India is silently making progress in the area of biotechnology with a growth rate of around 25 per cent. In what can be considered as a major boost, the Association of Biotechnology Led Entrepreneurs (ABLE) is leant to focus on regulations governing biosimilars, the next growth opportunity in the biotech sector. Realising the strides India is making on biotech front several events related to biotech, including Bangalore Bio has been happening in the country for the past several years, gathering global players to explore business and investment opportunities in this booming market. As Bangalore Bio 2009 is all set to be held in Bangalore, in an interview with Nandita Vijay, Dr M Vidyasagar, president, ABLE provided a detailed account of Indian capabilities in biotech, its future and importance of events like Bangalore Bio. Excerpts:
As the president of ABLE what are the focus areas that will be addressed?
The new set of office bearers of ABLE will attempt to address the entire spectrum of issues, including regulations governing biosimilars. Several Indian pharmaceutical companies are now trying to enter the space of biosimilars, in addition to small molecule generic drugs front. The regulations governing biosimilars impose very high barriers for Indian companies. By lobbying both Indian and foreign governments we need to make sure that these barriers are lowered. Another focus will be venture capital (VC) funding. In India, we do not have access to true venture capital. What we call VC funding in India is actually private equity, which tries to make only safe bets, rather than the risky bets at a much earlier stage of evolution of a company. Also, there is a mismatch between what VCs want to fund and what the Indian biotech community aspires to. By and large, VCs wish to fund safe projects like contract research and manufacturing, clinical trials etc, and not original discovery or product development. We need to showcase our abilities better so that we are able to attract funding in those areas where we aspire for success.
How would your experience at TCS Life Sciences and expertise in information technology (IT) for drug discovery and diagnostics help guiding the biotech sector?
Being president of ABLE would require looking beyond the specific activities of TCS Life Sciences and its research and development (R&D) group. Having said that, I do believe that the biotech and pharma sectors are now much more than willing to accept computational methods for designing and fine-tuning new drugs than they were earlier. I suspect this is due to the ever mounting cost of drug discovery. So in my view tools like 'bio-suite' will find greater acceptance going forward.
When it comes to biotech, there is a constant competition between Andhra Pradesh (AP) and Karnataka. Which of the two has an edge in the field?
Both Karnataka (more precisely Bangalore) and AP (specifically Hyderabad) have their own strengths. For instance, there are plenty of small start-ups working in the broad area of drug discovery in Bangalore. In contrast, Hyderabad is far ahead when it comes to agri-biotech. Both cities have a lot of high quality educational institutions and national R&D laboratories. I think it is rather simplistic to reduce Indian biotechnology to an AP vs. Karnataka issue. There are also pockets of excellence in Ahmedabad, Mumbai, Pune and Delhi. If Indian biotech is to make an impact on the world at large, we need all of these cities to grow and build on their existing base of excellence.
Do you think that events like Bangalore Bio have an important role to play in propelling India's biotech industry? If yes, please detail the reasons?
There is no doubt that events like the Bangalore Bio provide opportunities for business development. The event has been an ideal networking and learning platform to get to know people, technologies and products. As leading biotech companies congregate, opportunities to collaborate and make investments have come through. Such events are a good platform for governments to talk about the development in their states to attract investments, for venture capitalists to spot opportunities for funding and for suppliers and other service providers to grow their businesses.
Going by India's strength in IT and chemistry, would bioinformatics and chemistry related research be the future growth avenues for companies here?
There are two challenges here. First, unlike in traditional IT customer sectors such as banking, insurance and transportation, most pharmaceutical companies are not yet ready to outsource their core functions, such as IT support for drug discovery. So even though pharma companies do some outsourcing, what is outsourced is traditional IT work such as payroll and supply chain management which have nothing to do with the pharma / biotech industry per se. I think that outsourcing IT support for drug discovery still has a long way to go. The second problem is that when IT techniques are successful, they do a far better job of predicting failures than they of predicting successes. So a good bio-simulation programme will enable a biotech company to weed out drugs very early in the discovery cycle, before a lot of money has been spent on them. Now if this kind of work is done in-house, then that is one thing. But how will a pharma company pay an external agency for having saved them future expenditure? The revenue model for charging such tools is not clear to me. So perhaps we will see the evolution of platform technology with traditional revenue models (e.g. number of user licenses). However, these difficulties will not come in the way of India eventually playing an important role in bioinformatics-based services.
In the last two years, there has been a boom in the bioIT and bioservices space, compared to biotech production space. What should be done to increase the development of biotech drugs or contract manufacturing?
Whenever the cost of initial entry is high, the number of aspirants will be small. Conversely when the entry barrier is low, you will see more start-ups. That is a fact of life and nothing can be done about that.
Biotech has seen the entry of several start-ups. But several of them have not gained ground. What do you think are the reasons?
The mortality rate for start-ups is 80 to 90 per cent in every sector. So we should not be surprised by this kind of failure rates amongst start-ups.