The biotechnology industry in India grew by 20 per cent during 2007-08 with revenues of US $2.56 billion (Rs 10,273.7 crore). An Ernst and Young survey projects India as an emerging biotech leader, ranked third in the Asia-Pacific region, based on the number of biotech companies. The industry employs 20,000 scientists and is concentrated in six major clusters - Bangalore, Hyderabad, Chennai, Pune-Mumbai, Delhi and Ahmedabad-Vadodara. The state of Karnataka is home to 55 per cent of the Indian biotech sector.
The global pharmaceutical industry's profitability has been affected by rising research and development (R&D) costs and pricing pressure. Over the years, India has become a hub for outsourcing R&D activity. An abundance of cheap labour and highly skilled technical manpower along with world-class facilities for biopharmaceutical manufacturing has attracted foreign investment to India.
Indian companies are at relatively early stage in their R&D programmes focusing on affordability and accessibility of medicines among target populations. With the adoption of product patents in 2005, many vaccine companies have dedicated R&D programmes to combination vaccines. Health biotech firms are increasingly using strategic partnerships to expand their innovative capacity. For example, Intas Biopharmaceuticals, India and Kwizda Pharma GmbH, Austria have jointly completed a phase I clinical trial study of Neukine. Both companies re expected to lodge an application to get Neukine approved for the European market upon completion of an upcoming clinical phase III trial.
According to a recent survey of the Association of Biotech Led Enterprises (ABLE), the biopharma segment continues as the largest contributor to the biotech industry with sales of $1.72 billion (Rs 6,899 cr) and accounts for 67 per cent of the total industry revenues. Research services touched US $500 million and revenues from bio IT (bioinformatics) touched US $250 million. The biotech exports grew to Rs 5,733.7 crore, 56 per cent of the biotech pie. Biopharma exports accounted for over 70 per cent, while the bioservices sector had 26 per cent share in exports. The bioservices and bioagri sectors grew by 53 per cent and 30 per cent, respectively. The bioindustrial sector grew by 4 per cent to Rs 410 crore and the bioinformatics sector by 31 per cent to Rs 190 crore.
In 2007-08, the investments grew by 21 per cent y-o-y to Rs 2,750 crore. Based on current trends and the new progressive biotech policy in place, the Indian biotech industry is expected to touch $13-16 billion by 2015.
The top 10 companies collectively value Rs 3789.26 crore, accounting for 37 per cent share of total biotech sales. The top five companies (home grown) account for 31 per cent share, while the top three companies (biopharma) account for 25 per cent share with combined sales of 2576.98 crore.
Government support
The Indian government in its latest union budget placed strong emphasis on boosting its biotech sector. There have been a number of changes spanning monetary, regulatory and development.
Monetary measures: A number of measures have been taken by the government to promote the biotechnology sector. These include increased allocation of funds, reduction in taxes and higher investment by the department of Biotechnology while increasing support for public-private partnerships (PPPs).
Allocations
● INR 235 crore for autonomous R&D institutions
● INR 315 crore for R&D
● INR 45 crore for grand challenge programmes
Tax implications
● Tax levied on pharmaceutical products manufactured in the country has been halved
● Reduction in the federal value added tax by 2%
● Extension of tax concessions to pharma and biotech research companies that take up outsourced research work
Investment
● India's Department of Biotechnology (DBT) is investing up to 30 per cent of its budget in PPP schemes by the end of the 11th Plan (2007-2012). It is estimated at INR 6,500 crore.
Change in regulatory standards
● The National Biotechnology Regulatory Authority (NBRA), under DBT, will replace many of the other bureaucracies with which biologics makers in India now must interact for biosafety issues.
Development of tech clusters
The government is at an advanced stage of planning four technology clusters. They are:
● The agrifood technology cluster in Punjab
● The health science, biotechnology cluster in Haryana
● The animal science and biotechnology cluster
● The marine science and technology cluster (University affiliated).
A law is also being considered to create a framework for universities to patent their discoveries.
The global market for generic biopharmaceuticals is expected to grow in the next few years, with several blockbuster drugs losing patents. Indian companies appear well positioned to leverage their cost effective manufacturing capabilities to corner some of the market. In addition, the weighted deduction of 125 per cent on payments made for outsourcing R&D in the latest budget is likely to boost contract research organisations. Given that the new patent regime has been fully implemented, the challenge for India lies in enabling companies to move from process innovation to product innovation and in getting VCs to back innovation.
(Courtesy: Yes -PharmaLife)