Recent advances in the field of science and technology have positioned knowledge centric and research driven industries like biotechnology at the forefront, thereby altering the neo-economics of the world. Biotechnology is aptly termed as a sunrise industry, due to unprecedented potential to address every aspect of human life such as healthcare, environment, food, industry and agriculture.
Biotechnology activities were hitherto restricted to select pockets in the developed countries with very little collaborative initiatives. However increasing competition, escalating costs of R&D, low success rates and increasing timelines have forced global players to shift their R&D focus to developing countries like India and China.
The Indian biotechnology industry was estimated at Rs. 4745 crore in FY2005, with a growth rate of almost 37%. Although currently contributing to just about 1% of the global Biotechnology industry, it is projected to achieve a share of almost 10% over the next five years. This growth is attributed to a number of factors such as
" Paradigm shift from being one of the world's largest manufacturers of generic drugs, to developing capabilities for innovation, in the healthcare, agriculture and Biopharmaceutical sector.
" India's emerging profile as a forerunner in the field of recombinant vaccines, with Indian players like Serum Institute of India, nominated as the world's leading exporter of vaccines, to almost 120 countries around the world.
" Key support and initiatives from the Government to promote FDI through policy reforms, IPR compliance, establishment of SEZs and biotechnology parks so as to attract investors.
" India's pre-eminent position in the global IT industry, which can be leveraged for positioning India on the global bio-IT map.
" Availability of low-cost per transaction, huge talent pool of qualified researchers and presence of reputed R&D institutes.
India as an innovator of biotech products
Recent years have witnessed a growth in the number of in-house manufactured recombinant biotech products in India. Of the nearly 50 recombinant products currently in the global market, nearly 14 are already into seeking government approval in India. India stands only second to the US in having the highest number of FDA approved manufacturing facilities. Prominent products include Recosulin and Insugen from Shreya Lifesciences and Biocon. Indigenous manufacturing of recombinant products has lead to a drastic reduction in costs of the drugs. This has been very strongly witnessed in the field of vaccine development, where the indigenously manufactured hepatitis B vaccine by Shantha Biotechnics cost a mere Rs. 150, in contrast to the international brand priced at Rs. 487.
Major initiatives in Indian vaccine development are backed by noteworthy initiatives by organizations like WHO, GAVI, Bill & Melinda Gates Foundation, which have not only shown keen interest but have partnered with the government and private companies to develop newer vaccines in line with the requirements of developing countries. Some of the prominent ones which are at various stages of development include anthrax, HPV, HIV, typhoid, Japanese encephalitis, malaria, cholera, rotavirus, HIB meningitis, and improved versions of TB vaccine, and others.
These are being developed in close cooperation with premier research institutes. ICMR in India is already supporting development of 2 types of vaccines for HIV/AIDS- one undergoing clinical trials in Chennai and another one at NARI, Pune. The Cholera vaccine is under development with partnership between the National Institute of Cholera & Enteric Diseases, Kolkata, the Council for Scientific and Industrial Research and ICMR. ICMR is also developing vaccines like the aersol measles vaccine for improved vaccine delivery as a booster dose in children aged 14 years. If the vaccine development is successful, it will be an innovative and world's first of its kind measles vaccine indigenously produced in India.
Indian companies have already marked their presence in the global vaccine market. They are also equipped with the excellent manufacturing units of international standards. Therefore with the IPR policy in place and a well-earned government support India could definitely place an excellent and successful example of a public-private initiative for vaccine development to the world.
Key government initiatives
The government of India has been proactive in its support for biotechnology led initiatives in India. The Department of Biotechnology through the Swaminathan Task force has proposed formulating a National Biotechnology Regulatory Body for governing policy regulations pertaining to application of biotechnology to agriculture- food, pharma-medicine. Similarly budgetary allowances are made through the national Five Year Plans, of which the current Tenth Five Year Plan focuses on areas such as Human Genome sequences, Proteomics, Structural Biology and Bioinformatics.
