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  • 1. EXPORT-IMPORT BANK OF INDIA OCCASIONAL PAPER NO. 137 BIOTECHNOLOGY INDUSTRY IN INDIA: OPPORTUNITIES FOR GROWTHEXIM Bank’s Occasional Paper Series is an attempt to disseminate the findings ofresearch studies carried out in the Bank. The results of research studies can interestexporters, policy makers, industrialists, export promotion agencies as well asresearchers. However, views expressed do not necessarily reflect those of the Bank.While reasonable care has been taken to ensure authenticity of information and data,EXIM Bank accepts no responsibility for authenticity, accuracy or completeness of suchitems. © Export-Import Bank of India Published by Quest Publications January 2010
  • 2. CONTENTS Page No.List of Tables 5List of Exhibits 7List of Boxes 9Executive Summary 111. Introduction 322. Global Biotech Industry 373. Biotechnology in India: Current Status 564. Indian Biotech Segments: Emerging Opportunities 825. Challenges & Strategies 111 Project Team: Mr. S. Prahalathan, General Manager, Research & Planning Group Mr. Ashish Kumar, Chief Manager, Research & Planning Group Mr. Rahul Mazumdar, Manager, Research & Planning Group 3
  • 3. List of TablesTable Title Pg. No.No.1. Global Biotechnology Data for 2007 and 2008 422. Region-wise Biotechnology Data, 2008 433. Top 10 Biotech Products by Estimated Sales by 2014 484. Top Ten Biotech Drugs in 2008 495. Top Biotech Clusters in India - 2008-09 686. Top Biotech Cities in India - 2008-09 697. Biotech Parks in India 718. Understanding Key Segments in Biotechnology Industry 849. Select Key Firms in the Biopharma Business in India 8610. Recombinant Therapeutic Drugs Approved for Marketing In India 9011. Biotech Crops in Field Trial in India, 2008 9412. Area, Production and Productivity of Cotton in India (2002-08) 9713. Consumer Goods made with Industrial Biotech 10014. Comparison of Generics, Biosimilars and Biologics 10415. Key Biotech Products Losing Patent Protection in the US 122 5
  • 4. List of ExhibitsNo. Title Pg. No.1. Share of Population above 65 Years in Select Countries (in%) 342. Top Biotechnology Nations, 2008 (By Number of Firms) 383. Trend in Financing of Global Biotech Industry (US$ Bn) 394. Number of Greenfield FDI Projects in Biotech Industry 40 in the World- 2004–20095. Share of Regions in Global Biotechnology Revenues - 2008 42 (Public Company Data)6. Share of Regions in Global Biotechnology 44 R&D Expenditure - 2008 (Public Company Data)7. R&D intensity (%) and R&D Expenses Per Employee 44 (US$ 000), 2008 (Public Company Data)8. Share of Regions in Global Biotechnology 45 Employment – 2008 (Public Company Data)9. Share of Regions in Terms of Number of Players 4610. Average Revenue Per Employee & Employee 47 Intensity Per Company11. Indian Biotech Industry in 2008-09 5612. Evolution of The Biotechnology Industry in India 5813. Key Advantages of Biotechnology Industry in India 5914. Indian Biotechnology Industry Structure 6315. Indian Biotechnology Industry – Revenue by Segments 6516. Domestic Business of Various Biotech Segments in India 6617. Export Business of Various Biotech Segments in India 6718. Top Biotech Regions in India - 2008-09 6819. Budgetary Allocations in The Five-year Plans in India (Rs. Crore) 7520. Growth of The Biotechnology Industry in India 8321. Key Segments in Indian Biotechnology Industry 8322. Biopharma Revenue By Segments in India 8523. Segmentwise Shares of Biopharma Industry (2008-09) in India 8624. UN Human Development Index Rank by Select Countries 11225. Trends in Pharma-Biotech M&A Deals 119 7
  • 5. List of BoxesNo. Title Pg. No.1. DNA – Cornerstone of Biotechnology 332. Recombinant DNA Technology 363. Centers of Excellence in Biotechnology Sector in India 614. Biotechnology Patent Facilitating Cell 725. National Biotechnology Development Strategy 766. Biotechnology Institutional Infrastructre in India 77 (Existing and Proposed)7. “Builder” Scheme 788. India’s First Nanotech Park 1089. Umbilical Cord Blood Banking 10910. Ramalingaswami Fellowship - An Initiative for Reversing Brain Drain 11811. Exim Bank’s Support to Research & Development 121 9
  • 6. EXECUTIVE SUMMARYINTRODUCTION participation, and most importantly,Biotechnology is a generic term that due to the proactive and enablingencompasses a wide spectrum of policies of the Government. In fact,scientific and technological the various policies of theapplications used across a variety Government over the last threeof sectors. Biotechnology therefore decades have enabled the Indianmust be seen in the context of a biotechnology industry to carve outcontinuum of other disciplines and a niche for itself in the globallytechnologies where its synchronized competitive environment andapplication drives new products and consolidate its position.technologies. In the present daycontext, the importance of the GLOBAL BIOTECH INDUSTRYbiotechnology sector has assumed The global biotech industry isincreasing significance. The sector predominantly skewed in favour oftoday possesses the ability to the developed countries, both inprovide crucial leads, which can terms of number of firms as alsohelp not only in curing critical in terms of revenues. USA tops thediseases but also reduce list with over 1750 companies,widespread hunger. With a strong followed by France (824), Southand consistent research and Korea (773) and Spain (659). India,development thrust, the sector is with 325 biotech companies inincreasingly being viewed as an 2008, was ranked 11th in the worldanswer to diseases, such as cancer and fourth in the Asia-Pacific regionand AIDS; as an instrument to after South Korea, Japan andenhance agricultural productivity; Australia.and in providing solutions to climate Notwithstanding the recentchange and promoting sustainable economic meltdown, the revenues ofdevelopment through use of the public biotechnology companiesbiofuels. across the world increased from The industry today has achieved US$ 84.7 bn in 2007 to US$ 89.6 bna global status through firm-level in 2008, an increase of 5.7%. In spitestrategies, active industry-level of this increase in revenues, the 11
  • 7. inudstry posted loss in operations, Science and Technology (DST) inalthough the loss in the year 2008 1982. The NBTB acted as an apexdeclined from US$ 2.6 billion in 2007 body, which was given the task ofto US$ 1.4 billion in 2008. The R&D identifying priority areas andexpenditure in the biotech industry evolving a long-term plan for theregistered a marginal decline of 0.3% development of biotechnology. Fourin 2008, reflecting the overall years later in 1986, the NBTB wasrecessionary situation prevailing in upgraded to a full-fledgedthe world economy. The total Department of Biotechnologyemployees engaged in the public (DBT). This paved the way forbiotechnology companies also furthering the growth ofexhibited similar trends registering a biotechnology in the country.marginal decline of 0.5% in 2008, toreach a little over 2 million. The global The progress for biotechnologyrevenues per employee in the industry in India has been possiblebiotech industry were to the tune of due to the inherent advantages thatUS$ 0.44 million, while the global the country has, including diverseemployee intensity per company in flora and fauna, large gene pool,the biotech industry was at 42.5 temperate climate, quality manpoweremployees. In the year 2008, there and low-operational costs. Further,were more than 4700 companies the proactive policies and measuresoperating in biotechnology industry taken by the Government of Indiaacross the globe, with most of them and its agencies, have allowed the(83%) controlled by private entities. industry to capitalize upon such advantages. Today, biotechnology isBIOTECHNOLOGY IN INDIA: being promoted in the countryCURRENT STATUS keeping in view its enormousThe Indian Biotechnology industry potential to improve agriculture, food,has been evolving over three health, environment and energydecades. The milestones of the requirements of the population.evolution of biotech industry in Indiabegan in 1978, in Bangalore, when In terms of market dynamics, thethe country’s first biotech company Indian biotech sector had a healthyBiocon was established for growth in 2008-09 with its revenuesproducing industrial enzymes. The reaching Rs. 12137 crore. WithinGovernment provided a major this, BioPharma contributedthrust to the sector with the Rs. 7883 crore, followed byestablishment of the National BioServices (Rs. 2062 crore),Biotechnology Board (NBTB) under BioAgriculture (Rs. 1494 crore),the aegis of the Department of BioIndustrial segment (Rs. 47812
  • 8. crore), and BioInformatics (Rs. 220 25% to Rs 7,152 crore. Sub-crore). Recent trends in turnover of segments like BioPharma andthe industry indicate that the Indian BioServices have had a majority ofbiotechnology industry recorded a their revenues coming from exports,CAGR of 31.5% during the period with export revenue constituting2001-02 to 2008-09, increasing from around 62% and 95%, respectively,Rs.2345 crore to Rs. 12137 crore in these sub-segments during 2008-during the period. The domestic 09. In fact, these two segmentsbiotechnology market clocked constitute over 95% of the totalrevenues of Rs 4,985 crore in 2008- biotech exports from India.09, registering a 10% growth as BioInformatics (2.37%), BioIndustrialcompared to the previous year, and (1.24%), and BioAgri (0.89)% areaccounting for around 41% of marginal contributors to overallrevenues generated in the industry. export of indian biotech industry.As regards segment-wise data, The Indian biotechnologyfor the year 2008-09, industry is spread across manyBioPharmaceutical sector accounted states in the country. These statesfor the largest chunk of the biotech have unveiled state-specific biotechindustry, garnering a share of 65% policies and have established biotechin total revenues, with vaccines being parks to attract investment in thisthe largest contributor within the industry. These parks have emergedBioPharmaceutical segment. as a focal point of some of theBioServices (17%) and BioAgri leading biotech clusters such as(12.3%) are other major sub- Genome Valley in Hyderabad andsegments of Indian biotech industry. Hinjewadi in Pune. The respectiveSegments like BioIndustrial and government policies in these statesBioInformatics garnered a share of and scientific ambiences have also3.9% and 1.8%, respectively of the been responsible for the growth oftotal revenue in 2008-09. bioclusters.Interestingly, the share of the various Government of India on its partsegments of the biotechnology has initiated certain far-reachingindustry remained almost the same legislations to promote the growth ofwith minor changes in 2008-09, as the biotechnology industry in thecompared to 2007-08. country. In India, there are The Indian biotech industry is involvement of several organisationslargely export-driven accounting for regulating the development of60 % of the total revenues in 2008- biotechnology, which has often09. In rupee terms, the resulted in overlap of functions. Inexports business went up by almost order to streamline the regulatory 13
