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September 19, 2008

Profile of Serum Institute

Biocon is India's largest biotech firm, right? Wrong! According to this profile in Business Today, Pune-based Serum Institute of India, has the crown with revenues of Rs 987 crore in 2007-08 and accounts for nearly a tenth of the Indian biotech industry revenues. (Biocon's renuees are Rs 912 crore).

Started in 1967 by Cyrus Poonawalla, a commerce graduate, the institute commenced operations with Tetanus Antitoxin and anti-snake venom serums, which were in short supply in the country. By early 1990s, the company was manufacturing a range of affordable vaccines for rabies, measles, and hepatitis-B among other diseases. But, it was still largely focussed on the domestic market. The big break came in 1994 when the World Health Organisation accredited the institute and it began to export vaccines across the world. By 1998, the institute’s products were available in over a 100 countries.

Nearly 85 per cent of Serum Institute’s turnover comes from exports. Its largest clients are UNICEF and the Pan American Health Organization (PAHO). “Nearly a fourth of our turnover comes from selling vaccines like DTP, hepatitis and measles vaccines to UNICEF. Another 10-15 per cent of our revenues come from selling vaccines to PAHO,” says (Adar Poonawalla, Director-Operations).

The rest of its revenues comes from selling vaccines directly to various countries. For example, in 2004, the institute vaccinated over 33 million people with the measlesrubella (MR) vaccine in Iran— amongst the largest vaccination campaigns in the world. Poonawalla will not reveal how much these large-scale campaigns accrue; though he reveals that usually each country adds to 1-2 per cent of the company’s revenues. What’s perhaps stunning is the profit margins that the institute is pulling off. Adar reveals that the company’s net profit stood at Rs 380 crore (in 2007-08). “We simply make the lowest-cost, highquality vaccines in the world,” says he.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.