Opinion

Surviving the slowdown

Call it a slowdown, a credit crunch or a recession; the bottom line is that cash is tight. What does this mean for the biotechnology industry? Globally, market analysts are predicting that smaller cash-strapped biotech companies will be cornered into making deals, even selling out to bigger players, like Pharmacopeia which sold out to Ligand. There will be a wave of consolidation among bigger players as well, as they seek to employ economies of scale. Biotech companies have traditionally found it challenging to find investors, as the gestation period overshoots the investment timelines of most investors. To add to an investor's discomfort, biotech remains shrouded in scientific jargon. Investors often have to make a decision depending solely on the quality of phase II data and this makes it riskier to pick a winning product/technology.

Smart biotech companies have therefore gone the bio-services route, putting in a services-based revenue stream while pursuing research agendas, a classic example being the Biocon-Syngene combination. Strategic alliances will also be the order of the day. Syngene's latest partnership with US biotech Sapient Discovery very clearly taps into the crying need to cut down the time (and consequently, cash resources) it takes for a pharma or biotech company to go from hit to lead. Many more such alliances are required to unclog the new products pipeline, both for small as well
as large molecules and could serve as the lifeline to survive and succeed in these trying times. Therefore our cover story in this issue analyses the effects on biotech companies and tries to gauge the slowdown strategy of these players.

We also have an entire section focusing on diagnostics as a disease management tool. Early and accurate diagnosis can cut down treatment costs as well as disease burden on governments.

This February, the Indian and global biotech industry meets once again at the sixth edition of Bio Asia 2009 and the event promises to offer both intellectual as well as financial stimulus to the biotech ecosystem evolving in the country. A key new feature is the track on agri-biotech, reflecting the key role of this sector in India. The event will be followed two months later by another event on India's biotech calendar, Bangalore Bio 2009, which also marks the first anniversary of Express Biotech. We plan to feature look ahead to the future, focusing on trends like upcoming
biotech SEZs, the influence of infrastructure groups as they fashion India's biotech blueprint. Write to me for more information on this special issue.

Viveka Roychowdhury
viveka.r@expressindia.com