Dr Simon Best, the founder and present non-executive chairman of the Edinburgh-based Ardana Bioscience is also the chairman of Bio Industry Association (BIA) UK. He is also the non-executive chairman, Neuro3D, France and non-executive director, Avesthagen (India) and the Entelos Inc.

Dr Best was in India for Bangalore Bio 2006 as part of the UK delegation. In an interview with Nandita Vijay of Chronicle Pharmabiz, Dr Best discusses the prospects and the potential of the sector. Excerpts:

How would you perceive the global biotech scenario in terms of growth & development?

The scene is positive and healthy. The US, UK are leaders. Of the 700 biotech companies worldwide (medical biotechnology, agriculture biotechnology, services, clinical and CROs), around 150 are in drug therapeutics. The BIA, UK has a good representation of the sector. Europe has around 350 listed companies and 50 of these are from the UK. The UK supports 30,000 biotech jobs. Around 50% of the drugs in the pipeline are currently in phase III which means a large number of products are expected to come out soon. Biotech is a high risk and high demand sector which means that one has to be patient to go through the investments cycles. Both US, UK faced a downturn in 2003-04, but managed to recover. However, to raise money in the UK, companies just about had research products or in-licensed global marketing rights. Those undertaking reformulation of generics have also been able to both develop and sell. These fund raising efforts helped companies to convince investors that they could get to the market quicker.

In India venture capitalists (VCs) are not so proactive, what is the scene in the UK?

VC's in the West are experts to offer several forms of fund raising options. This has led to sizeable startups. In the past even an academician could raise money for a product which was thought to have a future, but these days VCs insist on several viable, lucrative ideas with early market entry apart from startups to be manned by a sound management team with experienced business expertise and not just those with scientific skills.

Can UK VCs be compared with those in the US to be willing to take risks?

They are not. If one looks at the amount of money companies are able to raise in one round, then UK VCs are not so proactive, however, there is a twist here because the public markets have become more difficult. Although in the US, VCs are more willing to invest, still one cannot float a unit unless free money valuation is justified. An emerging trend is that there are plenty of small US companies with floating in London.

What is the scene for manpower?

UK has an impressive pool of scientific manpower with a large number of medical graduates. There is a brain drain with candidates going to US, Europe. This because UK universities supply of graduates is overshooting the industry demand. There has also been a huge shift from the old fashioned chemistry to new sciences like molecular chemistry, genomics, proteomics, bioinformatics where government research grants are the highest. With the result chemistry departments have shrunk. This has resulted in a serious shortage of chemistry experts in an era where biologicals monoclonal antibodies and protein drugs are the focus. Yet, there is a need to make small molecule drugs and ideally there should be a marriage between new biotechnology and traditional chemistry. The shortfall of chemists, has led both US, UK to look at outsourcing chemistry applications particularly from India.

What are the specific plans for UK cos in the country?

Interesting projects are going on between UK and Europe in stem cells. Interactions between UK scientists and the LV Prasad Institute at Hyderabad are on to rebuild cornea after eye damage. Since much of the work was done effectively in India, we will begin to see serious investments for stem cells research here.

After discussing India's strengths, there is an impression that West is still skeptical about India, please comment?

India lacks the experience in drug discovery. Another weakness is that India can do only preclinical trials on rodents but not on larger species. This is a serious deterrent because it is vital to test on larger species as the next phase of trial is on humans. Global multinationals like Quintiles invest heavily in phase II and III because of access to patients. The preclinical trial and very early human trials will continue at Eastern Europe, Ukraine, Russia and Belarus because of the availability of large animal species. Indian govt will have to review this animal trial opportunities which is a religious issue as primates (monkeys).

What are the trends in the biotech sector?

There is an antibody boom. Human Genome Project (HGP) data can be used to develop drugs. Another visible trend is use of smaller bits of DNA, RNA, silencing RNA (siRNA) to develop technologies for treatment. Reduction in drug development cost is being devised. Small molecules are much cheaper to manufacture than anything biologics. With HGP data, efforts are on to develop old fashioned drugs with no side effects like the biologicals. Therefore, on the one hand there is a new biology and on the other there is return to chemistry.

What about affordable & accessibility of drugs?

Drugs costs have to come down over a period of time. Time scales and risks are the challenges. A major cause for high drug costs is the regulatory process which is based on a 40-year-old science. All the science used to design drugs could be used to redesign outdated regulatory processes. With HGP drugs can be redesigned for safety testing without animal trials and long drawn human tests for clearances.

In your opinion what is the future of this sector?

Given the present demographics and social structure of the countries and rapidly rising economies of India and China where a lot of diseases we cannot be still treated, biotech will play a domineering role. It can bring in cheaper and effective drugs. Life threatening diseases of the future continue to be cardiovascular and diabetes which is beginning to reduce life expectancy in the Western world.

This is because, despite drugs, serious rectifications in life styles are crucial. Among the degenerative and autoimmune disorders: Parkinson's, Alzheimer's, osteoporosis rheumatoid arthritis will continue to pose treatment challenges. But with a whole range of drug cocktails and new therapies, cancer will not be life threatening. The key drivers of the sector are unmet needs of the diseases and the challenges to fight epidemics and infectious diseases.