Channel: Industry

Tuesday, May 24, 2011
Biotechnology: India's new sunshine sector
 
 

The Indian biotechnology sector is well on course to become India’s new sunrise industry. With comparative advantage India is ready to march ahead on this mission. The R & D facility, Skill set and low cost are putting India on the global map in the field of biotech. Based on the current growth estimates the Indian biotech Industry is likely to reach $ 10 bn revenue by 2015.

 

The high growth displayed by the Indian biotechnology sector is the cumulative impact of various growth drivers present in the country. The biotechnology market in India possesses a growth rate of more than 30% annually. This growth rate is among the maximum in the globe. Even though the country currently holds a market share of barely 2% of worldwide revenues however, it has an immense potential to develop into a major player in the worldwide biotechnology market by the year 2015.

 

India’s significance in Biotechnology field is diverse and broad based. Besides generating skilled manpower plus a knowledge base, the country is portrayed to be a perfect location for manufacturing as well as high-level biotech research programmes. With the support of government initiatives, the industry is heading for high growth in the future.

 

The Indian biotech industry grew threefold in just five years to report revenues of $3 bn in 2009-10, a rise of 17 percent over the previous year. The bio pharma sector contributed nearly three-fifth to the industry’s revenues at $1.9 bn, a rise of 12 percent, followed by bio services at $573 mn and bio-agri at $420.4 mn. The remaining revenue came from the bio industrials $122.5 mn and bio-informatics $50.2 mn segments. Bio-pharma and bio-services sectors contributed 63 percent and 33 percent, respectively, to the total biotech exports. The bio agriculture, bio industrials and bioinformatics sectors remained focused on domestic operations, bringing in nearly 90 percent of their revenues from India.

 

India is also gaining importance as a clinical trial destination. India participates in 7 percent of the global Phase III trials and 3.2 percent in the Phase II trials with industry sponsored trials having grown by 39 percent CAGR during 2004-08.Major Investments, along with outsourcing activities and exports, are key drivers for growth in the biotech sector.

 

The growth in Indian biotech sector is also well connected with the global growth. Global biotechnology players have demonstrated an increasing interest in collaborating with Indian companies. As a result of this the sector has attracted sizeable investment in recent years. The total FDI in the drugs and pharmaceuticals sector is around $1.85 bn between April 2000 and December 2010. Some of the major investments in the sector were Swiss Pharma company Lonza AG investment around $55.33 mn through its Indian subsidiary in a phased manner in Genome Valley project, Hyderabad. Biotechnology major Biocon plans to invest around $107 mn over the next three years to set up plants that will supply generic biotechnology drugs to Europe and the United States. The Defense Research and Development Organization (DRDO), plans to spend $63.5 mn to upgrade and custom-make its existing line of biotech products for civilian use.

 

The biotechnology industry in India is also likely to see a significant increase in merger and acquisition (M&A) activity. The Indian biotech industry crossed the $3 bn mark in 2010, witnessing a 23 percent growth over the previous year. Of this, while the share of domestic firms stood at 47 percent, exports accounted for 53 percent of the overall revenues. India’s high-skill and low cost advantage is said to have helped in gaining export contracts and clinical research bio services.

 

The development of the biotech sector in India has been well supported by the government. Though it has taken long time to formulate the assistance but government has always been keen to be a partner in growth for the industry. The Department of Biotechnology, Government of India, and the Indian Council of Agricultural Research (ICAR) have entered into a MoU with the Biotechnology and Biological Science Research Council (BBSRC), UK, and the Department for International Development (DFID). The initiative is expected to forge productive global partnerships between scientists in the UK, India and other developing countries to leverage high quality biological and biotechnological research for sustainable crop production in South Asia and Sub-Saharan Africa. An agreement on Russia-India Biotech Network (RIBN) was signed to serve as a dedicated platform to help facilitate collaboration between Russian and Indian biotech companies in 2010.Hyderabad-based contract research firm GVK Biosciences has also partnered with Research Point Global, the US-based clinical organization. Biocon Limited has signed an MoU with Malaysia’s Biotechnology Corporation (BiotechCorp) to explore collaboration and potential investment in Malaysia’s biotechnology industry. Moreover, Syngene International, the custom research subsidiary of Biocon Ltd, has entered into a discovery and development collaboration with Endo Pharmaceuticals of the United States to develop biological therapeutic molecules against cancer.

 

In recognition of the need for training and education for generating interdisciplinary human resource relevant to biotechnology, the Government of India and UNESCO have taken a joint decision to establish the Regional Center for research, training and education in biotechnology under the auspices of UNESCO. The UNESCO Regional Center for Biotechnology is scheduled to come up in Faridabad, Haryana. Further, the Department of Biotechnology (DBT), Government of India, has also decided to set up a unique Health Biotech Science Cluster (HBSC) at Faridabad. Government is also likely to set up a National Biotechnology Regulatory Authority, to stimulate public and private investment in biotechnology.

 

Indian States are also doing their bit to promote the biotechnology industry. According to B.S. Yeddurappa, Chief Minister of Karnataka, a bio-venture fund with a seed capital of $10 mn will be set up to incubate start-ups by young entrepreneurs. Meanwhile, the Government of India proposes to set up a $640.68 mn venture capital fund to give a fillip to drug discovery and strengthening the pharma infrastructure in the country, Ashok Kumar, Secretary, Department of Pharmaceuticals, said. The National Agri Food Biotechnology Institute (NABI), a DBT project, is likely to be ready in the next three years. In this way the sector is getting the academic as well business uplift both from private players as well as institutional set up.

 

So while India’s telecom and automobile sector have exhibited an unparallel growth story in the past few years, the Indian Biotech sector looks bullish to touch the similar feat in the future. With both demand and supply factors present, there is no denial to the fact that India presents one of the most fantastic opportunity for the growth for the sector across the globe. Having said so, it is important to realize that any laggard movement in creating a framework for growth can well derail our biotech mission.

 
 

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