Biotechnology Industry in India Opportunies for Growth

EXPORT-IMPORT BANK OF INDIA

OCCASIONAL PAPER NO. 137

BIOTECHNOLOGY INDUSTRY IN INDIA:OPPORTUNITIES FOR GROWTH

EXIM Bank’s Occasional Paper Series is an attempt to disseminate the findings ofresearch studies carried out in the Bank. The results of research studies can interestexporters, policy makers, industrialists, export promotion agencies as well asresearchers. However, views expressed do not necessarily reflect those of the Bank.While reasonable care has been taken to ensure authenticity of information and data,EXIM Bank accepts no responsibility for authenticity, accuracy or completeness of suchitems.

© Export-Import Bank of IndiaPublished by Quest Publications

January 2010

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CONTENTS

Page No.

List of Tables 5

List of Exhibits 7

List of Boxes 9

Executive Summary 11

1. Introduction 32

2. Global Biotech Industry 37

3. Biotechnology in India: Current Status 56

4. Indian Biotech Segments: Emerging Opportunities 82

5. Challenges & Strategies 111

Project Team:

Mr. S. Prahalathan, General Manager, Research & Planning Group

Mr. Ashish Kumar, Chief Manager, Research & Planning Group

Mr. Rahul Mazumdar, Manager, Research & Planning Group

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List of Tables

Table Title Pg. No.No.

1. Global Biotechnology Data for 2007 and 2008 42

2. Region-wise Biotechnology Data, 2008 43

3. Top 10 Biotech Products by Estimated Sales by 2014 48

4. Top Ten Biotech Drugs in 2008 49

5. Top Biotech Clusters in India - 2008-09 68

6. Top Biotech Cities in India - 2008-09 69

7. Biotech Parks in India 71

8. Understanding Key Segments in Biotechnology Industry 84

9. Select Key Firms in the Biopharma Business in India 86

10. Recombinant Therapeutic Drugs Approved for Marketing In India 90

11. Biotech Crops in Field Trial in India, 2008 94

12. Area, Production and Productivity of Cotton in India (2002-08) 97

13. Consumer Goods made with Industrial Biotech 100

14. Comparison of Generics, Biosimilars and Biologics 104

15. Key Biotech Products Losing Patent Protection in the US 122

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List of Exhibits

No. Title Pg. No.

1. Share of Population above 65 Years in Select Countries (in%) 34

2. Top Biotechnology Nations, 2008 (By Number of Firms) 38

3. Trend in Financing of Global Biotech Industry (US$ Bn) 39

4. Number of Greenfield FDI Projects in Biotech Industry 40in the World- 2004–2009

5. Share of Regions in Global Biotechnology Revenues - 2008 42(Public Company Data)

6. Share of Regions in Global Biotechnology 44R&D Expenditure - 2008 (Public Company Data)

7. R&D intensity (%) and R&D Expenses Per Employee 44(US$ 000), 2008 (Public Company Data)

8. Share of Regions in Global Biotechnology 45Employment – 2008 (Public Company Data)

9. Share of Regions in Terms of Number of Players 46

10. Average Revenue Per Employee & Employee 47Intensity Per Company

11. Indian Biotech Industry in 2008-09 56

12. Evolution of The Biotechnology Industry in India 58

13. Key Advantages of Biotechnology Industry in India 59

14. Indian Biotechnology Industry Structure 63

15. Indian Biotechnology Industry – Revenue by Segments 65

16. Domestic Business of Various Biotech Segments in India 66

17. Export Business of Various Biotech Segments in India 67

18. Top Biotech Regions in India - 2008-09 68

19. Budgetary Allocations in The Five-year Plans in India (Rs. Crore) 75

20. Growth of The Biotechnology Industry in India 83

21. Key Segments in Indian Biotechnology Industry 83

22. Biopharma Revenue By Segments in India 85

23. Segmentwise Shares of Biopharma Industry (2008-09) in India 86

24. UN Human Development Index Rank by Select Countries 112

25. Trends in Pharma-Biotech M&A Deals 119

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List of Boxes

No. Title Pg. No.

1. DNA – Cornerstone of Biotechnology 33

2. Recombinant DNA Technology 36

3. Centers of Excellence in Biotechnology Sector in India 61

4. Biotechnology Patent Facilitating Cell 72

5. National Biotechnology Development Strategy 76

6. Biotechnology Institutional Infrastructre in India 77(Existing and Proposed)

7. “Builder” Scheme 78

8. India’s First Nanotech Park 108

9. Umbilical Cord Blood Banking 109

10. Ramalingaswami Fellowship - An Initiative for Reversing Brain Drain 118

11. Exim Bank’s Support to Research & Development 121

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INTRODUCTION

Biotechnology is a generic term thatencompasses a wide spectrum ofscientific and technologicalapplications used across a varietyof sectors. Biotechnology thereforemust be seen in the context of acontinuum of other disciplines andtechnologies where its synchronizedapplication drives new products andtechnologies. In the present daycontext, the importance of thebiotechnology sector has assumedincreasing significance. The sectortoday possesses the ability toprovide crucial leads, which canhelp not only in curing criticaldiseases but also reducewidespread hunger. With a strongand consistent research anddevelopment thrust, the sector isincreasingly being viewed as ananswer to diseases, such as cancerand AIDS; as an instrument toenhance agricultural productivity;and in providing solutions to climatechange and promoting sustainabledevelopment through use ofbiofuels.

The industry today has achieveda global status through firm-levelstrategies, active industry-level

participation, and most importantly,due to the proactive and enablingpolicies of the Government. In fact,the various policies of theGovernment over the last threedecades have enabled the Indianbiotechnology industry to carve outa niche for itself in the globallycompetitive environment andconsolidate its position.

GLOBAL BIOTECH INDUSTRY

The global biotech industry ispredominantly skewed in favour ofthe developed countries, both interms of number of firms as alsoin terms of revenues. USA tops thelist with over 1750 companies,followed by France (824), SouthKorea (773) and Spain (659). India,with 325 biotech companies in2008, was ranked 11th in the worldand fourth in the Asia-Pacific regionafter South Korea, Japan andAustralia.

Notwithstanding the recenteconomic meltdown, the revenues ofthe public biotechnology companiesacross the world increased fromUS$ 84.7 bn in 2007 to US$ 89.6 bnin 2008, an increase of 5.7%. In spiteof this increase in revenues, the

EXECUTIVE SUMMARY

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inudstry posted loss in operations,although the loss in the year 2008declined from US$ 2.6 billion in 2007to US$ 1.4 billion in 2008. The R&Dexpenditure in the biotech industryregistered a marginal decline of 0.3%in 2008, reflecting the overallrecessionary situation prevailing inthe world economy. The totalemployees engaged in the publicbiotechnology companies alsoexhibited similar trends registering amarginal decline of 0.5% in 2008, toreach a little over 2 million. The globalrevenues per employee in thebiotech industry were to the tune ofUS$ 0.44 million, while the globalemployee intensity per company inthe biotech industry was at 42.5employees. In the year 2008, therewere more than 4700 companiesoperating in biotechnology industryacross the globe, with most of them(83%) controlled by private entities.

BIOTECHNOLOGY IN INDIA:CURRENT STATUS

The Indian Biotechnology industryhas been evolving over threedecades. The milestones of theevolution of biotech industry in Indiabegan in 1978, in Bangalore, whenthe country’s first biotech companyBiocon was established forproducing industrial enzymes. TheGovernment provided a majorthrust to the sector with theestablishment of the NationalBiotechnology Board (NBTB) underthe aegis of the Department of

Science and Technology (DST) in1982. The NBTB acted as an apexbody, which was given the task ofidentifying priority areas andevolving a long-term plan for thedevelopment of biotechnology. Fouryears later in 1986, the NBTB wasupgraded to a full-fledgedDepartment of Biotechnology(DBT). This paved the way forfurthering the growth ofbiotechnology in the country.

The progress for biotechnologyindustry in India has been possibledue to the inherent advantages thatthe country has, including diverseflora and fauna, large gene pool,temperate climate, quality manpowerand low-operational costs. Further,the proactive policies and measurestaken by the Government of Indiaand its agencies, have allowed theindustry to capitalize upon suchadvantages. Today, biotechnology isbeing promoted in the countrykeeping in view its enormouspotential to improve agriculture, food,health, environment and energyrequirements of the population.

In terms of market dynamics, theIndian biotech sector had a healthygrowth in 2008-09 with its revenuesreaching Rs. 12137 crore. Withinthis, BioPharma contributedRs. 7883 crore, followed byBioServices (Rs. 2062 crore),BioAgriculture (Rs. 1494 crore),BioIndustrial segment (Rs. 478

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crore), and BioInformatics (Rs. 220crore). Recent trends in turnover ofthe industry indicate that the Indianbiotechnology industry recorded aCAGR of 31.5% during the period2001-02 to 2008-09, increasing fromRs.2345 crore to Rs. 12137 croreduring the period. The domesticbiotechnology market clockedrevenues of Rs 4,985 crore in 2008-09, registering a 10% growth ascompared to the previous year, andaccounting for around 41% ofrevenues generated in the industry.As regards segment-wise data,for the year 2008-09,BioPharmaceutical sector accountedfor the largest chunk of the biotechindustry, garnering a share of 65%in total revenues, with vaccines beingthe largest contributor within theBioPharmaceutical segment.BioServices (17%) and BioAgri(12.3%) are other major sub-segments of Indian biotech industry.Segments like BioIndustrial andBioInformatics garnered a share of3.9% and 1.8%, respectively of thetotal revenue in 2008-09.Interestingly, the share of the varioussegments of the biotechnologyindustry remained almost the samewith minor changes in 2008-09, ascompared to 2007-08.

The Indian biotech industry islargely export-driven accounting for60 % of the total revenues in 2008-09. In rupee terms, theexports business went up by almost

25% to Rs 7,152 crore. Sub-segments like BioPharma andBioServices have had a majority oftheir revenues coming from exports,with export revenue constitutingaround 62% and 95%, respectively,in these sub-segments during 2008-09. In fact, these two segmentsconstitute over 95% of the totalbiotech exports from India.BioInformatics (2.37%), BioIndustrial(1.24%), and BioAgri (0.89)% aremarginal contributors to overallexport of indian biotech industry.

The Indian biotechnologyindustry is spread across manystates in the country. These stateshave unveiled state-specific biotechpolicies and have established biotechparks to attract investment in thisindustry. These parks have emergedas a focal point of some of theleading biotech clusters such asGenome Valley in Hyderabad andHinjewadi in Pune. The respectivegovernment policies in these statesand scientific ambiences have alsobeen responsible for the growth ofbioclusters.

Government of India on its parthas initiated certain far-reachinglegislations to promote the growth ofthe biotechnology industry in thecountry. In India, there areinvolvement of several organisationsregulating the development ofbiotechnology, which has oftenresulted in overlap of functions. Inorder to streamline the regulatory

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process, the Government hasproposed the establishment of theNational Biotechnology RegulatoryAuthority (NBRA), to provide aconsistent mechanism for regulatoryapproval. In July 2008, the DBTintroduced the NationalBiotechnology Regulatory Act, whichwould establish the NBRA as anempowered body to approvegenetically modified crops, food,recombinant biologics like DNA,vaccines, recombinant gene therapyproducts, and recombinant andtransgenic plasma-derived productssuch as clotting factors, veterinarybiologics and industrial products.

The enactment of New PatentsAct, 2005, brought a paradigm shiftin research and development in thesector. Previously, India had a patentprotection for process rather than theproduct, which brought aboutcomplacency without initiating mucheffort upon the development of newproducts. The New Patents Act of2005 enforces product patentsthereby inspiring firms and researchinstitutions to undertake theinnovation at their behest. Apart fromthis, there are two bills, namely, DNAProfiling Bill, and The Protection andUtilization of Public FundedIntellectual Property Bill, which areon the anvil and are expected to bepassed by the Parliament shortly.

Government Funding

In addition to creating enablingpolicies, the Government has also

been supporting the sector throughprovision of funds. WhileGovernment funding to the Science& Technology sector increasednearly three times from the TenthFive-Year Plan to the Eleventh Five-Year Plan, support to the biotechindustry increased by as much asfour times during the same periodwith the budgetary allocationshooting up from Rs. 25301.35crore in the Tenth Plan toRs. 75304 crore in the EleventhPlan. In fact, the Department ofBiotechnology received almost8.5% (Rs. 6389 cr) of the totalbudgetary outlay of the Ministry ofScience & Technology in theEleventh Plan. Though the DBTremains the main fundingorganization for the Biotech sectorin India, there are other scientificdepartments, which have alsostarted contributing in this field.

Research & DevelopmentFacilitation

The DBT and other organizationshave also proactively taken up anumber of initiatives in creatinginstitutional infrastructure and astrong research base in the countryin areas relating to agriculture andforestry, human health, animalproductivity, environmental safetyand industrial production.

DBT has also been at theforefront of maintaining manyinternational collaborations andintroducing joint proposals with

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countries like Australia, Canada,Finland, Germany, Sweden, USA,Japan and the EU. Under theNational Bioresource DevelopmentBoard, a major initiative has beentaken for the establishment of aMicrobial Culture Collection–Biological Research Centre at Pune.The Centre has provision to holdmore than 2,00,000 bacteria andfungi following internationalstandards, with the gradualupgradation of the facility as anInternational Depository Authority onmicrobial collections. Under theprogramme on prospecting of drugsfrom microbial sources, about onelakh bacterial isolates have beencollected and screened. More thantwo lakh extracts have beenprepared, and about 7,000 promisinghits obtained.

INDIAN BIOTECH SEGMENTS:EMERGING OPPORTUNITIES

The biotechnology industry has aglobal presence today. While theindustry has its roots in thedeveloped country markets,emerging countries like India havestarted playing an important roleleveraging upon its USPs (UniqueSelling Proposition) through bettercoagulation of academic researchand commercial development,coupled with the synchronization ofscience and finance to emerge asa strong contender in the globalbiotech industry. Amidst anenvironment of continuing cut-throat

competition, and ever changingregulations, the Indian biotechindustry has been successful increating a niche for itself in theworld.

The biotech industry in India canbe broadly categorized under fivedistinct segments - BioPharma,BioServices, BioAgriculture,BioIndustrial, and BioInformatics,with each sub-segment contributingto the growth of the biotechnologyindustry.

BioPharmaceuticals

BioPharmaceutical products aretherapeutic or preventativemedicines that are derived frommaterials naturally present in livingorganisms using recombinant DNA(rDNA) technology. The growth inBioPharmaceutical drugs andbiologics has outperformed thepharmaceutical market. This hasbeen so largely due to two factors– firstly, the former addresses areasof clinical needs that areunmanageable with conventionaltherapeutics, including cancers andgenetic diseases; and secondly,they are able to command apremium price. The totalBioPharma segment in Indiaregistered a 14.3% growth in termsof total revenues in 2008-09 toaggregate Rs. 7883 crore asagainst Rs. 6889 crore recorded in2007-08. The segment has beenthe single largest contributor to theIndian biotech industry for many

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years, especially due to its exportorientation. In 2008-09. exportsaccounted for 62% of theBioPharma revenue, while domesticsales accounted for the remaining38%. With India having a relativelywell developed pharmaceuticalsector, there are synergies thatexist between the two sectors. Thesuccess strategies adopted by theIndian pharmaceutical sectortherefore needs to be suitablyleveraged by the Indian biotechplayers in order to realize theuntapped business potential.

The BioPharma sector can befurther classified into three broadsub-segments, viz. vaccines,therapeutics and diagnostics. Thevaccines sub-segment is the primecontributor, accounting for close to46% of the total revenues arisingfrom the BioPharma sector in 2008-09. The vaccines segment has alsoshown a healthy growth trendsrecording a CAGR of 15.3% duringthe period 2005-06 to 2008-09,increasing from Rs. 2341 crore toRs. 3587 crore. On a yearly basis,the revenue in 2008-09 increased at10.2%, from Rs.3250 crore in 2007-08.

The recent upsurge in demandfor vaccines, both in domestic andinternational markets, is importantboth from public health andeconomic perspectives. According toDepartment of Biotechnology,Government of India, there arearound 15 companies involved inmarketing over 50 brands for

15 different vaccines. A BioSpectrumestimate put the size of Indianvaccine sub-segment at Rs 3,587crore (US$ 737 million) in 2009, andis expected to grow at about 20-25%over the next few years; whileglobally, the vaccine sub-segment isvalued at US$ 20.6 billion and isgrowing faster than the pharmaindustry. The world market size ofcombination vaccine is projected tocross US$ 2 billion mark in 2013,which implies an annualcompounded growth of over 18%.

As far as the therapeutic sub-segment is concerned, it contributedaround 37% of the total revenuesgenerated from BioPharma in 2008-09. During 2008-09, the Indiantherapeutics market recorded a 19%growth to record revenues worth Rs.2956 crore. Human insulin was thelargest contributor to the therapeuticsmarket, a reflection of India’s largediabetic population. With diabetesnow ranked as the fifth leadingdisease causing death acrossdeveloped country markets, andforecast to grow, the market foronce-a-day drug delivery and non-invasive drug delivery systemscontinues to offer significant potentialfor expansion. India is predicted tolead the way with 73.5 million peopleexpected to have diabetes by 2025.

The diagnostics businessaccounted for close to 17% of thetotal BioPharma business in 2008-09, recording a CAGR of around14% during the period 2005-2009(from Rs. 905 crore to

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Rs. 1340 crore). On a yearly basis,the revenue increased at 16.5% -from Rs.1150 crore in 2007-08.However, this increase has beenlower as compared to the growth inthe previous year, which was around21%. It is estimated thatapproximately 60-70% of medicaltreatments in India are based onlaboratory diagnostic tests.Diagnostics revenue marketincreased from Rs.905 crore in 2005-06 to touch Rs.1340 crore in 2008-09.

With increasing healthconsciousness among the Indianpopulation and an increase inawareness of diseases such asAIDS, Hepatitis, coupled with theGovernment’s efforts to promotecommunity health, such ascompulsory testing by blood banksfor AIDS, there exists enormouspotential for the diagnostic sub-segment. It is also important to notethat with a higher disposable incomeand with a growing middle classpopulation, the market for qualitymedical facilities are increasing inIndia. Hospitals and diagnosticcentres across the country aretherefore concentrating on equippingthemselves with the best in classmedical and diagnostic services.This is likely to be another driver ofgrowth for this sub-segment.

BioServices

BioServices mainly include clinicalresearch and contract research

organizations (CRO) and to someextent custom manufacturing. TheBioServices sector, whichaccounted for about 17% to thetotal biotechnology industry’srevenues, and recorded a growthof 31% in 2008-09, over theprevious year. Exports dominatedthe BioServices segmentaccounting for almost 95% of thetotal BioServices revenues ofRs. 2062 crore in 2008-09. In fact,the BioServices segmentcontributed to over 27% of the totalexports from the biotechnologyindustry. Even in this sub-segment,the country holds certainadvantages that could be suitablyleveraged. According to a recent ATKearney global survey, India isranked third across all countries(after the USA and China) in termsof its overall attractiveness as aclinical trial destination. India, withthe availability of large scientificpool is well placed to cater to asignificant part of this demand.

Of late, a new trend inBioServices sub-segment is beingobserved, where large companiesoutsource their clinicalmanufacturing facilities whileretaining commercial manufacturingand control over cost of goods,quality, and on supply. On the otherhand, it has also been observed thatsome specialized clinicalmanufacturing organizations preferto outsource the routine job ofcommercial manufacturing, which

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they may no longer perceive as theircore competence area, as alsooutsource the core business ofresearch and development. As theBioServices business expands,many firms engaged in this segmentare offering services in areas likedata management, clinical trials, sitemanagement, bio equivalence andbio availability studies, toxicologystudies, apart from catering toknowledge process outsourcing forpharma industry. All these trendsoffer significant opportunities for theIndian biotech companies.

BioAgri

BioAgri contributed around 12% ofthe total market value ofBiotechnology in India afterBioPharma and BioServices, in2008-09, with a total revenuegeneration of Rs. 1494 crore, ofwhich domestic revenuesconstituted around 96%. TheBioAgri segment revenueswitnessed the second highestgrowth rate after BioServicessegment, with over 24% growth in2008-09, over the previous year.The domestic market, combinedwith a reasonable scientificinfrastructure in agriculture, rich bio-diversity and skilled human-capital,make India an important globalbase for BioAgri research. Thesurge in opportunities are expectedto improve agricultural productivity,especially at a time when per capitaarable land and water resourcesare diminishing.

Hybrid Seeds

The Indian population has alreadycrossed the 1 billion mark. Toprovide food and nutritional securityfor such a large population,including protection againstmalnutrition, it is important thatproductivity levels are increasedthrough the use of right qualityseeds, which have the capacity toproduce more with lesser inputs. Inthis context, the seed industry hasa critical role to play indissemination of latest agriculturaltechnology to the farmers, andmaking good quality seedsavailable to them. Adoption ofgenetically modified (GM) cropswould assure higher productivityand nutritional security. Presently,GM plants are largely in use forcommercial agriculture andpredominantly linked with traits ofone or two transgenics that fosterssalinity and alkalinity resistance,drought resistance, herbicidetolerance, insecticide resistance,and resistance to microbialdiseases. With the success of BtCotton, the Government hasrealised the enormous potential ofsuch technologies and has beenkeen to put in place policies andregulations, which would promoteresponsible crop biotechnology.

Biopesticides and BiofertilisersThe biopesticides and biofertiliserssub-segments, though constitutinga modest proportion of the BioAgri

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segment, have been growing at ahealthy pace since the last fewyears. The Government of Indiahas initiated a number ofprogrammes to control majorweeds and pest-diseases ofimportant crops, vegetables andplants to increase their productivitythrough various biocontrol agents.A number of universities andinstitutes have been working in thearea of biofertilisers. The agriculturesector in India has been supportedby public research programmes invarietal development, yieldimprovement and diseasemanagement. Several internationalcompanies have set up researchand development facilities in Indiafor developing hybrid seeds andother biotechnology-basedactivities.

BioIndustrial

The BioIndustrial segmentpredominantly consists of enzymemanufacturing and marketingcompanies. These enzymes areused in manufacturing segmentssuch as detergents, textiles, food,leather, paper and pharmaceuticals.Although the use of enzymes is stillat a relatively low level, interest inthe benefits of using enzymaticsolutions in India has been showingan upward trend. The BioIndustrialsegment is estimated to havegarnered revenues to the tune ofRs. 478 crore in 2008-09, a growth

of 16.6% over the previous year.While almost 81% of the revenuein the year 2008-09 was generatedfrom the domestic market, this subsegment contributed around 1% ofthe total biotechnology exports fromthe country during the year.

Indian BioIndustrial companiesproduce various enzymes, whichinclude amylases, proteases,cellulases, xylanases, gluco-amylases, pectinases, papains,bromelain and catalases amongothers, with around 45% of totalenzyme production catering to thepharmaceutical industry. It is worthnoting that the product range andservices offered by the firms in thissub-segment are growing rapidly asthe use of enzymes is gainingwidespread acceptance. Firms todayare increasingly looking at producingvarious types of industrial enzymesusing natural methods of production,from plants and vegetable origin, andfermentation.

BioInformatics

The share of BioInformatics in totalBiotechnology sector is around1.8% in 2008-09. This sub segmentmade a modest progress,increasing from Rs. 75 crore in2002-03 to Rs. 220 crore in 2008-09, thereby growing at a CAGR of19.64%. The sector is largelyexport driven with almost 77% ofthe total revenues coming fromoffshore markets in the year

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2008-09. Considering the rapiddiversification of softwareapplications and the continuousquest for growth in the IT industry,BioInformatics segment presents aprospective area for IT application.BioInformatics segment usescomputer software tools fordatabase creation, datamanagement, data warehousing,data mining, and globalcommunication network. The Indianfirms have been strategicallydevising tools so as to cater to theworld requirements. Some of thefirms based in India, such asStrand Life Sciences, MolecularConnections, Mascon Life Sciencesand Helix, have created indigenoustools for various componentsacross the drug discovery valuechain that are being used all overthe world. Strand Life Sciences hasdevised a software program called‘Avadis’ for which it has receivedawards from organizations like RedHerring, Frost & Sullivan, andWorld Economic Forum. “Avadis” isan integrated decision analyticsprogram that deals with data miningand analytics needs of the variouslife sciences sector.

Emerging Niche Areas inBiotechnology

Biosimilars

The expiry of patent protection andregulatory data protection forcertain biotechnological medicineshas led to the development of what

are called as biosimilars.Biosimilars attempt to copy theprocess, which leads to theproduction of the original innovativebiotechnological medicine.

As regulatory obstacles tobiosimilars development isincreasingly being resolved, agrowing number of opportunities arebeing created for generic companiesin the BioPharmaceutical market.According to IMS data, the worldBioPharmaceutical market wasvalued at US$ 85.9 billion in 2007.Conservative projections estimatethat sales of BioPharmaceuticalproducts would exceed US$135billion by 2011. With some of theearliest BioPharmaceutical productshaving already lost patent protection,the originators of BioPharmaceuticalproducts are facing intensecompetition from genericsdevelopers. In response, originatorsare resorting to a range of defensivetactics, including the reformulation ofexisting products to improve efficacy,the implementation of more efficientdelivery systems, and the pursuit ofhigh-level intellectual property (IP)battles.

