G Steven Burrill is CEO of Burrill & Company, a life sciences merchant bank engaged in three core activities - venture capital investment, strategic partnering and strategic advisory services. He is one of the most prominent biotech investors and a recognised strategic visionary. Prior to founding Burrill & Company in 1994, Burrill spent 28 years with Ernst & Young coordinating their services to clients in the life science/biotech/high technology/manufacturing industries worldwide.
Burrill chairs the boards of Pyxis Genomics and Paradigm Genetics and also serves on the Board of directors of 7 other biotech companies. Burrill has authored annual reports on the U.S. and European biotechnology industry for the past 18 years. He is recognized as "the biotech visionary" by the prestigious Scientific American journal and is one of the original architects of the U.S. Biotech industry.
Steven Burrill shares his vision for biotech with Dr Tania Fernandez and Dr Val Bliskovsky in an interview for Pharmabiz.com
Being a 38-year veteran of the US Biotechnology Industry, a financier and an industry builder as well as the best analyzer of what is really happening in biotech land, could you please summarize in a few sentences the current situation in biotech?
We are a thirty-year old industry and a very successful one. Thirty years ago the industry did not have the tools, technologies, management teams, products, and successful businesses that we have today. The human genome project re-engineered this industry's toolbox in the last few years and gave us new tools and technologies to not only understand our genome but also move us rapidly towards personalised medicine. Our current concern regarding bio-terrorism will be another "moon shot" for this industry and this will be significantly larger research spend than the spend on the human genome project. The technology that will be developed for new diagnostics, therapeutics and vaccines will revolutionize everything that we do.
The biotech industry today currently has 5,000 companies worldwide, of which about 500 are publicly owned, the industry has a $50 plus billion dollars revenue base, and hundreds of products on the market. We have come a long way. This is a growing industry and one with a superb future.
Could you please share with us your opinion regarding the factors that promote biotech development in the US? Why do you think that other countries lag behind?
The Biotech industry is fueled by capital. We invest millions into developing a product and it may take 15 years from concept to market. We have benefited from 30 years of US investors investing in hope, passion and opportunity, funded by venture capitalists and the public equity markets.
The US also had an enormous spend for development of these technologies funded by the National Institutes of Health for decades, now spending $27 billion per year.
The entrepreneurial environment that this country has embraced for decades may be an even more important factor. We believe that small companies and individuals can make a giant difference. Most of the job growth in this country occurred in small growing companies, not the large ones, and we must do everything we can to enable this growth to continue. The US embraces entrepreneurial culture in a broad sense. We understand and believe in risk, and these biotech businesses are risky. We accept failure; a known commodity when one takes risks. A lot of other countries do not believe in entrepreneurship. They think it is self-promotion, self-grandiosement and that the only reason for entrepreneurship is to create wealth.
Biotech businesses have all started as small entrepreneurial companies. To grow an industry one must start at the beginning. In the US we also have a lot less government involvement. Our government invests in research and then moves out of the way. In other countries the government may not invest enough in research or may get too involved in industry functioning.
Lack of faith in science, lack of embracement of an entrepreneurial community and the need for a robust public and private equity market all contribute to the fact that biotechnology is not growing as rapidly in other countries.
Could you share with us your vision for India?
India is home to over 150 biotech companies with a total bioscience investment of nearly $150 million US dollars. Though this is a small share of the global biotech market, the promise of the growth of the industry in India is significant. Forecasters estimate that the domestic market for biotech products will grow to $4.3 billion by 2010, up from just $2 billion in 2001. Some expect India to claim 8% of the world's biotechnology companies by 2010.
More importantly India has a tremendous scientific base and a very successful generic pharmaceutical industry but on the negative side, intellectual property protection is not as strong as it should be although that is set to change in January 2005. Historically India's "brain drain" to the U.S/Europe has been a problem although this may now be reversible.
What factors in India do you think would make it favorable for foreign companies to set base there?
In India's favor, there is a growing demand for biotechnology products, rich biodiversity, a strong base in research and development, one of the largest agricultural sectors of the world and perhaps its greatest asset - its wealth of well educated human capital. India also boasts a large English speaking population.
The country is positioned to grow into a major R&D center for biotechnology companies who are seeking low cost, a skilled workforce and large markets. This is why companies like Monsanto, Pfizer, AstraZeneca, Unilever, Dupont, Bayer, Novartis and Eli Lily have set up there. India has a powerful and inexpensive information base with reasonable pharmaceutical experience. From a clinical trials standpoint India has access to lots of patients and a sophisticated network. India also has short patient recruitment times.
Apart from skilled and low-cost labor force and large markets, what other unique opportunities, if any, do you think India has to offer?
I think India's biggest opportunities may lie in agbio and bioinformatics, capitalizing on its already strong information technology foundation and significant agricultural base. There is also the potential for the country to capitalize on its history of manufacturing generic pharmaceuticals - emerging as a center for biogenerics. Also its proximity to China and the rest of Asia and its growing markets may play a critical role.
Finally, investors especially early private capital and VCs look for exits...liquidity for investors is always a concern. Robust equity public markets help. India's recent successful offering of Biocon on its national market shows increased liquidity.
Other unique advantages lie in contract manufacturing and the CRO industry. In the contract manufacturing arena, strong scientific expertise, the ability to build GMP compliant facilities both quickly and inexpensively as well the fact that the manufacturing processes are IP protected will serve to India's advantage. For the CRO industry, a strong base of English speaking MDs and nurses, a large base of previously untreated patients with different diseases and relatively lower costs (estimated at 20-50% of US costs) with full GCP compliance verifiable by audits will prove to be driving factors.
You mentioned earlier that in the US the government played a role in biotech in the initial phases, but then respectfully stayed out of it and your concern was that in other countries either total lack of governmental support or more likely too much government involvement could actually jeopardize the growth of biotech. Would you care to comment on your analysis of the governmental support in India?
The Indian government is very optimistic not only about research and manufacturing for biotechnology companies based elsewhere but also that India will generate its own innovations. India's department of biotechnology budget nearly doubled over 5 years to $50 million in fiscal 2003.
Among other initiatives the department established a 5-year, $20 million Indian genome inititative to study genetic variation among its population. The government is also establishing a Plant Genomic Centre in New Delhi and a Centre for Human Genetics in Bangalore and committed a $40 million per year budget for 10 years. The government of Andhra Pradesh has recently established India's first biotech fund ($30m) called APIDC Ventures.
In spite of this seemingly positive picture, it seems that Venture Capitalists have been fairly reluctant to pour money into India. Do you envisage this changing?
Venture investors have been reticent so far to pour big money into biotech products in India because of concerns of the long road ahead to developing a marketable product, weak intellectual property protections and ongoing controversies about genetically modified products. However there are steps being taken to address some of these issues. The government, for example, is addressing regulatory needs and strengthening patent production. India has established regulations to approve genetically modified crops, recombinant therapeutics and set guidelines for stem research. India has also signed the TRIPS agreement in a move that is expected to increase foreign investment and improve the environment for R&D. In fact, we at Burrill and Company are very interested in investing in Indian based biotech companies.