  • 9. process, the Government has been supporting the sector throughproposed the establishment of the provision of funds. WhileNational Biotechnology Regulatory Government funding to the ScienceAuthority (NBRA), to provide a & Technology sector increasedconsistent mechanism for regulatory nearly three times from the Tenthapproval. In July 2008, the DBT Five-Year Plan to the Eleventh Five-introduced the National Year Plan, support to the biotechBiotechnology Regulatory Act, which industry increased by as much aswould establish the NBRA as an four times during the same periodempowered body to approve with the budgetary allocationgenetically modified crops, food, shooting up from Rs. 25301.35recombinant biologics like DNA, crore in the Tenth Plan tovaccines, recombinant gene therapy Rs. 75304 crore in the Eleventhproducts, and recombinant and Plan. In fact, the Department oftransgenic plasma-derived products Biotechnology received almostsuch as clotting factors, veterinary 8.5% (Rs. 6389 cr) of the totalbiologics and industrial products. budgetary outlay of the Ministry of Science & Technology in the The enactment of New Patents Eleventh Plan. Though the DBTAct, 2005, brought a paradigm shift remains the main fundingin research and development in the organization for the Biotech sectorsector. Previously, India had a patent in India, there are other scientificprotection for process rather than the departments, which have alsoproduct, which brought about started contributing in this field.complacency without initiating mucheffort upon the development of new Research & Developmentproducts. The New Patents Act of Facilitation2005 enforces product patentsthereby inspiring firms and research The DBT and other organizationsinstitutions to undertake the have also proactively taken up ainnovation at their behest. Apart from number of initiatives in creatingthis, there are two bills, namely, DNA institutional infrastructure and aProfiling Bill, and The Protection and strong research base in the countryUtilization of Public Funded in areas relating to agriculture andIntellectual Property Bill, which are forestry, human health, animalon the anvil and are expected to be productivity, environmental safetypassed by the Parliament shortly. and industrial production. DBT has also been at theGovernment Funding forefront of maintaining manyIn addition to creating enabling international collaborations andpolicies, the Government has also introducing joint proposals with14
  • 10. countries like Australia, Canada, competition, and ever changingFinland, Germany, Sweden, USA, regulations, the Indian biotechJapan and the EU. Under the industry has been successful inNational Bioresource Development creating a niche for itself in theBoard, a major initiative has been world.taken for the establishment of a The biotech industry in India canMicrobial Culture Collection– be broadly categorized under fiveBiological Research Centre at Pune. distinct segments - BioPharma,The Centre has provision to hold BioServices, BioAgriculture,more than 2,00,000 bacteria and BioIndustrial, and BioInformatics,fungi following international with each sub-segment contributingstandards, with the gradual to the growth of the biotechnologyupgradation of the facility as an industry.International Depository Authority onmicrobial collections. Under the BioPharmaceuticalsprogramme on prospecting of drugs BioPharmaceutical products arefrom microbial sources, about one therapeutic or preventativelakh bacterial isolates have been medicines that are derived fromcollected and screened. More than materials naturally present in livingtwo lakh extracts have been organisms using recombinant DNAprepared, and about 7,000 promising (rDNA) technology. The growth inhits obtained. BioPharmaceutical drugs and biologics has outperformed theINDIAN BIOTECH SEGMENTS: pharmaceutical market. This hasEMERGING OPPORTUNITIES been so largely due to two factorsThe biotechnology industry has a – firstly, the former addresses areasglobal presence today. While the of clinical needs that areindustry has its roots in the unmanageable with conventionaldeveloped country markets, therapeutics, including cancers andemerging countries like India have genetic diseases; and secondly,started playing an important role they are able to command aleveraging upon its USPs (Unique premium price. The totalSelling Proposition) through better BioPharma segment in Indiacoagulation of academic research registered a 14.3% growth in termsand commercial development, of total revenues in 2008-09 tocoupled with the synchronization of aggregate Rs. 7883 crore asscience and finance to emerge as against Rs. 6889 crore recorded ina strong contender in the global 2007-08. The segment has beenbiotech industry. Amidst an the single largest contributor to theenvironment of continuing cut-throat Indian biotech industry for many 15
  • 11. years, especially due to its export 15 different vaccines. A BioSpectrumorientation. In 2008-09. exports estimate put the size of Indianaccounted for 62% of the vaccine sub-segment at Rs 3,587BioPharma revenue, while domestic crore (US$ 737 million) in 2009, andsales accounted for the remaining is expected to grow at about 20-25%38%. With India having a relatively over the next few years; whilewell developed pharmaceutical globally, the vaccine sub-segment issector, there are synergies that valued at US$ 20.6 billion and isexist between the two sectors. The growing faster than the pharmasuccess strategies adopted by the industry. The world market size ofIndian pharmaceutical sector combination vaccine is projected totherefore needs to be suitably cross US$ 2 billion mark in 2013,leveraged by the Indian biotech which implies an annualplayers in order to realize the compounded growth of over 18%.untapped business potential. As far as the therapeutic sub- The BioPharma sector can be segment is concerned, it contributedfurther classified into three broad around 37% of the total revenuessub-segments, viz. vaccines, generated from BioPharma in 2008-therapeutics and diagnostics. The 09. During 2008-09, the Indianvaccines sub-segment is the prime therapeutics market recorded a 19%contributor, accounting for close to growth to record revenues worth Rs.46% of the total revenues arising 2956 crore. Human insulin was thefrom the BioPharma sector in 2008- largest contributor to the therapeutics09. The vaccines segment has also market, a reflection of India’s largeshown a healthy growth trends diabetic population. With diabetesrecording a CAGR of 15.3% during now ranked as the fifth leadingthe period 2005-06 to 2008-09, disease causing death acrossincreasing from Rs. 2341 crore to developed country markets, andRs. 3587 crore. On a yearly basis, forecast to grow, the market forthe revenue in 2008-09 increased at once-a-day drug delivery and non-10.2%, from Rs.3250 crore in 2007- invasive drug delivery systems08. continues to offer significant potential for expansion. India is predicted to The recent upsurge in demand lead the way with 73.5 million peoplefor vaccines, both in domestic and expected to have diabetes by 2025.international markets, is importantboth from public health and The diagnostics businesseconomic perspectives. According to accounted for close to 17% of theDepartment of Biotechnology, total BioPharma business in 2008-Government of India, there are 09, recording a CAGR of aroundaround 15 companies involved in 14% during the period 2005-2009marketing over 50 brands for (from Rs. 905 crore to16
  • 12. Rs. 1340 crore). On a yearly basis, organizations (CRO) and to somethe revenue increased at 16.5% - extent custom manufacturing. Thefrom Rs.1150 crore in 2007-08. BioServices sector, whichHowever, this increase has been accounted for about 17% to thelower as compared to the growth in total biotechnology industry’sthe previous year, which was around revenues, and recorded a growth21%. It is estimated that of 31% in 2008-09, over theapproximately 60-70% of medical previous year. Exports dominatedtreatments in India are based on the BioServices segmentlaboratory diagnostic tests. accounting for almost 95% of theDiagnostics revenue market total BioServices revenues ofincreased from Rs.905 crore in 2005- Rs. 2062 crore in 2008-09. In fact,06 to touch Rs.1340 crore in 2008- the BioServices segment09. contributed to over 27% of the total With increasing health exports from the biotechnologyconsciousness among the Indian industry. Even in this sub-segment,population and an increase in the country holds certainawareness of diseases such as advantages that could be suitablyAIDS, Hepatitis, coupled with the leveraged. According to a recent ATGovernment’s efforts to promote Kearney global survey, India iscommunity health, such as ranked third across all countriescompulsory testing by blood banks (after the USA and China) in termsfor AIDS, there exists enormous of its overall attractiveness as apotential for the diagnostic sub- clinical trial destination. India, withsegment. It is also important to note the availability of large scientificthat with a higher disposable income pool is well placed to cater to aand with a growing middle class significant part of this demand.population, the market for quality Of late, a new trend inmedical facilities are increasing in BioServices sub-segment is beingIndia. Hospitals and diagnostic observed, where large companiescentres across the country are outsource their clinicaltherefore concentrating on equipping manufacturing facilities whilethemselves with the best in class retaining commercial manufacturingmedical and diagnostic services. and control over cost of goods,This is likely to be another driver of quality, and on supply. On the othergrowth for this sub-segment. hand, it has also been observed that some specialized clinicalBioServices manufacturing organizations preferBioServices mainly include clinical to outsource the routine job ofresearch and contract research commercial manufacturing, which 17
  • 13. they may no longer perceive as their Hybrid Seedscore competence area, as also The Indian population has alreadyoutsource the core business of crossed the 1 billion mark. Toresearch and development. As the provide food and nutritional securityBioServices business expands, for such a large population,many firms engaged in this segment including protection againstare offering services in areas like malnutrition, it is important thatdata management, clinical trials, site productivity levels are increasedmanagement, bio equivalence and through the use of right qualitybio availability studies, toxicology seeds, which have the capacity tostudies, apart from catering to produce more with lesser inputs. Inknowledge process outsourcing for this context, the seed industry haspharma industry. All these trendsoffer significant opportunities for the a critical role to play inIndian biotech companies. dissemination of latest agricultural technology to the farmers, andBioAgri making good quality seeds available to them. Adoption ofBioAgri contributed around 12% of genetically modified (GM) cropsthe total market value of would assure higher productivityBiotechnology in India after and nutritional security. Presently,BioPharma and BioServices, in GM plants are largely in use for2008-09, with a total revenue commercial agriculture andgeneration of Rs. 1494 crore, of predominantly linked with traits ofwhich domestic revenues one or two transgenics that fostersconstituted around 96%. The salinity and alkalinity resistance,BioAgri segment revenues drought resistance, herbicidewitnessed the second highest tolerance, insecticide resistance,growth rate after BioServicessegment, with over 24% growth in and resistance to microbial2008-09, over the previous year. diseases. With the success of BtThe domestic market, combined Cotton, the Government haswith a reasonable scientific realised the enormous potential ofinfrastructure in agriculture, rich bio- such technologies and has beendiversity and skilled human-capital, keen to put in place policies andmake India an important global regulations, which would promotebase for BioAgri research. The responsible crop biotechnology.surge in opportunities are expectedto improve agricultural productivity, Biopesticides and Biofertilisersespecially at a time when per capita The biopesticides and biofertilisersarable land and water resources sub-segments, though constitutingare diminishing. a modest proportion of the BioAgri18