The US, one of the largestbiosimilar markets in the world,recently introduced the WaxmanBiosimilars Bill in March 2009, whichprovides the approval of biosimilarproducts that are defined as “noclinically meaningful differencesbetween the biological product andthe reference product”, as well as

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“interchangeable” biosimilars,defined as a product that can be“switched one or more times” with thereference product “without anexpected increase in the risk ofadverse events”. The Bill, uponpassing into an Act is expected toprovide immense opportunities forIndian firms, especially those thathave already ventured into theBiosimilars space, and have filedAbbreviated New Drug Applications(ANDAs) in the US. With a fewplayers in the Biosimilars space, thecompetition is expected to becomparatively low and thereby actsas a great boost for biosimilar playersin the market.

According to Datamonitor, theIndian biosimilars market is projectedto grow to more than US$ 2 billionby 2014 as key patent expires fordrugs such as epoetin alpha,filgrastim, interferon beta 1a,interferon alpha, human growthhormone (hGH), and insulin-glargine. While many of these drugsrepresent the low-hanging fruit of thebiologics world and are unlikely toprovide the monetary gains of morecomplex drugs, they do offermanufacturers the opportunity toposition themselves within thebiosimilars sector in anticipation ofmore lucrative targets.

Nanotechnology

Nanotechnology is consideredwidely as the most promisingtechnology of the 21st century.Recent years have witnessed a

convergence of nanotechnologyand biotechnology. From an Indiancontext, nanotechnology is at a verynascent stage, but given thepotential of the sector, it is expectedto grow at a robust pace in thecoming years. Nanotechnology alsohas the potential to revolutionizethe Indian agriculture scenario. It ispredicted that nanotechnology willtransform the entire food industry,changing the way food is produced,processed, packaged, transported,and consumed. Several Indian firmsand research institutes are workingon nanotechnology products fordrug delivery, water filters, arsenicremoval, reducing water and airpollution, antimicrobial coatings andriver cleaning projects. TheGovernment on its part isproactively promoting variousprograms under nanotechnologyinitiative. A ‘Vision Group’ has beenformed with members fromacademia, industry and research, todevelop a national nanotechnologypolicy. Government of India hasannounced an investment ofRs. 1,000 crore through a missionon nanotechnology from 2006 to2011. The Government has alsoannounced a US$ 250 millionprogramme to build three nationalinstitutes for nanoscience.

Stem Cell Research

Stem cell research is being toutedas the next wave of biotechnologynot only in India but also across the

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world, which could potentiallytransfigure treatment of diseases inthe next couple of decades.According to a study by Frost &Sullivan, the global market for stemcell therapy is projected to bearound US$ 20 billion by 2010.There are almost 180 prominentcompanies working on stem cellresearch in the world, majority ofwhich are based in the US, followedby the EU, Israel, Thailand,Canada, and Australia. The StemCell Research Forum India (SCRFI)has predicted India to have amarket size of about US$ 540million by 2010 with an annualgrowth rate of 15%.

The potential of stem celltechnology to develop therapy formany untreatable diseases throughcellular replacement or tissueengineering is being widelyrecognized. Therapies using stemcells are giving hope to millions ofpatients afflicted with chronicdiseases. Globally, stem cells areused to treat over 130 diseases, andit is estimated that more than 500clinical trials are being done todevelop therapies using stem cells.

Indian companies are becomingan important part of this revolution,helping to treat patients withdiseases ranging from eye problemsto heart disorders. The Governmentof India has supported more than 55programmes on various aspects ofstem cell research. Apart from this,the new initiative by the USadministration in 2009 frees up

hundreds of stem cell lines aroundthe world for US fund, and this isexpected to expand collaborationswith Indian researchers, who haveover the past decade, under fewerrestrictions, carried forward thisinitiative with their own funding.

CHALLENGES & STRATEGIES

Challenges

Skill Development

In spite of mushrooming ofeducational institutions offering arange of courses in biotechnology,the void between the needs of theindustry and skills taught at theseinstitutions still remain, though thegap is being narrowed down. Mostof these institutions have limitedability to provide the rightpedagogy, or the requisiteinfrastructure. The challenge ofbridging the gap between theneeds of the industry and thecurricula taught at variousinstitutions needs to be addressedby cohesive actions from theGovernment, industry andacademia.

Basic Education &Health System

Amongst the most critical buildingblocks for biotechnologydevelopment and its success, goodeducation and health systems arevery important. India has beenpositioned low in terms of boththese measures as reflected by theUN Human Development Index.

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India’s ranking is 132 out of a totalof 153 countries, and also thelowest as compared to othercompeting countries in this sector.Part of this can be attributed to thelow healthcare expenditure by theGovernment.

Government Health Expenditure

Most Governments in developingcountries usually financeprogrammes that support childimmunization against variousdiseases as part of the basic publichealth package. India too has suchimmunization programmes, but, dueto relatively high birth rate andpopulation, the share ofGovernment health budget in totalhealthcare expenditure is relativelylow (25% in 2009). In comparison,other emerging countries like Brazil(47.9%), Russia (63.2%), China(40.7%) and South Africa (37.7%)portray a better management ofGovernment healthcare system. Itmay also be noted that as apercentage of the GDP, the totalhealth expenditure in India is only3.6%, far below than that of otheremerging economies. Thus, thereis an urgent need to augmentbudgetary allocation to the healthsector, particularly in improvingprimary health care facilities.

Funding

The inherent characteristics of thebiotechnology makes the industry ahigh investment one with longgestation period. Thus, funding

plays a crucial role in ensuring theculmination of a concept into acommercially viable product. Globalfinancial crisis has affected thefunding prospects of biotechcompanies, as risk aversionincreased among venturecapitalists, angel investors as alsofinancing institutions. These havebeen further exacerbated by theslow activity in the IPO market dueto anaemic stock market. Accordingto the Biotechnology IndustryOrganization (BIO), prospects forbiotech IPOs are likely to remaindim in the year 2009, on the heelsof a very weak base (the year2008), with amounts raised in 2008through this instrument being onlyUS$ 116 million, as against US$2.3 billion in 2007.

Ethical Issues in GeneticResearch

Biotechnology has been confrontingthe world with some ethical issues,which have raised numerouschallenges with no definitesolutions. Genetic research and itsapplications like geneticengineering, manipulation, testing,therapy, eugenics, selectiveabortion, GMOs, stem cellresearch, and cloning, openedsignificant ethical and consumerissues, including the potential risksthat may be adversely impactingthe environment. The issue ofgenetically modified food appearsto be of a particular concern. Achallenge for the Indian

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biotechnology industry will be towork and liaise widely with thecommunity and earn its confidenceand investors. Awareness may begenerated among the consumersthrough provision of detailedinformation, ranging from the basicsof gene technology to details of theregulatory processes.

Concentration of IPRs

Intellectual property rights (IPRs)are intended to promote researchand development by allowingresearchers to generate revenue tomeet the development costs.However, there are concerns thatthe current level of biotechnologyIPRs are concentrated mainly in thehands of the private sector. It isreported that globally, fewcompanies are responsible for thevast majority of agri-biotechresearch. These companies havefocused on crops and traits (suchas herbicide resistance) that arehaving commercial significance,and thus, may not be willing totransfer it to others. Globally,Mergers & Acquisitions trendsamong biotechnology companieshave also been on similar lines,encouraging the concentration ofIPRs, which may affect the abilityof developing countries like India,to negotiate for access toproprietary technologies at areasonable price. This challengestems largely from patents thatconfer broad rights over GMOs andplant varieties.

Biosecurity

Biosecurity is another challengeand there is a growing debate anddiscussions among the academicand policy spheres with regard tobioterrorism, biosafety, andemergence and re-emergence ofinfectious diseases as concerns tothe society as a whole. The threatsassociated with misuse ofbiotechnology affect the growthprospects of this industry, whichotherwise present potential benefitsfor global populace at large,especially in area such as health,food and environment.

Bio-hacking

Biohackers are a group ofenthusiasts who are involved inworking with cells and geneswithout any sound knowledge. Withthe fall in the cost of equipmentscapable of manipulating DNA, thethreat of growing number ofbiohackers is significant. The workraises fears that people couldcreate a deadly microbe onpurpose, just as computer hackershave unleashed crippling viruses orhacking into various websites. Sucha scenario may lead to “bio-spam,bio-spyware, bio-adware” and otherbio-nuisances. An unrestrictedbiohackery scenario could put thehealth of the biohackers, thecommunity around them, and theenvironment, under unprecedentedrisk, and poses significantchallenge that needs to be suitablyaddressed.

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Patenting of Micro-organisms

Another associated challenge to thebiotech industry is patenting ofmicro-organisms and associatedbiosafety requirements, as strictbiosafety norms have to befollowed while handling micro-organisms. The regulations foraccessing strains from a depositoryhave to be carefully worked out toensure that these do not land intowrong and/ or technicallyincompetent hands. India too needsto bring in a patent law forprotecting micro-organisms andrules for accessing strains from adepository. In this context, theDepartment of Biotechnology,Government of India, has proposedto build an internationallyrecognized depository in thecountry. It is hoped that followingthe establishment of the depository,a law in this regard would beenacted based on similar lawsprevailing in other countries.

Strategies

Public-Private Partnerships

Public-private partnership needs tobe encouraged and supported inareas that are vital to nationaldevelopment, from a scientific,economic or social perspective. Thefocus needs to be on technologyand product development. India hasa wide network of universities,departments and specializedinstitutes that have been promoted

by various authorities providingnumerous specialised sciencedegrees at the Masters’ level.These institutions also provide aneffective network of researchlaboratories. Efforts should bemade to bring in a seamlesstransfer of knowledge and peopleamong these universities, institutes,and corporates for bettercoordination, and to share theirresearch-based information on anongoing basis. Corproates couldhave preferential access to theintellectual property generated insuch jointly funded projects.Another alternative could beencouraging public-fundedsuccessful R&D institutions toestablish ‘not for profit’ companiesto facilitate collaborative work withindustry. There should be anindustry-academia alliance whereinthe industry could have an activeparticipation when it comes toplanning curriculum and methods ofevaluation. Private firms may alsoshare the responsibility to promoteacademic excellence by creatingChairs in Universities and furtherstrengthen the industry – academiarelationship.

Need for enhancing VentureCapital funding in India

One of the biggest challenges forthe Indian biotech industry isattracting investment throughventure capital mode. With thecorporate sector being risk averse

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to investing in biotechnologyprojects, especially in theirgestation and early phases, theneed of VC funding becomescritical for the growth of the biotechindustry in India. Venture capitalfirms typically source majority oftheir funding from large investmentinstitutions such as pension fundsand financial institutions, who liketo invest long term only withassurance of high returns. Thus,venture capitalists make carefulinvestment decisions, which leadsto high risk aversion rates. Instead,India may consider promotingventure capital investment on thelines of Russian model. Russia hasbeen boosting venture capitalsector from scratch, by seedingfunds with Government support,through the Russian VentureCompany (RVC). Israel has alsoadopted similar approach of state-backed venture capital model toboost the investments in knowledgebased industry.

Strategy to Move to a HigherValue Chain

Indian biotechnology industry, overthe years, has developed a numberof biotech products, but has beenfound to perform tremendously wellin the vaccine segment. Theplayers in this industry as well asthe research institutions shouldincreasingly focus upon moving upthe value chain by enhancingstrengths in new products andapplications, and by offering R&D

solutions in drug discovery andvalidation based on genomics,proteomics, pathway analysis(determining how toxic orradioactive substances reachhumans), and clinical trials onhumans. Drug discovery andinnovations in drug delivery,especially in areas like diabetes,cancer, and inflammatory ailmentscould take the industry into greaterheights. Indian biotech industryshould also look forward to movingup the value chain in terms ofgeographies so that India is presentin more premium markets.

Enhancing Biotech Applications

Modern research finds applicationof biotechnology in variousindustries, and thereby adds valueto the products and processes ofsuch industries, includingagriculture, forestry, marine,environmental management, pestmanagement, and management ofhuman and animal healthcare. Tocapitalize on the potential benefitsand to ensure internationalcompetitiveness, it is important topromote speedy and widespreaddiffusion of biotechnology to thebroader industrial community, whilemaintaining its responsible andsustainable use. Industry initiativesand entrepreneurship commitmentsare particularly essential in thisregard. The Government couldpromote research-industry linkagesand facilitate market informationincluding technological and

27

commercial trends andopportunities. Integration ofbiotechnology with variousmanufacturing sectors could alsobe encouraged through bettersynergy and coordination ofactivities among variousdepartments / institutions, with theDepartment of Biotechnology,Government of India, serving asfocal point.

Lucrative Domestic Market

The domestic biotech market isexpected to post robust growth withrising income levels, improvingliving standards, growing medicalinfrastructure, increasing healthinsurance penetration, enablingregulatory framework andinstitutional infrastructure, and thegrowing number of organizedpharma-retail chains. For example,in a country like India (which isoften referred to as the diabeticcapital of the world), it is certain tofind a market for products likeinsulin. With more and more peopleleading a sedentary lifestyle, theremay be opportunities for the Indianbiotech industry to innovateproducts that cater to the demandfor controlling such chronicdiseases.

Biotech Skill Development

Biotechnology industry is highlyR&D intensive. In order to remainglobally competitive, the industryrequires a pool of highly skilled

manpower. India has already madeits mark in scientific research in theworld, with a large pool of scientificmanpower. The education systemin India, with its wide network ofuniversities providing qualityscience education has helpedimmensely in this regard. However,with the changing composition ofeconomic growth there is anemerging trend of students notpreferring science stream for careeropportunities. This may lead toshortage of qualified manpower inhighly research oriented activitiessuch as biotechnology. Thus, it isimportant to devise policies thatwould attract more students to thescience stream. Many countriesgive both financial and fiscalincentives in the form of grants andpreferential loans, to encouragestudents to opt for science streams.A similar scheme could be thoughtof, particularly for encouragingstudents to take up biotechnologyas a subject of their specialisation.

Reversing Brain Drain

Shortage of manpower due tobrain-drain is another challengefaced by the Indian biotech industry.The expected shortage ofscientists / skilled professionals inOECD countries may enhance thebrain-drain from India in the comingyears, unless suitable policymeasures are taken to reverse thetrend. There is an urgent need toexpand the current research

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programmes with attractivecompensation package in order toattract world-class talent. In thiscontext, it may mentioned thatGovernment has initiated aprogramme ‘RamalingaswamyFellowship’, aimed at bringing backscientists of Indian origin workingabroad in various fields ofbiotechnology, and who aredesirous of pursuing R&D in Indianinstitutions. It may be mentionedthat China Academy of Sciences(CAS) has establishedprogrammes, such as SpeciallyHired Foreign Research Fellows,and Young Foreign ScientistProject, through which the countrywould arrract over 600 Chinesescientists working abroad, annually;each returning scientist wouldreceive funding of aroundUS$300,000 per annum. Corporateentities too may get involved byproviding adequate exposure to thebudding talents through training andplacements. This would alsoprovide the Indian biotechnologyindustry a tremendous manpoweradvantage over its competitors.

Symbiotic Relationship betweenPharma and Biotech Sectors

Use of organisms for theimprovement of medical processesconstitutes one of the majorbusiness segments of thebiotechnology industry. Thisprovides significant opportunities forpharmaceutical firms also. Ingeneral, biotech firms would

concentrate their business modelsin covering a part of the productdevelopment value chain. Biotechfirms are often not much engagedin entire product development valuechain due to shortage of funds andnecessary know-how.Pharmaceutical firms couldcomplement the biotech sectorthrough their knowledge andfinancial power. Also,pharmaceutical firms, which requirecontinuous innovation, could benefitcooperating with biotech firms whoprovide new product concepts andinnovative technologies.

Strengthening North-SouthCollaborations

Many Indian firms use servicescontracts with foreign firms to fundtheir operations, developcommercialization capabilities andaccess valuable internationaltechnology and expertise. Servicesprovided include R&D, clinical trialsand manufacturing. Multinationalcorporations are increasinglyconducting clinical trials in India andrely on Indian contract researchorganizations to manage thesetrials. It will be vital for the Indianbiotech firms to expand theircapabilities in clinical trialmanagement, and pay closeattention, not only to good clinicalpractice guidelines, but also tobioethical principles, providing ahigh level of care and protecting therights of patients. This will not onlyfacilitate achieving of global

29

standards for the Indian contractresearch firms, but will also help tobring in more foreign exchangeearnings, through enhanced exportsof services. Though theGovernment of India in this regardhas taken a number of steps bycollaborating with a number ofinstitutions in various countriesabroad, a lot more needs to bedone in furthering this initiative.

Encouragement to InnovativeFunding Models

Pharma / biotech firms could setup Special Purpose Vehicles(SPVs) which could be contractedby the parent firms for productdevelopment work in areas such asspecialty generics, topicals,steroids, hormones, andbiopharmaceuticals, which mayhave high initial productdevelopment costs, and which arenon-infringing process, based onregulatory compliances. Suchfunding models may not stretch thebalance sheets of the parentcompanies, nor result in equitydilution. An agreed percentage ofrevenues from the SPV fundedprojects could be returned back tothe parent company, or fundingbank, towards the investment. Inthe case of institutional financing,once the funding bank recovers itsinvestment or IRR, the ownershipof the products would flow back tothe company without anycomplications what so ever.

Emerging Biosimilar Market

Biotechnology industry in India hasa well-developed foundation with astrong pharmaceutical andbiosupplier sectors. The globalmarket for biosimilars is expectedto grow significantly in the next fewyears as several ‘blockbuster’ drugslose patent protection. A recordnumber of drug patents expire overthe next few years, which shouldlead to stiff competition fromgenerics and a drop in prices.Evaluate Pharma, an industryconsultancy, estimates that abouthalf of the US$ 383 billion-worth ofpatented drugs to be sold in theworld in 2009 may lose patentprotection within five years. In 2010alone, the industry is likely to beput at risk with nearly 15% drop inits revenues from patented drugs.Indian companies appear wellpositioned to leverage upon theircost-effective manufacturingcapabilities to compete on a globalscale and garner some of thismarket.

In the context of patent expiry onbio-pharmaceuticals, it may be notedthat USA would emerge as one ofthe largest biosimilar markets afterapproval of Waxman Biosimilar Bill,providing opportunities for Indianfirms. Biosimilars is a term used toassign a sense of similarity betweenthe originator biologic and a genericversion. According to industrysources, there are at least 75

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proteins and peptide therapeuticsidentified in the US as potentialprofitable targets for new products.Most of these were approved as NewDrug Applications (NDAs) to facilitatebiopharma companies to developbiosimilar products. It is expectedthat stringent regulatory approvalwould be put in place to permitmarketing of biosimilar products atan affordable costs.

Catalysing Coherence inClusters

Cluster development is a keystrategy to promote innovation,accelerate technology transfer andfacilitate product development.Biotechnology, being inter-disciplinary in nature (encouragingscientific and engineeringresearch), requires enablinginfrastructure for promoting andnurturing innovation for buildingsuccessful enterprises. Theclustering concept maximisessynergy and efficiency of firmslocated in the cluster. Although thisapproach has already beenemerging in the country, it isimportant to ensure that suchstrategies deliver desired resultsthrough a coherent effort of all thestakeholders. Existing biotechclusters could also be examinedwith respect to any voids that couldbe plugged to achieve the desiredresults. Efforts could also be madeto set up clusters around theexisting institutions of excellence,and to integrate them deeply into

the economic, entrepreneurial andsocial fabric of the region.

Leveraging InternationalPartnerships

Biotechnology is globallyrecognized as a rapidly emerging,complex and far reachingtechnology, and therefore a stronginternational partnership, both at thelevels of research institutions andat corporate front, is essential.International cooperation andpartnerships can be leveraged toachieve global best practices in thecountry’s science and technologicalefforts for joint intellectual propertygeneration, harmonization ofregulatory processes, smooth crossborder movement of biologicalmaterials, and access to globalmarkets for the country’s productsand processes. Such an approachwould not only bring in bettertechnical know-how, but would alsohelp in enhancing India’s researchand development resulting inquicker and faster outcomes.Efforts have already been taken atthe Government level to leveragethe institutional strengths across thecountries. Such efforts should beenhanced with collaborationmeasures on continuous basis.

Biotechnology Usage inBiofuels

Biotechnology could also be one ofthe most effective and innovativetools to make sustainable use ofbiofuel, reducing the adverse

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environmental impacts of greenhouse gas emissions, and limitingthe diversion of land from foodcrops to fuel crops. Biotechnologycould also be critical to increaseland productivity both in fuel cropsand food crops, through plantscience, modern plant breedingtechniques and with state-of-the-artapplication of crop protection. Sincethe introduction of biotechnology inagriculture and food production inthe early-1990s, biotechnology hasbeen utilized to develop new toolsfor improving productivity. In 2005,twenty-one countries plantedbiotech crops covering a total of222 million acres. These cropsinclude soybeans, corn, cotton,canola, papaya, and squash thatare improved versions of thetraditional varieties. In addition,rapid-rise yeast, and an enzymeused to make cheese, are bothcommonly produced throughbiotechnology.

SUM UP

India is already being reckoned asa frontrunner in the biotechnology

industry. With a huge base oftalented, skilled and costcompetitive manpower, and a well-developed scientific infrastructure,India is poised to become a leadingglobal player in biotechnology. Thevast population of India helps notonly in creating significant domesticdemand, but also provides biotechresearch companies with a vastgene pool. The institutionalinfrastructure in the country offersa strong foundation for thesestrengths to get transformed intobusiness opportunities. Indian firmscould focus on acquiring overseasbiotechnology units in countries likethe US, which have seen plungingvaluations due to the globalmeltdown. Though India has a longway to go in terms of innovationsin processes, instruments, andfunding, the future looks bright forthe industry with India poised tobecome one of the global leadersin this industry. India, with all itsinherent strengths, can definitelyuse biotechnology as a vehicle toimprove the lives of billions acrossthe world.

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Biotechnology is a generic termthat encompasses a wide spectrumof scientific and technologicalapplications used across a variety ofsectors. Biotechnology thereforemust be seen in the context of acontinuum of other disciplines andtechnologies where its synchronizedapplication drives new products andtechnologies.

To quote Former US Senator,Robert F Kennedy, “we live ininteresting times” - it is indeed amatter of great awe that an industryas nascent as Biotechnology (i.e.during the 1970s) has come a longway by changing the way livingbeings across the globe perceive andlive life. It is worth noting that thebiotechnology industry began amidsta lot of regulatory hurdles, but in duecourse of scientific breakthroughs, itproved its mettle and has todaysettled the doubts of most sceptics,to emerge as a successfulinstrument in fostering theendeavours of the scientificcommunity for the betterment of thehuman populace at large.

In the present day context, theimportance of the biotechnology

industry has assumed increasingsignificance. The industry todaypossesses the ability to providecrucial leads, which could help incuring critical diseases, as alsoreducing widespread hunger. With astrong and consistent research anddevelopment thrust, the industry isincreasingly being viewed as asolution provider to diseases such ascancer and AIDS; as an instrumentto enhance agricultural productivity;and in providing solutions to climatechange and promoting sustainabledevelopment through the use ofbiofuels.

With such a wide array of enduse, and more still under study, therealms of biotechnology today are inan expansion mode, entering intoother emerging contours likenanotechnology, stem cell research,etc. The global biotechnologyindustry today is at the beginning ofa technology curve whose limits arestill being explored andcomprehended.

Realising the potential of thebiotech industry, the Indian playershave been prompt in embracingbiotechnology. Today, Indian

1. INTRODUCTION

33

biotechnology industry is one of thehigh performing knowledge-basedsegments. The industry hasachieved a global status through firmlevel strategies, active industryparticipation, and most importantly,due to the proactive and enablingpolicies of the Government. In fact,the various policies of theGovernment over the last twodecades have helped the Indianbiotechnology industry to carve outa niche in the globally competitiveenvironment and consolidate itsposition.

With the country emerging asone of the fastest growingeconomies and projected to beranked among the top threeeconomies by the middle of the

21st century, the pressure on thecountry’s resources would beimmense. Under suchcircumstances, biotechnology isexpected to act as a powerful enablerthat can revolutionize agriculture,healthcare, industrial processing,while promoting environmentalsustainability.

It must be noted that while Indiacurrently has a demographicadvantage, being home to youngpopulation, who are less than25 years of age, in due course (bythe year 2050), they would graduateto the old-age group (of around 65years) which would have its ownpitfalls and challenges. A robustbiotechnology industry, under suchcircumstances, can act as a strong

Box 1:DNA – CORNERSTONE OF BIOTECHNOLOGY

DNA, or deoxyribonucleic acid, is the hereditary material in humans and almost allother living organisms. Nearly every cell in a persons body has the same DNA.Most DNA is located in the cell nucleus (where it is called nuclear DNA), but asmall amount of DNA can also be found in another part of the cell called themitochondria (mitochondrial DNA or mtDNA)

Considering that all cells virtually speak the same genetic language, DNA fromone cell can be read and acted on in another one—even a different cell type froma different specie. This feature is what makes DNA the cornerstone of modernbiotechnology. Scientists can, for example, use a yeast cell to make human insulinby inserting the human insulin gene into the yeast.

DNA is also the foundation for hundreds of diagnostic tests for genetic diseasesand predisposition to disease. Some new tests can even identify which treatment,and what dosage, is best for a particular patient.