The government is directing its major efforts towards development of better yielding transgenic crops like rice and cotton. The ICAR in collaboration with Rockfeller Foundation has founded the National Rice Biotechnology Network for producing superior varieties of rice. Similar initiatives for conducting and monitoring filed trials for Bt cotton in partnership with Monsanto are also underway.
The state governments have also prioritized biotechnology, and a number of states have formulated their own biotech policies to promote biotech business and entrepreneurship. One of the salient features of these initiatives has been establishment of biotech parks and special economic zones to attract investors. Prominent biotech Parks in India include the Shapoorji Pallonji Park, AP, ICICI Knowledge Park in AP, Lucknow Biotech Park, International Biotech Park in Pune, TICEL Park. These Parks are excellent centers for nurturing cross-industry and cross-country partnerships, through providing state of the art infrastructure facilities, a platform for fostering academia-industry tie-ups and also providing incubator space for budding start-ups. The Indian Government is also proposing to set up a Bio-IT Park to harness the existing IT capabilities with the emerging biotech prowess.
India as Bio-IT hub
The Bio-IT industry in India is at a nascent stage and currently valued at about 100 crores. However, considering the rapidly growing recognition of India's capabilities in the technology-driven sectors across the globe, it is expected to emerge as a leading player. Adding to its attractiveness is the fact that India has a pre-eminent position in the global IT market, an inherent low cost advantage and large pool of quality manpower, which can facilitate an easy vertical growth in the IT-BT sector. Currently there are about 50 different companies in this space offering a range of services, from data management, data integration solutions to the pharma, biotech, clinical trials and life sciences sectors, along with customized suite of software tools facilitating research and development.
The Bio-IT space includes pure play Bio-IT companies like Ocimum, Strand Genomics, Labvantage, Mascon Lifesciences and IT giants like IBM, Infosys, Satyam, and Oracle which have also diversified their business activities to grab their share of the Bio-IT pie.
Another promising sector is 'Discovery Research Outsourcing', which is a new opportunity for the Indian Bioinformatics Industry. Escalating competition among multi-national companies, spiraling costs of drug development, poor success rates and cutting-edge timelines have forced global players to outsource parts or whole of the drug discovery chains to relatively cheaper markets like India and China.
The current Indian drug research outsourcing market comprises about 20 prominent players, including leaders like GVK Bio, Syngene- a subsidiary of Biocon, Reliance Life Sciences, and TCG. Majority of these companies are small- medium sized companies employing about 200-230 scientists. Most of them have entered into contractual arrangements with leading multinationals like Wyeth, and Eli-Lilly for development work routinely involving different aspects full time equivalent research, medicinal chemistry, custom research and manufacturing services and clinical trials. The Indian market for pre-clinical development was estimated to $ 1.18 billion and the clinical development market was estimated at $ 1.63 billion in 2004. It is slated to grow to about $ 3.18 and $ 4.35 billion by 2011 respectively.
Drivers for the opportunity existing in India for discovery research outsourcing are:
" Low cost of drug discovery and development
" Low cost of hiring medicinal chemists- 1/5th of the cost in the US
" Higher-margins and lucrative benefits for the Indian companies
" Available pool of qualified and well educated chemists
" Available skills in IT like data management
Future directives
India's pre-eminent position in the global IT market, its growing strength in the fields of Vaccine development and recombinant therapeutics has further consolidated India's position on the global Bio-IT map. With increasing initiatives from the Indian Government in the form of regulatory reforms, IPR compliance; Financial and infrastructural support through establishment of biotech and proposed Bio-IT Park, India is all set to grab a significant share in the global Bio-IT market. However the existing capabilities in terms of IPR generation, R&D activities and cross-country collaborations, necessitate that the benefits of such parks need to exploited to the fullest extent so as to improve inter-networking between academia-industry, provide incubation space for budding entrepreneurs and attract global players to set up base in India. If the government and industry work in complete collaboration, India could well scale up to the huge opportunity existing and it won't be long before India emerges as a significant player in the world biotech scenario.
(The author is Industry Analyst, Healthcare Practise, Frost & Sullivan, India. She can be contacted the author through: sthomas@frost.com)