  • 14. segment, have been growing at a of 16.6% over the previous year.healthy pace since the last few While almost 81% of the revenueyears. The Government of India in the year 2008-09 was generatedhas initiated a number of from the domestic market, this subprogrammes to control major segment contributed around 1% ofweeds and pest-diseases of the total biotechnology exports fromimportant crops, vegetables and the country during the year.plants to increase their productivity Indian BioIndustrial companiesthrough various biocontrol agents. produce various enzymes, whichA number of universities and include amylases, proteases,institutes have been working in the cellulases, xylanases, gluco-area of biofertilisers. The agriculture amylases, pectinases, papains,sector in India has been supported bromelain and catalases amongby public research programmes in others, with around 45% of totalvarietal development, yield enzyme production catering to theimprovement and disease pharmaceutical industry. It is worthmanagement. Several international noting that the product range andcompanies have set up research services offered by the firms in thisand development facilities in India sub-segment are growing rapidly asfor developing hybrid seeds and the use of enzymes is gainingother biotechnology-based widespread acceptance. Firms todayactivities. are increasingly looking at producing various types of industrial enzymesBioIndustrial using natural methods of production,The BioIndustrial segment from plants and vegetable origin, andpredominantly consists of enzyme fermentation.manufacturing and marketingcompanies. These enzymes are BioInformaticsused in manufacturing segments The share of BioInformatics in totalsuch as detergents, textiles, food, Biotechnology sector is aroundleather, paper and pharmaceuticals. 1.8% in 2008-09. This sub segmentAlthough the use of enzymes is still made a modest progress,at a relatively low level, interest in increasing from Rs. 75 crore inthe benefits of using enzymatic 2002-03 to Rs. 220 crore in 2008-solutions in India has been showing 09, thereby growing at a CAGR ofan upward trend. The BioIndustrial 19.64%. The sector is largelysegment is estimated to have export driven with almost 77% ofgarnered revenues to the tune of the total revenues coming fromRs. 478 crore in 2008-09, a growth offshore markets in the year 19
  • 15. 2008-09. Considering the rapid are called as biosimilars.diversification of software Biosimilars attempt to copy theapplications and the continuous process, which leads to thequest for growth in the IT industry, production of the original innovativeBioInformatics segment presents a biotechnological medicine.prospective area for IT application. As regulatory obstacles toBioInformatics segment uses biosimilars development iscomputer software tools for increasingly being resolved, adatabase creation, data growing number of opportunities aremanagement, data warehousing, being created for generic companiesdata mining, and global in the BioPharmaceutical market.communication network. The Indian According to IMS data, the worldfirms have been strategically BioPharmaceutical market wasdevising tools so as to cater to the valued at US$ 85.9 billion in 2007.world requirements. Some of the Conservative projections estimatefirms based in India, such as that sales of BioPharmaceuticalStrand Life Sciences, Molecular products would exceed US$135Connections, Mascon Life Sciences billion by 2011. With some of theand Helix, have created indigenous earliest BioPharmaceutical productstools for various components having already lost patent protection,across the drug discovery value the originators of BioPharmaceuticalchain that are being used all over products are facing intensethe world. Strand Life Sciences has competition from genericsdevised a software program called developers. In response, originators‘Avadis’ for which it has received are resorting to a range of defensiveawards from organizations like Red tactics, including the reformulation ofHerring, Frost & Sullivan, and existing products to improve efficacy,World Economic Forum. “Avadis” isan integrated decision analytics the implementation of more efficientprogram that deals with data mining delivery systems, and the pursuit ofand analytics needs of the various high-level intellectual property (IP)life sciences sector. battles. The US, one of the largestEmerging Niche Areas in biosimilar markets in the world,Biotechnology recently introduced the Waxman Biosimilars Bill in March 2009, whichBiosimilars provides the approval of biosimilarThe expiry of patent protection and products that are defined as “noregulatory data protection for clinically meaningful differencescertain biotechnological medicines between the biological product andhas led to the development of what the reference product”, as well as20
  • 16. “interchangeable” biosimilars, convergence of nanotechnologydefined as a product that can be and biotechnology. From an Indian“switched one or more times” with the context, nanotechnology is at a veryreference product “without an nascent stage, but given theexpected increase in the risk of potential of the sector, it is expectedadverse events”. The Bill, upon to grow at a robust pace in thepassing into an Act is expected to coming years. Nanotechnology alsoprovide immense opportunities for has the potential to revolutionizeIndian firms, especially those that the Indian agriculture scenario. It ishave already ventured into the predicted that nanotechnology willBiosimilars space, and have filed transform the entire food industry,Abbreviated New Drug Applications changing the way food is produced,(ANDAs) in the US. With a few processed, packaged, transported,players in the Biosimilars space, thecompetition is expected to be and consumed. Several Indian firmscomparatively low and thereby acts and research institutes are workingas a great boost for biosimilar players on nanotechnology products forin the market. drug delivery, water filters, arsenic removal, reducing water and air According to Datamonitor, the pollution, antimicrobial coatings andIndian biosimilars market is projected river cleaning projects. Theto grow to more than US$ 2 billion Government on its part isby 2014 as key patent expires for proactively promoting variousdrugs such as epoetin alpha, programs under nanotechnologyfilgrastim, interferon beta 1a, initiative. A ‘Vision Group’ has beeninterferon alpha, human growth formed with members fromhormone (hGH), and insulin-glargine. While many of these drugs academia, industry and research, torepresent the low-hanging fruit of the develop a national nanotechnologybiologics world and are unlikely to policy. Government of India hasprovide the monetary gains of more announced an investment ofcomplex drugs, they do offer Rs. 1,000 crore through a missionmanufacturers the opportunity to on nanotechnology from 2006 toposition themselves within the 2011. The Government has alsobiosimilars sector in anticipation of announced a US$ 250 millionmore lucrative targets. programme to build three national institutes for nanoscience.NanotechnologyNanotechnology is considered Stem Cell Researchwidely as the most promising Stem cell research is being toutedtechnology of the 21 st century. as the next wave of biotechnologyRecent years have witnessed a not only in India but also across the 21
  • 17. world, which could potentially hundreds of stem cell lines aroundtransfigure treatment of diseases in the world for US fund, and this isthe next couple of decades. expected to expand collaborationsAccording to a study by Frost & with Indian researchers, who haveSullivan, the global market for stem over the past decade, under fewercell therapy is projected to be restrictions, carried forward thisaround US$ 20 billion by 2010. initiative with their own funding.There are almost 180 prominentcompanies working on stem cell CHALLENGES & STRATEGIESresearch in the world, majority ofwhich are based in the US, followed Challengesby the EU, Israel, Thailand, Skill DevelopmentCanada, and Australia. The StemCell Research Forum India (SCRFI) In spite of mushrooming ofhas predicted India to have a educational institutions offering amarket size of about US$ 540 range of courses in biotechnology,million by 2010 with an annual the void between the needs of thegrowth rate of 15%. industry and skills taught at these institutions still remain, though the The potential of stem cell gap is being narrowed down. Mosttechnology to develop therapy for of these institutions have limitedmany untreatable diseases through ability to provide the rightcellular replacement or tissue pedagogy, or the requisiteengineering is being widely infrastructure. The challenge ofrecognized. Therapies using stem bridging the gap between thecells are giving hope to millions of needs of the industry and thepatients afflicted with chronic curricula taught at variousdiseases. Globally, stem cells are institutions needs to be addressedused to treat over 130 diseases, and by cohesive actions from theit is estimated that more than 500 Government, industry andclinical trials are being done to academia.develop therapies using stem cells. Indian companies are becoming Basic Education &an important part of this revolution, Health Systemhelping to treat patients with Amongst the most critical buildingdiseases ranging from eye problems blocks for biotechnologyto heart disorders. The Government development and its success, goodof India has supported more than 55 education and health systems areprogrammes on various aspects of very important. India has beenstem cell research. Apart from this, positioned low in terms of boththe new initiative by the US these measures as reflected by theadministration in 2009 frees up UN Human Development Index.22