Because DNA and related cellular processes are so specific, biotechnologyproducts can often solve problems with fewer unintended consequences thanother approaches. In fact, the best words to describe today’s biotechnology arespecific, precise and predictable.

34

and critical medium to help gear thecountry to face such challengingsituations.

Another important aspect ofIndia’s demography is theburgeoning population, for whom thecountry has to find possible avenuesof feeding. This is where the role ofthe biotechnology industry becomeseven more critical. Biotechnology isideally positioned to help improve theefficiency and profitability of theagricultural sector through higheryields and reduced dependence onpesticides. This is crucial in an agewhen despite progress in agriculture,millions of people in India still do nothave access to adequate foodsupplies. In the coming years,enhanced yields and increasednutritive value of crops usingagricultural biotechnology is

expected to feed India’s burgeoningpopulation and ensure the nutritionalsecurity of the nation.

In India, an admirable start hasalready been made throughmeasures like a well-conceivedregulatory framework being put inplace to approve bioagriculturalcrops and recombinant DNAproducts for human health. Based onsound ethical guidelines, a policy thatallows stem cell research is also inplace. Some of the recent initiativesby the Indian government to promotebiotechnology such as 100% rebateon R&D expenditures, and allowing100% foreign direct investment in thebiotech industry, are also contributingto the growth of the industry.

The patent reforms haveexposed the domestic firms to

SOURCE: World Population Prospects 2008, Exim Bank Research

Exhibit 1:SHARE OF POPULATION ABOVE 65 YEARS IN SELECT COUNTRIES

(in%)

35

compete with foreign firms and thishas enhanced innovation. Westerncompanies, lured by strong skilledmanpower and lower cost research,have boosted investments into theindustry along with strong linkagesand partnerships. With theannouncement of the NationalBiotechnology DevelopmentStrategy, and the likely establishmentof a nodal authority, NationalBiotechnology DevelopmentAuthority, the emergence of strong

growth in this industry is inevitable.The biotechnology industry thereforecan act as a long-term sustainablecompetitive strength for India with itsenormous potential to improveagriculture, food, health,environment and energyrequirements of the population.Further, the shrinking physicalboundaries enable biotechcompanies to tap large marketsaround the world.

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Box 2:RECOMBINANT DNA TECHNOLOGY

Recombinant DNA is the foundation of modern biotechnology. The termrecombinant DNA literally means the joining—or recombining— of two pieces ofDNA from different sources, such as from two different organisms.

Human beings began to change the genetic material of domesticated plantsand animals thousands of years ago by breeding individuals with valuable genetictraits while excluding others from reproduction; as a result, the genetic makeup ofthe plants and animals was changed. Now, in addition to using selective breeding,genes at the molecular level are recombined using more precise techniques ofrecombinant DNA technology. Making manipulations more precise and outcomesmore certain, biotechnology decreases the risk of producing organisms withunexpected traits and avoids the time-consuming, trial-and-error approach ofselective breeding.

Genetic modification through selective breeding and recombinant DNAtechniques resemble each other, but there are important differences:

� Genetic modification using recombinant DNA techniques allows movementof single genes whose functions are known from one organism to another.

� In selective breeding, large sets of genes of unknown function are transferredbetween related organisms.

Techniques for making selective breeding, more predictable and precise, havebeen evolving over the years. In the early 1900s, Hugo DeVries, Karl Correns andEric Tshermark rediscovered Mendel’s laws of heredity. In 1953, James Watsonand Francis Crick, deduced DNA’s structure from experimental clues and modelbuilding. In 1972, Paul Berg and colleagues created the first recombinant DNAmolecules, using restriction enzymes. Ten years later, the first recombinant DNA-based drug (recombinant human insulin) was introduced to the market. By 2000,the human genome had been sequenced and today recombinant DNA techniquesare used in conjunction with molecular cloning to:

� Produce new medicines and safer vaccines;

� Enhance biocontrol agents in agriculture;

� Increase agricultural yields and decrease production costs;

� Reduce allergy-producing characteristics of some foods;

� Improve food’s nutritional value;

� Develop biodegradable plastics and other biobased products;

� Decrease water and air pollution; and

� Slow food spoilage.

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The 21st century is witnessingconsolidation and expansion in theglobal biotechnology industry, withnew inventions of its widerapplications and use. Biotechnology,if used to its optimal capacity, isexpected to have a significant impacton the healthcare and agriculturesector for the betterment of the worldpopulation, in addition to providingcommercial and industrial benefits.This untapped potential in thisindustry has been encouragingcountries across the world to investand design programmes promotingthe industry, especially in researchand development.

GLOBAL RANKINGS

Major countries, based on thenumber of biotechnologycompanies, both public and private,are illustrated in Exhibit-2. USA topsthe list with over 1750 companies,followed by France (824), SouthKorea (773) and Spain (659). India,with 325 biotech companies in2008, was ranked 11th in the worldand fourth in the Asia-Pacific regionafter South Korea, Japan andAustralia. However, it may be notedthat European Union, as a single

entity, has the largest number ofbiotech firms in the world,estimated at 1836 in 2008.

GLOBAL FINANCING

The ongoing economic meltdown,amongst the severest in recenttimes, has had a visible impact ona number of industries across theglobe. The main manifestation ofthe crisis, especially in 2008 andearly 2009, has been a total creditsqueeze and liquidity crunch in theglobal financial markets. Thisresulted in deferment of expansionplans of various companies,including those in the biotechsector. In fact, in 2008, it was forthe first time in five years that theglobal biotech industry witnessed adecline in funds raised. It has beenobserved that the major sources offinancing the biotech sector waslargely through initial publicofferings (IPO), follow-on, privateinvestment in public equities(PIPEs), partnerships or throughdebt and other instruments. Clearly,the economic crisis has had amajor bearing on these instrumentsof raising funds, reflected by a

2. GLOBAL BIOTECH INDUSTRY

38

sharp fall in actual funds raised byfirms in the biotech industry.

According to BioCentury (a US-based publishing house), the overallcapital raised by biotech companiesacross the globe declined by around36% from US$ 52.79 bn in 2007 toUS$ 33.76 bn in 2008. It was quiteevident that the most drastic fall wasin funds raised from public investors.Data for the year 2008 revealed thatin spite of the drastic marketconditions, IPOs constituted over60% of the total funding of theindustry. However, the total amountof capital raised from IPO, combinedwith follow-on, dropped by 32%, from

US$ 34 bn in 2007 to US$ 23 bn in2008. Venture funding, constitutingover 9% of the total capital raised byglobal biotech industry in 2008,declined modestly in absolute valuesglobally, by around US$ 1.6 bn in2008, to touch US$ 3.1 bn.

However, it may be noted thatthe decline in funding is expected tocontinue in the coming few years andthereby creating a challenge for thebiotech firms to source funds forsustaining its growth. Thoughventure capitalists are still in themarket, they are expected to be moreselective in their ventures.

SOURCE: Ernst & Young 2009, OECD Report 2009; JETRO; UK Trade andInvestment; Exim Bank Research.

Exhibit 2:TOP BIOTECHNOLOGY NATIONS, 2008 (BY NUMBER OF FIRMS)

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MERGER AND ACQUISITION(M&A) DEALS

M&A activity in Biotech industry wasrobust in the US and Europe in2008. According to a Ernst & Youngreport, there were 53 M&Atransactions involving USbiotechnology companies in 2008,representing a total value of US$28.5 billion, a record high, notcounting megadeals in recent years(the previous megadeal was in2007 with the acquisition ofMedlmmune by AstraZeneca). InEurope, M&A activity in Biotechindustry was valued US$ 5.0 billion;the value of strategic alliances havealso increased. Overall, thepotential value of strategic alliancesinvolving companies in US andEurope still remains immense.

The Ernst & Young 2008 reportobserves that there has been an

increase in M&A activity amongbiotechnology firms of similar size toimprove cash positions, but does notnecessarily see increased M&Aactivity in the Biotech industry bypharma firms. However, it is believedthat large companies may not startbuying assets in large numbers thatdo not fit their strategic objectives justbecause the valuations are relativelycheaper. Instead, the pharma firmsmay remain interested in moremature biotech companies, on thelines of the recent biotechacquisitions such as Genentech,MedImmune (Gaithersburg, MD),Millennium Pharmaceuticals, andImClone. Roche acquiredGenentech in 2009, andAstraZeneca (London) acquiredMedImmune in 2007. Takedaacquired Millennium in 2008, and EliLilly acquired ImClone in 2008. It mayalso be observed that owing to the

SOURCE: BioCentury, Nature Biotechnology Journal 2009.

Exhibit 3:TREND IN FINANCING OF GLOBAL BIOTECH INDUSTRY (US$ BN)

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expiry of many patented products inthe next couple of years, thepropensity of big pharmaceuticalfirms acquiring biotech companiesmay increase.

GLOBAL DIRECTINVESTMENTS

Unlike the funding scenario, directinvestments, especially theGreenfield investments, in thebiotech sector have maintainedtheir pace even in the currenteconomic turmoil. Withgovernments across the worldstriving to develop thebiotechnology industry, andperceiving it as a basis for long-term development, multinationalcompanies in the biotechnologyarena have been actively exploringnewer markets. While the R&Dactivities of global multinationals inlife sciences still remainconcentrated in the developed

economies, these companiesincreasingly seek new locations inthe emerging countries to tap thewide knowledge base that areavailable at competitive prices.

Even in difficult marketconditions, cross-border investmentin biotechnology continues to grow,and has not shown a decline fromthe investment level of the year 2008.The number of greenfield FDIprojects in the biotech sector hasbeen increasing over the last fiveyears. In 2008, an estimated US$ 2.9bn of biotech investment wasrecorded.

Growth is also being fuelled byinvestment to, and from, emergingmarkets. This trend is expected tocontinue as emerging marketcountries are likely to display theiradvantages over the developedcountries, in terms of costcompetitiveness and availability of

SOURCE: World Investment Report 2009, Exim Bank Research

Exhibit 4:NUMBER OF GREENFIELD FDI PROJECTS IN BIOTECH INDUSTRY

IN THE WORLD - 2004–2009

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talent pool. However, developedcountries (especially USA) stilldominate the world in innovation inthe biotech sector, and thus wouldremain as attractive destinations forR&D investments. Asia-Pacificshowed prowess as a location forbiotechnology investments in 2008 -overtaking Western Europe tobecome the number one region in theworld for investment projects. Froman Indian perspective, FDI wouldpave way for increasedinfrastructure, scaling up of localfacilities, increased market size andfacilitate R&D, which translates intomore “local content”.

INDUSTRY PERFORMANCE

Most countries today have well-developed biotechnology programsand a proactive strategic visionwhich has, to a certain extent,negated the fall in capital fundsduring the current times ofeconomic meltdown. The revenuesof the public biotech companiesacross the world increased fromUS$ 84.7 bn in 2007 to US$ 89.6bn in 2008, an increase of 5.7%,according to a report by Ernst &Young. It is worth noting that thisgrowth was witnessed in spite ofthe global financial crisis hittingeconomies across the world.However, this modest growth wasunevenly distributed across theglobe with varying performance inregions.

USA’s public biotech firms grewby 8.4% in 2008, in terms of product

sales, which was much lower ascompared to the 11.3% growthwitnessed in 2007, and significantlylower than the industry’scompounded annual growth rate(CAGR) of about 17% during theperiod 2003-2008. This lowering ofthe overall revenue in the US waslargely because of the acquisitionsof many successful biotech firms bycompanies which cannot be strictlyclassified as being within the realmsof biotech industry. Revenues alsodiminished because of slower growthof a number of top firms in the US,such as Amgen, and ThousandOaks.

Revenues of European biotechfirms increased by 13% in 2008, totouch Euro 15.3 billion as comparedto the revenue level of Euro 13.5billion in 2007. The growth in theEuropean biotech industry wasboosted by a top-line growth inexcess of 20% by Elan (Ireland),Eurofins Scientific (France), Meda(Sweden) and Qiagen (theNetherlands), while Switzerlandbased Actelion, and UK based ShirePharma grew by 16% in 2008. Asregards the performance of Asian(including Pacific) biotech industry isconcerned, revenues have recordeda growth of 25% in 2008. This healthygrowth was mainly led by stronggrowth in Australia, where revenuesgrew by 26% in 2008.

Total Income

Despite the 5.7% surge in globalbiotechnology revenues in 2008,

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SOURCE: Ernst & Young 2009

Exhibit 5:SHARE OF REGIONS IN GLOBAL BIOTECHNOLOGY REVENUES - 2008

(Public Company Data)

Table 1:GLOBAL BIOTECHNOLOGY DATA FOR 2007 AND 2008

Units Parameter Year % Change

2007 2008 2008 over 2007

Public Company Data

USD Billion Revenue 84.7 89.6 5.7

USD Billion R&D Expense 31.8 31.7 -0.3

USD Billion Net Income (Loss) -2.6 -1.4 - 46.1

Number Employees 204930 200760 -2.0

Number Public Sector Companies 798 776 -2.8

Number Private Sector Companies 4001 3941 -1.4

Number Total Companies 4799 4717 -1.7


over the revenues generated in theyear 2007, the profit remainednegative for the globalbiotechnology industry as a whole.However, there has been a decline

in losses in 2008; the global netloss that had climbed to US$ 2.6billion in 2007 abated to US$ 1.4billion in 2008. This reduction in netloss in 2008, over 2007, was

43

helped by the reduction in netlosses in Europe, and turnaroundto profit in USA. However net losshas grown in Canada, with theindustry witnessing more than 50%rise in net losses in the year 2008.

R&D Expenditure

The R&D expenditure in the biotechindustry, due to the financial crisis,registered a marginal decline ofaround 0.3%, in 2008, over theyear 2007. The R&D expenditure inthe biotech industry was the highestin USA (accounting for a share of80%), followed by European region(16%), and Canada and Asia-Pacific (2% each).

The life-science companies inthe Asia-Pacific region on an averagespent 12% of their revenue, on R&Din 2008. China led the region with theaverage R&D spend of 19.14%. InChina, the companies in the revenuerange of US$ 1 million – US$ 5million spent almost 30% of theirrevenues in R&D. South Korearanked second with an average R&Dspend of 17.8% of revenue, with thecompanies in the revenue range ofUS$ 1 million – US$ 5 million werespending an average of 24% onR&D. India followed at the thirdposition with average R&D spendingof 10.55%. The average R&Dspending for Taiwan, Singapore,Malaysia and Australia was in therange on 1% - 6%.

Table 2:REGION-WISE BIOTECHNOLOGY DATA, 2008

Units Parameter USA Europe Canada Asia-Pacific

Public Company Data

USD Billion Revenue 66.12 16.51 2.04 4.96(73.7) (18.4) (2.2) (5.5)

USD Billion R&D Expense 25.27 5.17 0.70 0.60(79.7) (16.3) (2.2) (1.8)

USD Billion Net Income (Loss) 0.41 -0.70 -1.14 0.01

Number Employees 128200 49060 7970 15530(63.8) (24.4) (3.9) (7.7)

Number Public Sector 371 178 72 155Companies (47.8) (22.9) (9.2) (19.9)

Number Private Sector 1383 1658 286 614Companies (35.0) (42.0) (7.2) (15.5)

Number Total Companies 1754 1836 358 769(37.1) (38.9) (7.5) (16.3)

Figures in the parantheses are share in world.SOURCE: Ernst & Young 2009

44

Analysis of R&D expenditure peremployee for the globe and acrossregions yielded interesting results. Inthe year 2008, the R&D expenditureper employee for the globalbiotechnology industry was

US$ 158,120. Interestingly, USA hadthe highest R&D expenses peremployee, of US$ 197,110, followedby Europe (US$ 105,400) andCanada (US$ 88,210). R&Dexpenses per employee in

Exhibit 7:R&D INTENSITY (%) AND R&D EXPENSES PER EMPLOYEE

(US$ 000), 2008 (Public Company Data)


Exhibit 6:SHARE OF REGIONS IN GLOBAL BIOTECHNOLOGYR&D EXPENDITURE - 2008 (Public Company Data)


45

Asia-Pacific was modest at US$38,700 in 2008. Global R&Dexpenditure as a percentage ofglobal revenues (R&D intensity) wasas high as 35% in the year 2008.USA again topped the list with itsR&D intensity at 38%, while Canadaand Europe had R&D intensity of34% and 31%, respectively. R&Dintensity of Asia Pacific Region wasonly 12% in the year 2008.

Employee Numbers

The total employees engaged inthe public biotechnology companiesdecreased marginally by 0.5% in2008 over the year 2007, to reacha little over 2 million. This decreasein growth was essentially due to adecrease in number of employees

in USA, by 2.4%; however, thenumber of employees in bothEurope and Canada increased by3% and 9%, respectively. In theyear 2008, 64% of the employeesengaged in the biotechnologyindustry belonged to USA, followedby Europe (24%), Canada (4%),and Asia-Pacific (8%).

Number of Players

The Ernst & Young report statesthat during 2008, there were morethan 4700 companies operating inbiotechnology industry across theglobe with most of them (83%)controlled by private entities.Interestingly, bulk of these privatecontrolled companies belonged toEurope, with a share of 39% in the


Exhibit 8:SHARE OF REGIONS IN GLOBAL BIOTECHNOLOGY

EMPLOYMENT – 2008(Public Company Data)

46

total number of biotech companiesacross the globe, followed by USA(37%), Asia-Pacific (16%), andCanada (8%). In relative terms,USA had the maximum number ofpublicly traded companies ascompared to other regions. Thespurt in the number of privatecompanies was led by Europe, andwas followed by USA, with the Asia-Pacific region being a distant third.

Average Revenue perEmployee & EmployeeIntensity per Company

An analysis of the average revenueper employee for the year 2008,based on the Ernst & Young data,shows that the global revenue per

employee in the biotech industrywas to the tune of US$ 0.44 million,while the global employee intensityper company in the biotech industry(total employees divided by numberof companies) was at42.5 employees. In absolute terms(region wise), for the period 2008,USA had the highest averagerevenue per employee, of aboutUS$ 0.5 million, followed by Europeat US$ 0.33 million and Asia-Pacificat US$ 0.32 million. Canada’sperformance was modest withaverage revenue per employeebeing only US$ 0.25 million in2008. USA topped the list in termsof employee intensity also, with anaverage 73 employees per


Exhibit 9:SHARE OF REGIONS IN TERMS OF NUMBER OF PLAYERS

47

company, as compared to anaverage of 26.7 employees inEurope, 22.3 employees in Canada,and 20.2 employees in Asia-Pacific.

MAJOR BIOTECHNOLOGYPLAYERS: COUNTRY ANALYSIS

ASIA PACIFIC REGION

China

The Chinese Government has beena key investor in the biotechnologyindustry, and has helped theindustry to tide over the ongoingfinancial crisis. According to areport1, China’s biotechnologyindustry has maintained an annualgrowth rate of 30%, since 2005.China has a reputation of being aleading medical science innovator

making occasional breakthroughs,including the world’s firstcommercialized gene therapyproduct. According to the ChinaNational Center for BiotechnologyDevelopment (CNCBD), there areabout 20 biotech parks throughoutChina, with most companiesfocusing on human therapeuticsand agriculture.

As far as biotech financing isconcerned, the venture capitalcommunity is relatively small in Chinaas compared to the Westerncountries. Companies that raisedventure capital in 2008 includedSanghai based NovaMedPharmaceuticals, which securedUS$ 14 million from Atlas Ventures,and Fidelity Asia Ventures. Apart

Exhibit 10:AVERAGE REVENUE PER EMPLOYEE & EMPLOYEE

INTENSITY PER COMPANY

SOURCE: Ernst & Young, 2009;

1 Nature Biotechnology Journal, January 2009

48

Table 3:TOP 10 BIOTECH PRODUCTS BY ESTIMATED SALES BY 2014

(US$ Million)

Rank Companies Total Sales

1 Avastin (Roche) 9232

2 Humira (Abott and Elsai) 9134

3 Rituxan (Roche) 7815

4 Enbrel (Wyeth, Amgen, Takeda) 6583

5 Lantus (Sanofi-Aventis) 6386

6 Herceptin (Roche) 5796

7 Crestor (AstraZeneca) 5739

8 Sprivla (Boehringer Ingelheim) 5552

9 Remicade (SGP, J&J, Misubashi Tanable) 5220

10 Gleevec (Novartis) 5136

SOURCE: BioWorld, EP Vantage

from this, Futaste Pharmaceuticals,a supplier of APIs, raised funds from3i Group. IPOs in China were fewduring 2008-09. Jiangsu NhwaPharamceutical, a companydeveloping drugs for the centralnervous system completed a US$ 25million IPO in July 2008.

In 2006, the Governmentadopted the Medium and Long-TermNational Plan for Science andTechnology (S&T) - 2006-2020,which aims to make China a leadingS&T power and innovation economy.The plan identifies biotechnology,alongside seven other frontiertechnologies, as a priority forfunding. Despite the continuingeconomic crisis, the ChineseGovernment has pledged to help thebiotech business. The Municipal

Government of Beijing, operatingunder the 11th Five Year Plan (2006-2010), has promised to invest US$74 million in the biotech sector during2009-10, funding eight majorprojects. The goal is to foster anannual output from Beijing’s biotechsector of US$ 7.4 billion by the endof 2010. It must be noted that thenumber of biotechnology patentsfiled in China have also seen anincrease from 22 during the period1994-96 to 423 during the period2004-062.

Japan

According to the Japan ExternalTrade Organization (JETRO) thenumber of biotechnology firms in2006 stood at 586. Although Japanhas been an industrialized country,

2 OECD, Patent and REGPAT databases, January 2009; and EPO WorldwideStatistical Patent database, September 2008

49

Table 4:TOP TEN BIOTECH DRUGS IN 2008

(US$ million)

Trade (generic)/ Indicative Usage for 2008 2007Drug maker Revenues Revenues

Enbrel (etanercept)/ Rheumatoid arthritis, psoriatic arthritis, 6,191 5,273Amgen ankylosing spondylitis, plaque psoriasis,

juvenile rheumatoid arthritis

Rituxan (rituximab)/ Non-Hodgkin’s lymphoma, rheumatoid 5,480 4,604Genentech, arthritisBiogen Idec

Remicade Crohn’s disease, ankylosing spondylitis, 5,273 4,420(infliximab)/ psoriatic arthritis, ulcerative colitis,Johnson & Johnson rheumatoid arthritis, psoriasis

Avastin Colorectal cancer, non-small-cell lung 4,807 3,431(bevacizumab)/ cancer, breast cancer, brain cancerGenentech (approved May 2009)

Humira Rheumatoid arthritis, psoriatic arthritis, 4,521 3,064(adalimumab)/ psoriasis, Crohn’s disease,Abbott ankylosing spondylitis, juvenile

rheumatoid arthritis

Gleevec/Glivec Chronic myelogenous leukemia, 3,700 3,050(imatinib mesylate)/ gastro-intestinal stromal tumors,Novartis acute lymphocytic leukemia, hypereosinophilic

syndrome, mastocytosis, dermatofibrosarcomaprotuberans, myelodysplastic syndrome,myeloproliferative disorders

Lantus Types I and II diabetes 3,668 2,840(insulin glargine(rDNA origin)injection/SanofiAventis

Neulasta Infection associated with chemotherapy- 3,318 3,000(pegfilgrastim)/Amgen induced neutropenia

Aranesp Anemia 3,137 3,614a(darbepoetin alfa)/Amgen

Prevnarpneumococcal 7- Prevention of diseases caused by 2,716 2,439valent conjugate Streptococcus pneumoniaevaccine/Wyeth

aAranesp, in fourth place in terms of revenue in 2007, fell to ninth place in 2008.

SOURCE: BioMed Tracker - Nature Biotechnology 2009

50

it is still trying to catch up with itspeers in the West as far as thebiotech industry is concerned. Forinstance, venture capitalists inJapan unlike in other parts tend tobe less interested. Most of them inJapan are a subsidiary of banks orsecurity companies with hardly anyexposure in biotech. However, inspite of the recession, three biotechIPOs materialised in 2008. Thesewere NanoCarrier, CarnaBiosciences and R-Tech Uneo.

The formation and nurturing ofbiotech hubs in combination withregulatory reforms are expected tocreate better conditions for thebiotech sector in Japan. However,the country still faces severalchallenges such as expensive clinicaltrials and government-mandatedpricing of prescription drugs. Thesechallenges reduce the growthprospects in domestic markets. Arather inflexible academic systemalso tends to restrain the flow ofprofessional expertise andinformation among the academicinstitutions and corporate players.Main challenge faced by theJapanese biotech companies,irrespective of the sizes, duringeconomic meltdown would be todevelop new and innovativeproducts. With the Japanese Yenstrengthening against the US dollar,

devaluation of assets in thedeveloped countries could bring innew buying opportunities andincreased cross-border deals. Someof the deals concluded by theJapanese companies in 2008 includeEisai’s acquisition of US-based MGIPharma, collaboration of TakedaPharmaceuticals with Amgen, DaiichiSankyo acquiring German-basedbiotech firm U3 Pharma, followed by64% stake in India-based Ranbaxy.It may be noted that the number ofbiotechnology alliances for researchand technology transfer in Japanhave increased from 20 in 1996 to53 in 20063. The number ofbiotechnology patent applicationshas also increased from 894 during1994-95 to 3720 during the period2004-20064. Apart from this, Japan’sglobal share in biotechnology patentapplications stood at around 11% in2006 and was amongst the highestin the world.5

Australia

The biotech industry in Australiacomprises a range of companies,from start-ups to more developedcompanies, selling products inAustralia and abroad, and applyingbiotechnology to health, industrialprocessing, agriculture andenvironmental issues. The biotechindustry includes a large number of

3 UNU-MERIT CATI database, Maastricht, the Netherlands, April 20094 UNU-MERIT CATI database, Maastricht, the Netherlands, April 20095 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide

Statistical Patent database, September 2008

51

6 UNU-MERIT CATI database, Maastricht, the Netherlands, April 20097 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide

Statistical Patent database, September 20088 UK Trade & Investment

research intensive SMEs, includingmany spin-offs from universitiesand other publicly funded researchorganisations.

