Scaling new heights
With government playing the mentor by lending a helping hand, the take-off process for the biotech sector may be much smoother
The Department of Biotechnology (DBT), Government of India has estimated that the Indian Biotech sector will achieve $5 billion in revenues by 2010 (CAGR of 35.91 percent). The major growth drivers being biopharmaceuticals, bioservices and bioinformatics.
Last year alone, the biotech industry grew at 39 percent, says Dr MK Bhan, Secretary, DBT. “We have begun to do well in services sector; as far as clinical research, clinical trials, contract research areas are concerned, we are improving but are way behind our actual potential,” he adds. In the light of such figures, the opportunity in this knowledge-driven segment is substantial. The only question is will the Indian industry jump at it?
The biotechnology industry is witnessing a rapid growth in investment. The sector has witnessed a CAGR of 50.31 percent in investment over the period 2000-01 to 2003-04. The industry is expanding rapidly. The funding needs of the industry are met by sources such as the government, venture capital funds, private investors, capital markets, banks and financial institutions. The government allocation to the Department of Biotechnology has gone up consistently over the years and in the recent past. It increased from Rs 263 crore in 2003-04 to Rs 323 crore in 2004-05. It is further estimated to be around Rs 459 crore for the year 2005-06.
The Association of Biotechnology Led Enterprises (ABLE) estimates that the Indian biotechnology industry posted sales of around Rs 4745 crore (more than $1 billion) during FY2005, a growth of 36.5 percent over the previous year, led largely by higher sales of biopharmaceuticals. According to ICRA, the sales of biotechnology based pharmaceutical products accounted for over 75 percent of the total sales of biotechnology industry in 2005.
The biopharmaceuticals market has four sub-segments: vaccines, therapeutics, diagnostics and others. Vaccines, with sales amounting to Rs 1669 crore is the largest segment followed by diagnostics (Rs 60.1 crore), therapeutics (Rs 50 crore) and others (Rs 80 crore). The diagnostics sector accounted for 16.5 percent of the biopharmaceuticals market, says the ICRA report. Despite nearly 25 manufacturers, the market for diagnostics is mainly import driven.
With the business estimated at around Rs 425 crore in FY2005, the bioservices sector ranks after the biopharmaceutical sector in the Indian biotechnology market. Most of the companies in this sector are involved in contract research or services, related to clinical trials and data management.
Bioinformatics has become a powerful tool for advanced research and development in the field of biotechnology. The Indian bioinformatics market reported revenues of Rs 100 crore, 40 percent of this from the domestic market. There are about 45 companies in this space, based mainly in southern India with a majority focusing on developing bioinformatics tools and products and the rest involved in marketing. Companies like Strand Genomics, SciNova Technologies, Mascon Lifesciences and Helix Genomics have about five to eight products. Multinationals like Accelrys (a subsidiary of Pharmacopeia) and Tripos have a direct presence in India. Prominent software companies such as Infosys and TCS (Biosuite), offer bioinformatics services while IBM, Sun Microsystems and Intel, provide hardware.
The biopharmaceutical sector can get a fillip from a favourable policy environment, good infrastructure and increasing partnerships and alliances. Despite huge potential, complications and overlap in regulations are major roadblocks. Some examples are— lengthy approval process for drugs, genetically modified organisms and intellectual property rights issues.
DBT is providing impetus to the Indian biotechnology industry with a favourable policy framework. This includes establishing a science-based and professional regulatory system, promoting industry-academia partnership in R&D, initiating programmes for training and development of manpower, building competence in technology transfer and commercialisation, building and strengthening infrastructure-repositories, biotech parks, regulatory toxicology and safety assessment.
According to D D Patankar, Head, Biotechnology, Intas Pharma, the role of government is to facilitate, support and reduce the hurdles. The rest depends on the industry. He believes that the government has, in recent times, become very supportive in addressing industry concerns and has recently streamlined the complicated regulatory process through the Mashelkar task force, comprising government and industry nominees