  • 18. India’s ranking is 132 out of a total plays a crucial role in ensuring theof 153 countries, and also the culmination of a concept into alowest as compared to other commercially viable product. Globalcompeting countries in this sector. financial crisis has affected thePart of this can be attributed to the funding prospects of biotechlow healthcare expenditure by the companies, as risk aversionGovernment. increased among venture capitalists, angel investors as alsoGovernment Health Expenditure financing institutions. These haveMost Governments in developing been further exacerbated by thecountries usually finance slow activity in the IPO market dueprogrammes that support child to anaemic stock market. Accordingimmunization against various to the Biotechnology Industrydiseases as part of the basic public Organization (BIO), prospects forhealth package. India too has such biotech IPOs are likely to remainimmunization programmes, but, due dim in the year 2009, on the heelsto relatively high birth rate and of a very weak base (the yearpopulation, the share of 2008), with amounts raised in 2008Government health budget in total through this instrument being onlyhealthcare expenditure is relatively US$ 116 million, as against US$low (25% in 2009). In comparison, 2.3 billion in 2007.other emerging countries like Brazil(47.9%), Russia (63.2%), China Ethical Issues in Genetic(40.7%) and South Africa (37.7%) Researchportray a better management of Biotechnology has been confrontingGovernment healthcare system. It the world with some ethical issues,may also be noted that as a which have raised numerouspercentage of the GDP, the total challenges with no definitehealth expenditure in India is only solutions. Genetic research and its3.6%, far below than that of other applications like geneticemerging economies. Thus, there engineering, manipulation, testing,is an urgent need to augment therapy, eugenics, selectivebudgetary allocation to the health abortion, GMOs, stem cellsector, particularly in improving research, and cloning, openedprimary health care facilities. significant ethical and consumer issues, including the potential risksFunding that may be adversely impactingThe inherent characteristics of the the environment. The issue ofbiotechnology makes the industry a genetically modified food appearshigh investment one with long to be of a particular concern. Agestation period. Thus, funding challenge for the Indian 23
  • 19. biotechnology industry will be to Biosecuritywork and liaise widely with the Biosecurity is another challengecommunity and earn its confidence and there is a growing debate andand investors. Awareness may be discussions among the academicgenerated among the consumers and policy spheres with regard tothrough provision of detailed bioterrorism, biosafety, andinformation, ranging from the basics emergence and re-emergence ofof gene technology to details of the infectious diseases as concerns toregulatory processes. the society as a whole. The threats associated with misuse ofConcentration of IPRs biotechnology affect the growthIntellectual property rights (IPRs) prospects of this industry, whichare intended to promote research otherwise present potential benefitsand development by allowing for global populace at large,researchers to generate revenue to especially in area such as health,meet the development costs. food and environment.However, there are concerns thatthe current level of biotechnology Bio-hackingIPRs are concentrated mainly in the Biohackers are a group ofhands of the private sector. It is enthusiasts who are involved inreported that globally, few working with cells and genescompanies are responsible for the without any sound knowledge. Withvast majority of agri-biotech the fall in the cost of equipmentsresearch. These companies have capable of manipulating DNA, thefocused on crops and traits (such threat of growing number ofas herbicide resistance) that are biohackers is significant. The workhaving commercial significance, raises fears that people couldand thus, may not be willing to create a deadly microbe ontransfer it to others. Globally, purpose, just as computer hackersMergers & Acquisitions trends have unleashed crippling viruses oramong biotechnology companies hacking into various websites. Suchhave also been on similar lines, a scenario may lead to “bio-spam,encouraging the concentration of bio-spyware, bio-adware” and otherIPRs, which may affect the ability bio-nuisances. An unrestrictedof developing countries like India, biohackery scenario could put theto negotiate for access to health of the biohackers, theproprietary technologies at a community around them, and thereasonable price. This challenge environment, under unprecedentedstems largely from patents that risk, and poses significantconfer broad rights over GMOs and challenge that needs to be suitablyplant varieties. addressed.24
  • 20. Patenting of Micro-organisms by various authorities providingAnother associated challenge to the numerous specialised sciencebiotech industry is patenting of degrees at the Masters’ level.micro-organisms and associated These institutions also provide anbiosafety requirements, as strict effective network of researchbiosafety norms have to be laboratories. Efforts should befollowed while handling micro- made to bring in a seamlessorganisms. The regulations for transfer of knowledge and peopleaccessing strains from a depository among these universities, institutes,have to be carefully worked out to and corporates for betterensure that these do not land into coordination, and to share theirwrong and/ or technically research-based information on anincompetent hands. India too needs ongoing basis. Corproates couldto bring in a patent law for have preferential access to theprotecting micro-organisms and intellectual property generated inrules for accessing strains from a such jointly funded projects.depository. In this context, the Another alternative could beDepartment of Biotechnology, encouraging public-fundedGovernment of India, has proposed successful R&D institutions toto build an internationally establish ‘not for profit’ companiesrecognized depository in the to facilitate collaborative work withcountry. It is hoped that following industry. There should be anthe establishment of the depository, industry-academia alliance whereina law in this regard would be the industry could have an activeenacted based on similar laws participation when it comes toprevailing in other countries. planning curriculum and methods of evaluation. Private firms may alsoStrategies share the responsibility to promote academic excellence by creatingPublic-Private Partnerships Chairs in Universities and furtherPublic-private partnership needs to strengthen the industry – academiabe encouraged and supported in relationship.areas that are vital to nationaldevelopment, from a scientific, Need for enhancing Ventureeconomic or social perspective. The Capital funding in Indiafocus needs to be on technology One of the biggest challenges forand product development. India has the Indian biotech industry isa wide network of universities, attracting investment throughdepartments and specialized venture capital mode. With theinstitutes that have been promoted corporate sector being risk averse 25
  • 21. to investing in biotechnology solutions in drug discovery andprojects, especially in their validation based on genomics,gestation and early phases, the proteomics, pathway analysisneed of VC funding becomes (determining how toxic orcritical for the growth of the biotech radioactive substances reachindustry in India. Venture capital humans), and clinical trials onfirms typically source majority of humans. Drug discovery andtheir funding from large investment innovations in drug delivery,institutions such as pension funds especially in areas like diabetes,and financial institutions, who like cancer, and inflammatory ailmentsto invest long term only with could take the industry into greaterassurance of high returns. Thus, heights. Indian biotech industryventure capitalists make careful should also look forward to movinginvestment decisions, which leads up the value chain in terms ofto high risk aversion rates. Instead, geographies so that India is presentIndia may consider promoting in more premium markets.venture capital investment on thelines of Russian model. Russia has Enhancing Biotech Applicationsbeen boosting venture capital Modern research finds applicationsector from scratch, by seeding of biotechnology in variousfunds with Government support, industries, and thereby adds valuethrough the Russian Venture to the products and processes ofCompany (RVC). Israel has also such industries, includingadopted similar approach of state- agriculture, forestry, marine,backed venture capital model to environmental management, pestboost the investments in knowledge management, and management ofbased industry. human and animal healthcare. To capitalize on the potential benefitsStrategy to Move to a Higher and to ensure internationalValue Chain competitiveness, it is important toIndian biotechnology industry, over promote speedy and widespreadthe years, has developed a number diffusion of biotechnology to theof biotech products, but has been broader industrial community, whilefound to perform tremendously well maintaining its responsible andin the vaccine segment. The sustainable use. Industry initiativesplayers in this industry as well as and entrepreneurship commitmentsthe research institutions should are particularly essential in thisincreasingly focus upon moving up regard. The Government couldthe value chain by enhancing promote research-industry linkagesstrengths in new products and and facilitate market informationapplications, and by offering R&D including technological and26
  • 22. commercial trends and manpower. India has already madeopportunities. Integration of its mark in scientific research in thebiotechnology with various world, with a large pool of scientificmanufacturing sectors could also manpower. The education systembe encouraged through better in India, with its wide network ofsynergy and coordination of universities providing qualityactivities among various science education has helpeddepartments / institutions, with the immensely in this regard. However,Department of Biotechnology, with the changing composition ofGovernment of India, serving as economic growth there is anfocal point. emerging trend of students not preferring science stream for careerLucrative Domestic Market opportunities. This may lead toThe domestic biotech market is shortage of qualified manpower inexpected to post robust growth with highly research oriented activitiesrising income levels, improving such as biotechnology. Thus, it isliving standards, growing medical important to devise policies thatinfrastructure, increasing health would attract more students to theinsurance penetration, enabling science stream. Many countriesregulatory framework and give both financial and fiscalinstitutional infrastructure, and the incentives in the form of grants andgrowing number of organized preferential loans, to encouragepharma-retail chains. For example, students to opt for science streams.in a country like India (which is A similar scheme could be thoughtoften referred to as the diabetic of, particularly for encouragingcapital of the world), it is certain to students to take up biotechnologyfind a market for products like as a subject of their specialisation.insulin. With more and more peopleleading a sedentary lifestyle, there Reversing Brain Drainmay be opportunities for the Indian Shortage of manpower due tobiotech industry to innovate brain-drain is another challengeproducts that cater to the demand faced by the Indian biotech industry.for controlling such chronic The expected shortage ofdiseases. scientists / skilled professionals in OECD countries may enhance theBiotech Skill Development brain-drain from India in the comingBiotechnology industry is highly years, unless suitable policyR&D intensive. In order to remain measures are taken to reverse theglobally competitive, the industry trend. There is an urgent need torequires a pool of highly skilled expand the current research 27