According to the OECDBiotechnology Statistics, 2009, thetotal number of biotechnology firmsin Australia stood at 527. Theemployment by publicly listed biotechcompanies in Australia has increasedfrom 9770 in 2007 to 10480 in 2008.

The sector ’s major exportscontinue to be IP, through licensingdeals with large internationalpharmaceutical and biotechnologycompanies. The number ofbiotechnology patent applicationshas also increased from 297 during1994-95 to 556 during the period2004-20066. In fact, Australia’s globalshare in biotechnology patentapplications was around 2.1% in2006.7

The Australian Government hasresponded to the current economiccrisis with the announcement of newmeasures that are intended to helpthe players to tide over thechallenges. In March 2009, theGovernment announced theestablishment of an AUS$ 59.15million ‘Innovation InvestmentFollow-on Fund’ to provide muchneeded support for innovative

companies requiring capital forgrowth. Follow-on funding was madeavailable to companies participatingin the Government’s existing early-stage venture capital programs. Thisinitiative is aimed to ensure thatthese companies remain viable andcontinue to operate in Australia. OnMay 21, 2009, as an additional boostto medium and small biotech firms,the Australian Government hasannounced 45% refundable taxcredits for R&D. The AUS$ 6.11billion budget package for scienceand innovation in 2009 constituted a25% increase over the previous year,the largest annual increase in thebudget for science and innovation,since 1978-79.

EUROPEAN REGION

United Kingdom

UK has around 435 biotechcompanies, plus service andtechnology providers, cumulativelyemploying around 19000 people,with revenues of around £2.5 billion(US$3.6 billion)8.

According to Ernst & Young, UKwas the leading player in theEuropean region, in 2008,accounting for 20% of the totalclinical pipeline, and 23% of Phase

52

III9 assets. However, it may be notedthat UK is losing out the leadingposition it commanded few yearsago. In 2006, the UK accounted for35% of all products in development,and 41% of Phase III products.United Kingdom was also a hot spotfor cross-border transactionsaccounting for 38% of the EuropeanM&A activity by value. The numberof biotechnology patent applicationshas also increased from 985 during1994-95 to 1264 during the period2004-200610. Apart from this, UK’sglobal share in biotechnology patentapplications stood at around 7% in2006 and was amongst the highestin Europe.11

Following the global financialcrisis, in December 2008, the UKbiotech industry sought the supportof UK government for creation of twofunds – one to fund the mergers andacquisitions between smaller biotechfirms, to drive consolidation; and theother to provide funds for “high-potential” firms. The UK Governmenthas announced the introduction of a£750 million Strategic InvestmentFund for emerging technologies,including biotech.

Switzerland

According to Ernst & Young data,Switzerland had a total of 229

companies with 159 biotechdevelopers and the rest as biotechsuppliers. The total investments intothe biotech industry in Switzerlanddeclined following the globalfinancial crisis, in 2008. From alevel of US$ 885 million in 2007,investments went down to touchUS$ 205.2 million in 2008 – adecline of over 74%. As far asrevenues are concerned, the publicSwiss biotech firms fared far wellthan the private firms. Revenues ofpublic firms increased by 8.8%whereas the revenue for privatefirms increased marginally byaround 2% in 2008 over the year2007. Profits too increased forpublic firms to touch US$ 228million in 2008, as compared to aloss of US$ 9 million in 2007;whereas in the case of private firmslosses increased from US$ 18million in 2007 to US$ 33.3 millionin 2008. Research & Developmentexpenses too are higher in thepublic companies (US$ 1350.9million in 2008) as compared toprivate companies (US$ 512.1million in 2008). In the privateSwiss biotech sector, the R&Dexpenses increased from US$ 403million in 2006 to US$ 559 millionin 2008. The booming biotechsector in Switzerland employed

9 Phase III - Large scale controlled trials for efficacy/safety; also the laststage before a request for approval for commercial distribution is made tothe FDA. Typically include 1,000 to 7,500 patients and are three to five yearsin length (given in detail about the other Phases in Chapter-4)

10 UNU-MERIT CATI database, Maastricht, the Netherlands, April 200911 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide

Statistical Patent database, September 2008

53

17993 people as on 2008, anincrease by 15.9%, from 15,525 in2006.

LATIN AMERICA REGION

Brazil

There are around 181 life sciencesfirms in Brazil, of which 39% (or71) are biotechnology companiesoperating in Brazil12, of which 63firms have less than 50 employees.The share of biotechnology firmsactive in agriculture stood at 23%in 200713. Other biotechnologyareas include health, naturalresources and environment.

A key aspect concerningbiotechnology companies isinnovation. According to thedatabase of the Brazilian PatentOffice (INPI) 84.5% of the companiesdo not have patents in Brazil;whereas 10% have one, 2.8% havetwo, and only 2.8% have three patentapplications. It is worth mentioningthat the number of patents depositedby the companies is an importantparameter but does not necessarilymean that the degree of innovationinside the companies isproportionally low. As researchactivities and scientists are highlyconcentrated in Brazilian universitiesand research institutes, many

innovative technologies employed bythe biotechnology companies havebeen licensed and are protected bypatents deposited in the name of theuniversity/research institute orresearcher. Brazil’s share in worldbiotechnology patent applicationsstood at 0.3% as on 200614. Thenumber of biotechnology patentapplications has increased from 6during 1994-95 to 27 during theperiod 2004-200615.

Cuba

Over the last twenty years, Cubahas established a prominentposition in the biotechnologyindustry, which has become one ofthe most important driving forces ofthe country’s economy. Since the1980s, Cuba has built up world-class expertise in the biotechnologysector as part of a centralisedstrategy to boost international tradeand to support domestic socialdevelopment - particularly in areassuch as public health andagriculture.

The emergence and expansionof biotechnology in Cuba as a newbranch of the economy has been agood model in improving the healthof many persons in the country. TheCentre for Genetic Engineering and

12 Biomass Foundation, 200713 OECD, Biotechnology statistics database, January 200914 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide

Statistical Patent database, September 200815 UNU-MERIT CATI database, Maastricht, the Netherlands, April 2009

54

Biotechnology (CIGB), flagshiporganization for biotechnologyresearch in Cuba, was founded in1986, and during the period 1990-1996, the Cuban Governmentinvested around US$1 bn to give riseto what is currently known as ‘TheWestern Havana BioCluster ’,comprising 52 institutions.

Once described as “Cuba’sbillion dollar gamble,” the CubanGovernment sponsored programmehas successfully led to thefoundation of more than 100 R&Dfacilities and pharmaceutical centres,over 150 international patents fornew drugs and treatments, andemployment of more than 30,000workers in the field of scientificdevelopment16. As a result, Cubanow leads the world in many fieldsof specialist medical research. It isalso one of the few countries to havebeen accredited by the World HealthOrganization for the production ofHepatitis B vaccines.

The most important region ofCuban biotechnology is the areaknown as Havana’s WesternScientific Pole, which comprises 52scientific institutions and whereapproximately 4,000 scientists andengineers are working on more than100 ongoing research projects. Thisregion provides the focus of UNIDO’snew investment programme, whichwill provide in-depth support for

British companies wishing to explorepartnership opportunities.Surprisingly, Cuba has eschewed theventure-capital funding model thatrich countries consider a prerequisitefor developing a premierebiotechnology industry; the biotechindustry in Cuba has grown rapidlydespite a strong venture capitalfunding model.

The country’s expertise in thisindustry has already provided thebasis for many internationalpartnerships - most typically, thecreation of joint companies abroad,where Cuban institutions contributetechnology, know-how and technicalassistance.

SUM

The biotech industry is becomingmore competitive and is rapidlyexpanding across the globe. TheUS biotech industry’s hegemonicstatus is slowly being challenged byother countries in the world apartfrom relatively younger firms inEurope and Asia Pacific regions,who are trying to catch up with theestablished ones.

The resilience of the globalbiotech industry was even moreevident from the northwardmovement of the industry as a whole,despite the implications and thespillover effects of the financialcontagion of 2008-2009. The biotech

16 www.americanchronicle.com/articles/view/104114, as accessed on Dec. 10,2009

55

industry is maturing and the marketvaluations of most of the successfulfirms are challenging thepharmaceutical firms. With manypatented pharmaceutical productsexpected to come out of the patentcover, many pharmaceutical firmsare evincing keen interest toleverage the potential ofbiotechnology for their survival.

The biotechnology industry,despite the emerging challenges,has grown stronger with tremendousinventiveness and creativity.Globally, the industry has showedimmense potential to cater to betterhealth care, a better environmentand more sustainable future, andthereby fuelling economicdevelopment and growth.

56

Adam Smith, in his classic‘Wealth of Nations’, wrote, “A truewealth of a nation is measured notby how much gold it possesses butby what it can produce”. By thisyardstick, biotechnology brought anunprecedented global revolution,through which the world’s hungerand diseases alike can be mitigatedby creating new mechanisms.

3. BIOTECHNOLOGY IN INDIA:CURRENT STATUS

Biotechnology is being promotedin the country keeping in view itsenormous potential to improveagriculture, food, health,environment and energyrequirements of the population, andthereby to generate employment,and contribute to the economicprogress of the nation throughenvironmentally sustainableindustrial development.

Exhibit 11:INDIAN BIOTECH INDUSTRY IN 2008-09

57

The Indian biotech sector hasbeen growing by leaps and boundswith the overall turnover in 2008-09reaching Rs. 12137 crore.BioPharma contributed Rs. 7883crore; followed by BioServices(Rs. 2062 crore), BioAgri (Rs. 1494crore), BioIndustrial (Rs. 478 crore),and BioInformatics (Rs. 220 crore)segments.

EVOLUTION OF THEBIOTECHNOLOGY INDUSTRYIN INDIA

The Indian Biotechnology industryhas an interesting evolution thathas spanned over three decades.The milestones of the evolution ofbiotech industry in India began in1978, in Bangalore, when thecountry’s first biotech company,Biocon, was established forindustrial enzymes and laterventuring into biotherapeutics.

The Government provided amajor thrust to the industry with theestablishment of the NationalBiotechnology Board (NBTB) underthe aegis of the Department ofScience and Technology (DST) in1982. The NBTB acted as an apexbody, which was given the task ofidentifying priority areas and evolvinga long-term plan for the developmentof biotechnology. Four years later, in1986, the NBTB was upgraded to afull-fledged Department ofBiotechnology (DBT). This paved theway for furthering the growth ofbiotechnology in the country.

It may be mentioned that theevolution and growth ofbiotechnology firms has its roots inthe pharmaceutical industry. Keypharmaceutical firms established inpre-1980s in the country, likeWockhardt Ltd, Hindustan AntibioticsLtd, Lupin Ltd, and Gland PharmaLtd, have diversified or adaptedbiotechnology at a later stage in theirmanufacturing and research. Withthe establishment of a dedicatedDepartment of Biotechnology, tonurture and promote biotechnologyin the country, the number of playersin the sector started increasing. Post-WTO period witnessed theemergence of a number of start-ups,along with large pharmaceuticalfirms venturing into the biotechbusiness, and emergence of spin-offfirms from the established pharmamajors, like Dabur, Ranbaxy,Dr. Reddys, and Cadila joiningbiotechnology majors like Biocon andShantha Biotechnics. The firstsuccessfully established spin-offcompany from the Indian Institute ofScience (IISc), Strand Genomics,also emerged during this period. Anumber of healthcare MNCs like EliLilly , GlaxoSmith- Kline, Pfizer, etc.have also set up biotech subsidiariesin the country.

THE INDIA ADVANTAGE

The success and the progress ofbiotechnology sector in India ispossible due to the unique set ofadvantages that India offers.Growth in the Indian biotechnology

58

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industry is also supported by thediverse flora and fauna, large genepool, temperate climate, qualitymanpower and low-operationalcosts. Further, the proactive policiesand measures taken by theGovernment and its agencies, haveallowed the industry to capitalizeupon such advantages.

Biodiversity

The Indian sub-continent, whichoccupies only 2.4% of the totalglobal surface area, has the mostvaried species of flora and fauna.The country’s diverse flora andfauna offers a goldmine of rawinformation. Biotech companies,functioning in India, are in aposition to utilize this immensebiodiversity, and can easily findsamples, that facilitate field

research in a much more efficientand cost effective manner. Theavailability of rich biodiversity isfurther enhanced by the country’svaried agro-climatic zones and adiversified agricultural sector, bothof which can play an important rolein facilitating research anddevelopment of different agribiotechproducts applicable worldwide.

Large gene pool

A ‘gene pool’ can be defined as allof the genetic information, includingall variations, contained within apopulation of a particular speciesat a particular time. India, in thiscontext, has a diverse gene poolthat holds significant potential.Clusters of isolated genes can befound in tribal groups and fromcross-country marriages. India’shuman gene pool provides lucrative

Exhibit 13:KEY ADVANTAGES OF BIOTECHNOLOGY INDUSTRY IN INDIA

SOURCE: Exim Bank Research

60

prospects for genomic research.This not only helps domesticbiotechnology companies but alsoacts as a pull factor for foreigncompanies to shift base to India.

Temperature

India’s vast expanse is blessed withvaried climatic conditions, which isideal for the large-scale practice ofbiotechnology. India also has oneof the largest coastlines in theworld. With at least seven distinctclimatic zones and one of thelargest and most varied sets ofmarine organisms, India offerstremendous opportunity to thegrowth of biotech industry. Thisambient temperature in most partsof the country provides enablingconditions to develop biotechproduct using the living organisms.This also curtails immensely thecost of cooling or heating, whichbecomes obligatory for the practiceof biotechnology in most parts ofthe Western world. Apart from this,India also has coastlines wherethere is an uninterrupted sunshinefor almost 340 days in the year,which facilitates growth of marineorganisms in open areas.

Operational Costs

India’s low cost base in research,development and manufacturingprovide the Indian biotech industrya competitive edge over itscounterpart in other countries. Thelarge pool of scientists, engineersand medical professionals offer alow cost base in research, clinical

development and manufacturing,and thus generating outsourcingopportunities, especially inbioprocessing, drug discovery, andclinical research. The costdifferential for drug discoverybetween the United States andIndia is around 75%. In India, adrug discovery process costsaround US$ 200 million ascompared to the cost estimate ofUS$ 800 million in the US. Similarly,clinical trials cost 30% less to carryout in India than in Australia andabout 50% less than in the US. Onan average, the annual salary foran Indian PhD biotechnologyscientist in India, at the entry-levelis much lesser as compared to acounterpart in the United States orSingapore. With, academia-industryresearch partnerships gainingpopularity, this will further augmentthe low cost of innovation. Indiatherefore is gradually becoming akey destination for outsourcing R&Din biotechnology industry.

Quality Manpower

India’s rich human capital, havinga large English speaking skill base,is believed to be one of thestrongest assets for this knowledge-based industry. Besides, Indiaproduces 30 lakh graduates, 7 lakhpostgraduates, and 1500 qualifiedPhD’s in biosciences andengineering each year with theindustry employing approximately20,000 scientists. The cost ofskilled manpower in India is alsorelatively low. The low-cost and

61

large availability of skilledmanpower provides the Indianbiotechnology industry atremendous competitive manpoweradvantage over its counterpart firmsin other countries. Apart from this,the Department of Biotechnology

(DBT) has set up numerous top-notch Centres of Excellence (COE)in the country. These centers areresponsible for generating skilledmanpower as well as supportingR&D efforts of corporates. Theseinstitutions have also been

Box 3:CENTERS OF EXCELLENCE IN BIOTECHNOLOGY SECTOR IN INDIA

Advanced Basic Research

� Tuberculosis Drug Resistance (Indian Institute of Science, Bangalore; TheFoundation of Medical Research, Mumbai; Birla Institute of Technology &Science, Pilani)

� Designing inhibitors against infectious agents (National Institute ofImmunology, New Delhi)

� Basic Molecular biology of a model microorganism, E.coli (Centre for DNAFingerprinting and Diagnostics, Hyderabad)

Advanced Science with Translational Research

� Systems Biology of Tuberculosis and Drug Development (International Centrefor Genetic Engineering and Biotechnology, New Delhi; University of Delhi,South Campus, New Delhi; Central Research Institute of Jute & Allied Fibres,Barrackpore, W.B)

� Genetics and Genomics of Silkmoths, (Centre for DNA Fingerprinting andDiagnostics, Hyderabad)

� Antivirals Against Hepatitis C (Indian Institue of Science, Bangalore & others)

� Mesenchymal and Adult Stem Cell Therapies (Christian Medical College,Vellore)

� Platform Technologies for Designer Crops (International Crop ResearchInstitute for the Semiarid Tropics, Hyderabad)

� Stem Cell Research: Basic and Translational (All India Institute of MedicalSciences, New Delhi)

Partnership with Industry

� Heterosis Breeding in Rice (University of Delhi-South Campus, New Delhi &Mahyco Ltd., Jalna)

� DBT-University Institute of Chemical Technology (Energy BiosciencesCentre), Mumbai

SOURCE: Department of Biotechnology, Government of India, Annual Report2009-10

62

enhancing interactions between theacademia and the industry. Elevensuch COEs are underimplementation in the areas of:genome sciences and predictivemedicine; system biology andtuberculosis; genome-mapping andmolecular breeding of Brassicas,Stem Cell research, Anti-virals etc.It is envisaged to fund 50 COEsmostly in Universities duringEleventh Plan.

Attractive Domestic Market

India’s large population of over abillion people is a huge market forbiotech products and services.Further, the domesticpharmaceutical firms are leveragingthe advantages of Indian biotechindustry in their activities rangingfrom process innovation, productdevelopment, and drug discovery.The growing pharmaceuticalindustry in India thus providesmarket for the Indian biotechindustry.

INDUSTRY STRUCTURE

Biotech Players: The IndianBiotechnology industry is dividedinto various segments, and eachsegment has various layers that areplaying a proactive role for thegrowth of the industry. Government,the research labs, and institutionsform one layer, which are carryingout continuous research anddevelopment; companies who aresolely into biotech products on acommercial basis form the second

layer; these firms are completelyfocused on marketing of the biotechproducts, whereas pharmaceuticaland IT companies, which are at thenext level, are carrying out certaindedicated biotechnology relatedactivities, either in the form ofsolution providers or in the form offacilitators.

Government Funding: TheGovernment has been investingsignificantly for the growth of thebiotechnology industry since 1985.The Government has been fundingvarious research-based institutionsto carry out biotechnology researchwork. The Government has alsobeen increasing its budgetaryallocation to the Department ofBiotechnology in its five-year planoutlays. While most of this fundingis for advanced research, there areorganizations like the TechnologyDevelopment Board (TDB), underthe auspices of Department ofScience & Technology, that give outequity and soft loans towardstechnology development, solely forcommercial purposes. The TDB isnot exclusive to the healthcare orbiotechnology industry but has so farinvested the largest share of its fundsin these sectors.

Venture Capital: Research anddevelopment is the backbone of thebiotechnology industry as theindustry is highly research intensive.Some of the researches carry on foryears without any specific timeline.Most venture capitalists are typically

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averse to investing in biotech R&D,but are open to funding companieswhose products and markets areclearly identified. Their focus is onfunding the commercialisation oftechniques that are alreadydeveloped. Hence, most of theprivate sector firms are quite risk-averse to investing in biotechnologyprojects in their gestation and earlyphases. However, it may be notedthat private equity (PE) investmentsin the life sciences sector clockedUS$ 183 million during the 10-monthperiod, between January and

October 2008, compared witharound US$ 173 million for the sameperiod in 2007.

BioSuppliers: The biotechnologysector demands numerousinstruments from simple test tubesto high-end equipments. Capitalizingon the demand bandwagon, anumber of suppliers, including fromAmerica and European regions,have entered the market. In fact, thebio-suppliers market is currentlydominated by MNCs that want totake advantage of the increasing

Exhibit 14:INDIAN BIOTECHNOLOGY INDUSTRY STRUCTURE


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R&D investments by domesticbiotechnology and pharmaceuticalcompanies. The growth in theBioSuppliers segment of Indianbiotech industry was 15.5% in 2008-09, to reach a revenue level ofRs. 3621 crore in 2008-09. Some ofthe leading domestic players include:Spinco Biotech, Imperial LifeSciences, RFCL, Genetix BiotechAsia and DSS Imagetech. WafersIndia, Becton Dickenson, ThermoFisher Scientific and Millipore Indiaare some of the major multinationalbiosupplier companies operating inIndia.

Buyers: This is infact the majorsegment which drives the growth ofvarious sub-segments in thebiotechnology industry. The specificrequirements and the needs of thebuyer segment is particularlyidentified and taken care of, andthereafter research on various endproducts is initiated. The initial targetgroup is the Government, privatehospitals, and ultimately the patient,who uses the products for treatmentand diagnostic purposes. Besides,there are buyers in the industry, suchas pharmaceutical companies andresearch institutions, that usebiotechnology intermediates andproducts in the process of creatingtheir own end products.

INDIAN BIOTECH INDUSTRY:THE MARKET SIZE

The Indian biotech industry in 2008-09 registered 18% growth, and

recorded revenues of Rs. 12,137crore. The BioPharmaceuticalsector accounted for Rs. 7883crore, a growth of around 18% in2008-09; the BioServices sectorregistered 31% growth to touchRs. 2062 crore; the BioAgri sectorgrew by 24% to clock a revenue ofRs. 1,494 crore; the BioIndustrialsector grew by 16% to reach alevel of Rs. 478 crore; and theBioInformatics sector grew by 15 %to amass Rs. 220 crore revenues,during this year.

Revenue

The Indian biotechnology industryhas been growing at aCompounded Annual Growth Rate(CAGR) of 31.5% during the period2001-02 and 2008-09. Thedomestic biotechnology marketclocked revenues of Rs 4,985crore, registering a 10% growth inrupee terms. However in dollarterms (US$ 1.06 billion), there hasbeen a negative growth of about7% in 2008-09 as compared toUS$ 1.14 billion revenuesgenerated in 2007-08.

As regards segment-wise datafor the year 2008-09,BioPharmaceutical sector accountedfor the largest chunk of the biotechindustry, having a share of 65% intotal revenues with vaccines beingthe largest contributor in theBioPharmaceutical segment. TheBio Services and the BioAgrisegments followed the

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BioPharmaceutical segment with ashare of 17% and 12.3%,respectively, in 2008-09. Segmentslike BioIndustrial and BioInformaticsgarnered a share of 3.9% and 1.8%,respectively, of the total revenue in2008-09. Interestingly, the share ofthe various segments of theBiotechnology industry remainedalmost the same with minor changesin 2008-09 as compared to 2007-08.

It is also interesting to note thatsegments like BioAgri, BioIndustrialand BioInformatics generated morerevenues from the domestic marketas compared to the overseas market,in contrast to the BioPharma andBioServices segments, revenues ofwhich are largely generated fromexports. However, the BioPharma

and BioAgri have the majority sharein terms of domestic business in thecountry.

Exports

The very nature of the biotechindustry, is export-driven. The risein dollar value helped companies toup their topline. In rupee terms, theexports business went up by almost25% to Rs 7,152 crore, accountingfor 60% of the total business in2008-09; yet, the total industryexports registered only 6% growthin dollar terms, over the export levelin 2007-08, to US$ 1.5 billion.

Segments like BioPharma andBioServices have had a majority oftheir revenues coming from exports,with export revenue constituting

Exhibit 15:INDIAN BIOTECHNOLOGY INDUSTRY – REVENUE BY SEGMENTS

SOURCE: Biospectrum, ABLE

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around 62% and 95%, respectively,during 2008-09. Infact, these twosegments constitute over 95% of thetotal biotech exports from India.BioInformatics, BioIndustrial, andBioAgri constitute a share of 2.37%,1.24%, and 0.85%, respectively, intotal biotech exports in 2008-09.

Bioclusters

Development of clusters is one ofthe critical success factors for manycountries that have achieved thehighest level of innovativeness inthe field of biotechnology. Theseclusters, which are mostly region-specific, essentially provide aplatform for effective

communication among scienceagencies, state governments,research institutions, universities,and industries through sharing ofexperiences and expertise,resources and infrastructure, andthereby facilitating creation of aknowledge-based hub.

The Indian biotechnologyindustry is spread across manystates in the country. These includeMaharashtra, Karnataka,Andhrapradesh, National CapitalRegion, and Gujarat. Many of thesestates have unveiled state-specificbiotech policies and have establishedbiotech parks to attract investmentin this industry. The respective

Exhibit 16:DOMESTIC BUSINESS OF VARIOUS BIOTECH SEGMENTS IN INDIA

* values within the oval are percentage share of the segment in the respectiveyear


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government policies in these statesand scientific ambiences have beenresponsible for the growth ofbioclusters in these states.

