At the helm of sunrise
The Department of Biotechnology (DBT), Government of India, estimates that the Indian biotechnology sector will achieve $5 billion in revenues by 2010 (CAGR of 35.91 percent) with the growth driven by 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 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?
Working in partnership
Indian companies are exploring alliances to enlarge their market. Shantha Biotechnics with assistance from the Centre for Cellular and Molecular Biology, launched India’s first recombinant vaccine for Hepatitis B called Shanvac
Many pharmaceutical and biotechnology companies have been eyeing the country, which is the world’s diabetic capital, with a huge potential for anti-diabetic products. To tap this growing market, Indian companies invested heavily in R&D in developing indigenous human insulin and entered into tie-ups with multinationals to market cheap human insulin products in the country. Wockhardt and Biocon have launched their indigenous recombinant insulin, marketed under the brands Wosulin and Insugen respectively in the domestic market.
A report from Investment Information and Credit Rating Agency (ICRA) says that alliances with multinationals are also common for sourcing biopharmaceutical products. For instance, Biocon has signed a long-term agreement with Bristol Myers Squibb to supply recombinant insulin; the firm has already filed a drug master file (DMF) with the USFDA to market bulk insulin in the US. Further, some Indian pharmaceutical companies are planning to introduce their biopharmaceutical products in the global biogenerics market, the report says. To begin with, these companies intend to introduce their products in unregulated markets, and then submit filings in regulated markets. Wockhardt for example has received 20 registrations for its biotech products (Hepatitis B vaccine, Erythropoeitin and insulin) as of July 2005.
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
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 proved to be a powerful tool for advanced research and development in the field of biotechnology. The Indian bio-informatics 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 such as Strand Genomics, SciNova Technologies, Mascon Lifesciences and Helix Genomics have about five to eight products in their kitty. Further, multinationals such as 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.
No new paths
Most Indian biopharmaceutical companies focus their R&D initiatives on process engineering and different versions of existing drugs. This is because new drug discovery is expensive while significant potential exists in domestic and unregulated markets for biopharmaceuticals already available in the global market. The biogenerics market of developed countries is a growth opportunity and companies are now focussing their R&D efforts on improving the delivery system, new technologies and new products with the assistance of global firms.
According to Dr D Patankar, Head, Biotechnology, Intas Pharma, “On the research front in biotech industry, as in the regular pharma industry, not much is happening. This is because of prohibitive investment, gestation period and uncertainties for Indian companies at this stage. There are probably a few companies doing early stage research, but those are individual initiatives; it is not a phenomenon within the country.”
The biopharmaceutical sector can get a fillip from an enabling 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 and genetically modified organisms and intellectual property rights issues.
DBT is giving impetus to the Indian biotechnology industry through providing an enabling 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. Bhan says, “The quantum of government support for innovation has increased. There are still problems in regulating medical devices, equipment, and stem cells. We still need to pursue the idea of a truly independent, well-managed and well-funded professional scientific regulatory setup.”
According to Patankar, 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. Recently the government streamlined the complicated regulatory process through the Mashelkar task force, comprising government and industry nominees.
Biotech parks and incubators involve establishment of infrastructure with civil works, creation of common instrumentation facilities and so on. Until FY2005, DBT had received proposals from several states as well as institutions such as University Institute of Chemical Technology (UICT), Mumbai. DBT approved the establishment of the Lucknow Park (under development) and the first Biotech incubator at Genome Valley, Hyderabad, with four other proposals still under consideration.
Investment and funding
The biotechnology industry in India has been 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 and 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. This is further estimated to be around Rs 459 crore for the year 2005-06, an increase of 42 percent over the previous year.
Besides the support through DBT, government funding to the biotechnology industry is also routed through various funding agencies that offer research grants and fellowships through soft loans or equity, for research in various fields of biotechnology and commercialising indigenous biotechnology. These agencies are involved in partnerships with the private sector and thus pass on the benefits of their research activities. Some of the funding programmes of the government are routed through Technology Develo-pment Board (TDB) and Technology Information Forecasting and Assessment Council (TIFAC).
Still to do
There is an urgent need to identify applications for biotechnology in the country. Several ministries (besides the Department of Biotechnology) have entered the scene; both for the development of the technology and for its regulation, which results in lack of focus and co-ordination, and duplication of research funding.
The National Biotech Strategy addressing these issues and giving strategic directions is a positive step.