  • 23. programmes with attractive concentrate their business modelscompensation package in order to in covering a part of the productattract world-class talent. In this development value chain. Biotechcontext, it may mentioned that firms are often not much engagedGovernment has initiated a in entire product development valueprogramme ‘Ramalingaswamy chain due to shortage of funds andFellowship’, aimed at bringing back necessary know-how.scientists of Indian origin working Pharmaceutical firms couldabroad in various fields of complement the biotech sectorbiotechnology, and who are through their knowledge anddesirous of pursuing R&D in Indian financial power. Also,institutions. It may be mentioned pharmaceutical firms, which requirethat China Academy of Sciences continuous innovation, could benefit(CAS) has established cooperating with biotech firms whoprogrammes, such as Specially provide new product concepts andHired Foreign Research Fellows, innovative technologies.and Young Foreign ScientistProject, through which the country Strengthening North-Southwould arrract over 600 Chinese Collaborationsscientists working abroad, annually; Many Indian firms use serviceseach returning scientist would contracts with foreign firms to fundreceive funding of around their operations, developUS$300,000 per annum. Corporate commercialization capabilities andentities too may get involved by access valuable internationalproviding adequate exposure to the technology and expertise. Servicesbudding talents through training and provided include R&D, clinical trialsplacements. This would also and manufacturing. Multinationalprovide the Indian biotechnology corporations are increasinglyindustry a tremendous manpower conducting clinical trials in India andadvantage over its competitors. rely on Indian contract research organizations to manage theseSymbiotic Relationship between trials. It will be vital for the IndianPharma and Biotech Sectors biotech firms to expand theirUse of organisms for the capabilities in clinical trialimprovement of medical processes management, and pay closeconstitutes one of the major attention, not only to good clinicalbusiness segments of the practice guidelines, but also tobiotechnology industry. This bioethical principles, providing aprovides significant opportunities for high level of care and protecting thepharmaceutical firms also. In rights of patients. This will not onlygeneral, biotech firms would facilitate achieving of global28
  • 24. standards for the Indian contract Emerging Biosimilar Marketresearch firms, but will also help to Biotechnology industry in India hasbring in more foreign exchange a well-developed foundation with aearnings, through enhanced exports strong pharmaceutical andof services. Though the biosupplier sectors. The globalGovernment of India in this regard market for biosimilars is expectedhas taken a number of steps by to grow significantly in the next fewcollaborating with a number of years as several ‘blockbuster’ drugsinstitutions in various countriesabroad, a lot more needs to be lose patent protection. A recorddone in furthering this initiative. number of drug patents expire over the next few years, which shouldEncouragement to Innovative lead to stiff competition fromFunding Models generics and a drop in prices. Evaluate Pharma, an industryPharma / biotech firms could set consultancy, estimates that aboutup Special Purpose Vehicles half of the US$ 383 billion-worth of(SPVs) which could be contractedby the parent firms for product patented drugs to be sold in thedevelopment work in areas such as world in 2009 may lose patentspecialty generics, topicals, protection within five years. In 2010steroids, hormones, and alone, the industry is likely to bebiopharmaceuticals, which may put at risk with nearly 15% drop inhave high initial product its revenues from patented drugs.development costs, and which are Indian companies appear wellnon-infringing process, based on positioned to leverage upon theirregulatory compliances. Such cost-effective manufacturingfunding models may not stretch the capabilities to compete on a globalbalance sheets of the parent scale and garner some of thiscompanies, nor result in equity market.dilution. An agreed percentage of In the context of patent expiry onrevenues from the SPV funded bio-pharmaceuticals, it may be notedprojects could be returned back to that USA would emerge as one ofthe parent company, or funding the largest biosimilar markets afterbank, towards the investment. In approval of Waxman Biosimilar Bill,the case of institutional financing, providing opportunities for Indianonce the funding bank recovers its firms. Biosimilars is a term used toinvestment or IRR, the ownership assign a sense of similarity betweenof the products would flow back to the originator biologic and a genericthe company without any version. According to industrycomplications what so ever. sources, there are at least 75 29
  • 25. proteins and peptide therapeutics the economic, entrepreneurial andidentified in the US as potential social fabric of the region.profitable targets for new products.Most of these were approved as New Leveraging InternationalDrug Applications (NDAs) to facilitate Partnershipsbiopharma companies to develop Biotechnology is globallybiosimilar products. It is expected recognized as a rapidly emerging,that stringent regulatory approval complex and far reachingwould be put in place to permit technology, and therefore a strongmarketing of biosimilar products at international partnership, both at thean affordable costs. levels of research institutions and at corporate front, is essential.Catalysing Coherence in International cooperation andClusters partnerships can be leveraged toCluster development is a key achieve global best practices in thestrategy to promote innovation, country’s science and technologicalaccelerate technology transfer and efforts for joint intellectual propertyfacilitate product development. generation, harmonization ofBiotechnology, being inter- regulatory processes, smooth crossdisciplinary in nature (encouraging border movement of biologicalscientific and engineering materials, and access to globalresearch), requires enabling markets for the country’s productsinfrastructure for promoting and and processes. Such an approachnurturing innovation for building would not only bring in bettersuccessful enterprises. The technical know-how, but would alsoclustering concept maximises help in enhancing India’s researchsynergy and efficiency of firms and development resulting inlocated in the cluster. Although this quicker and faster outcomes.approach has already been Efforts have already been taken atemerging in the country, it is the Government level to leverageimportant to ensure that such the institutional strengths across thestrategies deliver desired results countries. Such efforts should bethrough a coherent effort of all the enhanced with collaborationstakeholders. Existing biotech measures on continuous basis.clusters could also be examinedwith respect to any voids that could Biotechnology Usage inbe plugged to achieve the desired Biofuelsresults. Efforts could also be made Biotechnology could also be one ofto set up clusters around the the most effective and innovativeexisting institutions of excellence, tools to make sustainable use ofand to integrate them deeply into biofuel, reducing the adverse30
  • 26. environmental impacts of green industry. With a huge base ofhouse gas emissions, and limiting talented, skilled and costthe diversion of land from food competitive manpower, and a well-crops to fuel crops. Biotechnology developed scientific infrastructure,could also be critical to increase India is poised to become a leadingland productivity both in fuel crops global player in biotechnology. Theand food crops, through plant vast population of India helps notscience, modern plant breeding only in creating significant domestictechniques and with state-of-the-art demand, but also provides biotechapplication of crop protection. Since research companies with a vastthe introduction of biotechnology in gene pool. The institutionalagriculture and food production in infrastructure in the country offersthe early-1990s, biotechnology has a strong foundation for thesebeen utilized to develop new tools strengths to get transformed intofor improving productivity. In 2005, business opportunities. Indian firmstwenty-one countries planted could focus on acquiring overseasbiotech crops covering a total of biotechnology units in countries like222 million acres. These crops the US, which have seen plunginginclude soybeans, corn, cotton, valuations due to the globalcanola, papaya, and squash that meltdown. Though India has a longare improved versions of the way to go in terms of innovationstraditional varieties. In addition, in processes, instruments, andrapid-rise yeast, and an enzyme funding, the future looks bright forused to make cheese, are both the industry with India poised tocommonly produced through become one of the global leadersbiotechnology. in this industry. India, with all its inherent strengths, can definitelySUM UP use biotechnology as a vehicle toIndia is already being reckoned as improve the lives of billions acrossa frontrunner in the biotechnology the world. 31
  • 27. 1. INTRODUCTION Biotechnology is a generic term industry has assumed increasingthat encompasses a wide spectrum significance. The industry todayof scientific and technological possesses the ability to provideapplications used across a variety of crucial leads, which could help insectors. Biotechnology therefore curing critical diseases, as alsomust be seen in the context of a reducing widespread hunger. With acontinuum of other disciplines and strong and consistent research andtechnologies where its synchronized development thrust, the industry isapplication drives new products and increasingly being viewed as atechnologies. solution provider to diseases such as cancer and AIDS; as an instrument To quote Former US Senator, to enhance agricultural productivity;Robert F Kennedy, “we live in and in providing solutions to climateinteresting times” - it is indeed a change and promoting sustainablematter of great awe that an industry development through the use ofas nascent as Biotechnology (i.e. biofuels.during the 1970s) has come a longway by changing the way living With such a wide array of endbeings across the globe perceive and use, and more still under study, thelive life. It is worth noting that the realms of biotechnology today are inbiotechnology industry began amidst an expansion mode, entering intoa lot of regulatory hurdles, but in due other emerging contours likecourse of scientific breakthroughs, it nanotechnology, stem cell research,proved its mettle and has today etc. The global biotechnologysettled the doubts of most sceptics, industry today is at the beginning ofto emerge as a successful a technology curve whose limits areinstrument in fostering the still being explored andendeavours of the scientific comprehended.community for the betterment of the Realising the potential of thehuman populace at large. biotech industry, the Indian players In the present day context, the have been prompt in embracingimportance of the biotechnology biotechnology. Today, Indian32