It may however be noted that thewestern and the southern regions ofthe country accounted for 85% of thetotal revenues, cumulativelygarnering more than Rs.10,000 crorein 2008-09.

The Biocluster in the westernregion is the largest in terms of therevenue generated in the financialyear 2008-09. The western region,which includes states likeMaharashtra, Goa and Gujarat, hadgenerated revenues worth overRs. 5,260 crore, registering a rise of

around 18% over the revenuesgenerated by the region in theprevious year. The western region’sshare in the total revenue generationstood at 43.35%. Serum Institute ofIndia, led the western region’scontribution in 2008-09 with the firm’stotal revenue generation amountingto Rs. 1114 crore.

The southern region continuedto be the second with a share of41.89%. The southern regionbiocluster covered states like AndhraPradesh, Karnataka and Tamil Naduwith combined revenues of Rs. 5084crore, recording a growth of 16.38%over the revenues generated by theregion in the previous year.

Exhibit 17:EXPORT BUSINESS OF VARIOUS BIOTECH SEGMENTS IN INDIA

* values within the oval are percentage share of the segment in the particularyear

SOURCE: Biospectrum ABLE

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Biotechnology Parks

India has been witnessingdevelopment of several biotechparks in the last few years. Someof these Parks, such as ShapoorjiPallonji Biotech Park, Hyderabad;ICICI Knowledge Park, Hyderabad;International Biotech Park, Pune,

have been instrumental in fulfillingthe infrastructure requirements ofthe rapidly growing Indian biotechindustry. These parks haveemerged as a focal point of someof the leading biotech clusters, suchas Genome Valley in Hyderabad,and Hinjewadi in Pune.

Exhibit 18:TOP BIOTECH REGIONS IN INDIA - 2008-09


Table 5:TOP BIOTECH CLUSTERS IN INDIA - 2008-09

(in crore)

Region Revenue in Revenue in % Share in2008-09 2007-08 2008-09

Maharashtra 3978.10 3615.13 32.78Karnataka 2535.71 2220.00 20.89Andhra Pradesh 2188.23 1830.32 18.03NCR 1792.14 1452.98 14.77Gujarat 755.92 472.24 6.23Top 5 Regions 11250.10 9590.67 92.69Other States 886.90 683.33 7.31

Total Revenues 12137.00 10274.00 100


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States such as Andhra Pradesh,Kerala, Maharashtra, Punjab, TamilNadu and Uttar Pradesh have madesubstantial progress in establishingbiotech parks, whereas states suchas Himachal Pradesh, Karnataka,Madhya Pradesh, Rajasthan andUttarakhand are in developmentstage.

Karnataka, one of the first Statesto pro-actively promote thebiotechnology industry with aseparate policy in 2001, rolled out aRs. 100-crore fund for manufacturingcompanies and Rs. 50-crore corpusfor encouraging R&D. TheKarnataka Government has alsoexpressed its intension to driveinvestments in Tier II and Tier III citiesby starting focused biotech parkswith the support of advancedresearch institutes; these include: aRs. 110-crore nutrition or food park

and a phytomedicine park at Mysoreaided by the CFTRI; a Rs. 30-crorebio-agri centre at Dharwad; a Rs. 70-crore marine biotech park inMangalore; and a Rs. 30-croreanimal facility at Bidar.

Andhra Pradesh IndustrialInfrastructure Corporation (APIIC) isplanning to develop a biotech SpecialEconomic Zone (SEZ) in Hindupur,in Anantapur district. Besides, abiotech SEZ for livestock/animalbiotech sector is being developed byAPIIC in Pulivendula, Kadapa district,adjacent to the Indira Gandhi Centrefor Advanced Research on Livestock(IGCARL).

With a large number ofinternational biotech and pharmacompanies initiating their R&D andmanufacturing operations in India,the demand for world-class

Table 6:TOP BIOTECH CITIES IN INDIA - 2008-09

(in crore)

City Revenue in Revenue in % Share in2008-09 2007-08 2008-09

Bangalore 2535.00 2220.00 20.89Mumbai 2476.00 1974.83 20.40Hyderabad 2188.00 1830.32 18.03NCR 1792.14 1452.92 14.77Pune 1461.00 1254.00 12.04Ahmedabad 557.00 442.24 4.59Others 1127.86 1099.69 9.29

Grand Total 12137.00 10274.00 100


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infrastructure offered by biotechparks has increased significantly.Even Indian companies are attractedby the advantages of enablinginfrastructure offered by the biotechparks and are increasinglyrelocating/ locating their facilities intothese parks. These parks provideseveral advantages and act as ageographic concentration/ cluster oflife sciences industry, researchinstitutions, sci-tech academia andother amenities of scientific andgeneral purpose.

The parks provide R&D facilitiesand manufacturing infrastructure ofinternational standards. Further, theyoffer affordable space, incentivesand services for start-up, mid-stage,late-stage and manufacturingpharma / biotech companies seekingto develop innovative products andservices; attract internationalorganisations to locate their R&Dactivities in the parks, create andmaintain international and nationallinkages. The biotech parks not onlybenefit the large firms but are alsoinstrumental in promoting the settingup of small and medium biotechenterprises which can initiate modernbiotech products on a smaller scale,especially if the initiation comes fromthe academia with proper knowledgeand know-how of products.

GOVERNMENT INITIATIVES

The growth of the biotechnologysector in India is often attributed tothe visionary initiative taken by the

Government of India in the early1980s. Initially, the NationalBiotechnology Board (NBTB) wasset up in 1982, which was laterelevated to a full-fledgedDepartment of Biotechnology (DBT)under the Ministry of Science andTechnology in 1986. All thisprovided an early impetus to thedevelopment of biotechnology inIndia.

Regulatory Approvals

The Government, on its part, hasinitiated certain far-reachinglegislations to promote the growthof the biotechnology industry in thecountry. In India, severalorganisations are involved in theregulatory structure of the biotechindustry, which often resulted inoverlap of functions. In order tostreamline the regulatory process,the Government has proposed theestablishment of the NationalBiotechnology Regulatory Authority(NBRA), to provide a consistentmechanism for regulatory approval.In July 2008, the DBT introducedthe National BiotechnologyRegulatory Act, which wouldestablish the NBRA as anempowered body to approvegenetically modified crops, food,recombinant biologics, like DNA,vaccines, recombinant genetherapy products, and recombinantand transgenic plasma-derivedproducts, such as clotting factors,veterinary biologics and industrialproducts.

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Table 7:BIOTECH PARKS IN INDIA

Name of the Park Area (Acres) No. of Companies Specialization

Shapoorji Pallonji 300 16 companies in Life Science, healthcareBiotech Park, Phase I and and pharmaceuticalHyderabad 10 companies

in Phase II

ICICI Knowledge Park, 200 35 R&D companies Life ScienceHyderabad

Agri Science Park, 25 108 ventures have Agribiotech andHyderabad already been incubated agribusiness R&D

Bangalore Helix, 14 8 biotech incubators Sector specific SEZBangalore Biotech Park

Biotech Park, Lucknow 8 15 enterprises Healthcare, agriculture,environment, industrialapplication and energy

Kinfra Biotech Park, 50 Expected to house Bioinformatics andCochin 15-20 biotech units biotechnology with focus

with shared facilities on marine, herbal andlike biotech incubation agricultural biotechnologycenter

Kinfra Biotech Park, 25 Developing Stage Agriculture, healthcare,Thiruvanthapuram diagnostic and industrial

enzymes

Golden Jubilee Biotech 20 10 enterprises Agro, food and nutrition,Park for Women medical, and healthcareSociety, Kanchipuram and environment & energy

Inspira Infrastructure 25 Developing Stage This biotech park isBiotech Park, designed for bipharmaAurangabad and agri-biotech

companies who are intomanufacturing and R&D

International Biotech 100 12 enterprises Medical and PharmaPark, Pune Biotechnology

Savli Biotech Park, 724 11 companies have All major sectors ofVadodara been recommended for Biotechnology

land allotment inPhase -I

Ticell Bio Park, Chennai 5 12 enterprises Medical Biotechnology,nutraceuticals, agriculturalbiotechnology andbioinformatics

Agri Biotechnology Park, 124 — —Jalna

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The enactment of New PatentsAct, 2005, brought a paradigm shiftin research and development in thesector. Previously, India had a patentprotection for process rather than theproduct, which brought aboutcomplacency without initiating mucheffort upon the development of newproducts. The New Patents Act of2005 enforces product patentsthereby inspiring firms and researchinstitutions to undertake theinnovation at their behest.

DNA Profiling Bill

The Deoxyribose Nucleic Acid(DNA) analysis of body substancesis a powerful technology that makesit possible to determine whether thesource of origin of one bodysubstance is identical to that of

another, and further to establish thebiological relationship between twoindividuals, living or dead. With theobjective to enhance protection ofpeople in the society andadministration of justice, analysis ofDNA found at the scene of crime,of the victim or offender has beenused to establish identity. The DNAanalysis offers sensitive informationwhich, if, misused can harm aperson or the society. There is needto regulate the use of DNA profilesonly for lawful purposes through anAct to be passed by the Parliament.

The proposed legislation by DBTenvisages to establish standards forlaboratories, staff qualifications,training, proficiency testing,collection of body substances,custody trail from collection to

Box 4:BIOTECHNOLOGY PATENT FACILITATING CELL

Intellectual property protection plays an important role in gaining advantageousposition in the competitive game for economic growth. India enjoys a large assetof R&D personnel and infrastructure facilities. Scientists and policy makers needinformation and facilities for protecting the products of intellectual power of Indianscientists. As a step in this direction, the Department of Biotechnology (DBT),Government of India established a Biotechnology Patent Facilitation Cell inJuly1999.

Biotechnology Patent Facilitating Cell, a single window awareness -cum -facilitation mechanism, aims to create awareness and understanding aboutIntellectual Property Rights (IPRs) among scientists and researchers, by arrangingworkshops, seminars, conferences, etc. at all levels, and for introducing patentinformation as a vital input in the process of formulation of R&D programmes inbiotechnology, and providing patenting facilities to biotechnologists in the country,for filing Indian and foreign patents on a continuous basis. The patent filing isdone through National Research Development Corporation (NRDC). The totalnumber of patent applications filed by DBT with PCT, USPTO and other countries,with potential commercial value is over two hundred.

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reporting, and a Data Bank withpolicies of use and access toinformation, its retention anddeletion. It has also been proposedto have DNA Data Bank Managerwho would supervise, execute andmaintain the system, and a DNAProfiling Board of eminent scientists,administrators and law enforcementofficers which would administer andcarry out other functions assigned toit under the proposed Act.

The Protection and Utilizationof Public Funded IntellectualProperty Bill, 2008

Public funded research inUniversities, academic andresearch institutions have oftenproduced innovations that holdpotential for public good. However,a large number of innovations havenot been reaching the industry orthe public. Important reasons thathave been identified for inadequatemovement of Intellectual Property(IP), from laboratory to marketinclude:

� Possession of the IPgenerated remaining with thefunding agency;

� Vague regulatory legalframework in Universities,academic and researchinstitutions for commerciali-zation, and limited financialincentives to the researchers;

� Procedural complexities intechnology transfer, its

absorption andcommercialization.

The Government therefore hasenvisaged to create a legalframework in the form of TheProtection and Utilization of PublicFunded Intellectual Property Bill,2008. The expected benefits of theBill include:

� Establishment of uniform legalframework for protection andutilization of the IP generatedout of public funded R&D;

� Encouragement for innovationsin private sector as well as inUniversities, academic andresearch institutions thatreceive grants fromGovernment;

� Promotion of collaborationbetween Government,nongovernmental organizationsand private sector;

� Commercialization of IPgenerated out of Governmentfunded R&D, and promotion ofinnovation culture within thecountry;

� Minimising the dependence ofUniversities, academic &research institutions and otherrecipient organizations forfunding on the Government, asthe Bill provides for utilizationof a portion of royalties orincome, generated out of thepublic funded IP for researchand educational purposes;

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� Generation of employment inniche areas, with unique skillsrequired for the IPmanagement, developmentand marketing;

� Transfer of technologies fromresearch laboratories to marketplace (nationally andinternationally).

Government Funding

Government funding to the Science& Technology sector increased bynearly three times from the TenthFive-Year Plan to the Eleventh Five-Year Plan, while support to thebiotech industry steadily increasedby four times during the sameperiod. The budgetary allocationincreased from Rs. 25301.35 croresin the 10th Plan to Rs. 75304 croresin the 11th Plan. Infact, theDepartment of Biotechnologyreceived almost 8.5% of the totalbudgetary outlay of the Ministry ofScience & Technology. TheDepartment of Biotechnology wasallocated an amount of Rs. 901.50crore (Rs. 879.00 crore (Plan) andRs. 22.50 crore (Non-Plan)) for theyear 2008-09. The budgetallocation for 2009-10 is Rs. 924crore (Rs. 900.00 crore (Plan) andRs. 24.00 crore (Non-Plan)).Though the DBT remains the mainfunding organization for the Biotechindustry in India, there are otherscientific departments, which havealso started contributing in this field,albeit in a small level.

Several State Governments(e.g. Andhra Pradesh, Karnataka,Maharashtra, Himachal Pradesh,Uttar Pradesh, Kerala and Gujarat)have also come up with addedfinancial (e.g. tax concessions) andpolicy incentives (biotech parks,incubators of their own) to spurinvestment in biotechnology.

The Government of India hasalso introduced a number of fiscalincentives, from time to time, byrelaxing price controls for drugs,investment incentives, and taxholidays for R&D spending. Thisamply corroborates the serious rolethe Government has been playing inpromoting institutions and firmsinvolved in biotechnology.

Department ofBiotechnology’s Vision for2009-10

The year 2009-10 has beenidentified for reforming thecompetitive grants system andgovernance. It is aimed at:

� Expanding capacity fortranslation research in health,agriculture, industry andenvironment sectors;

� Advancing standards inmanufacturing of biologicals;

� Rapidly responding to newopportunities in newer areasi.e. nano-sciences, stem cellbiology, genetics and genomicsbased healthcare andagriculture;

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� Expanding the use ofInformation Technology;

� Focussing on young scientists;

� Creating a pipeline of products.

Remodeling of DBT is on theanvil. The infrastructure built over thepast decade has supported so far thebottom-up research. However withthe current strength, mid-and high-level inventions may result into bed-to-bench technologies.Understanding the nationalrequirements, DBT is making effortsto deliver them.

National BiotechnologyRegulatory Authority (NBRA)

The National BiotechnologyRegulatory Bill, 2008 seeks to setup the NBRA as an independent,autonomous, statutory agency tosafeguard the health and safety of

the people and to regulate the safedevelopment and deployment ofbiotechnology products andprocesses. The new legislation isexpected to provide an opportunityto consolidate and enhance theefficiency and effectiveness ofbiotechnology regulation, increasecollaboration with stategovernments in this area, promotepublic confidence in the regulatorysystem, and facilitate internationaltrade.

Biotechnology IndustryPartnership Programme (BIPP)

In February 2009, DBTimplemented a new scheme “BIPP”for enhancing the scope of public-private partnership, which isexpected to provide a fillip forresearch, more so in light ofindustry facing a credit squeeze

Exhibit 19:BUDGETARY ALLOCATIONS IN THE FIVE-YEAR PLANS IN INDIA

(RS. CRORE)

SOURCE: Planning Commission, Exim Bank Research

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following the global financial crisis.The scheme is a Governmentpartnership with industries for publicsupport on a cost-sharing basis for:(i) Path-breaking research infuturistic technologies with majoreconomic and global advantage;and (ii) Development of nationallyrelevant technologies in the areasof agriculture, health, bio-energyand green manufacturing. BIPPscheme has proposed to addressthe crucial product evaluation andvalidation processes, i.e BioPharmaproducts by human clinical trials,and agriculture products by fieldtrials. Upto 100% grant-in-aidsupport is proposed to be providedfor Phase-I, II and III clinical trialsof biotech based research leads;

and for limited and large scale fieldtrials in the case of agricultureproducts. The Rs 350-crorepackage will underwrite the risk ofresearch and development ofinnovating molecules andprocesses. It will also be open toall innovative biotechnologycompanies, who are looking to doresearch in agriculture, health,bioenergy and greenmanufacturing.

Biotechnology IndustryResearch Assistance Council(BIRAC)

In order to have an interfacebetween industry, and academia,and to help promote start-ups,

Box 5:NATIONAL BIOTECHNOLOGY DEVELOPMENT STRATEGY

The National Biotechnology Development Strategy approved in November2007 by the Government of India aims at:

� creating tools and technologies that address the challenges of the largesections of the society;

� providing products and services at affordable prices; and

� making India globally competitive in the emerging bio-economy.

The basic goal of the National Biotechnology Development Strategy is to enableemergence of an eco-system that promotes innovation. The priority is to promoteinnovation in biotechnology in Small and Medium sized Enterprises (SMEs). Topromote R&D in SMEs, a ‘Small Business Innovation Research Initiative’ (SBIRI)scheme has been launched for funding early stage, pre-proof of concept research.Sectoral priorities have also been identified in the areas of agriculture, health,industry and environment. The Strategy provides for producing more world classresearchers; establishing centres of excellence and interdisciplinary networks inthe university system; strengthening technology transfer and patenting skills;promoting Biotech clusters and parks; building a strong regulatory system;improving transnational movement of biologicals, building new institutes in a fewkey areas where there is deficiency; and linking international partnerships to nationalgoals.

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SMEs can facilitate innovativeresearch in large industries. TheDepartment has also planned toestablish a Biotechnology IndustryResearch Assistance Council-(BIRAC), as an autonomous bodyaiming to provide financial,infrastructural, social, professionaland institutional network support.During the year, a “Pilot BIRAP”-Biotechnology Industry Research &Development AssistanceProgramme – has been launchedin partnership with the Associationof Biotechnology Led Enterprises(ABLE), and Biotech ConsortiumIndia Ltd. (BCIL). A Management-

cum-Advisory Board for BIRAP hasalso been constituted andmodalities for implementation arebeing worked out.

Research & DevelopmentFacilitation

Government of India hasproactively taken up a number ofinitiatives in creating institutionalinfrastructure (e.g. microbial culturecollections, cell and tissue lines,gene banks, laboratory animals,facilities for oligonucleotidesynthesis, etc.) and a strongresearch base in the country inareas relating to agriculture and

Box 6:BIOTECHNOLOGY INSTITUTIONAL INFRASTRUCTRE IN INDIA

(existing and proposed)

� National Institute of Immunology, New Delhi� National Centre for Cell Sciences, Pune� National Brain Research Centre, Manesar, Haryana� Centre for DNA Fingerprinting & Diagnostics, Hyderabad� National Institute of Plant Genome Research, New Delhi� Institute of Life Sciences, Bhubaneshwar� Institute of Bioresources & Sustainable Development, Imphal� Rajiv Gandhi Centre for Biotechnology, Thiruvananthapuram� Institute of Stem Cell Sciences & Regeration Medicine, Bangalore� National Institute of Biomedical Genomics, Kalyani, West Bengal� Translational Health Science & Technology Institute, Faridabad� UNESCO Regional Centre for Biotechnology Training and Education,

Faridabad� National Agri-food Biotechnology Institute, Mohali, Punjab� National Institute of Marine Biotechnology Chennai� National Institute of Animal Biotechnology� Institute of Silk and Biomaterial Technology

Bio-clusters� Agri-food Biotechnology Cluster, Mohali, Punjab� Health Biotech Science Cluster, Faridabad (NCR)� Bangalore Biotech Cluster, Bangalore

SOURCE: Department of Biotechnology Annual Report 2008-09.

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forestry, human health, animalproductivity, environmental safetyand industrial production.

Biotechnology InformationSystem (BTISnet)

Recognizing the importance ofinformation technology for pursuingadvanced research in modernbiology and biotechnology, abioinformatics programme,envisaged as a distributeddatabase and network organisation,was launched during 1986-87. TheBiotechnology Information System(BTISnet) is the NationalBioinformatics Network in the formof Distributed Network. The networkhas been established linking morethan 150 centres/institutions spreadall over India. The BTISnet centres

are developing new databases andtools; creating human resource; andconducting research in differentareas of “Bioinformatics andComputational Biology”. For thepurpose of sharing the hardwareand software/ database resourceswithin the centres under BTISnet,a Virtual Private Network (VPN), inthe form of BioGrid India, has beenset up.

International Collaborations

The Department of Biotechnologyhas been at the forefront ofmaintaining many internationalcollaborations and introducing jointproposals with countries likeAustralia, Canada, Finland,Germany, Sweden, USA, Japanand the EU.

Box 7:“BUILDER” SCHEME

Boost to University Interdisciplinary Life Science Departments forEducation and Research

During 11th Five Year Plan, the Department of Biotechnology, Government ofIndia, has launched a scheme known as DBT University Interdisciplinary Schoolof Life Sciences for Advanced Research and Education (DBT-ISLS) to strengthenthe universities in their efforts towards building globally competitive bio-economy.The aim is to promote networking of existing life sciences departments ofuniversities and invigorating interdisciplinary bioscience research. The schemewould be to upgrade the post-graduate teaching and training, laboratories in termsof infrastructure, new faculty, fellowships for students, training programmes andre-grouping research activities. The academia-industry interaction would bepromoted taking advantage of the strengths and weaknesses of specificuniversities.

A scheme called “Bioinformatics Infrastructure Facilities (BIF)” has beeninitiated under BTISnet with a purpose to promote innovation in biology throughinformatics. Under the BIF scheme of BTISnet, over eighty educational institutionshave already been provided with the infrastructure. Centres of Excellence (COEs)in Bioinformatics are at University of Pune, Pune; JNU, New Delhi; Bose Institute,Kolkata; IISc, Bangalore; and Madurai Kamaraj University, Madurai.

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Some notable collaborationswith countries and institutions abroadconcluded in recent years include:

� An Indo-AustralianBiotechnology Fund wascreated with an aim to developand support collaborativeresearch activities in the fieldsof biomedical devices andimplants, stem cells, vaccines/medical diagnostics, transgeniccrops, nutraceuticals andfunctional foods, andbioremediation. A Jointworkshop on Nutraceutical andFunctional Foods was alsoconvened in Australia in March,2008.

� DBT will be part of theInternational ERA-net project(European Research Area-ERA) named NEW INDIGO,which is aimed at fostering andcoordinating the scientificcooperation between ERA andIndia. This will also strengthenthe almost negligible multi-lateral S&T cooperationbetween EU and India. TheEuropean Community hascommitted 1.5 million Euros forvarious programmes with India;

� An Indo-Finnish DiagnosticResearch Centre has beenproposed with commitmentfrom Tekes, a funding agencyof the Government of Finland;

� DBT has partnered with UKbased Wellcome Trust (WT) to

launch a three-tier fellowshipprogramme on biomedicalresearch at postdoctoral level;

� The INDO-US Vaccine ActionProgramme (INDO-US VAP)has been developed with theaim to provide vaccines ofnational health relevance in acollaborative manner;

� DBT and Advanced IndustrialScience and Technology(AIST), Japan have signedMoU to work jointly in the fieldof Life Sciences andBiotechnology; and

� The Biotechnology YES(Young EntrepreneursScheme) is an innovativeprogramme with the objectiveof raising awareness of thecommercialization ofbioscience ideas amongstpostgraduate/postdoctoralscientists. The University ofNottingham Institute forEnterprise and Innovation andBiotechnology, (UK), andBiological Sciences ResearchCouncil (UK), organize theprogramme.

� In the Fifteenth Session of theIndo-Russian Joint Council forthe implementation andcoordination of the IntegratedLong-Term Programme (ILTP)of Science & Technology(October, 2008 in New Delhi),both the countries expressedtheir keenness to havescientific collaboration in the

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areas of biotechnology. BharatImmunologicals and BiologicalsLtd. (BIBCOL), a public sectorundertaking under DBT, hasalso evinced keenness tocollaborate with Russia forproduction of IPV, BCG, DPT+,JEV Vaccine and Rabies.

� The Indo-Swiss programme inBiotechnology (ISCB), jointlyfunded by DBT and the SwissAgency for Development andCooperation (SDC), launchedin 1998, has completed twoPhases till March 2008, andcurrently Phase–III (2007-2011) is under implementation.The current phase is aimed attechnology advancement andproduct development.

Select InstitutionalCollaborations

� Osmania University,Hyderabad; and The Royal &Agricultural University,Copenhagen, Denmark;

� Madurai Kamaraj University,Madurai; and AalborgUniversity, Denmark;

� Department of Plant MolecularBiology, University of DelhiSouth Campus, New Delhi;and Department of Biologicaland Environmental Sciences,University of Helsinki, Finland;

� National Institute ofPharmaceutical Education andResearch (NIPER),

Chandigarh, in collaborationwith Åbo Akademi University,Turku, (Finland);

� International Centre forGenetic Engineering andBiotechnology (ICGEB), NewDelhi; and University of Turku,Finland;

� Indian Institute of Technology(IIT), Kharagpur; and TheEuropean Molecular BiologyLaboratory (EMBL), HamburgOutstation (Germany);

� Institute of Genomics andIntegrative Biology (IGIB), NewDelhi; and University atGottingen, Gottingen,Germany;

� National EnvironmentalEngineering Research Institute(NEERI), Nagpur; and RudolfBoem Institute ofPharmacology and Toxicology,Leipzig, Germany;

� Talwar Research Foundation,New Delhi; with the NationalCancer Institute, NationalInstitute of Health (NIH), USA;

� Indian Institute of Science(IISc.), Bangalore; andMorehouse School ofMedicine, USA.

