The Bangalore-based leading biotech player Biocon's moves to tap growing business opportunities in Germany has achieved further momentum as its German subsidiary AxiCorp bagged a tender offer from AOK, Germany's largest health insurer, to supply Metformin, a key diabetic generic drug in Germany. The AOK tender is valued at Euro 13.5 million.

The contract is planned to be awarded for the entire German territory over the next 2 years and is subject to review in accordance with the German tender regulations. The tender is expected to strengthen the market presence of AxiCorp in the booming generic business.

"AOK is a prestigious tender for a biopharma company operating in Germany. Winning this tender has demonstrated our presence in German markets and our concerted efforts to build up promising business in Europe through AxiCorp," said Rakesh Bamzai, president, Biocon Limited.

The selection of AxiCorp as the AOK tender supplier for a key generic drug in Germany follows the recent changes to German healthcare laws, which now mandate the use of generic versions by patients, who are covered by public health insurance schemes such as AOK, for the reimbursement of insurance claims. As per the recent regulatory changes, patients covered by a public insurance scheme such as AOK are no longer entitled for the insurance claims, if recommended branded drugs.

"The recent changes in the German healthcare laws have induced AOK, a leading public health insurer that covers about 40 per cent of the total insured population in Germany, to scout for generic procurement contracts," said a source.

Though many Indian companies participated in the tender, Biocon could sweep the deal with its eagerness to tap the emerging market opportunities in Germany. This year's tender featured big names like Dr. Reddy's, Biocon and Mylan.

This deal indicates that Indian companies are finding their feet in Europe and participating in big businesses through tenders in the region. This is a trend catching on among India pharma and biotech companies and several players are devising strategies to increase their presence in the region. While in the past it was US which India pharma-bio majors were keen to tap, now Europe is becoming a much sought after destination.

According to Kiran Mazumdar-Shaw, chairman and managing director, Biocon, AxiCorp is a key strategic investment for the company as it heralds Biocon's European foray for biosimilars like recombinant human insulin. "We have invested in AxiCorp's impressive entrepreneurial team and its highly differentiated business model, which helps us to build strong marketing and distribution capabilities in Europe. Both companies share a common vision of affordable healthcare, which we can deliver through a combination of Biocon's low cost manufacturing and AxiCorps low cost distribution," she added.

AxiCorp is an ISO 9001 certified company with a differentiated distribution model that is aligned to the radically altered way the German pharmaceutical market now functions. It is a specialised marketing and distribution company established in 2002 by a group of industry experts to address the lucrative generics and parallel distribution market in Germany and Europe. In early 2008, Biocon made a 70 per cent controlling stake in AxiCorp Gmbh for Euro 30 million.

"Since we enjoy a 70 per cent controlling stake in AxiCrop it is easy for us to market and distribute generics, biosimilars, biologics and innovative drugs in Germany and Europe," said the company sources.

Biocon is well-positioned to be amongst the largest value creators in the biotech sector. "We have the capability from development to production of biopharmaceuticals, clinical trials and clinical research. Our research and development efforts have led to partner with companies, decrease the time to market and also license out molecules," apprised Kiran Mazumdar-Shaw.

"The company is in discussions with many companies in the US and Europe to become their partners in clinical research. We are also identifying new businesses with high growth potential. Besides, the company will scout for opportunities to invest in companies for rapid growth and generate higher returns to gain market dominance in the regulated regions," she added.