Pharmabiz
 

Innovation, partnership hold the key for growth

Nandita Vijay, BangaloreThursday, September 24, 2009, 08:00 Hrs  [IST]

Biotech sector, one of the key growth drivers of the Indian economy, is consolidating and looking at various business models to sustain the growth momentum it has been witnessing the last two years. A visible trend is the globalization strategy which saw a host of activities revolving around the localization of global companies and globalization of Indian companies. Owing to this, several partnerships were inked and there were also concerted efforts in product development innovation, according to the Association of Biotechnology Led Entrepreneurs (ABLE). In 2008-09, the Indian biotech sector has registered earnings to the tune of Rs 12,137 crore with a growth rate of 18 per cent which combines bio-pharmaceuticals, bio-agri, biotech products and bio-services. Going by the performance this fiscal, the biotech industry proved to be export-driven because the earnings generated from the international market was 60 per cent and valued at Rs. 7,152 crore as against the revenues from the national market which was at Rs 4,985 crore. There are 370 biotech companies in the country. The biopharma segment continued to account for the largest share of the biotech industry revenues with 65 per cent share of the total pie The share of exports in the total biopharma pie was close to 58 per cent. The bio-agri sector grew by 24 per cent to Rs 1,494 crore. The bio industrial sector grew by 16 per cent to Rs 478 crore. The bioinformatics sector registered 15 per cent growth to generate Rs 220 crore. The booming bio-cluster The bio-cluster concept has given a fillip to the sector development. Karnataka which has more than half of the biotech companies in the country is growing at 26 per cent with revenues of Rs. 2,500 crore. Bangalore has evolved itself into a natural bio cluster accounting for the maximum number of biotech industry covering the entire landscape from biopharma, bio agri to bio services and bioinformatics. The state's industry will grow further with the forward looking biotech policy, research efforts and ability to attract investment, said Kiran Mazumdar Shaw, chairperson, Vision Group on Biotechnology, government of Karnataka and CMD, Biocon Ltd. The biotech industry should look at achieving sustainable growth. This can be achieved only through cross border partnerships and adequate funding to take the industry to the next level of growth, she added. Shaw said that it is vital for the industry to move away from integrated innovation and look at synergies to progress by partnering in knowledge-sharing efforts. The country can play a key role in addressing the global challenges of food and health insecurities. To achieve this goal, we need to innovate. "Innovation is the only way to evade the impact of the current economic slowdown," she pointed out. Worldwide the biopharma industry is witnessing maximum growth in segments like targeted therapy which covers antibodies and vaccines, theranostics which deals with molecular/gene based diagnostics to determine therapies and clinical development services covering the entire gamut from phase I-IV human trials. India is already in a position to grab a fair component of business from key areas like vaccines, diagnostics and clinical trials. The country right now has the largest vaccine production capacity in the world. From Serum Institute in Pune to Panacea Biotec, New Delhi besides the Hyderabad-based Bharat Biotech and Shantha Biotechnics, all companies are armed with the expertise to produce recombinant -DNA vaccine to DTP+ Hep B+ Hib pentavalent vaccine and combination vaccines. According to Ernst & Young, there are both increased interest in investment and tax incentives which enables the biotech sector to emerge as a significant force on the global biotech map. "India would be considered a significant player on the global arena if it captures at least 10 per cent of the market by 2010. India, which ranks among the top 10 biotech hubs of the world, would join the elite club of top five biotech hubs, if it achieves the $ five billion mark by 2010, said Utkarsh Palnitkar, head of Life Sciences Practice at Ernst & Young India. India holds good potential in genetic engineering, immunological techniques, cell culture methods, stem cells. All these areas contribute to the prowess of research and development in the biotech space, said Prof. G Padmanabhan, scientist emeritus and former director, Indian Institute of Science. Increasing investments In 2007-08, the industry's investments touched Rs 2,750 crore registering an increase of 21 per cent, compared to around Rs 2,270 crore in 2006-07. The growth in investments is estimated at 38 per cent. Encouragement in innovative research, development of an environment with advanced infrastructure and high quality-trained talent are the key factors required to take the Indian biotechnology industry to the next phase of growth," Dr. Shama Bhat, chairman and managing director, Bhat Biotech. Interest by international majors Factors making India a much-sought after destination to seek collaborations in the area of biotechnology are the availability of a large pool of scientific expertise, the largest number of international regulated drug production plants and research centres like the Indian Institute of Science, National Centre for Biological Sciences and the Jawaharlal Nehru Centre for Advanced Research. In fact, in Bangalore, there are also companies like Biocon, Avesthagen, Advinus Therapeutics, XCyton, Gangagen Biotechnologies, Bhat Biotech that could be considered for alliances, stated sources from the international delegations who were here for the Bangalore Bio event held in mid June this year. The UK Life Sciences Mission is also exploring opportunities for joint venture and collaborations in the Indian pharma-biotech space. The mission is working to finalize a tripartite deal between Nottingham University, Indian Institute of Management, Bangalore and Indian Institute of Technology, Kanpur for the collaborative research programme in the area of drug discovery, said Richard Hyde, British Deputy High Commissioner, adding that the initiative of the university and management-technology institutes would be the beginning of several drug discovery efforts. The other countries which had evinced interest in the biotech partnerships include State of Victoria, France and Italy among others. Seed Funding Early this year, the Union Government through the Department of Biotechnology had committed funds to promote growth through its initiatives like Biotech Industry Partnership Programme (BIPP), Biotech Industry Research Assistance Programme (BIRAP) along with the Small Business Innovation Research Initiative (SBIRI) scheme to boost public-private-partnership effort and New Millennium Indian Technology Leadership Initiative (NMITLI) financial assistance schemes. All these funding projects are playing a stellar role to boost the growth of the sector, said Shaw. According to Shrikumar Suryanarayan, Director General, Association of Biotechnology Entrepreneurs, BIPP has a fund allocation of Rs 350 crore from DBT. This financial assistance programme is a first-of-the-kind in the country announced by the government for the industry. The major difference between BIPP and SBIRI scheme is that in the case of BIPP, the industry can keep the Intellectual Property (IP) which has been a huge attraction to the fund. But in the case of SBIRI, IP had to be shared. Several big companies which had invested in bringing a project or product to a certain stage had sought funds from the DBT or a third party. They are reluctant to give up IP at a phase when certain amounts of investments were already made. This 'IP custody with industry' feature has been an important aspect of BIPP and ABLE had given considerable inputs for this. There are not many such innovative schemes like BIPP globally. The programme is all about encouraging companies to take risk, he added. Growth prospects Indian biotech sector is at a take off stage with significant opportunities it offers. With globalization, there is scope for intellectual capital and a requirement for smart and low cost innovations. There is need for affordable targeted therapies and faster diagnostic devices which could give it a competitive advantage in the global arena. Therefore Indian biotech companies need to demonstrate capabilities of developing drugs and devices of sustainable commercial value that could attract the investors, opines Shaw.

 
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