  • 28. Box 1: DNA – CORNERSTONE OF BIOTECHNOLOGY DNA, or deoxyribonucleic acid, is the hereditary material in humans and almost all other living organisms. Nearly every cell in a persons body has the same DNA. Most DNA is located in the cell nucleus (where it is called nuclear DNA), but a small amount of DNA can also be found in another part of the cell called the mitochondria (mitochondrial DNA or mtDNA) Considering that all cells virtually speak the same genetic language, DNA from one cell can be read and acted on in another one—even a different cell type from a different specie. This feature is what makes DNA the cornerstone of modern biotechnology. Scientists can, for example, use a yeast cell to make human insulin by inserting the human insulin gene into the yeast. DNA is also the foundation for hundreds of diagnostic tests for genetic diseases and predisposition to disease. Some new tests can even identify which treatment, and what dosage, is best for a particular patient. Because DNA and related cellular processes are so specific, biotechnology products can often solve problems with fewer unintended consequences than other approaches. In fact, the best words to describe today’s biotechnology are specific, precise and predictable.biotechnology industry is one of the 21 st century, the pressure on thehigh performing knowledge-based country’s resources would besegments. The industry has immense. Under suchachieved a global status through firm circumstances, biotechnology islevel strategies, active industry expected to act as a powerful enablerparticipation, and most importantly, that can revolutionize agriculture,due to the proactive and enabling healthcare, industrial processing,policies of the Government. In fact, while promoting environmentalthe various policies of the sustainability.Government over the last two It must be noted that while Indiadecades have helped the Indian currently has a demographicbiotechnology industry to carve out advantage, being home to younga niche in the globally competitive population, who are less thanenvironment and consolidate its 25 years of age, in due course (byposition. the year 2050), they would graduate With the country emerging as to the old-age group (of around 65one of the fastest growing years) which would have its owneconomies and projected to be pitfalls and challenges. A robustranked among the top three biotechnology industry, under sucheconomies by the middle of the circumstances, can act as a strong 33
  • 29. and critical medium to help gear the expected to feed India’s burgeoningcountry to face such challenging population and ensure the nutritionalsituations. security of the nation. Another important aspect of In India, an admirable start hasIndia’s demography is the already been made throughburgeoning population, for whom the measures like a well-conceivedcountry has to find possible avenues regulatory framework being put inof feeding. This is where the role of place to approve bioagriculturalthe biotechnology industry becomes crops and recombinant DNAeven more critical. Biotechnology is products for human health. Based onideally positioned to help improve the sound ethical guidelines, a policy thatefficiency and profitability of the allows stem cell research is also inagricultural sector through higher place. Some of the recent initiativesyields and reduced dependence on by the Indian government to promotepesticides. This is crucial in an age biotechnology such as 100% rebatewhen despite progress in agriculture, on R&D expenditures, and allowingmillions of people in India still do not 100% foreign direct investment in thehave access to adequate food biotech industry, are also contributingsupplies. In the coming years, to the growth of the industry.enhanced yields and increasednutritive value of crops using The patent reforms haveagricultural biotechnology is exposed the domestic firms to Exhibit 1: SHARE OF POPULATION ABOVE 65 YEARS IN SELECT COUNTRIES (in%) SOURCE: World Population Prospects 2008, Exim Bank Research34
  • 30. compete with foreign firms and this growth in this industry is inevitable.has enhanced innovation. Western The biotechnology industry thereforecompanies, lured by strong skilled can act as a long-term sustainablemanpower and lower cost research, competitive strength for India with itshave boosted investments into the enormous potential to improveindustry along with strong linkages agriculture, food, health,and partnerships. With the environment and energyannouncement of the National requirements of the population.Biotechnology Development Further, the shrinking physicalStrategy, and the likely establishment boundaries enable biotechof a nodal authority, National companies to tap large marketsBiotechnology Development around the world.Authority, the emergence of strong 35
  • 31. Box 2: RECOMBINANT DNA TECHNOLOGY Recombinant DNA is the foundation of modern biotechnology. The term recombinant DNA literally means the joining—or recombining— of two pieces of DNA from different sources, such as from two different organisms. Human beings began to change the genetic material of domesticated plants and animals thousands of years ago by breeding individuals with valuable genetic traits while excluding others from reproduction; as a result, the genetic makeup of the plants and animals was changed. Now, in addition to using selective breeding, genes at the molecular level are recombined using more precise techniques of recombinant DNA technology. Making manipulations more precise and outcomes more certain, biotechnology decreases the risk of producing organisms with unexpected traits and avoids the time-consuming, trial-and-error approach of selective breeding. Genetic modification through selective breeding and recombinant DNA techniques resemble each other, but there are important differences: Genetic modification using recombinant DNA techniques allows movement of single genes whose functions are known from one organism to another. In selective breeding, large sets of genes of unknown function are transferred between related organisms. Techniques for making selective breeding, more predictable and precise, have been evolving over the years. In the early 1900s, Hugo DeVries, Karl Correns and Eric Tshermark rediscovered Mendel’s laws of heredity. In 1953, James Watson and Francis Crick, deduced DNA’s structure from experimental clues and model building. In 1972, Paul Berg and colleagues created the first recombinant DNA molecules, using restriction enzymes. Ten years later, the first recombinant DNA- based drug (recombinant human insulin) was introduced to the market. By 2000, the human genome had been sequenced and today recombinant DNA techniques are used in conjunction with molecular cloning to: Produce new medicines and safer vaccines; Enhance biocontrol agents in agriculture; Increase agricultural yields and decrease production costs; Reduce allergy-producing characteristics of some foods; Improve food’s nutritional value; Develop biodegradable plastics and other biobased products; Decrease water and air pollution; and Slow food spoilage.36
  • 32. 2. GLOBAL BIOTECH INDUSTRY The 21st century is witnessing entity, has the largest number ofconsolidation and expansion in the biotech firms in the world,global biotechnology industry, with estimated at 1836 in 2008.new inventions of its widerapplications and use. Biotechnology, GLOBAL FINANCINGif used to its optimal capacity, is The ongoing economic meltdown,expected to have a significant impact amongst the severest in recenton the healthcare and agriculture times, has had a visible impact onsector for the betterment of the world a number of industries across thepopulation, in addition to providing globe. The main manifestation ofcommercial and industrial benefits. the crisis, especially in 2008 andThis untapped potential in thisindustry has been encouraging early 2009, has been a total creditcountries across the world to invest squeeze and liquidity crunch in theand design programmes promoting global financial markets. Thisthe industry, especially in research resulted in deferment of expansionand development. plans of various companies, including those in the biotechGLOBAL RANKINGS sector. In fact, in 2008, it was for the first time in five years that theMajor countries, based on the global biotech industry witnessed anumber of biotechnologycompanies, both public and private, decline in funds raised. It has beenare illustrated in Exhibit-2. USA tops observed that the major sources ofthe list with over 1750 companies, financing the biotech sector wasfollowed by France (824), South largely through initial publicKorea (773) and Spain (659). India, offerings (IPO), follow-on, privatewith 325 biotech companies in investment in public equities2008, was ranked 11th in the world (PIPEs), partnerships or throughand fourth in the Asia-Pacific region debt and other instruments. Clearly,after South Korea, Japan and the economic crisis has had aAustralia. However, it may be noted major bearing on these instrumentsthat European Union, as a single of raising funds, reflected by a 37
  • 33. Exhibit 2: TOP BIOTECHNOLOGY NATIONS, 2008 (BY NUMBER OF FIRMS) SOURCE: Ernst & Young 2009, OECD Report 2009; JETRO; UK Trade and Investment; Exim Bank Research.sharp fall in actual funds raised by US$ 34 bn in 2007 to US$ 23 bn infirms in the biotech industry. 2008. Venture funding, constituting According to BioCentury (a US- over 9% of the total capital raised bybased publishing house), the overall global biotech industry in 2008,capital raised by biotech companies declined modestly in absolute valuesacross the globe declined by around globally, by around US$ 1.6 bn in36% from US$ 52.79 bn in 2007 to 2008, to touch US$ 3.1 bn.US$ 33.76 bn in 2008. It was quite However, it may be noted thatevident that the most drastic fall was the decline in funding is expected toin funds raised from public investors.Data for the year 2008 revealed that continue in the coming few years andin spite of the drastic market thereby creating a challenge for theconditions, IPOs constituted over biotech firms to source funds for60% of the total funding of the sustaining its growth. Thoughindustry. However, the total amount venture capitalists are still in theof capital raised from IPO, combined market, they are expected to be morewith follow-on, dropped by 32%, from selective in their ventures.38
