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[ Contn. ] The Golden Cusp A marriage of the mind
The opportunities from biology are so vast that they are presenting themselves to IT companies, doing even lesser-known niche applications seemingly unrelated to biotech. Spectramind, is a year-old start-up, with first-round funding in excess of Rs 50 crore, which primarily uses the internet to provide customer services to clients abroad-in jargon, web-enabled outsourced services. That could be, say, answering e-mails from customers of a US computer company. Now, as Spectramind CEO Raman Roy-a former head of GE's now famous call centre in Gurgaon-freely admits, he knows next to nothing about genomics. Yet today, 20 of his 500 employees work in bioinformatics, mostly Ph.Ds in molecular biology who mine genomics data, validate it, and create databases for two types of US clients: genomics companies, and companies who aggregate already published biological content. ''Our foray into genomics was much before the dotcom bust,'' explains Roy. ''We saw this as an opportunity upfront.'' Like his IT services, the philosophy is the same. The staff gets to work on cutting edge-research. The customer gets to leverage this intellectual capital at significantly lower costs. Bioinformatics worldwide is, in actual terms, probably no more than a $3 billion industry (and about $50 million in India, though very little of this comes from genomics and proteomics). It will spiral upwards, this much is certain. It is already booming today with a CAGR of nearly 30 per cent. Genomics and proteomics research is expected to increase the current 450-odd biological targets to more than 5,000.
Indian biotech is growing fast and could one day rack up export figures like the software industry does, especially if the biotech-infotech convergence takes off. It's a comparison that professionals cannot help but make. Remember that around 1990 similar paens were being sung for software, even though its exports was only about a few million dollars. Biotech is in the same position today. There is a growing number of US drug companies that would like to send banks of genomics and proteomics data for analysis to India. And as it happened with software, there are lots of Western biotech companies that would happily subcontract the enormous work of sequencing genes and building protein catalogues. The key drivers for bioinformatics are the same as those that created the software boom: a shortage of bioinformatics personnel running into the thousands in the West; and the low cost of getting it done in India. Like it, English is the lingua franca of the bioinformatics world. And then of course there's the flourishing IT sector. The new fruits of biotech may be ripening, but this doesn't mean that your every day it firm can do some overnight plucking. While a bioinformatics professional might earn anywhere from 20 per cent more to double the salary of your average IT professional, there just aren't enough of them. A lot of the work isn't something your average engineering geeks trained in C++ can handle. They will also need to know about fields like computational biology and complexity. What it needs are supergeeks equally adept in biology and information sciences. Such professionals command annual salaries of about $100,000 in the US today. Right now, the Indians who qualify, run only into a few hundreds. Indian companies must realise that as they did with software, they have to first build a reputation. Pioneers must blaze a path and demonstrate that they can actually perform the complex linkage between their tech and the biological data flowing in from clients. They must also be able to show that they know the rules of the new frontier, a land shrouded in a fog of secrecy, patents, and NDAs, certainly greater in degree than the IT industry has been used to. Roy of Spectramind sees intellectual property issues as a big difference between outsourced work in it-enabled areas and that in genomics: ''We guarantee our clients that their IPR remains theirs. ''
Despite a strong research base in biotechnology in the form of a rash of public institutes, India has never been very well placed in the genomics race. It wasn't a part of the human genome project. This is why bioinformatics in India is largely concerned with the more staid structures of molecules rather their sequences, the study of how and why molecules link to each other to form genes. Much of India's $2.5 billion (Rs 11,000 crore) biotech market focuses today on low-end products like vaccines, not cutting-edge genomics or proteomics. But that will hopefully change as the new start-ups take root. The emerging convergence of biotech and infotech is showing up clearly in the very location of some new projects. In December 2000, the Tamil Nadu Industrial Development Corporation and the US company Genome Technologies signed an agreement to set up a Rs 450 crore biogenomics and bioinformatics project at Chennai. Using Genome Technologies' patented sequencing technology, the centre will use 600 professionals to do cutting-edge genomics and proteomics work for companies worldwide. Across the border in Karnataka, the Institute for Bioinformatics and Applied Biotechnology is coming up in the Whitefield Tech Park. The hype around biotech is not new. Biotech was heralded as the glamour industry in the late 1980s in the US. Then the dream soured. Of the more than 1,000 companies in the US, less than a quarter were actually profitable and many did not even have a product. Early VCs endured bruising losses. With the coming of the Internet age, biotech went off VC radar screens. With the plunge of the NASDAQ, the tech battering, the decoding of the genome, and the coming of proteomics, the tide is turning again. ''Biotech had become hot by the end of 2000 itself,'' says Nitin Deshmukh, Head (Private Equity Investment), ICICI Ventures, which has made investments from between $1 million to $5 million in six Indian biotech companies in the last 10 months. Be aware though that biotech business models this time around are in a state of evolution. Consequently, VC money is still hard to come by, though VCs worldwide invested $700 million in bioinformatics companies in the last year. Genomics and proteomics requires oodles of capital and patience. ''Biotech is very different from infotech,'' confesses Wentink of Avesthagen. ''Though we had impressive research credentials,'' says Wentink, ''it took a year-and-a-half to get the $2 million in funding we required.''
''There are few VC-backed success stories till date in biotech,'' says Subash Reddy, vice-president (incubation) of E4E Labs, a prominent Bangalore-based technology holding company. ''The absence of successful entrepreneurs is a major hindrance. That is why biotech start-ups have to focus on solving a problem rather than try and build a technology.'' In that sense, the new age of proteomics is particularly well-suited to the world of start-ups and small, nimble companies doing niche work, more than genomics ever was. The Human Genome Project was a central clearing house and the decoding occurred under its auspices. In the next decade, expect to see scientists frantically working away in hundreds of labs and small companies as they attempt to map the interactions of human proteins. Since information on the genome is available, it doesn't make much sense to sell this in the long run, say analysts. Biotech companies will now have to actually do the dirty work of developing drugs. So couldn't proteomics companies sell information about proteins to drug companies? They could, and are, but some believe this is a flawed, short-term approach. It should be tied in with drug development. But with new drugs still five to 10 years away and each drug estimated to cost a billion dollars in development costs, don't expect too many to tread here immediately. The rush to proteomics is a less coordinated effort than the grand, one-of-its-kind genome project, but entirely in keeping with the free-market it ethos of everyone-for-themselves. There will be a rash of contracting, subcontracting, collaboration, cooperation opportunities for the Indian IT, biotech, or bioinformatics company that chooses to seek them. -Additional reporting by Aparna Ramalingam 1 2 |
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