Indian biotech's global designs

India's importance as a genuine biotechnology player has increased manifold at the international level. Government initiatives, cost effectiveness and a talented pool of scientists have given momentum to this industry. Sachin Jagdale analyses

"There is urgent need to focus on strengthening the human resource component in relevant fields such as bio-statistics, biochemistry, bio-informatics, microbiology, fermentation and down stream processing, genetics, cell biology, law and patent practice etc. There is a need to focus on instilling a "patent culture" in our research endeavours, along with increased industry-academia linkages and collaborative research. Focus also needs to be on attracting eminent Indian scientists back to the country and utilising their expertise in driving innovation" - Alok Gupta Executive Vice President and Country Head-Life Sciences and Technology Yes Bank

Both biotechnology and life sciences have come of age since 1986 when Department of Biotechnology (DBT) was set up under the Ministry of Science and Technology. Biotech has captured the imagination of the world and India is not an exception. India has just started to come out of its cocoon. Biotech industry in India has changed gears and so-called 'lag' phase has transformed in to a 'log' phase, as many biotech projects take shape across the country. This change is very quick, as industry stalwarts know the necessity of sailing fast as the sea of opportunities is getting crowded with other competitors.

Bio-trekking

Indian biotech industry has shown great growth potential over the last one decade. In the year 2006-07, industry's revenue touched $2-billion mark, from $1 billion in 2004-05. Now industry is quite optimistic that by 2010, revenue will be around $5 billion. Indian government is playing its role of fuelling biotech business in India. Government initiatives like tax incentives, biotech parks and government seed funding for biotech start-ups are indeed genuine efforts to make India a major player in the global biotech business.

However, inspite of these steps, Indian biotech industry's global share is just around two percent. Jay Chigurupati, CEO, Zenotech Laboratories, analyses the situation, "Generic biopharmaceuticals in India started showing up late compared to several other emerging markets like China, Argentina and South Korea. Our first biotech product from India was launched only in 1997. Patented biopharma products have not yet been developed/launched by Indian pharma/ biotech companies. Hence Indian biotech constitutes a very small fraction of the global biotech industry."

Fire in the belly

"In the generic biotech space, Indian pharma/biotech companies are gearing up to challenge the European and US companies" - Jay Chigurupati, Chief Executive Officer Zenotech Laboratories

An Ernst & Young survey says that India is one of the five evolving biotech leaders in the Asia-Pacific region. Japan, Taiwan, Singapore and Korea are the other countries. In other words, India does have the required ingredients to become a strong Asian biotech player. India's small share in the global biotech market is surprising, as India was one of the first few developing countries that understood the importance of biotech to revamp the health care sector. In fact India's sixth five-year plan was the first policy document to boost biotech growth in the country.

Considering the global dominance of European biotech companies and in total contrast the nominal share of Indian biotech players, are Indian biotech companies finding it difficult to compete with European biotech giants? We get different opinions. Chigurupati putsit this way, "Not really; in any case Indian biotech companies have yet to make any mark in the innovator product space; while in the generic biotech space, Indian pharma/biotech companies are gearing up to challenge the European and US companies. While the first two biogenerics (growth hormone and erythropoietin, EPO) came from EU companies, hopefully the third product, granulocyte-colony stimulating factor, (G-CSF), will come from Indian companies as well."

Raring to go

Despite being in a juvenile stage, the growth rate of Indian biotech is phenomenal. For the last three years Indian biotech has shown a growth rate of between 35-40 percent. Ever expanding biotech activities in states like Maharashtra, Delhi, Chennai, and Andhra Pradesh have indeed up India on the global biotech map. Projects like Genome Valley at Hyderabad have compelled foreign biotech majors to take note of their new ally.

Besides this, we should not ignore initiatives by some of big names of Indian corporate sector. Reliance Group, one of India's most respected business groups, entered life sciences with the launch of Reliance Life Sciences (RLS). Even Tata group has invested $10 million in Advinus Therapeutics in March 2006 in order to establish a new research facility. Alok Gupta, Executive Vice President and Country Head-Life Sciences and Technology, Yes Bank, says, "India offers advantages in multiple areas including cost, skilled scientific manpower (engineers, scientists, and doctors), large drug-naïve population, large domestic market, language, increasingly world class healthcare infrastructure etc. These advantages position India favourably towards becoming the global hub for bio-pharmaceutical manufacturing, medical tourism and tapping business opportunities in contract research services. With the implementation of the product patent regime this year and the opening up of health insurance sector, the Indian life sciences industry is poised for dramatic growth."

Challenges and solutions

According to Chigurupati, there are challenges like EU/US FDA approvable manufacturing facilities, skill sets to run large bioreactors and processing plants, strong research and development capabilities that will strongly decide the future of Indian biotech. Gupta says, "Innovation, human capital, infrastructure and finance are the key requirements that needed to be worked on. Improvement in these areas will guarantee a bright future for Indian biotech." He states, "There is urgent need to focus on strengthening the human resource component in relevant fields such as bio-statistics, biochemistry, bio-informatics, microbiology, fermentation and down stream processing, genetics, cell biology, law and patent practice etc. There is a need to focus on instilling a "patent culture" in our research endeavours, along with increased industry-academia linkages and collaborative research. Focus also needs to be on attracting eminent Indian scientists back to the country and utilising their expertise in driving innovation."

Recently, Yes Bank was the strategic advisor to Prolong Pharmaceuticals Inc, a US-based, venture-backed drug delivery research and development company. Yes Bank helped to create an innovative structured drug development agreement with Zydus Cadila, for the development of a next generation therapeutic protein, 'PEG-EPO', for the treatment of severe anemia. Speaking about the finance models suitable for the biotech sector, Gupta says, "It is necessary to explore innovative funding models such as public private partnership (PPP) models between Government and private sector (akin to SBIC), technology transfer cells at leading institutions. One should focus on encouraging early stage investing in the sector through various fiscal incentives."

After constant support of around two decades from the Government of India and investors from the private sectors, Indian biotech has evolved triumphantly. With a growth rate of around 35-40 percent, Indian biotech looks set to flourish. Though a lot has been done, much more remains to be done. In pharma, Indian innovation is now a given. Its high time Indian players repeat and even go beyond the pharma success in the biotech arena as well.

sachin.jagdale@expressindia.com