Beyond Borders Ppt

8/8/2019 Beyond Borders Ppt

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Financial crisis

Application of biotech to all the fields

Emerging biotech cos got affected verybadly

Started working on pay rolls, selling assetsetc.

Worried about the recovery Emergence of New Normal

Formulation of new & sutainable businessmodels


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Crisis started to settle after some time

Financing improved

India & China: least effected by the crisis


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E&Y predicted that therell be a sharpreduction in cos numbers but that didnt

happen Investors are looking for de-risked

investments and a challenging & healthymarket environment

Companies shrunk only 11% as againstthe predictions of 33% decline


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Most of the US & Canadian cos had lesscash on hand during the crisis

Key driver of survival: ability to operatemore efficiently

Efficient ways to deploy scarce capital,

defray high costs of R&D, share risks &rewards


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VCs have funded portfolios of thecompanies that have the potential to

grow into fully integrated, self sustainingenterprises.

VCs in crisis: capital constraints,practically non existing IPOs and longexit options


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Increasing efficiency: funding vs innovation

Decreasing R&D costs and increasing its

success rate Reality: pharma cos are divesting

Asset centric model developed by IndexVentures

Patients need drugs, not the companies

Investors need efficient ways to deploycapital


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Pharma cos are innovating

Some cos are sticking to drug discovery

and others are expanding (for ex. fromgenerics to nutraceuticals)

Collaboration between biotech and

pharma companies Option based transactions and buying

only if the clinical trial has beensuccessfully completed


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Govts pressurized companies on pricingpolicies

Drivers of this trend

1. Growing costs2. Desire to penetrate to greater citizenry Budgetary pressures on theGovt due to low

tax revenues

In US, health insurance is tied to employmentstatus Widespread layoffs -> increased the no. of

people at the risk of losing access tohealthcare


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Drug development is time consuming &expensive

Biotech cos depended majorly on1. VCs

2. Public markets &

3. Pharma companies Working with 3rd parties is not just to slash

costs but it also helps in other ways


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Five guiding principles for the newnormal

1. Seize funding opportunities2. Capital efficiency matters

3. If you build, will they pay?

4. Collaborate effectively5. Differentiate your assets


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Innovation in Biotechnology

Role of public policy

Ex: Protection of IPs & Stem Cell funding inBushs regime

FIPNet by Elli Lilly. 3 broad areas

1. Functional outsourcing

2. Novel ways to discover & developmolecules

3. Equity investments & partnerships


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Opportunities: Western cos focusing onreducing head counts and R&D costs

India & China: Centres of the growth Challenges for western cos:

understanding local market, local

culture, available resources, infra andGovt policies


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Dominated by TCMs

Scenario is slowly changing

Growth rate of 29% from 2006-09 andwould surpass Germany & France as #3drug maker by 2011 (IMS Survey)

Highly attractive outsourcing destination Health Reforms: worth $124 billion

insurance for non-employed urban &rural population


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China updated its EDL 307 medicines 2/3rd : products discovered outside China 1/3rd : TCM Govt regulated pricing Biomedicine is their strategic focus as per

11th five year plan Spending $9.2 b on technologies Accelerated process for new drug

approvals IP reforms; Science Parks etc


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Opportunities:x Liberalized IP regime

x Highly skilled work forcex Lower manufacturing and R&D costs

x Growing demand for healthcarex Not effected by recession

xLess reliant on capital from investors


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NBRA Bill Backed by controversial Bt Brinjal issue About to be presented in parliament in this

winter session of parliament Opposed by a strong lobby of GM seed

manufacturers National policy on vaccines being drafted

by ICMRx Equal importance to PSUsx To focus on manufacturing & affordability of

vaccinesx CROs require DCGIs approval


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Bt Brinjal would have been the first everGMfood crop to be grown on a large scale in theworld

India is working on rice, mustard, cauliflowerand peas Bt Brinjal failure could hinder 40 applications in

the process DCGI approved stem cell induced clinical trials

by StemPeutics in India (2nd after US) CordLife established cord cell banks in India Fortis tied up with Biek Biotech to conduct

clinical trials for a stem cell therapy


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Infra Development:x PPP models in establishing Biotech Parks &Clusters

x 3 Biotech clusters @Mohali, Faridabad &Bangalore

x Marine biotech research institute @ Kerala with@$45million

x Biotech SEZs in APx Karnataka:Millenium Biotech Policy II

x 5 biotech parks

Himachal Pradesh & Goa are also considering under PPPmodels


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Financing: Not by VCs & PE Funds

In US, VC funding was reduced from

$120m to $24million during recession Avasthagen planned an IPO in 2010 in

India; expected to raise $13-15 million

Investments: US based, Biogen Idecannounced to enter with its completedrug portfolio into India


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Deals:x Sanofi Aventis bought Shantha Biotechnics for

$660million

x Merck acquired Bangalore genei for $8.8millionx Daiichi Sankyo acquired Ranbaxy & Biovel Life

Sciences

x Advanta India acquired US based, CrossbytonSeed Co

x Transgene Biotek entered a licensing agreementwith DRL on obesity management drug

x BristolMyers Squibb along with Syngene had setupa integrated drug discovery center @ Biocon Park

x And several other deals


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Biosimilars: The next big opportunityx Reliance Life Sciences, Shantha, Panacea,

Biocon, Wockhardt and Intas Pharma havebeen developing new arenas in this area

x Oral Insulin by Biocon; to be US market by 2011

x Cipla formed a JV with Chinese firm forresearch in this field


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After financial crisis, US companies arelooking to acquire the companies in new

geographies in niche segments To move up the value chain Indian cos

has to continuously improve novel drugs& diversify its portfolio

4As and 3Ps strategy


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Thank YouBY_

ANIRUDH PULUGURTHAPGDM-BT (0911-01)

INSTITUTE OF PUBLIC ENTERPRISE

Beyond Borders Ppt

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