  • 34. Exhibit 3: TREND IN FINANCING OF GLOBAL BIOTECH INDUSTRY (US$ BN) SOURCE: BioCentury, Nature Biotechnology Journal 2009.MERGER AND ACQUISITION increase in M&A activity among(M&A) DEALS biotechnology firms of similar size toM&A activity in Biotech industry was improve cash positions, but does not necessarily see increased M&Arobust in the US and Europe in activity in the Biotech industry by2008. According to a Ernst & Young pharma firms. However, it is believedreport, there were 53 M&A that large companies may not starttransactions involving US buying assets in large numbers thatbiotechnology companies in 2008, do not fit their strategic objectives justrepresenting a total value of US$ because the valuations are relatively28.5 billion, a record high, not cheaper. Instead, the pharma firmscounting megadeals in recent years may remain interested in more(the previous megadeal was in mature biotech companies, on the2007 with the acquisition of lines of the recent biotechMedlmmune by AstraZeneca). In acquisitions such as Genentech,Europe, M&A activity in Biotech MedImmune (Gaithersburg, MD),industry was valued US$ 5.0 billion; Millennium Pharmaceuticals, andthe value of strategic alliances have ImClone. Roche acquiredalso increased. Overall, the Genentech in 2009, andpotential value of strategic alliances AstraZeneca (London) acquiredinvolving companies in US and MedImmune in 2007. TakedaEurope still remains immense. acquired Millennium in 2008, and Eli The Ernst & Young 2008 report Lilly acquired ImClone in 2008. It mayobserves that there has been an also be observed that owing to the 39
  • 35. expiry of many patented products in economies, these companiesthe next couple of years, the increasingly seek new locations inpropensity of big pharmaceutical the emerging countries to tap thefirms acquiring biotech companies wide knowledge base that aremay increase. available at competitive prices. Even in difficult marketGLOBAL DIRECT conditions, cross-border investmentINVESTMENTS in biotechnology continues to grow,Unlike the funding scenario, direct and has not shown a decline frominvestments, especially the the investment level of the year 2008.Greenfield investments, in the The number of greenfield FDIbiotech sector have maintained projects in the biotech sector hastheir pace even in the current been increasing over the last fiveeconomic turmoil. With years. In 2008, an estimated US$ 2.9governments across the world bn of biotech investment wasstriving to develop the recorded.biotechnology industry, andperceiving it as a basis for long- Growth is also being fuelled byterm development, multinational investment to, and from, emergingcompanies in the biotechnology markets. This trend is expected toarena have been actively exploring continue as emerging marketnewer markets. While the R&D countries are likely to display theiractivities of global multinationals in advantages over the developedlife sciences still remain countries, in terms of costconcentrated in the developed competitiveness and availability of Exhibit 4: NUMBER OF GREENFIELD FDI PROJECTS IN BIOTECH INDUSTRY IN THE WORLD - 2004–2009 SOURCE: World Investment Report 2009, Exim Bank Research40
  • 36. talent pool. However, developed sales, which was much lower ascountries (especially USA) still compared to the 11.3% growthdominate the world in innovation in witnessed in 2007, and significantlythe biotech sector, and thus would lower than the industry’sremain as attractive destinations for compounded annual growth rateR&D investments. Asia-Pacific (CAGR) of about 17% during theshowed prowess as a location for period 2003-2008. This lowering ofbiotechnology investments in 2008 - the overall revenue in the US wasovertaking Western Europe to largely because of the acquisitionsbecome the number one region in the of many successful biotech firms byworld for investment projects. From companies which cannot be strictlyan Indian perspective, FDI would classified as being within the realmspave way for increased of biotech industry. Revenues alsoinfrastructure, scaling up of local diminished because of slower growthfacilities, increased market size and of a number of top firms in the US,facilitate R&D, which translates into such as Amgen, and Thousandmore “local content”. Oaks. Revenues of European biotechINDUSTRY PERFORMANCE firms increased by 13% in 2008, toMost countries today have well- touch Euro 15.3 billion as compareddeveloped biotechnology programs to the revenue level of Euro 13.5and a proactive strategic vision billion in 2007. The growth in thewhich has, to a certain extent, European biotech industry wasnegated the fall in capital funds boosted by a top-line growth induring the current times of excess of 20% by Elan (Ireland),economic meltdown. The revenues Eurofins Scientific (France), Medaof the public biotech companies (Sweden) and Qiagen (theacross the world increased from Netherlands), while SwitzerlandUS$ 84.7 bn in 2007 to US$ 89.6 based Actelion, and UK based Shirebn in 2008, an increase of 5.7%, Pharma grew by 16% in 2008. Asaccording to a report by Ernst & regards the performance of AsianYoung. It is worth noting that this (including Pacific) biotech industry isgrowth was witnessed in spite of concerned, revenues have recordedthe global financial crisis hitting a growth of 25% in 2008. This healthyeconomies across the world. growth was mainly led by strongHowever, this modest growth was growth in Australia, where revenuesunevenly distributed across the grew by 26% in 2008.globe with varying performance inregions. Total Income USA’s public biotech firms grew Despite the 5.7% surge in globalby 8.4% in 2008, in terms of product biotechnology revenues in 2008, 41
  • 37. Exhibit 5: SHARE OF REGIONS IN GLOBAL BIOTECHNOLOGY REVENUES - 2008 (Public Company Data) SOURCE: Ernst & Young 2009 Table 1: GLOBAL BIOTECHNOLOGY DATA FOR 2007 AND 2008 Units Parameter Year % Change 2007 2008 2008 over 2007 Public Company Data USD Billion Revenue 84.7 89.6 5.7 USD Billion R&D Expense 31.8 31.7 -0.3 USD Billion Net Income (Loss) -2.6 -1.4 - 46.1 Number Employees 204930 200760 -2.0 Number Public Sector Companies 798 776 -2.8 Number Private Sector Companies 4001 3941 -1.4 Number Total Companies 4799 4717 -1.7 SOURCE: Ernst & Young 2009over the revenues generated in the in losses in 2008; the global netyear 2007, the profit remained loss that had climbed to US$ 2.6negative for the global billion in 2007 abated to US$ 1.4biotechnology industry as a whole. billion in 2008. This reduction in netHowever, there has been a decline loss in 2008, over 2007, was42
  • 38. Table 2: REGION-WISE BIOTECHNOLOGY DATA, 2008 Units Parameter USA Europe Canada Asia-Pacific Public Company Data USD Billion Revenue 66.12 16.51 2.04 4.96 (73.7) (18.4) (2.2) (5.5) USD Billion R&D Expense 25.27 5.17 0.70 0.60 (79.7) (16.3) (2.2) (1.8) USD Billion Net Income (Loss) 0.41 -0.70 -1.14 0.01 Number Employees 128200 49060 7970 15530 (63.8) (24.4) (3.9) (7.7) Number Public Sector 371 178 72 155 Companies (47.8) (22.9) (9.2) (19.9) Number Private Sector 1383 1658 286 614 Companies (35.0) (42.0) (7.2) (15.5) Number Total Companies 1754 1836 358 769 (37.1) (38.9) (7.5) (16.3) Figures in the parantheses are share in world. SOURCE: Ernst & Young 2009helped by the reduction in net The life-science companies inlosses in Europe, and turnaround the Asia-Pacific region on an averageto profit in USA. However net loss spent 12% of their revenue, on R&Dhas grown in Canada, with the in 2008. China led the region with theindustry witnessing more than 50% average R&D spend of 19.14%. Inrise in net losses in the year 2008. China, the companies in the revenue range of US$ 1 million – US$ 5R&D Expenditure million spent almost 30% of their revenues in R&D. South KoreaThe R&D expenditure in the biotech ranked second with an average R&Dindustry, due to the financial crisis, spend of 17.8% of revenue, with theregistered a marginal decline of companies in the revenue range ofaround 0.3%, in 2008, over the US$ 1 million – US$ 5 million wereyear 2007. The R&D expenditure in spending an average of 24% onthe biotech industry was the highest R&D. India followed at the thirdin USA (accounting for a share of position with average R&D spending80%), followed by European region of 10.55%. The average R&D(16%), and Canada and Asia- spending for Taiwan, Singapore,Pacific (2% each). Malaysia and Australia was in the range on 1% - 6%. 43
  • 39. Analysis of R&D expenditure per US$ 158,120. Interestingly, USA hademployee for the globe and across the highest R&D expenses perregions yielded interesting results. In employee, of US$ 197,110, followedthe year 2008, the R&D expenditure by Europe (US$ 105,400) andper employee for the global Canada (US$ 88,210). R&Dbiotechnology industry was expenses per employee in Exhibit 6: SHARE OF REGIONS IN GLOBAL BIOTECHNOLOGY R&D EXPENDITURE - 2008 (Public Company Data) SOURCE: Ernst & Young 2009 Exhibit 7: R&D INTENSITY (%) AND R&D EXPENSES PER EMPLOYEE (US$ 000), 2008 (Public Company Data) SOURCE: Ernst & Young 200944
  • 40. Asia-Pacific was modest at US$ in USA, by 2.4%; however, the38,700 in 2008. Global R&D number of employees in bothexpenditure as a percentage of Europe and Canada increased byglobal revenues (R&D intensity) was 3% and 9%, respectively. In theas high as 35% in the year 2008. year 2008, 64% of the employeesUSA again topped the list with its engaged in the biotechnologyR&D intensity at 38%, while Canada industry belonged to USA, followedand Europe had R&D intensity of by Europe (24%), Canada (4%),34% and 31%, respectively. R&D and Asia-Pacific (8%).intensity of Asia Pacific Region wasonly 12% in the year 2008. Number of Players The Ernst & Young report statesEmployee Numbers that during 2008, there were moreThe total employees engaged in than 4700 companies operating inthe public biotechnology companies biotechnology industry across thedecreased marginally by 0.5% in globe with most of them (83%)2008 over the year 2007, to reach controlled by private entities.a little over 2 million. This decrease Interestingly, bulk of these privatein growth was essentially due to a controlled companies belonged todecrease in number of employees Europe, with a share of 39% in the Exhibit 8: SHARE OF REGIONS IN GLOBAL BIOTECHNOLOGY EMPLOYMENT – 2008 (Public Company Data) SOURCE: Ernst & Young 2009 45
  • 41. total number of biotech companies employee in the biotech industryacross the globe, followed by USA was to the tune of US$ 0.44 million,(37%), Asia-Pacific (16%), and while the global employee intensityCanada (8%). In relative terms, per company in the biotech industryUSA had the maximum number of (total employees divided by numberpublicly traded companies as of companies) was atcompared to other regions. The 42.5 employees. In absolute termsspurt in the number of private (region wise), for the period 2008,companies was led by Europe, and USA had the highest averagewas followed by USA, with the Asia- revenue per employee, of aboutPacific region being a distant third. US$ 0.5 million, followed by Europe at US$ 0.33 million and Asia-PacificAverage Revenue per at US$ 0.32 million. Canada’sEmployee & Employee performance was modest withIntensity per Company average revenue per employeeAn analysis of the average revenue being only US$ 0.25 million inper employee for the year 2008, 2008. USA topped the list in termsbased on the Ernst & Young data, of employee intensity also, with anshows that the global revenue per average 73 employees per Exhibit 9: SHARE OF REGIONS IN TERMS OF NUMBER OF PLAYERS SOURCE: Ernst & Young 200946
