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| Long way to go: Biotechnology
is still in a nascent stage, having been around for just three
decades globally. In India, there are few stand-alone biotech
firms and they are predominantly vaccine-based companies |
Biotech in India is big or
small, depending on how you define it. Revenue estimates range from
a few hundred million dollars to $1 billion. The higher number includes
tissue culture and other fermentation-based technologies as well
as services such as clinical trials. So, even if one were to discount
the figure by a good 60 per cent (as those who track the sector
would suggest), the industry revenues would still add up to a respectable
$400 million. "The bouquet of biotech products on offer will
increase at a rapid rate and the rate of growth of biopharma will
be much steeper compared to the growth in small molecule (conventional
chemistry)-based products," says Utkarsh Palnitkar, a partner
at Ernst & Young and who has tracked the sector closely for
years now.
But, as Palnitkar notes, it is pharmaceuticals that dominate
the market and this scenario will remain unchanged for some years
to come. In fact, biotechnology is typically a division for several
large companies in India. There aren't too many stand-alone biotech
firms in the country, and the handful that are, have grown from
being one-trick ponies to multiple-product marketers. Still, the
vast majority of them are first generation protein manufacturers
and predominantly vaccine-based companies. Few of them can claim
to have a monoclonal antibody-based pipeline, the hallmark of
a biotech company.
Talk to players and it becomes evident that the strength of
the Indian biotech industry at present is largely in bio-manufacturing
and this is expected to grow. "There is a huge potential
going forward. Just look at the players and the quantum of investments
that the sector is now attracting in India," says Kiran Mazumdar-Shaw,
Chairman and Managing Director, Biocon. She feels that with corporate
players such as the Tatas and Reliance Life Sciences entering
the industry, there's good chance of the sector growing to $5
billion in revenues by 2010 and to $20 billion by 2020. A lot
of the players are placing their bets on the generic space or
bio-similars. For instance, Dr Reddy's Laboratories, which set
up its critical care and biotechnology business in 1998, intends
to continue its investments into building the infrastructure and
capabilities for launching biogenerics in the less-regulated markets
in the next few years. Its longer-term target is to enter regulated
markets when regulatory issues become clear.
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| Global access: French
healthcare major Merieux Alliance acquired 60 per cent stake
in Varaprasad Reddy's (above) Shantha Biotechnics in November
2006 |
In biotechnology, it is often said that the process is as important
as the product itself, since different strains can be used to
extract the same protein. Therefore, the manner in which bio-equivalence
can be established is the crux of the issue. If the regulatory
authorities accept bio-similars and simultaneously prescribe a
larger quantum of clinical trials, the cost advantage that Indian
companies have will stand negated. But "I do think biotech
has a lot of potential and since the technologies are evolving,
there is now a greater understanding of the genetic basis of diseases,"
says Dr Reddy's Executive Vice Chairman and CEO G.V. Prasad.
Currently, Dr Reddy's biotechnology portfolio comprises Grafeel,
the biogeneric version of Filgrastim, a recombinant protein used
in chemotherapy-induced neutropenia (blood disorder) and bone
marrow transplantation. Other than Grafeel-which has been launched
in India, Brazil and a few other countries-it has 10 products
in various stages of development.
Some biotech players are even looking at taking their improved
drugs to international markets. Panacea Biotec, a vaccine-focussed
company, is a case in point. The company, with its tie-up with
UK-based Chiron Vaccines, is focussed on manufacturing, especially
in the area of vaccines. Some analysts also say that Panacea is
gearing up to launch proprietary NDDS-based products in international
markets. Similarly, Hyderabad-based Shantha Biotechnics has put
its global manufacturing strategy on a stronger footing by selling
a majority stake in itself to French major Merieux Alliance. Biocon
has a discovery programme as well with its joint venture partner
CIMAB of Cuba.
Although earnings-focussed analysts aren't too upbeat about
Biocon's prospects in the short term, it has the most ambitious
plans of all biotech companies in the country. It has a presence
in biopharmaceuticals and specialty enzymes (via Biocon), custom
synthesis (Syngene), clinical research (Clinigene) and biologicals
(a joint venture, Biocon Biopharmaceuticals). At present, about
half of Biocon's revenues come from statins. It has signed a licensing
deal with a us-based company in insulin (further details are not
available), and has plans of launching erythropoietin (used for
kidney failure and cancer associated anaemia) in India. It recently
launched a first-of-its-kind cancer treatment drug called Biomab-EGFR,
a therapeutic monoclonal antibody-based drug for treating head
and neck cancers. More recently, Biocon and Abu Dhabi-based pharma
company Neopharma signed an MoU for a JV to manufacture and market
a range of biopharmaceuticals for the GCC (Gulf Cooperation Council)
countries.
Globally, biotechnology completed three decades in 2006 (the
first biotech firm, Genentech, was founded in April 1976). "Increasingly,
pharma companies seem to have found that small molecules (traditional
chemistry-driven) have not been able to solve some of the emerging
medical problems and they are beginning to rely on biopharmaceuticals,''
says Deepanwita Chattopadhyay, CEO, ICICI Knowledge Park, in Hyderabad.
As the mystery of the human genome unfolds, biotech will only
gain in significance. |