Under the National BioresourceDevelopment Board, a MicrobialCulture Collection– BiologicalResearch Centre has beenestablished in Pune. The Centre

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would have provision to hold morethan 2,00,000 bacteria and fungi.Adopting international standards, thecentre has been gradually upgradedas an International DepositoryAuthority on microbial collections, likeAmerican Type Culture Collection

(ATCC). Under the programme onprospecting of drugs from microbialsources, about one lakh bacterialisolates have been collected andscreened. More than two lakhextracts have been prepared andabout 7,000 promising hits obtained.

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The biotechnology industry hasa global presence today. While theindustry has its roots in thedeveloped country markets, anemerging country like India, realisingthe benefits that could be derivedfrom the biotech sector, was one ofthe few developing countries toembrace the industry at an earlystage. In fact, India has been playingan important role in the global biotechindustry through better coagulationof academic research andcommercial development, coupledwith the synchronization of scienceand finance to emerge as a strongcontender in the global biotechindustry. Amidst an environment ofgrowing competition and everchanging regulations, the Indianbiotech industry has been successfulin creating a niche for itself in theworld. In fact, Indian firms throughcontinuous Research &Development (R&D) have been ableto create their own brands ofrecombinant DNA (rDNA), which hasresulted in an increase in their sharein global market, while accordingvisibility to the Indian biotech sectorat the global level.

INDIAN BIOTECH INDUSTRY:AN OVERVIEW

With the Government endeavoringan enabling environment, the Indianbiotech industry has been growingat a healthy pace. The robustgrowth in the Indian biotechindustry has resulted in the creationof a plethora of opportunities, bothat the domestic and internationalarena, for biotech businesses,especially in the areas ofBioPharmaceuticals, biosimilars,bio-agriculture, food and nutritionsectors. The revenues of the Indianbiotech industry quintupled duringthe period 1997-98 to 2008-09 –from US$ 0.5 billion to US$ 2.5billion.

The Indian biotech industry is wellpositioned to leverage on thecountry’s clinical and strongresearch capabilities, relatively lowoperational costs, institutionalinfrastructure, as also access to adiverse patient profile. Biodiversityof human gene pools and uniqueplant, animal and microbial diversityalso offer significant opportunitiesfor undertaking research in variousemerging areas.

4. INDIAN BIOTECH SEGMENTS:EMERGING OPPORTUNITIES

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INDIAN BIOTECH INDUSTRY:MAJOR SEGMENTS

The biotech industry in India canbe broadly categorised under fivedistinct segments - BioPharma,BioServices, BioAgriculture,BioIndustrial, and BioInformatics,

each of which is contributing to thegrowth of the biotechnologyindustry. The following sectionsattempt to highlight the scope andpotential of the major segments ofbiotechnology as classified above,and the opportunities they offer.

Exhibit 20:GROWTH OF THE BIOTECHNOLOGY INDUSTRY IN INDIA

SOURCE: BioSpectrum 2009.

Exhibit 21:KEY SEGMENTS IN INDIAN BIOTECHNOLOGY INDUSTRY


Value in Rs. Crores

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Table 8:UNDERSTANDING KEY SEGMENTS IN

BIOTECHNOLOGY INDUSTRY

BioPharmaceutical These are medical drugs produced using biotechnology.They are proteins (including antibodies), nucleic acids(DNA,RNA) used for therapeutic or diagnostic purposes,and are produced by means other than direct extractionfrom a native (non-engineered) biological source. A largemajority of BioPharmaceutical products arepharmaceuticals that are derived from life forms.

BioServices BioServices mainly include clinical research and contractresearch organizations (CRO) and to some extent custommanufacturing. BioServices today are also covering areaslike data management, clinical trials, site management,bio equivalence and toxicology studies apart from cateringto knowledge process outsourcing for pharma industry.

BioAgriculture The spectrum of biotechnology application in agricultureis very wide and includes generation of improved crops,animals, plants of agro forestry importance and microbes.The important area in BioAgri is the hybrid seeds businessfollowed by BioPesticides and BioFertilizers.

BioIndustrial The BioIndustry predominantly consists of enzymemanufacturing and marketing companies. The use ofenzymes is still limited in the country, but India holdssignificant potential for growth. These enzymes are usedin industries such as detergents, textiles, food, leather,paper and pharmaceuticals.

BioInformatics BioInformatics now entails the creation and advancementof databases, algorithms, computational and statisticaltechniques, and theory to solve formal and practicalproblems arising from the management and analysis ofbiological data. It is basically construction of databaseson genomes, protein sequences; modelling complexbiological processes, including systems biology.

SOURCE: Industry Sources, Exim Bank Research

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Biopharmaceutical

BioPharmaceutical products aretherapeutic or preventativemedicines that are derived frommaterials naturally present in livingorganisms using recombinant DNA(rDNA) technology. Conventionalpharmaceuticals are generallysmall molecules, whereasBioPharmaceuticals are typicallyproteins, peptides, nucleic acids orinactivated viruses or bacteria.According to a PwC report, thegrowth in BioPharmaceutical drugsand biologics have outperformedthe pharmaceutical market largelydue to two factors – firstly, theyaddress areas of clinical needthat are unmanageable withconventional therapeutics, includingcancers and genetic diseases, and

secondly, they are able tocommand a premium price.

BioPharma: SectorwiseRevenues

The total BioPharma sub-segmentin India, comprising vaccines,therapeutics and diagnostics haveregistered a 14.3% growth in 2008-09, over the previous year, in termsof total revenues. The segment hasbeen the single largest contributorto the Indian biotech industry formany years. The total BioPharmasector grew from Rs. 6889 crore in2007-08 to Rs. 7883 crore in 2008-09. In 2008-09 exports accountedfor 62% of the BioPharma revenue,while domestic sales accounted forthe rest (38%).

Exhibit 22:BIOPHARMA REVENUE BY SEGMENTS IN INDIA

SOURCE: BioSpectrum, Exim Bank Research

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Though there has been aconsistent growth in the IndianBioPharma sector, most of itsrevenues come from export sales. Inother words, there is a huge potentialin the domestic market yet to betapped by the Indian BioPharmasector. In this context, it may bementioned that India has a thrivingpharmaceutical industry, which is one

of the largest in the world, and arelatively developed, with a rankingof 4th in terms of volume ofproduction, and 13th in terms ofvalue. The success strategiesadopted by the Indian pharma-ceutical sector could be suitablyleveraged by the Indian biotechplayers to garner the businesspotential emerging in this segment.

Exhibit 23:SEGMENTWISE SHARES OF BIOPHARMA INDUSTRY (2008-09) IN INDIA

SOURCE: BioSpectrum, Exim Bank Research

Table 9 :SELECT KEY FIRMS IN THE BIOPHARMA BUSINESS IN INDIA

Vaccine Diagnostics Therapeutic

Serum Institute Tulip Novo NordiskPanacea TransAsia Biomedical Eli LillyBharat Biotec Bayer Reliance Life SciencesBharat Serums Span Diagnostics Bharat BiotecBiological E Becon Diagnostics Haffkine Bio-Pharmaceutical Bharat Biotech Pfizer Qualigens Diagnostics Smithkline Beecham J. Mitra & Co. Sanofi Pasteur xCyton Diagnostics

Wockhardt

SOURCE: Compiled from BioSpectrum

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Vaccines

The vaccines segment is the primecontributor, accounting for close to46% of the total BioPharma sectorin 2008-09. The vaccines segmentgrew at a compounded annualgrowth rate (CAGR) of around15.3% in the last four years, fromRs. 2341 crore in 2005-06 toRs. 3587 crore in 2008-09. Onyearly basis, the revenue in 2008-09 increased at 10.2%, fromRs.3250 crore in 2007-08.

The recent upsurge in demandfor vaccines, both in domestic andinternational markets is importantboth from public health andeconomic perspectives. According toDepartment of Biotechnology,Ministry of Science Technology,Government of India, there arearound 15 companies involved inmarketing over 50 brands for 15different vaccines. The vaccinessegment under BioPharma canfurther be classified as AnimalVaccines (used on animals) andHuman Vaccines (used on humans).

The animal biologicals market isgenerally derived from the need tocontrol animal diseases and therebyenhance productivity of the livestocksector. In animals, BioPharmasegment vaccines are widely usedfor diseases in the poultry sector, andfoot and mouth disease (FMD) ofcattle. There is a manifold increasein the demand for vaccines after theIndian Government launched a

nationwide vaccination programme,and FMD control programme tomake “disease-free zones”. Whilethe Government agencies aresupplying vaccines free of cost to thefarmers, the growing demand islilkely to be filled by the private sectorplayers as well. Companies likeBharat Biotech, one of the leadingnames in human biologics, BrilliantIndustries (mainly into pet vaccines),Venkateshwara Hatcheries andHester Pharmaceuticals (mainly intopoultry vaccines) are also enteringthe large animals vaccine segment.

Human vaccines preventspreading of many life-threateningdiseases (mainly through effectivepublic health interventions), and playa major role in significantly increasinghuman life expectancy. India with avast population is increasingly beingperceived as a major market forhuman vaccines in the world. Owingto an improved Intellectual PropertyRights (IPR) law, increase inhealthcare spending, and a relativelyhigh annual birth rate, coupled witha large prevalence of infectious andchronic diseases, the demand forvaccines in the country is expectedto grow manifold. In the years tocome, new diseases (like H1N1 flu)could also possibly be mitigatedthrough vaccination. In this context,it may be noted that, recently, inSeptember 2009, the U.S. Food andDrug Administration approvedvaccines made by CSL Limited,MedImmune LLC, Novartis Vaccines

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and Diagnostics Limited, and SanofiPasteur Inc., for preventing H1N1influenza virus.

Another important trend is theincrease in the production of highvalue combination vaccines (DPTwith Hepatitis B, Hib, and injectiblepolio vaccine), instead of the stand-alone customary vaccines. Byreducing the number of injections,combination vaccines help tofacilitate immunization against avariety of diseases with lesser costand better coverage. According toan estimate by BioSpectrum, the sizeof Indian vaccine sub-segment isexpected to grow at about 20-25 %over the next few years, whileglobally the vaccine sub-segment isvalued at US$ 20.6 billion and isgrowing faster than the pharmaindustry. BioSpectrum infact predictsthat the world market size ofcombination vaccine to cross US$ 2billion mark in 2013, which impliesan annual compound growth of over18%.

It is worth noting that India hasone of the largest immunizationprogrammes in the world, in termsof volume of vaccines used, numberof beneficiaries, number ofimmunization sessions organized,and the geographical diversity. WithUSFDA-compliant facilities, Indianvaccine makers also have a criticaledge in terms of the cost and qualityof R&D. It is anticipated that the

vaccine manufacturers in the countrymay witness manifold increase indemand for vaccines if theGovernment includes combinationvaccine, and newer vaccines toprevent diseases, like JapaneseEncephalitis and Dengue, in itsimmunization program.

According to the DBT, ShantaBiotechnics supplies over 40% of theglobal requirement of Hepatitis-Bvaccine under UNICEF programmein many countries. The SerumInstitute of India is the largestsupplier of vaccines to theGovernment of India’s ExpandedProgramme of Immunization (EPI),and is also the largest exporter ofvaccines with a distribution networkin 138 countries. It is also estimatedby DBT that every second child in theworld is vaccinated by the SerumInstitute’s measles and diphteria,pertussis and tetanus (DPT)vaccines. Serum Institute has alsobeen commissioned by World HealthOrganisation (WHO) to develop thevaccines against the latest strain ofH1N1. Panacea Biotec is anotherfirm supplying under the UNICEFprogramme and to the EPI. Othernotable Indian firms that aremanufacturing vaccines includeBharat Biotech, Bharat Serums,Biological E, Haffkine Bio-Pharmaceutical, Pfizer of India,Smithkline Beecham andWockhardt.

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Therapeutics

A therapeutic vaccine normallyprevents a disease from flourishingafter it has taken hold. Thetherapeutic segment contributedaround 37% of the total revenuesof BioPharma in 2008-09. TheIndian therapeutics market recordeda 19% growth to reach revenuesworth Rs. 2956 crore in 2008-09.Human insulin is the largestcontributor to the therapeuticsmarket owing to India’s largediabetic population. With diabetesnow ranked at fifth leading diseasecausing death across developedmarkets, and forecast fromPricewaterhouseCoopers (PwC)suggesting the disease to grow by7.1 % across the globe by 2013,the market for once-a-day drugdelivery, and non-invasive drugdelivery systems continue to offersignificant potential for expansion.India is predicted to lead the waywith 73.5 million people expectedto have the disease by 2025.

Having recognized the growthpotential for anti-diabetic products,Indian companies have investedconsiderably in developingindigenous human insulin. As such,companies like US-based Eli Lilly, byannouncing a joint venture withIndian company, Jubilant Organosys,in October 2008, are looking tosecure their place in this market. Thenext few years promise dramaticchanges in the treatment of diabetes,much of which are expected to be

driven by rapidly developingtechnology. Every company isstriving for two common goals,patient convenience and bettercontrol of the disease. In the lastcouple of years, Indian firms havelaunched rDNA insulin productsunder different brands at lowerprices, which have intensified thecompetition in the domestic market.Indian biotech major, Biocon, is alsolooking at the market space forinsulin in India.

Plasma proteins have alsocarved their own niche in the IndianBioPharma sector. India is a potentialmarket for manufacturing plasmaprotein owing to the presence of aquarter of the world’s haemophilicpatients in the country. With over100,000 patients, the countryrequires approximately 900,000 litresof plasma protein per year. Over theyears, India’s main source has beenBaxter Healthcare, USA. However,Reliance Life Sciences, eyeing anopportunity, has successfullylaunched five sets of plasma proteinsin 2005, namely Albumin (AlbuRel),Immunoglobin (ImmunoRel), AntiHaemophilic Factor VIII (HemoRel),Fibrin Sealant (ReliSeal), and Virusinactivated plasma (ReliPlasma), ata considerably lower price. Given thenascent stage of the therapeuticssub segment in the BioPharmasector, this area providestremendous opportunity for newinvestments through further researchand development.

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Table 10:RECOMBINANT THERAPEUTIC DRUGS APPROVED

FOR MARKETING IN INDIA(till October 2008)

Molecules Therapeutic Application

Hepatitis B vaccine Immunization against Hepatitis B

Granulocyte Colony Stimulating Factor Netropenia

Erythroprotein Anaemia

Interferon alpha 2B Leukemia, Hep – B, Hep – C

Epidermal Growth Factor (EGF) Organ morphogenesis, Mitogenesis

Streptokinase Dissolution of clot in acute mycordialinfarction

Human Insulin Diabetes

GM-CSF Chemotherapy induced neutropenia

Interferon alpha 2A Chronic myeloid leukemia

Human growth hormone Dwarfism in children

Nimotuzumab Breast cancer

Rituximab Non – Hodgkin’s lymphoma, arthritis

Tissue Plasminogen Activator Dissolution of clot in acute myocardialinfarction

Blood Factor VIII Hemophilia Type A

Follicle stimulating hormone Reproductive disorders

Teriparatide (Forteo) Parathyroid hormone for treatingosteoporosis

Drerecogin alpha Burns and severe sepsis

Platelet Derived Growth Factor Receptor antagonist in certain typesof cancer

Interleukin 2 Renal cell caricinoma

Blood Factor VII (Eptacogalpha) Control bleeding in Haemophilic patients

Iterferon gamma Chronic granulomatous disesse,osteopetrosis

Iterleukin 11 Thromobocytopenia

SOURCE: Indian GMO Research Information System

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Diagnostics

The diagnostics business accountsfor close to 17% of the totalBioPharma business in 2008-09.The diagnostics business grew ata compounded annual growth rate(CAGR) of around 14% during theperiod 2005-2009 - from Rs. 905crore in 2005-06 to Rs. 1340 crorein 2008-09. On a yearly basis, therevenue increased at 16.5%, fromRs.1150 crore in 2007-08. However,this increase has been lower ascompared to the growth in theprevious year, which was around21%. According to Netscribes, 60-70% of medical treatments in Indiaare based on laboratory diagnostictests. Diagnostics revenue marketincreased from Rs.2341 crore in2005-06 to touch Rs.3587 crore in2008-09.

With India becoming morehealth conscious and with increasein awareness of diseases such asAIDS, Hepatitis, etc., along with theGovernment’s efforts to promotecommunity health, such ascompulsory testing by blood banksfor AIDS, the potential of thediagnostic sub-segment is expectedto grow further in the days to come.It is also important to note that theincrease in per capita income in thecountry along with an increase in themiddle class population, Indians areseeking better medical facilities.Individuals today are not ready toforego medical treatment at the cost

of quality. Hospitals and diagnosticcentres across the country aretherefore concentrating on equippingthemselves with the best in classmedical and diagnostic services.

Companies that offer thesedevices are increasing theirinvestments and product portfolio inthe country. According to NationalInstitute of PharmaceuticalEducation and Research (NIPER),the level of R&D spending in themedical device and diagnosticsindustry as a percentage of sales hasbeen consistently increasing - from5.4% in 1990 to 8.4% in 1995, andfurther to 12.9% post-2000. NIPER,in January 2009, predicted themedical devices supplies market inIndia to grow at 23 % annually.

Today, there are many localcompanies that produce diagnostickits, reagents, and kits for bloodgrouping, serology, clinicalchemistry, pregnancy detection, HIVdetection and other rapid tests thatare accepted globally, and importsof such products by India in finishedform is almost negligible. While over50 companies are already doingbusiness in this segment, includingmultinationals, many large playersare still entering the Indian diagnosticmarket. The top firms haveconsolidated their market presenceand are growing between 15-20%.Some of the leading diagnosticcompanies are Tulip, TransAsiaBiomedical, Bayer, Span

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Diagnostics, Becon Diagnostics,Bharat Biotech, QualigensDiagnostics, J. Mitra & Co., andxCyton Diagnostics, among others.

BioServices

BioServices mainly include clinicalresearch and contract researchorganizations (CRO) and to someextent custom manufacturing17. TheBioServices sector, whichaccounted for about 17% to thetotal biotechnology industry’srevenues of Rs 12137 crore, hasrecorded a growth of 31% over theprevious year. The BioServicesrevenue for 2008-09 was estimatedat Rs 2062 crore. Exports dominatethe BioServices sector with almost95% of the total BioServicesrevenues in 2008-09. TheBioServices segment hascontributed, infact, to over 27% ofthe total exports from thebiotechnology industry.

The contract research spaceopened up in India after the countryentered into the new patent regime

since January 2005. The mainadvantage of India as a pre-clinicalwork and research destination lies inthe high quality of knowledge baseand low infrastructure cost.Companies looking for outsourcingwork to India are mainly small tomedium sized pharmaceutical andbiotechnology companies fromdeveloped countries. Withgenetically diverse population andwell-developed clinics and labs, Indiais also strategically placed to emergeas a front-runner destination foroutsourcing of clinical trials. Further,Indian companies, hospitals andclinics are endeavouring to complywith the guidelines of Good ClinicalPractices (GCP), thereby makingclinical trials a potential sector forinvestments .

According to a recent ATKearney global survey, India isranked third across all countries(after the USA and China) in termsof its overall attractiveness as aclinical trial destination. Also, McKinsey, in a study has predicted thatthe demand for trained

17 With India being a base for large number of plants approved by USFDA out side theUS and low manpower costs, the country is becoming an important destination formany leading pharma companies for both custom manufacturing and contractresearch. Custom manufacturing is now a growing area with slowdown in sales ofpatented drugs and drying of R&D pipelines. So MNCs are looking for alternativesto reduce the costs on R&D and manufacturing. Companies like Nicholas Piramal,Shasun Chemicals, Dishman Pharma, Dr Reddy’s Labs, Jubilant Organosys, GVKBiosciences, Suven Lifesciences, and Bharat Biotech are leading names in the custommanufacturing business. Similarly, Sun Pharmaceuticals and Torrent Pharmaceuticalsare into contract manufacturing of recombinant products for multinationals like EliLilly and Novo Nordisk, respectively. Chiron Behring Vaccines, a joint venture ofAventis, has been manufacturing Rabipur, anti-rabies vaccines for supplying to AventisPharma.

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professionals, including scientists,will reach upto 50,000 by 2013, fromthe current level of 10,000.

Of late, a new trend inBioServices sub-segment is beingobserved, where large companiesoutsource their clinicalmanufacturing facilities, whileretaining commercial manufacturingand control over cost of goods,quality and on supply. On the otherhand, it has also been observed thatsome specialized clinicalmanufacturing organizations preferto outsource the routine job ofcommercial manufacturing whichthey may no longer perceive as theircore competence area, as alsooutsource the core business ofresearch and development.

As the BioServices businessexpands, many firms engaged in thissub-segment are offering services inareas like data management, clinicaltrials, site management, bioequivalence and bioavailabilitystudies, toxicology studies, apartfrom catering to knowledge processoutsourcing for pharma industry.Infact, most of the Indian clinicalresearch organizations today are

actively involved in doingbioequivalence and bioavailabilitystudies with a handful of them intoclinical trials (Phase I-IV)18.

Quintiles Spectral,SiroClinpharm and Syngene are thethree key independent CROsoffering services in India in thebiotech field apart from others. Withclinical trials in India costing less thanone-tenth of the levels in developedmarkets, clinical researchorganizations in India could seekresearch and trial projects frominternational companies. However,they may need to demonstrate bestpractices and follow up proceduresprescribed to meet internationalstandards, especially the WHOprescribed Good Clinical Practices.

Bioagri Segment

Biotechnology has emerged as acritical instrument that seeks tomaintain India’s agriculturecompetitiveness and in achievingnutrition security in the face ofmajor challenges such as lowerproductivity of crops, livestock andfisheries; heavy production lossesdue to biotic (insects pests, weeds)

18 Phase I — Small-scale human trials to determine safety. Typically include 20 to 60patients and are six months to one year in length.Phase II — Preliminary trials on a drug’s safety/efficacy. Typically include 100 to500 patients and are one and a half to two years in length.Phase III — Large-scale controlled trials for efficacy/safety; also the last stage beforea request for approval for commercial distribution is made to the FDA. Typicallyinclude 1,000 to 7,500 patients and are three to five years in length.Phase IV — Follow-up trials after a drug is released to the public.

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and abiotic (salinity, drought,alkalinity) stresses; heavy post-harvest crop damage; and decliningavailability of water as anagricultural input. The spectrum ofbiotechnology application inagriculture is wide and includesdevelopment of improved variety ofcrops, animals, plants of agroforestry importance and microbes.The important sub-segment inBioAgri business is the hybridseeds business, followed byBioPesticides and BioFertilizers.

BioAgri contributed around 12%of the total market value ofBiotechnology in India, afterBioPharma and BioServices, in2008-09, with a total revenuegeneration of Rs. 1494 crore, ofwhich domestic revenuesconstituting around 96% of the total.The BioAgri segment revenueswitnessed the second highest growthrate after BioServices segment, withover 24% growth in 2008-09, overthe previous year.

India offers significant market forBioAgri segment given the fact thatIndia is largely an agrarian economy.The domestic market potential,combined with scientificinfrastructure in agriculture, rich bio-diversity and skilled human-power ispoised to make India an importantglobal base for BioAgri research. Thesurge in opportunity is expected toimprove agricultural productivityespecially at a time when there is adiminishing per capita arable landand water resources.

BioAgri also offers solutions forgrowing vegetables and fruits. As theuse of pesticide sprays and pesticideresidues remain a dauntingchallenge, especially in fruit andvegetable cultivation, extending theproven benefits of Bt from a fibrecrop to a food crop is the obviousnext step. R&D in food crop is alsoexpected to contribute to higher andmore stable yields apart fromenhanced nutrition. India, today, hascome a long way since its adoptionof Bt cotton in 2002. It is rankedfourth in the world among thecountries that are growing Bt crops,in terms of area under production.Reflecting on the importance and thepotential of this segment, researchon GoldenRice and mustard withincreased levels of beta-carotene isalso being undertaken. Thedevelopment of Bt brinjal (eggplant)is an appropriate and timely stepsince it is an important crop for small,resource-poor farmers, consumersand the Indian society at large.Research and field trials are alsobeing undertaken for other food andhorticultural crops, especiallyvegetables.

