Companies that have R&D operations in India find lack of government support a major challenge in conducting effective R&D although Indian government has taken many initiatives to encourage and promote R&D activity at all levels. Also companies find it difficult to source sufficient funds both internally and externally and even face lack of support from internal business team when it comes to R&D activity, says Prashant Nagre, CEO, Fermenta Biotech Ltd. in an interview with Nandita Vijay. Excerpts:
How do you view the current R&D scene in India?
Generally, the spending on R&D in India is mostly done by the corporates,but with government support things look to change. Companies such as Ranbaxy Laboratories, Glenmark, Dr Reddy’s Laboratories, Cadilla, Lupin and the likes are some of the private sector companies which are among the topmost spenders in R&D. Generally, there has been a healthy trend on the number of new R&D centres, especially from multinationals (MNCs) in India with pharma sector accounting for the largest share of R&D followed by the automobile sector. Despite this, an alarming trend is the closure of existing R&D centres. There is also a dip in the research investment made by MNCs which does not present a very encouraging picture. These MNCs traditionally have never been large spenders on R&D in India. Most large local pharma companies spend anywhere between 3-10 per cent of their revenues on R&D. However, most of the expenditure on research is aimed to help them in their generics business rather than creating new drug molecules.
What are the key strengths and the weaknesses of India in the R&D?
There are six key strengths for R&D in India. First is the low-cost, highly skill set of English speaking labour force and proven track record in design of high technology manufacturing devices. However, this low cost advantage is slowly weaning out and in many cases, cost is seen to be a critical component, making research non-viable.
Second is that India, being on the ‘threshold of biotech revolution’, has 280 registered biotech- and 180 bio-suppliers contributing to the total biotech market which is worth over hundred billion dollars. Already the world pharmaceutical companies have or are willing to set up their R&D centres here.
Third is laboratories such as CSIR, ICMR, IARI, JNU and PGIMS with world class infrastructure are the upcoming sectors involved in clinical research, and the medical and bio-informatics areas are key fields in development of the biotech sector in India.
Fourth is that several state governments, particularly in southern India, are pursuing biotech policies of their own, generally known as ‘State Biotechnology Policy’.
Fifth is that Government is now providing numerous subsidies and is relaxing norms for the biotech industries. There has been a lot of recent publicity regarding biotechnology, and public perceptions are being changed favourably.
Sixth is the recent initiatives of the Government to provide trained manpower on respective areas of expertise emerging as a sustainable model.
Now coming to the weaknesses in R&D in India. These cover the lack of adequate skills and infrastructure in some areas including inadequate documentation systems.
There are ambiguities in the interpretation and implementation of global regulatory and intellectual protection standards.
Further, there are issues on maintenance of confidentiality clause and the IP violation.
Another major point of consideration is the missing link between the research and commercialization Companies are still looking to sell the invention or new developments in the national and international market so as to compete with the competitors.
What according to you are the visible trends in this space?
Over the past few years ,entrepreneurs in India have integrated capabilities across a wide spectrum of the pharmaceutical research and development of value chain, from genomics, custom synthesis, physical and chemical characterization of molecules, in vitro studies and animal toxicology, to biopharmaceuticals, execution of phase 2 and phase 3 studies, data operations and statistics. The R&D services space is expanding right from modelling to genetic engineering to protein design which is a healthy sign. The cost of research is still not sustainable but for some projects, outsourcing helps to overcome the time and resource limitations. There has been an overall conscious effort to work in a non-infringing environment considering the implications the country has seen in the past, which has given a fillip to research.
Would India be a recognized hub for contract research?
Contract research (CR) per se is still a large market across chemical research or in biotech combined with other value added services. For example, the CR space in clinical research has a wide spectrum right from molecule synthesis to BE (bio-equivalence) studies under one roof. This has helped MNC originator companies to look at a one-stop solution in India. But in the area of clinical research or human studies the sector is better positioned to garner revenues compared to the other CR services. But in the last 16 months is on a standstill. With more stringent quality, ethical and regulatory framework compliance on clinical research, India will gain ground in the coming months.
