Hi-tech on a low budget

By Bette Flagler, April 30, 2007 @ 11 pm

Advice for the hi-tech startup: ‘Fail early and fail cheap’

Idealog May/June 2007, page 20. Photograph by Dean Treml

Considering it often takes a couple of billion dollars to get a drug from discovery to market, the cost of failure is high. So “fail early and fail cheap” is the advice of Biocon head Kiran Mazumdar-Shaw. She founded Biocon in her Bangalore garage with 10,000 rupees in 1978; now it’s India’s leading biotech company and Mazumdar-Shaw is the country’s richest woman.

Taking any product to market—let alone a drug—is a journey. Luckily, it’s a borderless world when it comes to biotech and different countries have different strengths. For a country New Zealand’s size, says Mazumdar-Shaw, it’s natural to focus on innovation. It’s what New Zealand does well, but it would be tough for us to develop a drug for market. On the other hand, India’s strengths are in later-stage development in a cost-competitive way. “Synergies” is an overused word on Wall Street but it’s a lifesaver on a tiny budget.

Mazumdar-Shaw never tried to please Wall Street, anyway. In fact, she prefers to look elsewhere. We tend to take an almost blinkered approach, she says, looking solely to the US and Europe for, say, biotechnology, but ideas and talent can come from anywhere. Biocon has in-licensed two molecules that underwent early development in Cuba. One of these, an insulin compound, is being modified for oral use. If it works, Biocon will be the first to deliver an oral insulin preparation in a cost-effective way; if it doesn’t, there is still a big global market for insulin. It’s an example that highlights another of Mazumdar-Shaw’s business strategies: pick products where Plan B is just as lucrative as Plan A.