Some of the companies activein this segment include VibhaAgrotech, Rasi Seeds, Krishidhan,Pioneer, and DuPont. Some IndianMNCs present here include Mahyco,Bejo Sheetal, JK Agrigenetics,Krishidhan and Syngenta. MNCsfrom abroad operating in Indiainclude Monsanto and Bayer. Allthese firms are increasing their

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Table 11:Biotech Crops in Field Trial in India, 2008

CROP ORGANIZATION

Brinjal Indian Agricultural Research Institute, New Delhi Sungro Seeds Ltd. Mahyco, Jalna Tamil Nadu Agriculture University, Coimbatore University of Agricultural Sciences, Dharwad Bejo Sheetal, Jalna

Cabbage Numhems, Gurgaon Sungro Seeds Ltd., New Delhi

Castor Directorate of Oilseeds Research, Hyderabad

Cauliflower Sungro Seeds Ltd., New Delhi Numhems, Gurgaon

Corn Monsanto, Mumbai

Groundnut International Crops Research Institute for Semi-AridTropics, Hyderabad

Okra Mahyco, Mumbai Sungro Seeds Ltd., New Delhi Bejo Sheetal, Jalna Arya Seeds, Gurgaon

Potato Central Potato Research Institute, Shimla National Institute of Plant Genome Research,

New Delhi

Rice Indian Agricultural Research Institute, New Delhi Tamil Nadu Agriculture University, Coimbatore M.S. Swaminathan Research Foundation, Chennai Directorate of Rice Research, Hyderabad Mahyco, Mumbai Bayer CropScience, Hyderabad Avestagen, Bangalore

Tomato Indian Agricultural Research Institute, New Delhi Mahyco, Mumbai Avestagen, Bangalore

SOURCE: Indian GMO Research Information System (IGMORIS), 2008; Departmentof Biotechnology, ISAAA, 2008

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existing R&D and commercialisingtheir infrastructure base in differentparts of the country.

Hybrid Seeds

The Indian population has crossedthe 1 billion mark already, and bythe year 2010, it is expected totouch 1.2 billion. To provide foodand nutritional security for such alarge population, includingprotection against malnutrition, it isimportant that productivity levels areincreased through the use of rightquality seeds, which have thecapacity to produce more withlesser inputs. In this context, theseed industry has a critical role toplay in dissemination of latestagricultural technology to thefarmers, and by making availablegood quality seeds to them.Adoption of genetically modified(GM) crops would assure higherproductivity and nutritional security.Presently, GM plants are largely inuse for commercial agriculture andpredominantly linked with traits ofone or two transgenics19 thatmanifest resistance to salinity,alkalinity, drought resistance,herbicide tolerance, insecticideresistance or microbial diseases.

In India, research on transgenicplants has been in progress in

several Government and privatelaboratories. Monsanto’s ‘Bollgard’Bt-gene, introduced by Monsanto-Mahyco into the Indian cottonhybrids, by backcrossing with atransgenic line, was cleared forcommercial use in 2001, after sevenyears of trials at various levels. Fromabout 50,000 ha of production areain the year 2002, the Bt cottonacreage increased to 7.6 millionhectares in 2008, thereby registeringa CAGR of over 130% over 6 yearsin India. In 2008, 30 seed companieswere engaged in the production of274 Bt cotton hybrids in nine states20.

Majority of the increase inproduction is attributed to Bt cottonhybrids, which have generatedimpressive results. The usage ofbiotech crops has also contributedto the growth in farm income in India.According to the InternationalService for the Acquisition of Agri-Biotech Applications (ISAAA),farmers have benefited with anadditional Rs. 12,800 crore farmincome generated due to Bt cottontechnology during the period 2002-2007.

With the success of Bt Cotton,the Government has realised theenormous potential of suchtechnologies and has been keen to

19 Transgenic, a subset of GMOs, are organisms which have inserted DNA thatoriginated in a different species

20 Global status of commercialized biotech/GM crops - ISAAA Brief No. 39, InternationalService for the Acquisition of Agri-biotech Applications, Ithaca, New York, 2008

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put in place policies and regulations,which would promote responsiblecrop biotechnology. According toISAAA, public sector investments incrop biotechnology in India alone areestimated to be around US$ 1.5billion over the last 5 years (2004-2009). The private sector is slowlypicking up by establishing new state-of-the-art R&D infrastructure, biotechlabs, high-tech green house and fieldtesting facilities, seed conditioning,and processing and packagingplants. Further, many seedcompanies in the country areendeavouring to invest significantlyin crop biotechnology. Several ofthem already have capabilities toleverage Marker Assisted Selection21

technologies to augment their cropimprovement programmes. They arenow moving towards crop genetictransformation approaches, either by

building the capabilities in-house, orby striking partnerships with otherinstitutions.

Investment in agricultural relatedbiotechnology has resulted inenhanced R&D capability andinstitutional building over the years.By 2010, India has the potential tobecome a major grower of transgenicrice and several geneticallyengineered vegetables. In the areaof agribiotech research, institutes likeDelhi University, Indian AgriculturalResearch Institute (IARI), NationalCentre for Plant Genome Research(NCPGR) are playing a critical rolein pursuing studies in various areas.

Biopesticides and Biofertilisers

The biopesticides and biofertiliserssub-segments, though constitutinga modest proportion of the BioAgri

Table 12:AREA, PRODUCTION AND PRODUCTIVITY OF COTTON IN INDIA

(2002-08)

Year Area Production Productivity(lakh ha) (lakh bales; 1 bale=170 kg) (kg / ha)

2002-03 76.67 136 3022003-04 76.30 179 3992004-05 87.86 243 4702005-06 86.77 244 4782006-07 91.44 280 5212007-08 94.39 315 5672008-09 93.73 290 526

SOURCE: Cotton Advisory Board, Government of India, 2009

21 Marker-assisted selection is a tool for genetic improvement of crops, livestock, forestryand fish.

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segment, have been growing at ahealthy pace since the last fewyears. The Government of Indiahas initiated a number ofprogrammes to control majorweeds and pest diseases ofimportant crops, vegetables andplants to increase their productivitythrough various biocontrol agents.A number of universities andinstitutes have been working in thearea of biofertilisers. The Universityof Hyderabad, National ResearchCentre for Plant Biotechnology, IARI(Indian Agricultural ResearchInstitute), BARC (Bhabha AtomicResearch Centre) and TERI (TataEnergy Research Institute), alongwith New Delhi based InternationalCentre for Genetic Engineering andBiotechnology (ICGEB), areworking on various programmes inthis field.

India and the US have signed afive-year agreement in the area ofagribiotech research. The agreementsigned is tripartite in nature; while thenodal agencies will be the UnitedStates Agency for InternationalDevelopment (USAID), and theDepartment of Biotechnology (DBT),Government of India, the researchwill be pursued with support fromCornell University, USA. India hasalso signed a MoU with theNetherlands for cooperation inbiotechnology in the areas ofagriculture and health.

The agriculture sector in Indiahas been supported by public

research programmes in varietaldevelopment, yield improvement anddisease management. Further, Indiaalso has a large base of manpower,trained in agriculture sciences toprovide extension services. Severalinternational companies have set upresearch and development facilitiesin India for developing hybrid seedsand other biotechnology-basedactivities. Leading players inbiopesticides and biofertilisers areaare Biotech International, andMultiplex Biotech, among others.

BioIndustrial

The BioIndustry predominantlyconsists of enzyme manufacturingand marketing companies. Theseenzymes are used in industriessuch as detergents, textiles, food,leather, paper and pharmaceuticals.Although the use of enzymes is stillat a relatively low level, interest inthe benefits of using enzymaticsolutions in India is intensifying.

The BioIndustrial segment isestimated to have garneredrevenues to the tune of Rs. 478 crorein 2008-09, a growth of 16.6% overthe previous year. Almost 81% of therevenue in the year 2008-09 wasgenerated from the domestic marketalone; this sub segment constitutesaround 1% of the total biotechnologyexports from the country in 2008-09.

Beer and brew industry finds alarge potential for use of enzymesfor improving their quality, yields and

99

process efficiency. The Government,on its part, has been encouraging theestablishment of wine parks, whichwould facilitate the processing ofgrapes for value addition. IndianBioIndustrial companies producevarious enzymes, which includeamylases, proteases, cellulases,xylanases, glucoamylases,pectinases, papains, bromelain andcatalases among others, with around45% of total enzyme productioncatering to the pharmaceuticalindustry. It is worth noting that theproduct range and services offeredby the firms in this sub-segment aregrowing rapidly as the use ofenzymes is gaining widespreadacceptance. Firms today areincreasingly looking at producingvarious types of industrial enzymesusing natural methods of production,from plants and vegetable origin andfermentation.

Several domestic enzymemanufacturers are building newfacilities. Apart from India-basedAdvancedEnzymes, Rossari Biotechand Zytex, Denmark basedNovozyme, are among the topcompanies in this segment in India.Other global players having a director indirect presence in the countryare Genencor International, EnzymeDevelopment Corp., DyadicInternational, and QuestInternational.

Opportunities exist in themanufacturing of industrial enzymesfor export purposes. The

Government of India has also beensupporting this industry by fundingmany projects related to industrialenzymes, thus helping the industryto grow and compete with globalplayers.

BioInformatics

BioInformatics is a scientificdiscipline that encompasses allaspects of biological informationacquisition, processing, storage,distribution, analysis andinterpretation. BioInformaticsbridges many disciplines andamalgamates disciplines likeBiology, Chemistry, Mathematics,Statistics and InformationTechnology so as to understand lifeand its processes.

The share of BioInformatics intotal Biotechnology industry is around1.8% in 2008-09. This sub segmentmade a modest progress, increasingfrom Rs. 190 crore in 2007-08 to Rs.220 crore in 2008-09, therebygrowing by 15.7%. The industry hasbeen found to be more exportoriented with almost 77% of the totalrevenues coming from offshoremarkets in the year 2008-09.

With the IT sector eyeing fordiversification of softwareapplications, BioInformatics posesas potential area for IT application.BioInformatics uses computersoftware tools for database creation,data management, datawarehousing, data mining, and

100

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102

global communication network. Themajor goal of BioInformatics is toobtain the complete sequences of asmany different genomes as possible.By having the sequence information,companies and researchorganizations initiates what iscommonly referred to as “sequencebased biology”. The sequenceinformation is then taken, and usedto give scientists more direction asto how they should designexperiments, and how thesescientists should analyze theexperiments. Functional genomics,biomolecular structure, cellmetabolism, biodiversity,downstream processing in chemicalengineering, drug design, vaccinedesign are some of the areas whereBioInformatics forms an integralcomponent.

Many Indian entrepreneurs haveset up companies to take advantageof the emerging opportunities in theBioInformatics segment. TheGovernment on its part has alsoinitiated a number of programs tofacilitate the growth of thisspecialized segment. The BTISnet(Biotechnology Information SystemNetwork) program of Department ofBiotechnology, Government of Indiahas taken various initiatives toprovide a national bioinformationnetwork designed to bridge the inter

disciplinary gaps on biotechnologyinformation and establish link amongscientists in organisations involvedin R&D and manufacturing activitiesin the country. The network haspresently grown to over sixty centrescovering major parts of the country.

The international client base forIndian BioInformatics companies hasexpanded rapidly. These entitiesinclude the National Institute ofHealth (NIH), University of Mexico;National Institute for Cellular Biology,Dublin; National Research Council,Sequencing Center at Halifax; andDavid Eisenberg’s Research Lab atDOE Institute for Genomics andProteomics, UCLA22; among others.Apart from domestic financialinstitutions, multilateral institutionslike International FinanceCorporation (IFC) have also beeninvesting in the biotech spectrum.For example, IFC has invested US$6.5 million of equity for a minoritystake and debt in Hyderabad based,Ocimum Biosolutions in 2006.Earlier, in May 2005, IFC hadinvested US$ 4 million equity toAPIDC Biotechnology Fund 23 witha focus on early stage life-sciencesbusinesses.

The Indian firms have beenstrategically devising tools so as tocater to the world requirements.

22 University of California, Los Angeles23 APIDC Biotechnology Fund is the first fund in India focusing on early stage, novel

IP-driven firms that have a strong presence in the domestic market.

103

Some of the firms based in Indiasuch as Strand Life Sciences,Molecular Connections, Mascon LifeSciences, and Helix have createdindigenous tools for variouscomponents across the drugdiscovery value chain that are beingused all over the world. Strand LifeSciences has devised a softwareprogram called ‘Avadis’ for which ithas received awards fromorganizations like Red Herring, Frost& Sullivan and World EconomicForum. “Avadis” is an integrateddecision analytics program that dealswith data mining and analytics needsof the various life sciences sector.

The pure-play BioInformaticscompanies in India include StrandGenomics, Ocmium Biosolutions,SysArris, SciNova India,CytoGenomics, Mascon andMolecular Connections. These firmshave come out with products cateringmainly to the needs of pharma andbiotechnology companies abroad.Strand Life Sciences has also tiedup with London based Pharmidex tocreate software to predict the abilityof molecules to cross physicalbarriers in the central nervoussystem. TCS has also signed a multibillion dollar contract with US basedSequenom24, to develop softwaresolutions.

Another emerging area is DNAchips market that is currently being

used in the diagnosis of diseasessuch as eye infection, meningitis andmeningoencephalitis, etc. whichhelps to detect the presence of thenucleic acid of the causativeorganism. Because of the extensiveresearch being done in India, thedemand for DNA chips have alsobeen increasing. Some of the firmsinvolved in DNA chips are AgilentTechnologies, Affymetrix, andOcimum Biosolutions.

EMERGING NICHE AREAS INBIOTECHNOLOGY

BioSimilars

The expiry of patent protection andregulatory data protection forcertain biotechnological medicineshas led to the development ofmedicines what are calledbiosimilars. Biosimilars attempt tocopy the process, which leads tothe production of the originalinnovative biotechnologicalmedicine. The term ‘biosimilars’ isin use in the European Union, butin the US the term ‘follow-onbiologics’ is much popular. In Indiahowever the terminology ‘biosimilar’is prevalent.

As regulatory obstacles todevelopment of biosimilars isincreasingly being resolved, agrowing number of opportunities are

24 SEQUENOM is committed to providing the best genetic analysis products that translate genomicscience into superior solutions for biomedical research, agricultural applications, molecularmedicine and non-invasive prenatal diagnostics research, and potentially, clinical utility.

104

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being created for generic companiesin the BioPharmaceutical market.According to IMS data, the worldBioPharmaceutical market wasvalued at US$ 85.9 billion in 2007.ABLE (Association of BiotechnologyLed Enterprises), put the sales ofBioPharmaceutical productsexceeding US$ 135 billion by 2011.With some of the earliestBioPharmaceutical products havingalready lost patent protection, theoriginators of BioPharmaceuticalproducts are facing intensecompetition from genericsdevelopers. In response, originatorsare resorting to a range of defensivetactics, including the reformulation ofexisting products to improve efficacy,the implementation of more efficientdelivery systems, and the pursuit ofhigh-level intellectual property (IP)battles.

The US, one of the largestbiosimilar markets in the world,recently introduced the WaxmanBiosimilars Bill in March 2009, whichprovides the approval of biosimilarproducts that are defined as “noclinically meaningful differencesbetween the biological product andthe reference product”, as well as“interchangeable” biosimilars,defined as a product that can be“switched one or more times” with thereference product “without anexpected increase in the risk ofadverse events”. The Bill alsoprovides incentives for brandcompanies to develop new therapies.

Specifically, similar to the currentstructure for approved drugs, the billwould provide five years of exclusivityfor a novel molecular structure beforeany biosimilar could be approved.The Bill also provides three-yearexclusivity for certain modificationsof a previously approved product(such as a new condition of use) anda six-month paediatric exclusivityperiod. Waxman’s Bill also providesfirst biosimilar applicants with at leastsix-month exclusivity period if aninterchangeable biosimilar product isapproved.

The Bill, if converted into an Act,will provide immense opportunitiesfor Indian firms, especially those thathave already ventured into theBiosimilars space and have filedAbbreviated New Drug Applications(ANDAs) in the US. With a fewplayers in the Biosimilars space, thecompetition is expected to becomparatively low and thereby actsas a great boost for biosimilar playersin the market.

According to Datamonitor, theIndian biosimilars market will growto more than US$ 2 billion by 2014as patent of key products, such asepoetin alpha, filgrastim, interferonbeta 1a, interferon alpha, humangrowth hormone (hGH), and insulin-glargine are expected to expire bythen. While many of these drugsrepresent the low-hanging fruit of thebiologics world and are unlikely toprovide the monetary gains of more

106

complex drugs, they do offermanufacturers the opportunity toposition themselves within thebiosimilars sector in anticipation ofmore lucrative targets.

India has a strong presence offirms engaged in the biosimilarspace. For example, Reliance LifeSciences launched three biosimilars- ReliPoietin [Erythropoietin (EPO)],ReliGrast [Granulocyte colonystimulating factor (GCSF)], andReliFeron (Interferon Alpha 2b) in thedomestic market in 2008. RelianceLife Sciences is currently working ona range of biosimilars, which are atdifferent stages of development viz.clinical trials, pre-clinical studies,process development and molecularbiology. They are also concurrentlyconducting clinical trials for twobiosimilars - EPO and GCSF - inEurope. Further, Reliance LifeSciences has built significantmanufacturing capacity forBioPharmaceuticals and all thesefacilities are compliant with USFDAand EMEA standards. Currently, theglobal biosimilars market is highlyfragmented with major players, suchas Biocon, Dr. Reddy’s Lab, Intas,LG LifeSciences, Ranbaxy, RelianceLifeSciences, Sandoz, Teva, andWockhardt, engaged in diverseproducts. However, with thecomplexity of the biosimilar businessand the technological and intellectualchallenges that companies may face,competition is not expected to besignificant.

Nanotechnology

Nanotechnology is consideredwidely as the most promisingtechnology of the 21st century. Theconcept of nanotechnology evolvedin 1959, when US based NobelLaureate Richard P Feynmansuggested, in his book, titled “Thereis Plenty of Room at the Bottom”,that manufacturing in thesubmicrometer scale would bepossible. Though he never used theword ‘nanotechnology’, theconcepts he propounded were latercoined into a new word‘nanotechnolgy’.

Recent years, in fact, have seena convergence of nanotechnologyand biotechnology. The convergenceof nanotechnology andbiotechnology opens the possibilityfor a wide variety of biologicalresearch topics and medical uses atthe molecular and cellular level. Theapplication of nanotechnology inbiotechnology provides informationwith unprecedented precision andsensitivity. It leads to thedevelopment of new revolutionarymodalities of bi-molecularmanufacturing, early diagnostics,medical treatment, and diseaseprevention, beyond the cellular levelto that of DNA and individual proteins- the building blocks of the lifeprocess.

Infact, this convergence hasbrought outcomes in research wherenew kinds of drug delivery systems

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can pervade the blood stream, targetcontaminated cells, and even deliverthe desired medication inprogrammable quantities at desiredintervals. Artificial replacements andplacebos at the nanoscale have beenother major developments. Rapidadvancements in biotechnology andinformation technology have furtherboosted medical diagnostics,biomedical research, genomics,genetic testing and new drugdiscovery. Nanotechnology has ledto major developments in health andmedicine. The long-term goal of thisconvergence is to contribute to theoverall human development andimprovise on fictional revolutionaryconcepts to reality.

From an Indian context,nanotechnology is at a very nascentstage; but given the potential of thesector, it is expected to grow at arobust pace in the coming years. Infact, nanotechnology has thepotential to revolutionize the Indianagriculture scenario. It is alsopredicted that nanotechnology willtransform the entire food industry,changing the way food is produced,processed, packaged, transported,and consumed.

Several Indian firms andresearch institutes are working onnanotechnology products for drugdelivery, water filters, arsenicremoval, reducing water and airpollution, antimicrobial coatings andriver cleaning projects. TheGovernment on its part is proactively

promoting various programs undernanotechnology initiative. A ‘VisionGroup’ has been formed withmembers from academia, industryand research, to develop a nationalnanotechnology policy. Governmentof India has announced aninvestment of Rs 1,000 crore througha mission on nanotechnology from2006 to 2011.The Government hasannounced a US$ 250 millionprogram to build three nationalinstitutes for nanoscience as well.

Stem Cell Research

Stem cell research is being toutedas the next wave of biotechnologynot only in India but also across theworld, which could potentiallyrevolutionize treatment of diseasesin the next couple of decades.Stem cells are ‘master’ cells thathave been found to possess thepotential to repair tissues or groworgans. Their sources vary. Whileembryonic stem cells can replicateany cell type without exception,those from other sources such asbone marrow or blood cord, theadult stem cells, though restrictedin their differentiation capacity, aremultipotent.

According to a study by Frost &Sullivan, the global market for stemcell therapy is expected to be aroundUS$ 20 billion by 2010. There arearound 180 prominent companiesworking on stem cell research in theworld, majority of which are basedin the US, followed by the EU, Israel,

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Thailand, Canada, and Australia. TheStem Cell Research Forum India(SCRFI) has predicted India to havea market size of about US$ 540million by 2010, with an annualgrowth rate of 15%.

The potential of stem celltechnology to develop therapy formany untreatable diseases throughcellular replacement or tissueengineering is being widelyrecognized. Therapies using stemcells are giving hope to millions ofpatients afflicted with chronicdiseases. Globally, stem cells areused to treat over 130 diseases andit is estimated that more than 500

clinical trials are being done todevelop therapies using stem cells.

Indian companies are becomingan important part of this revolution,helping to treat patients withdiseases ranging from eye problemsto heart disorders. The Governmentof India has supported more than 55programmes on various aspects ofstem cell research. These includegeneration of human embryonicstem cell lines, differentiation ofpancreatic progenitor cells to insulinsecreting cells, isolation of multipotential adult progenitor cells frombone marrow and their clonalexpansion, use of banana lectins for

Box 8:INDIA’S FIRST NANOTECH PARK

Nanobiosym Inc, a globally recognized nanotechnology firm is setting up India’sfirst Nanotech park, The Nanobiosym Technology Park (NTP), in Ahmedabad underpublic-private partnership involving the state Government. The 500 acre nanotechpark will include: a Nanobiosym incubator for research and development, amanufacturing engine, a global health village, a global business center, an institutefor education and human resource development, and green living space.

The Nanobiosym Technology Park aims to be an innovation epicenter thatwill bring together top talent from around the globe for cutting edge research,learning and incubation, and commercialization of new nano-enabled technologiesand products.

The innovative public-private partnership between Nanobiosym and theGovernment of Gujarat would maximize the benefits of the park for both the stateand the country. The park will bring the latest medical developments including theGeneRADAR, to improve the state’s healthcare infrastructure and attract world-class talent to stimulate world class development.

Nanobiosym is also forming a global consortium comprising of best of breedpartners from a variety of sectors like R&D, education, healthcare, infrastructuredevelopment, finance and banking, knowledge partners, multinationals and small/medium enterprises. The park is expected to act as a global powerhouse with afocus on hi-tech innovation and entrepreneurship.

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stem cell preservation,hematopoietic stem cells (HSC) forhaplo-identical HSC transplantation,use of limbal stem cells for ocularsurface disorders, isolation andcharacterization of mesenchymaland liver stem cells, in-vitrodifferentiation of human embryonicstem cells to neural and non-neurallineages, cardiac stem cells,embryonic stem cells etc.

In March 2009, Bangalore-based Stempeutics Researchreceived clearance from the DrugController General of India to

conduct human clinical trials todevelop drugs using stem cells. Withthis, India became the firstdeveloping country, after the US, toallow human clinical trials to developdrugs by using dormant cells in thebody that have natural regenerationcapabilities. Once injected into apatient, the stem cells can becontrolled with a simple magnet todirect them to the damaged area andcure it.

Reliance Life Sciences, thepioneer in stem cell-based researchin India on a commercial scale, has

Box 9:UMBILICAL CORD BLOOD BANKING

The emergence of umbilical cord blood banking has created more than adozen companies globally in a span of 2-3 years. Cord-blood cell transplants arebecoming common as a therapy for diseases of the blood as scientists are findingthat stem cells from umbilical cord blood may be able to grow into other kinds ofcells as well.

Storage of the stem cells derived from umbilical cord blood means one canpreserve and use genetically matched stem cells on hand, in case the child orsomeone else in the family suffers from a treatable blood disorder or needs abone marrow transplant. There is a 25% genetic match between the siblings andparents, which proves to be the most alluring prospect for expectant couples tobank their child’s cord blood (thus ultimately their stem cells). The use of thesestem cells more or less ensures absence of graft versus host reaction, which is ahuge drawback in cases of organ transplantation.

Such advances are casting cord blood, previously regarded as medical wasteafter childbirth, in a new light. Today doctors use cord blood cells to treat about 70diseases, mostly anemias or cancers of the blood, such as leukemias andlymphomas. Yet another area of future research concerns the delivery of stemcells to the tissues in which they are needed. Current practice involves either theinjection of stem cells directly into the targeted tissue, or injection of the stem cellsinto the bloodstream without any guarantee that they will actually find their way tothe appropriate tissues. Targeted delivery would ensure that the therapeutic stemcells are introduced to the organs and tissues that need them, where they needthem.

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already commercialised twoproducts. In 2008, the companylaunched ReliNethra, a first-of-its-kind treatment in India for cornealblindness. Recently, the companylaunched ReliHeal-G, which quicklyheals wounds. The company hascompleted clinical trials for treatmentfor heart attack using stem cells fromthe bone marrow of the patient. It iscarrying out clinical trials forapplication of stem cell-basedtherapies for skin disorder, stablevitiligo, non-healing diabetic ulcers,Parkinson’s disease, and spinal cordinjury.

