Role model
A strong believer in himself, Dr Poonawalla noted, "No role models for me. I don't want to say things that people on the stage usually say. They thank their parents but they don't even say hello to them in real life. Nothing strikes my mind really...!"

Asked if he would go through this struggle again, Dr Poonawalla summed up thus: "This is right. We may be number one in horse breeding and racing in India. But being a part of the growth of the biotechnology company is something else."

Narayan Kulkarni with Nanda Kasabe in Pune