Do you think India has the adequate qualified and trained personnel to work at R&D departments of pharma and biotech companies in the country?
Indian companies are trying to improve their national and global competitiveness and enhance their in-house expertise and capabilities require access to a pool of highly trained personnel. The Indian pharma industry will need 2.5 million skilled manpower by 2022, to maintain its high growth rate.
India does have reputed scientific institutes which churn out talented students every year. But the number of qualified students with desired skills and quality is scarce. Firms are finding that such a workforce of researchers trained in leading-edge pharmaceutical and biological methodology remains limited in India today partly because of brain drain or poor exposure of the students. Moreover, on a broader sense our curriculum is not fully industry driven with domain knowledge which would make a person more suitable for the companies.
What are the challenges before companies in India to conduct R&D?
Companies that have R&D operations in India find lack of government support as a major challenge . This is despite the efforts by the Indian government which has taken many initiatives to encourage and promote R&D activity at all levels. Also companies find it difficult to source sufficient funds both internally and externally and face lack of support from internal business team when it comes to R&D activity. The decision to fund R&D is influenced by the perception of research in the company, its effectiveness to solve problems and the expectation of immediate return from it.
Several large Indian companies with sizable R&D departments have reported operation in silos with little or no interaction with business units to build a technology roadmap. One of the biggest challenges is to utilize the scientific workforce to the best of their ability. Other constraints as indicated in the FICCI 2013 report on ‘India’s Emerging Competitiveness as Destination of Global R&D’ prepared by Battelle India points out the poor R&D infrastructure, specifically referring to non-availability of affordable and reliable testing and characterization facilities in India.
Some other challenges are the increasing cost structure particularly cost of manufacturing and labour. India is no longer the lowest cost destination for the outsourcing companies and has the growing competition from other geographies like China, Taiwan etc. Big pharmaceutical companies are setting up their facilities in India primarily offshoring. Though India has enforced patent laws, there is still lingering discomfort among few MNCs, particularly small biotech companies to work in India. Relative to western world, there is still a lot of government control that leads to additional timelines. Focus on safety health and environment (SHE) are relatively recent advances which companies would need to focus a great deal.
How viable are the industry-academia partnerships in this space?
The world of science and technology is changing at a very fast pace. Students in science and engineering now need to be adept at seeking answers and developing solutions rather than regurgitation of fundamental principles that they learn in a classroom. There is a need to adapt an industry-oriented education by the academia, in order to generate a workforce that is industry ready. The academia should work with industry to define skills that are useful for students to be productive in an industrial environment. Moreover, academic institutes should play an important role in collaborative R&D, because they can provide low cost talent under supervision of experienced teachers and professors along with laboratories equipped with suitable instruments for R&D.
Another reason for industry to engage with academic institutes is to evaluate research students as potential candidates for employment after they complete their studies.
This way companies can reduce the initial training and mentoring cost as the candidates become familiar with the culture and requirements of the company while they are still at universities.
Could you give us a snapshot of Fermenta Biotech’s R&D centre at Thane?
FBL is a pioneer in providing Penicillin Gacylase-based biocatalysis solutions for beta-lactams and cephalosporins. Driven by progressive and continuous development, our R&D is working on next generation Penicillin G acylase enzyme, for antibiotic synthesis with higher enzyme activity, higher stability and higher productivity. The antibiotics which are in our focus include Amoxicillin / Ampicillin / Cephalexin /Cefadroxil and other cephalosporin antibiotics. In addition, to beta- lactams and cephalosporin space, our R&D is also working on enzymes for chiral chemistry applications. These chiral chemistry applications are being scaled-up for commercial scale production. We have developed various supports like ‘DILBEADS’ which are macroporous, beaded polymer supports available with epoxy or hydroxyl groups for enzyme binding.
What are the future efforts of Fermenta in R&D?
The company’s R&D is also embarking upon on novel enzyme platforms being developed with process integration and simplification strategies. These process integrated approaches span from direct synthesis of antibiotics by integrating the number of unit steps as well as novel biotransformation process for making high value products. Our R&D is poised to provide integrated enzyme solutions for pharma, fine chemicals and other specialty chemical applications.