Apart from this, India’s largeststem cell banking company, LifeCell,and the US-based HarvestTechnologies, which manufacturesdevices for stem cell harvesting, aredeveloping a unique treatment forheart attack in association withcardiologist Dr. Naresh Tehran inNew Delhi, and Dr. RamachandraMedical College, Chennai.Parkinson’s patients in the countrywould be able to avail stem celltherapy services for treatment as theMumbai-based Jaslok Hospital andReliance Life Sciences are working

together to explore using thepatient’s own stem cells for curingthe disease.

A ‘Draft Guidelines for Stem CellResearch’ on regulatory aspects ofstem cell research and itsapplications, prepared by the IndianCouncil of Medical Research (ICMR)is on the anvil. The guidelines for thestem cell research have beenfinalized and have been submittedto the Ministry of Health and FamilyWelfare, Government of India. ANational Apex Committee for StemCell Therapy (NAC-SCRT) is beingconstituted jointly by the DBT andICMR as per these guidelines.

The new initiative by the USadministration in 2009 frees uphundreds of stem cell lines aroundthe world for US funding which wasfrozen in 2001. This effort is expectedto expand collaborations with Indianresearchers, who have over the pastdecade, under fewer restrictions,carried forward with their ownresearch. Given these instances, itis quite but natural that stem cellresearch in a country like India ispoised to bring about a sea changein healthcare.

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CHALLENGES

Skill Development

Industry sources have mentionedthat despite a mushroomingeducational institutions offering arange of courses in biotechnology,gap between the needs of theindustry and skills taught at theseinstitutions still remain, though thegap is being narrowed down. It hasalso been mentioned that most ofthese institutions have limited abilityto provide the right pedagogy, orthe requisite infrastructure. Thechallenge of bridging the gapbetween the needs of the industryand the curricula taught at variousinstitutions should be collectivelyaddressed by the Government,industry and academia.

Government HealthExpenditure

Most Governments in developingcountries usually financeprogrammes that support childimmunization against diseases likemeasles and diphtheria, pertussis

(whopping cough) and tetanus(DPT), as part of the basic publichealth package. Though India toohas such immunization programme,because of a relatively highbirthrate and population, the shareof Government health budget intotal healthcare expenditure isrelatively low (at 25%), accordingto the World DevelopmentIndicators – 2009. In comparison,other developing countries likeBrazil (47.9%), Russia (63.2%),China (40.7%) and South Africa(37.7%) portrays a bettermanagement of Governmenthealthcare system. It may also benoted that as a percentage of theGDP, the total health expenditure25

in India is around 3.6%, far belowthan that of other emergingeconomies.

Basic Education & HealthSystem

Amongst the most critical buildingblocks for biotechnologydevelopment and its success, agood education and health system is

5. CHALLENGES & STRATEGIES

25 Total health expenditure is the sum of public and private health expenditure. It coversthe provision of health services (preventive and curative), family planning and nutritionactivities, and emergency aid for health, but excludes provision of water and sanitation

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a must. India fares low in terms ofboth these measures as reflectedby the UN Human DevelopmentIndex – an index measuring theaccomplishments made by acountry in life expectancy,educational attainment, andstandard of living. India’s ranking is132 out of a total of 153 countries,and also one of the lowest ascompared to other competingcountries in this sector.

Funding

The inherent characteristics of thebiotechnology make the industry ahigh investment one with a longgestation period. Thus, funding

plays a key role in ensuring theconcept to develop into a product.Global financial crisis has affectedthe funding prospects of biotechcompanies, as risk aversionincreased among the venturecapitalists, angel investors, as alsofinancing institutions. These havebeen further exacerbated by theslow activity in the IPO market dueto an anemic stock market.According to the BiotechnologyIndustry Organization (BIO),prospects for biotech IPOs arelikely to remain dim in the year2009, on the heels of a very weakbase (the year 2008), raising US$116 million, as compared to raisingUS$ 2.3 billion in 200726.

Exhibit 24:UN HUMAN DEVELOPMENT INDEX RANK BY SELECT COUNTRIES

SOURCE: UN Human Development Report 2008, Exim Bank Research

26 Beyond Borders – Global Biotechnology Report 2009

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Ethical Issues in GeneticResearch

Biotechnology has been confrontingthe world with some ethical issues,which have raised numerouschallenges with no definitesolutions. Genetic research and itsapplications like geneticengineering, manipulation, testing,therapy, eugenics, selectiveabortion, GMOs, stem cellresearch, and cloning, openedsignificant ethical and consumerissues, including the potential risksthat may be adversely impactingthe environment. The issue ofgenetically modified food appearsto be of a particular concern. Achallenge for the Indianbiotechnology industry will be towork and liaise widely with thecommunity and earn its confidenceand investors. Awareness may begenerated among the consumersthrough provision of detailedinformation, ranging from the basicsof gene technology to details of theregulatory processes.

Concentration of IPRs

Intellectual property rights (IPRs)are intended to promote researchand development by allowingresearchers to generate revenue tomeet the development costs.However, there are concerns thatthe current level of biotechnologyIPRs are concentrated mainly at thehands of private sector. It isreported that, globally, few

companies are responsible for thevast majority of agri-biotechresearch. These companies havefocused on crops and traits (suchas herbicide resistance) that arehaving commercial significance,and thus, may not be willing totransfer to others. Globally, Mergers& Acquisitions (M&A) trendsamong biotechnology companieshave also been on similar lines,encouraging the concentration ofIPRs, which may affect the abilityof developing countries, like India,to negotiate for access toproprietary technologies at areasonable price. This challengestems largely from patents thatconfer broad rights over GMOs andplant varieties.

Biosecurity

Biosecurity is another challengewith growing debate anddiscussions among the academicand policy spheres, withbioterrorism, biosafety, andemergence and re-emergence ofinfectious diseases as concerns tothe society as a whole. Anotherchallenge faced by biotech industryis the proliferation of bioweaponswhich can create havoc to humancivilization. The threats associatedwith misuse of biotechnology affectthe growth prospects of thisindustry, which otherwise presentpotential benefits for globalpriorities, such as health, food andenvironment.

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Bio-hacking

Biohackers are a group ofenthusiasts who are involved inworking with cells and geneswithout any sound knowledge andlack of proper infrastructure. Withthe fall in the cost of equipmentsthat are capable of manipulatingDNA, the threat of growing numberof biohackers is significant. Thework raises fears that people couldcreate a deadly microbe onpurpose, just as computer hackershave unleashed crippling viruses orhacking into various websites. Sucha scenario may lead to “bio-spam,bio-spyware, bio-adware” and otherbio-nuisances. An unrestrictedbiohackery scenario could put thehealth of the biohackers, thecommunity around them, and theenvironment, under unprecedentedrisk.

Patenting of Micro-organisms

Another associated challenge to thebiotech industry is patenting ofmicro-organisms and associatedbiosafety requirements, as strictbiosafety norms have to befollowed while handling micro-organisms. The regulations foraccessing strains from a depositoryhave to be carefully worked out toensure that these do not land intowrong and/ or technicallyincompetent hands. India too needsto bring in a patent law forprotecting micro-organisms andrules for accessing strains from a

depository. In this context, theDepartment of Biotechnology,Government of India, has proposedto build an internationallyrecognized depository in thecountry. It is hoped that followingthe establishment of the depository,a law in this regard would beforthcoming. In this respect, lawsof other countries could also bereferred.

STRATEGIES

Public-Private Partnerships

Public-Private Partnership may beencouraged and supported in areasthat are vital to the nationaldevelopment, from a scientific,economic or social perspective, andfocused on technology and productdevelopment. Establishing a strongindustry academia linkage throughcollaboration would also bringmultifold benefits to the biotechindustry. India has a wide networkof universities, departments andspecialized institutes that havebeen promoted by variousauthorities (Department ofBiotechnology, Department ofScience & Technology, Council ofScientific and Industrial Research,Indian Council for MedicalResearch, Indian Council ofAgricultural Research, etc.)providing numerous specialisedscience degrees at the Masters’level. These institutions also providean effective network of research

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laboratories. Efforts should bemade to bring in a seamlesstransfer of knowledge and peopleamong these universities, institutes,and corporate for a bettercoordination among themselves,and to share their research-basedinformation on a continuous basis.The company could havepreferential access to theintellectual property generated insuch jointly funded projects.Another alternative could beencouraging public-fundedsuccessful R&D institutions toestablish not for profit companiesto facilitate collaborative work withindustry. In these facilities,researchers could pursue innovativeprojects for defined periods on usercharge basis, providing access tocentralized equipments andscientific consultation. There shouldbe an industry-academiaarrangement wherein the industrycould have an active participationwhen it comes to planningcurriculum and methods ofevaluation. Private firms may alsoshare the responsibility to promoteacademic excellence by creatingChairs in Universities and furtherstrengthen the industry – academiarelationship.

Need for enhancing VentureCapital funding in India

One of the biggest challenges forthe Indian biotech industry isattracting investment through

venture capital mode. With thecorporate sector being risk averseto investing in biotechnologyprojects, especially in theirgestation and early phases, theneed of VC funding becomescritical for the growth of the biotechindustry in India. Venture capitalturns typically source majority oftheir funding from large investmentinstitutions such as pension fundsand financial institutions, who liketo invest long term only withassurance of high returns. Thus,venture capitalists make carefulinvestment decisions, which leadsto high risk aversion rates. Instead,India may consider promotingventure capital investment on thelines of Russian model. Russia hasbeen boosting venture capitalsector from scratch, by seedingfunds with Government support,through the Russian VentureCompany (RVC). Israel has alsoadopted similar approach of state-backed venture capital model toboost the investments in knowledgebased industry.

Strategy to Move to a HigherValue Chain

Indian biotechnology industry, overthe years, has developed a numberof biotech products, but has beenfound to perform tremendously wellin the vaccine segment. Theplayers in this industry as well asthe research institutions shouldincreasingly focus upon moving up

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the value chain by enhancingstrengths in new products andapplications, and by offering R&Dsolutions in drug discovery andvalidation based on genomics,proteomics, pathway analysis(determining how toxic orradioactive substances reachhumans), and clinical trials onhumans. Drug discovery andinnovations in drug delivery,especially in areas like diabetes,cancer, and inflammatory ailmentscould take the industry into greaterheights. Indian biotech industryshould also look forward to movingup the value chain in terms ofgeographies so that India is presentin more premium markets.

Enhancing BiotechApplications

Modern research finds applicationof biotechnology in variousindustries, and thereby add valueto the products and processes ofsuch industries, includingagriculture, forestry, marine,environmental management, pestmanagement, and management ofhuman and animal healthcare. Tocapitalize on the potential benefitsand to ensure internationalcompetitiveness, it is important topromote speedy and widespreaddiffusion of biotechnology to thebroader industrial community, whilemaintaining responsible andsustainable use. Industry initiativesand entrepreneurship commitments

are particularly essential in thisregard. The Government maypromote research-industry linkagesand facilitate market informationincluding technological andcommercial trends andopportunities. Integration ofbiotechnology with variousmanufacturing sectors could alsobe encouraged through bettersynergy and coordination ofactivities among variousdepartments / institutions, with theDepartment of Biotechnology,Government of India, serving asfocal point.

Lucrative Domestic Market

The domestic biotech market isexpected to post robust growth withrising income levels, improvingliving standards, growing medicalinfrastructure, increasing healthinsurance penetration, enablingregulatory framework andinstitutional infrastructure, and thegrowing number of organizedpharma-retail chains. For example,in a country like India (which isoften referred to as the diabeticcapital of the world), it is certain tofind a market for products likeinsulin. With more and more peopleleading a sedentary lifestyle, theremay be opportunities for the Indianbiotech industry to innovateproducts that cater to the demandfor controlling such chronicdiseases.

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Biotech Skill Development

Biotechnology industry is highlyR&D intensive. In order to remainglobally competitive, the industryrequires a pool of highly skilledmanpower. India has already madeits mark in scientific research in theworld, with a large pool of scientificmanpower. The education systemin India, with its wide network ofuniversities providing qualityscience education, has helpedimmensely in this regard. However,with the changing composition ofeconomic growth there is anemerging trend of students notpreferring science stream for careeropportunities. This may lead toshortage of qualified manpower inhighly research oriented activitiessuch as biotechnology. Thus, it isimportant to devise policies thatwould attract more students to thescience stream. Many countriesgive both financial and fiscalincentives in the form of grants andpreferential loans, to encouragestudents to opt for science streams.

Reversing Brain Drain

Shortage of manpower due toBrain-Drain is another challengefaced by the Indian biotech industry.The expected shortage of scientists /skilled professionals in OECDcountries may enhance the Brain-Drain from India in the comingyears, unless suitable policymeasures are taken to reverse thetrend. There is an urgent need to

expand the current researchprogrammes with attractivecompensation package in order toattract world-class talent. In thiscontext, it may mentioned thatGovernment has initiated aprogramme ‘RamalingaswamyFellowship’, aimed at bringing backscientists of Indian origin workingabroad in various fields ofbiotechnology, and who aredesirous of pursuing R&D in Indianinstitutions. It may be mentionedthat China Academy of Sciences(CAS) has establishedprogrammes, such as SpeciallyHired Foreign Research Fellows,and Young Foreign ScientistProject, through which the countrywould arrract over 600 Chinesescientists working abroad, annually;each returning scientist wouldreceive funding of aroundUS$300,000 per annum. Corporateentities too may get involved byproviding adequate exposure to thebudding talents through training andplacements. This would alsoprovide the Indian biotechnologyindustry a tremendous competitivemanpower advantage over itscompetitors.

Symbiotic Relationshipbetween Pharma and BiotechSectors

Use of organisms for theimprovement of medical processes(red-biotechnology) constitutes oneof the major business segment of

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the biotechnology industry. Thisprovides significant opportunities forpharmaceutical firms also. Ingeneral, biotech firms wouldconcentrate their business modelsin covering a part of the productdevelopment value chain. Biotechfirms are often not much engagedin entire product development valuechain due to shortage of fundsand necessary know-how.Pharmaceutical firms couldcomplement the biotech firmsthrough their knowledgeand financial power. Also,pharmaceutical firms, which requirecontinuous innovation, could benefitcooperating with biotech firms whoprovide new product concepts andinnovative technologies.

Such a trend is increasinglyrelevant for collaboration betweencash-rich pharma firms and cash-dried biotech firms to sustainthemselves with a win-win strategy.This is amply corroborated by the

data compiled by Deloitte, whichindicates that the number of dealsbetween pharma and biotech firmsincreased from 20 in 2000 to 64 in2008. Infact, the median value ofdeals between pharma and biotechfirms rose from US$ 80 million in2000 to US$ 400 million in 2008. Thissubstantial growth also reflectsgreater maturity and perceived worthof target biotech companies and theirpipelines.

Strengthening North-SouthCollaborations

Many Indian firms use servicescontracts with foreign firms to fundtheir operations, developcommercialization capabilities andaccess valuable internationaltechnology and expertise. Servicesprovided include R&D, clinical trialsand manufacturing. Bharat BiotechInternational, for example, is one ofthe first developing country firms tomanufacture a foreign proprietary

Box 10:RAMALINGASWAMI FELLOWSHIP - AN INITIATIVE FOR REVERSING

BRAIN DRAIN

Ramalingaswami Fellowship supports distinguished non-resident scientistsof Indian origin who wish to return to India and pursue research of high calibre inLife/ Agricultural Sciences, Biotechnology, Bio-engineering, Translational HealthScience, etc. The initial duration of the fellowship is 5 years which is extendablefor another 5 years in exceptional cases. The awardee (s) get a consolidatedfellowship amount of Rs 50,000 per month for the first three years and Rs 60,000per month for the next two years along with an annual contingency grant of Rs. 5lakhs. Ramalingaswami fellows have the freedom to work in any of the scientificinstitutions/universities in the country and also continue to be eligible for regularresearch grants through extramural/other schemes of various S&T agencies ofthe Government of India.

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vaccine product, which iscontracted by the U.S. company,Wyeth, to produce its HaemophilisB (Hib) vaccine. Multinationalcorporations are increasinglyconducting clinical trials in India andrely on Indian contract researchorganizations to manage thesetrials. It will be vital for the Indianbiotech firms to expand theircapabilities in clinical trialmanagement, and pay closeattention, not only to good clinicalpractice (GCP) guidelines, but alsoto bioethical principles, to providea high level of care and protect therights of patients. This will not onlymake the Indian contract researchfirms to achieve global standards,but will also help to bring in moreforeign exchange earnings, throughenhanced exports of services.

Encouragement to InnovativeFunding Models

Encouraging innovative fundingmodels in the biotech industry isessential given the financialconstraints of this industry, Forexample, pharma / biotech firmsmay set up Special PurposeVehicles (SPVs) which shall becontracted by the parent firms forproduct development work in areassuch as specialty generics, topicals,steroids, hormones, andbiopharmaceuticals, which mayhave high initial productdevelopment costs, and which arenon-infringing process, based onregulatory compliances. Suchfunding models may not stretch thebalance sheets of the parentcompanies, nor equity dilution. An

Exhibit 25:TRENDS IN PHARMA-BIOTECH M&A DEALS

SOURCE: Deloitte, Exim Bank Research

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Box 11:EXIM BANK’S SUPPORT TO RESEARCH & DEVELOPMENT

Exim Bank has been closely associated with the promotion of R&D in thepharmaceutical / biotech sectors in India. The Bank has been providing integratedfinancing for R&D activities of the pharmaceutical and bio-pharmaceuticalcompanies. The financing is in the form of either term loan / equity participation orhybrid product, and would facilitate R&D expenditure and approvals in regulatedmarkets. This facility is primarily extended to pharmaceutical and bio-pharmaceutical companies. The eligible R&D activities under this financingprogramme include:

� Development and commercialisation of new product / process / application;

� Significant improvements in existing product / process / application/ design;

� Development of technology or design to satisfy domestic or internationalenvironment, technical requirements/ standards, specifications;

� Setting up, expansion of pilot plants;

� Research studies necessary for obtaining regulatory approvals, productregistrations, cost of filing and maintaining international patents; R&D centers.

The eligible R&D expenditures under this financing programme include:

� Acquisition of technology at the ‘proof of concept’ or design stage which willbe used to develop new product/ process;

� Land and building, civil works for housing eligible R&D activities;

� Dies, tools, laboratory and other R&D equipment, mould, computer hardware,software, miscellaneous fixed assets;

� Salaries of R&D personnel, support staff during the R&D project phaseincluding training costs;

� Cost of regulatory approvals, filing and maintenance of patent registration;

� Expenditure on external consultants for outsourcing a component of R&Dproject;

� Product documentation and allied costs during the R&D project phase;

� Costs of materials, surveys, technology demonstration studies, field trials.

agreed percentage of revenuesfrom the SPV funded projects couldbe returned back to the parentcompany, or funding bank, towardsthe investment. In the case ofinstitutional financing, once thefunding bank recovers itsinvestment or IRR, the ownership

of the products would flow back tothe company without anycomplications what so ever.

Emerging BiosimilarMarket in US

Biotechnology industry in India hasa well-developed foundation with

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strong pharmaceutical andbiosupplier sectors. The globalmarket for generics BioPharma-ceuticals are expected to growsignificantly in the next few years,as several ‘blockbuster’ drugs arelikely to lose patent protection. Arecord number of drug patentsexpire over the next few years,which should lead to stiffcompetition from generics, andsignificant fall in prices. EvaluatePharma, an industry consultancy,estimates that about half of theUS$ 383 billion-worth of patenteddrugs to be sold in the world in2009 may lose patent protectionwithin five years. In 2010 alone theindustry is expected to be put atrisk with nearly 15% drop in itsrevenue from patented drugs. Insuch a situation Indian companiesappear well positioned to leverageupon their cost-effectivemanufacturing capabilities tocompete on a global scale andgarner some of this market.

In the context of patent expiry onBioPharmaceuticals, it may be notedthat USA would emerge as one ofthe largest bio-similar markets afterapproval of Waxman Biosimilar Bill,providing opportunities for Indianfirms. Biosimilars is a term used toassign a sense of similarity betweenthe originator biologic and a copycatversion. According to industrysources, there are at least 75proteins and peptide therapeuticsidentified in the US as potential

profitable targets for new products.Most of these were approved as NewDrug Applications (NDAs) to facilitateBioPharma companies to developbiosimilar products. It is expectedthat stringent regulatory approvalwould be put in place to permitmarketing of biosimilar products atan affordable costs.

Catalysing Coherence inClusters

Cluster development is a keystrategy to promote innovation,accelerate technology transfer andfacilitate product development.Biotechnology, being inter-disciplinary in nature promotingscientific and engineering research,requires enabling infrastructure forpromoting and nurturing innovationfor building successful enterprises.The clustering concept maximisessynergy and efficiency of firmslocated in the cluster. Across theworld, especially in countries likeUSA, Canada, UK and Ireland,biotech clusters have been foundto be improving the performance ofthe firms. Although this approachhas already been emerging in thecountry, it is important to ensurethat such strategies deliver desiredresults through a coherent effort ofall the stakeholders. Existingbiotech clusters could also beexamined with respect to any voidsthat could be plugged to achievethe desired results. Efforts couldalso be made to set up clusters

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around the existing institutions ofexcellence, and to integrate themdeeply into the economic,entrepreneurial and social fabric ofthe region.

Leveraging InternationalPartnerships

Biotechnology is globallyrecognized as a rapidly emerging,complex, and far reachingtechnology, and therefore a stronginternational partnership, both at thelevels of research institutions andat corporate front, is essential.

International cooperation andpartnerships can be leveraged toachieve global best practices in thecountry’s science and technologicalefforts, for joint intellectual propertygeneration, harmonization ofregulatory processes, smooth crossborder movement of biologicalmaterials, and access to globalmarkets for the country’s productsand processes. Such an approachwould not only bring in bettertechnical know-how, but would alsohelp in enhancing India’s researchand development resulting in

Table 15:KEY BIOTECH PRODUCTS LOSING PATENT PROTECTION IN THE US

Brand Name Manufacturer Patent Expiry

Beneflix Wyeth 2009

Kogenate FS Bayer 2011

Novoseven Novo Nordisk 2011

ReFacto Wyeth 2014

Interleukin-2 Novartis 2012

Aranesp Amgen 2014

Procrit Ortho Biotech 2006

Neumega Wyeth 2011

Neulasta Amgen 2015

Genotropin Amgen 2006

Genotropin Pfizer 2008

Infergen InterMune 2009

Betaseron/Betaferon Novartis 2007

Amevive Astellas 2013

Enbrel Amgen/Wyeth 2012

Humira Abbott 2010

Remicade J&J 2018

SOURCE: Avendus Research, Industry Sources

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quicker and faster outcomes.Efforts have already been taken atthe Government level to leveragethe institutional strengths across thecountries. Such efforts should beenhanced with collaborationmeasures on continuous basis.

Biotechnology Usage inBiofuels

Biotechnology could also be one ofthe most effective and innovativetools to make sustainable use ofbiofuel, reducing the adverseenvironmental impacts of GHGemissions, and limiting the diversionof land from food crops to fuelcrops. Biotechnology would also becritical to increase land productivityboth in fuel crops and food crops,through plant science, modern plantbreeding techniques and with state-of-the-art application of cropprotection.

For fuel crops biotechnologycould help to:

� Increase biomass yield perhectare while reducing theneeds for production inputs;

� Improve crop quality (higherbiofuel yields);

� Reduce land-use competitionthrough higher productivity andreduced losses from bioticattacks (insect, viruses, etc),and biotic (environmental such

as drought, wind, salinity)stresses;

� Contribute to the cultivation ofenergy crops in areas withmarginal conditions;

� Develop efficientmicroorganisms and enzymesto convert the (hemi) celluloseto sugars, which can then befermented into biofuel.

Since the introduction ofbiotechnology in agriculture and foodproduction in the early-1990s,biotechnology has been utilized todevelop new tools for improvingproductivity. In 2005, twenty-onecountries planted biotech cropscovering a total of 222 million acres.These crops include soybeans, corn,cotton, canola, papaya, and squashthat are improved versions of thetraditional varieties. In addition, rapid-rise yeast, and an enzyme used tomake cheese, are both commonlyproduced through biotechnology.27

There are three main categoriesof biotechnology-enhanced crops inuse or development.

� Enhanced input traits, such asherbicide tolerance, insect andvirus protection, and toleranceto environmental stressors,such as drought;

� Value-added output traits, suchas corn with higher amounts of

27 International Food Information Council

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lysine for animal feed, orvegetable oils with increasedlevels of omega-3 fatty acids;

� Crops that producepharmaceuticals or improvethe processing of bio-basedfuels.

SUM UP

India is already being reckoned asa frontrunner in the biotechnologyindustry. With a huge base oftalented, skilled and costcompetitive manpower, and a well-developed scientific infrastructure,India is poised to become a leadingglobal player in biotechnology. Thevast population of India helps notonly in creating significant domesticdemand, but also provides biotech

research companies with a vastgene pool. The institutionalinfrastructure in the country offersa strong foundation for thesestrengths to get transformed intobusiness opportunities. Indian firmscould focus on acquiring overseasbiotechnology units in countries likethe US, which have seen plungingvaluations due to the globalmeltdown. Though India has a longway to go in terms of innovationsin processes, instruments, andfunding, the future looks bright forthe industry with India poised tobecome one of the global leadersin this industry. India, with all itsinherent strengths, can definitelyuse biotechnology as a vehicle toimprove the lives of billions acrossthe world.

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Biotechnology Industry in India Opportunies for Growth

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