Notwithstanding the adverse factors such as strengthening of rupee and price pressures in global markets, Indian biotechnology industry has successfully notched up a 20 per cent growth in 2007-08 with bio pharmaceutical sector contributing a large chunk of the total industry revenues. As per available information at hand, in 2007-08 Indian biotech industry registered revenues of Rs 10,273 crore, up 20 per cent from Rs 8,541 crore in 2006-07.
However, the growth achieved by the biotech industry in 2007-08 doesn't entirely draw a rosy picture. In fact, compared to the previous five years, in the last year the industry's growth rate plummeted to 20 per cent from a robust 30 per cent. For instance, in 2006-07 the Indian biotech industry produced revenues of Rs 8,541 crore, up 30.98 per cent from Rs 6,521 crore in 2005-06.
A close look at the sixth survey on Indian biotech industry, which was jointly brought out by Association of Biotech Led Entrepreneurs (ABLE) and Bio Spectrum, could help one comprehend that the recent slump in the growth of biotech was, among other things, a result of lackluster performance of bio pharma sector, bioagri sector and bio industrial sector. While bio services sector maintained its previous year's growth rate (53 per cent), bio informatics sector clocked a growth of 31 per cent in 2007-08 compared to 20.83 per cent in 2006-07.
Though still the largest contributor to the Indian biotechnology industry, the contribution of bio pharma sector in the last year slid to 67 per cent of the total industry revenues from 71 per cent of total industry revenues in the previous year. Also, its growth rate slid to 16 per cent during the period from 26.87 per cent in the corresponding year. In 2007-08, the bio pharma sector recorded revenues of around Rs 6,899 crore, compared to Rs 5,973 crore in 2006-07. But in effect, this growth was slower than the previous year's.
While the growth of bio agri sector in 2007-08 came down to 30 per cent from 54.85 per cent in the comparable year, the growth of bio industrial sector marginally declined to 4 per cent from 5.33 per cent in 2006-07.
Also, in 2007-08 the biotech industry saw a slid in its exports growth. During the period under review the share of exports in the total biotech pie declined to 56 per cent from 58 per cent in 2006-07. However, bio pharma's export share took a leap to 70 per cent from 61 per cent of market share in the previous year.
When it comes to 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. However this growth is tardy, given that in 2006-07 the biotech industry had witnessed a 38 per cent spurt in investments.
Industry experts feel that the recent slump is the result of consolidation of biotech industry in the country and its further growth would take place when the industry moves to the next level of change. "Stimulation in innovative research, creation 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," said sources within the industry.
Based on the current trends and the new progressive biotech policies in place, the ABLE-Bio spectrum survey forecast revenues of about $13-$16 billion by 2015.
Despite the current slid in the growth, the industry players are optimistic that measures like launch of new products would turn the corner. "The revenues could be higher if some innovative products that are currently in the pipeline receive regulatory approval," said, Dr K K Narayanan, president, ABLE and managing director, Metahelix Lifesciences. "In fact, the inability to sustain the growth momentum can be attributed to several factors. First of all the revenues from Indian-made innovative biotech products that can be sold globally are yet to kick- in" he added.
There are around 300 biotech companies in the country representing the bio-pharma, bio-services, bio-agri, bio-industrial and bioinformatics. In 2007-08, the top three bio pharma companies in the country were Serum Institute of India, Biocon and Panacea Biotec.
The Pune-based Serum Institute emerged as the top biotech company with revenues of Rs 987 crore for the third consecutive year followed by Biocon, Panacea Biotec and Nuziveedu Seeds, which is in the bio agri sector.
"The bio pharma industry in India is coming of age now and the next 5 years will be an interesting period. While bio services will continue to attract significant interest, bio generics exports to the regulated markets are likely to produce a quantum leap in the company earnings. There are also a growing number of companies in India that are beginning to develop novel biotechnology based pharmaceutical products for international and domestic market. Besides healthcare, we also expect biotechnology to begin to contribute significantly to other areas of the economy such as the biofuels sector," said, Shrikumar Suryanarayan, director general, ABLE.
In 2006-07, while the Indian biotech sector was valued at Rs 8,541 crore Karnataka's share was Rs 3360 crore, growing at a rate of 25 per cent. Retaining the growth momentum, in 2007-08 the state is known to have contributed nearly half of the earnings, which is estimated at Rs 5,100 crore.
Karnataka biotechnology sector has received investments to the tune of around Rs 155 crore as of March 2008. As per available data, seven investments were made in bioinformatics sector. The investments are expected to take a threefold increase once the Biotech Park 'Bangalore Helix' is set up, according Ashok Kumar C Manoli, secretary, information technology (IT) and biotechnology (BT) Government of Karnataka.
Besides, as many as 54 new units have been set up in the state, taking the total number of industries to 224. The units are primarily in the bio pharma space, followed by the bioinformatics initiatives.
In addition, Bangalore, the capital city of Karnataka is hailed as the world's fourth largest technology hub, thanks to its strong information technology base and the global reputation. The city is now fast turning into a complete 'bio cluster'. Besides, the Biocon Park in the Bommasandra industrial area and the upcoming Bangalore Helix Biotech Park apart from the Biocon, Advinus, Jubilant and Biovel Lifesciences infrastructure provide a global perspective to the state's biotech sector.
The state with its industrial friendly policies, salubrious climate, large technical pool from the pharmacy, engineering and medical colleges together with the presence of leading research institutes like Indian Institute of Science, National Centre for Biological Sciences and Jawaharlal Nehru Centre for Advanced Scientific Research (JNCASR) have succeeded in attracting a substantial chunk of bio pharma research labs and manufacturing units. Several bioinformatics companies have sprung up here because of the state's information technology expertise. The extension from IT to BT was only a matter of application, noted the state government.
The state can also boast of leading bio pharma companies like Biocon, Avesthagen, Bhat Biotech, Animal Biotech, Aurigene, Bangalore Genei, Biovel Life Science and XCyton, who focus on research and manufacture. In the drug discovery space, Karnataka has companies like Advinus Therapeutics, Jubilant Drug Discovery Centre, while in the bioinformatics space the state houses players like Molecular Connections, ArisGlobal Software, Bigtec, Genotypic Technologies, IBM and Infosys.
The state government with the contributions of the Vision Group on Biotechnology headed by Dr Kiran Mazumdar-Shaw, chairman and managing director, Biocon Limited is all set to announce the revised version of the biotech policy, which will not only continue to be industry friendly but provide all support for the sector to grow over the next decade.
"Karnataka was the first state to announce the biotech policy and now the revamped version will make it the most progressive document for the sector. It is expected to increase the investments," said, Dr Shaw.