Scientific talent,  top-of-the-line research centres, high-end manufacturing facilities and a substantial cost advantage have made India a much sought-after biotech destination. In the coming year, we will see more  M&As, co-development and marketing partnerships, as companies adopt  accelerated growth strategies. More biotech companies will choose integrated drug development to create a continuum of cost-effective solutions that optimize resource use, maximize results and enhance value, Kiran Mazumdar-Shaw, chairperson Vision Group on Biotechnology, Government of Karnataka and chairman and managing director, Biocon Ltd tells Nandita Vijay in an email interaction. Excerpts:

What according to you are the factors which make India an emerging bio economy?  
In the past decade, compared to other global players , the Indian biotechnology industry could soar much higher. The economic winter, increasing drug discovery costs, healthcare spending and patent expiration issues have singed the global pharma and biotech industry. At the same time India could capitalize on these challenges by developing business models that could  establish the Indian industry’s expertise in this area.

India, I believe is at the right place, at the right time, right now. A large and young pool of English-speaking scientific talent, top-of-the-line research centres, high-end manufacturing facilities (India has the largest number of FDA-compliant manufacturing centres), and a substantial cost advantage have helped make India a much sought-after biotechnology destination. And icing on the cake is the  the thriving Indian spirit of entrepreneurship. All this augurs well for India  and the next decade holds great promise for the nation.

Past trends show that Indian biotech companies are looking to expand their presence across continents. Many of these  companies are working for several US based customers and have also started making inroads into the European and emerging markets.

Leading players are aggressively moving to forge global alliances in a bid to propel R&D and marketing. These strategic tie-ups will help Indian players gain intellectual property assets while giving them a foothold in new markets. With global partnerships in place, Indian companies will have the technology know-how and the marketing acumen to take on the world.

Considering the challenges being faced by the global pharma and biotech companies , I firmly believe that Indian biotech industry will leapfrog  on its strengths and emerge as a potent force in the global biotechnology marketplace.

What is the key agenda of this year’s Bangalore India Bio which is the 11th edition of the mega event?
At Bangalore Bio this year the objective is to showcase India as an emerging bio-economy where biotechnology will play a key role in addressing healthcare needs through vaccines and therapeutic biologics, meet food & energy security through crops & biofuels, build environmental sustainability through enzymatic green technologies and drive economic growth through research & innovation.

Since the Bio Asia at Hyderabad is immediately after Bangalore India Bio,do you think our event will lose out on participants?
I believe it will enable delegates to take advantage of both events.

How has  the Indian biotech industry been impacted by the macro-economic pressure in the US and the across Eurozone?
I think Indian pharma & biotech sector has managed global challenges to its advantage. While global pharma industry has been struggling, the Indian pharmaceutical market continues to report a double-digit growth and it is expected to grow at a CAGR of 15 per cent over the next 10 years and quadruple to a size of $55 billion by 2020 from a 2010 market size of $12.6 billion.

The Indian pharma players have managed to expand their geographical reach beyond the US, Europe, and Japan accounting for 74 per cent of the current $850 billion global pharma market, and are targeting  the emerging markets like Latam and BRICTM, which are growing at 13 to 15 per cent  per annum according to IMS. These markets are expected to grow from $220 billion today to an aggregate market of $400 billion, representing almost 40 per cent of the global pharma market by 2015.

In terms of market segmentation, the lower entry barriers posed by emerging markets have allowed the strong penetration of generics and in recent times, bio similars. The fiercely competitive generic segment is estimated to double in size from the current $155 billion to $320 billion by 2015.

In terms of bio similar biologics, the current size of the biologics pie in the emerging markets is about $5 billion, but is largely dominated by innovator products. Trends indicate that penetration of these markets with biosimilars will accelerate at a rapid pace as with home-grown novel biologics. EPO and GCSF, for example, are already seeing a 60 per cent penetration in several emerging markets, overtaking innovator brands; and we believe that monoclonal antibodies, vaccines and growth factors are expected to present substantial opportunities by 2020.

This is largely due to the increasing purchasing power of developing nations, coupled with greater government and WHO-sponsored health care expense.

How does the business environment for the biotech sector in the international markets look with the EU debt concerns looming large?
I believe, India is in a strong position capable of converting challenges into opportunities. Today, India is in a position to provide differentiated partnership opportunities for European biotech companies for research and commercialization in a cost -effective way. This partnership model will augur well for both Indian and European biotech companies.

As the decade is also a phase where R&D costs are rising and drug  pipelines are drying up, what according to you would be the prospects of the  bio-pharma industry?
Loss of patent protection, a decline in the commercialisation of blockbuster drugs, and R&D cost spiral are making it more challenging to respond to investor concerns.

Global pharmaceutical companies are therefore in a state of flux and are rapidly recalibrating their growth strategies to include emerging markets, generics, biopharmaceuticals and ancillary products like diagnostics and devices. This scenario has opened up a number of opportunities to companies in the emerging economies where India is a strong contender.

Facing a systemic upheaval, the industry must recalibrate its business model to adroitly navigate the challenges and seize the opportunities presented by the new world order. With returns on investment plummeting to unsustainable levels, players need to make five  paradigm shifts:

• Reduce the risk and cost of drug development                    
• Expand into emerging markets
• Acquire advanced R&D assets
• Diversify their portfolio
• Collaborate and accelerate the journey

How does the future of Indian biotech appear and what would be the growth drivers?
I believe that in the coming year, we will see increased mergers and acquisitions activity – and more co-development and marketing partnerships – as companies adopt an accelerated growth strategy to help them enter new markets, grow capabilities and mitigate risks. More biotech companies will choose integrated drug development to create a continuum of cost-effective solutions that optimize resource use, maximize results and enhance value. Biosimilars is another high-growth area. The global biosimilars market is expected to be worth $19.4 billion by 2014 and players will strive to exploit the emerging opportunities .

Clinical research and contract manufacturing will also be big growth drivers in the coming years. While bio-fuels, the future of energy, presents enhanced opportunities for environmental sustainability, agro-biotechnology also offers great prospects for growth. The interplay of biotechnology and IT in India also holds tremendous potential that needs to be exploited.