  • 42. Exhibit 10: AVERAGE REVENUE PER EMPLOYEE & EMPLOYEE INTENSITY PER COMPANY SOURCE: Ernst & Young, 2009;company, as compared to an making occasional breakthroughs,average of 26.7 employees in including the world’s firstEurope, 22.3 employees in Canada, commercialized gene therapyand 20.2 employees in Asia-Pacific. product. According to the China National Center for BiotechnologyMAJOR BIOTECHNOLOGY Development (CNCBD), there arePLAYERS: COUNTRY ANALYSIS about 20 biotech parks throughout China, with most companiesASIA PACIFIC REGION focusing on human therapeutics and agriculture.ChinaThe Chinese Government has been As far as biotech financing isa key investor in the biotechnology concerned, the venture capitalindustry, and has helped the community is relatively small in Chinaindustry to tide over the ongoing as compared to the Westernfinancial crisis. According to a countries. Companies that raisedreport 1 , China’s biotechnology venture capital in 2008 includedindustry has maintained an annual Sanghai based NovaMedgrowth rate of 30%, since 2005. Pharmaceuticals, which securedChina has a reputation of being a US$ 14 million from Atlas Ventures,leading medical science innovator and Fidelity Asia Ventures. Apart1 Nature Biotechnology Journal, January 2009 47
  • 43. Table 3: TOP 10 BIOTECH PRODUCTS BY ESTIMATED SALES BY 2014 (US$ Million) Rank Companies Total Sales 1 Avastin (Roche) 9232 2 Humira (Abott and Elsai) 9134 3 Rituxan (Roche) 7815 4 Enbrel (Wyeth, Amgen, Takeda) 6583 5 Lantus (Sanofi-Aventis) 6386 6 Herceptin (Roche) 5796 7 Crestor (AstraZeneca) 5739 8 Sprivla (Boehringer Ingelheim) 5552 9 Remicade (SGP, J&J, Misubashi Tanable) 5220 10 Gleevec (Novartis) 5136 SOURCE: BioWorld, EP Vantagefrom this, Futaste Pharmaceuticals, Government of Beijing, operatinga supplier of APIs, raised funds from under the 11th Five Year Plan (2006-3i Group. IPOs in China were few 2010), has promised to invest US$during 2008-09. Jiangsu Nhwa 74 million in the biotech sector duringPharamceutical, a company 2009-10, funding eight majordeveloping drugs for the central projects. The goal is to foster annervous system completed a US$ 25 annual output from Beijing’s biotechmillion IPO in July 2008. sector of US$ 7.4 billion by the end of 2010. It must be noted that the In 2006, the Governmentadopted the Medium and Long-Term number of biotechnology patentsNational Plan for Science and filed in China have also seen anTechnology (S&T) - 2006-2020, increase from 22 during the periodwhich aims to make China a leading 1994-96 to 423 during the periodS&T power and innovation economy. 2004-062.The plan identifies biotechnology,alongside seven other frontier Japantechnologies, as a priority for According to the Japan Externalfunding. Despite the continuing Trade Organization (JETRO) theeconomic crisis, the Chinese number of biotechnology firms inGovernment has pledged to help the 2006 stood at 586. Although Japanbiotech business. The Municipal has been an industrialized country,2 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide Statistical Patent database, September 200848
  • 44. Table 4: TOP TEN BIOTECH DRUGS IN 2008 (US$ million)Trade (generic)/ Indicative Usage for 2008 2007Drug maker Revenues RevenuesEnbrel (etanercept)/ Rheumatoid arthritis, psoriatic arthritis, 6,191 5,273Amgen ankylosing spondylitis, plaque psoriasis, juvenile rheumatoid arthritisRituxan (rituximab)/ Non-Hodgkin’s lymphoma, rheumatoid 5,480 4,604Genentech, arthritisBiogen IdecRemicade Crohn’s disease, ankylosing spondylitis, 5,273 4,420(infliximab)/ psoriatic arthritis, ulcerative colitis,Johnson & Johnson rheumatoid arthritis, psoriasisAvastin Colorectal cancer, non-small-cell lung 4,807 3,431(bevacizumab)/ cancer, breast cancer, brain cancerGenentech (approved May 2009)Humira Rheumatoid arthritis, psoriatic arthritis, 4,521 3,064(adalimumab)/ psoriasis, Crohn’s disease,Abbott ankylosing spondylitis, juvenile rheumatoid arthritisGleevec/Glivec Chronic myelogenous leukemia, 3,700 3,050(imatinib mesylate)/ gastro-intestinal stromal tumors,Novartis acute lymphocytic leukemia, hypereosinophilic syndrome, mastocytosis, dermatofibrosarcoma protuberans, myelodysplastic syndrome, myeloproliferative disordersLantus Types I and II diabetes 3,668 2,840(insulin glargine(rDNA origin)injection/SanofiAventisNeulasta Infection associated with chemotherapy- 3,318 3,000(pegfilgrastim)/Amgen induced neutropeniaAranesp Anemia 3,137 3,614a(darbepoetin alfa)/AmgenPrevnarpneumococcal 7- Prevention of diseases caused by 2,716 2,439valent conjugate Streptococcus pneumoniaevaccine/WyethaAranesp, in fourth place in terms of revenue in 2007, fell to ninth place in 2008.SOURCE: BioMed Tracker - Nature Biotechnology 2009 49
  • 45. it is still trying to catch up with its devaluation of assets in thepeers in the West as far as the developed countries could bring inbiotech industry is concerned. For new buying opportunities andinstance, venture capitalists in increased cross-border deals. SomeJapan unlike in other parts tend to of the deals concluded by thebe less interested. Most of them in Japanese companies in 2008 includeJapan are a subsidiary of banks or Eisai’s acquisition of US-based MGIsecurity companies with hardly any Pharma, collaboration of Takedaexposure in biotech. However, in Pharmaceuticals with Amgen, Daiichispite of the recession, three biotech Sankyo acquiring German-basedIPOs materialised in 2008. These biotech firm U3 Pharma, followed bywere NanoCarrier, Carna 64% stake in India-based Ranbaxy.Biosciences and R-Tech Uneo. It may be noted that the number of biotechnology alliances for research The formation and nurturing of and technology transfer in Japanbiotech hubs in combination with have increased from 20 in 1996 toregulatory reforms are expected to 53 in 2006 3 . The number ofcreate better conditions for the biotechnology patent applicationsbiotech sector in Japan. However, has also increased from 894 duringthe country still faces several 1994-95 to 3720 during the periodchallenges such as expensive clinical 2004-20064. Apart from this, Japan’strials and government-mandated global share in biotechnology patentpricing of prescription drugs. Thesechallenges reduce the growth applications stood at around 11% inprospects in domestic markets. A 2006 and was amongst the highestrather inflexible academic system in the world.5also tends to restrain the flow ofprofessional expertise and Australiainformation among the academic The biotech industry in Australiainstitutions and corporate players. comprises a range of companies,Main challenge faced by the from start-ups to more developedJapanese biotech companies, companies, selling products inirrespective of the sizes, during Australia and abroad, and applyingeconomic meltdown would be to biotechnology to health, industrialdevelop new and innovative processing, agriculture andproducts. With the Japanese Yen environmental issues. The biotechstrengthening against the US dollar, industry includes a large number of3 UNU-MERIT CATI database, Maastricht, the Netherlands, April 20094 UNU-MERIT CATI database, Maastricht, the Netherlands, April 20095 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide Statistical Patent database, September 200850
  • 46. research intensive SMEs, including companies requiring capital formany spin-offs from universities growth. Follow-on funding was madeand other publicly funded research available to companies participatingorganisations. in the Government’s existing early- stage venture capital programs. This According to the OECDBiotechnology Statistics, 2009, the initiative is aimed to ensure thattotal number of biotechnology firms these companies remain viable andin Australia stood at 527. The continue to operate in Australia. Onemployment by publicly listed biotech May 21, 2009, as an additional boostcompanies in Australia has increased to medium and small biotech firms,from 9770 in 2007 to 10480 in 2008. the Australian Government has announced 45% refundable tax The sector ’s major exports credits for R&D. The AUS$ 6.11continue to be IP, through licensing billion budget package for sciencedeals with large international and innovation in 2009 constituted apharmaceutical and biotechnology 25% increase over the previous year,companies. The number of the largest annual increase in thebiotechnology patent applications budget for science and innovation,has also increased from 297 during since 1978-79.1994-95 to 556 during the period2004-20066. In fact, Australia’s global EUROPEAN REGIONshare in biotechnology patentapplications was around 2.1% in United Kingdom2006.7 UK has around 435 biotech The Australian Government has companies, plus service andresponded to the current economic technology providers, cumulativelycrisis with the announcement of new employing around 19000 people,measures that are intended to help with revenues of around £2.5 billionthe players to tide over the (US$3.6 billion)8.challenges. In March 2009, theGovernment announced the According to Ernst & Young, UKestablishment of an AUS$ 59.15 was the leading player in themillion ‘Innovation Investment European region, in 2008,Follow-on Fund’ to provide much accounting for 20% of the totalneeded support for innovative clinical pipeline, and 23% of Phase6 UNU-MERIT CATI database, Maastricht, the Netherlands, April 20097 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide Statistical Patent database, September 20088 UK Trade & Investment 51
  • 47. III9 assets. However, it may be noted companies with 159 biotechthat UK is losing out the leading developers and the rest as biotechposition it commanded few years suppliers. The total investments intoago. In 2006, the UK accounted for the biotech industry in Switzerland35% of all products in development, declined following the globaland 41% of Phase III products. financial crisis, in 2008. From aUnited Kingdom was also a hot spot level of US$ 885 million in 2007,for cross-border transactions investments went down to touchaccounting for 38% of the European US$ 205.2 million in 2008 – aM&A activity by value. The number decline of over 74%. As far asof biotechnology patent applications revenues are concerned, the publichas also increased from 985 during Swiss biotech firms fared far well1994-95 to 1264 during the period than the private firms. Revenues of2004-200610. Apart from this, UK’s public firms increased by 8.8%global share in biotechnology patent whereas the revenue for privateapplications stood at around 7% in firms increased marginally by2006 and was amongst the highest around 2% in 2008 over the yearin Europe.11 2007. Profits too increased for Following the global financial public firms to touch US$ 228crisis, in December 2008, the UK million in 2008, as compared to abiotech industry sought the support loss of US$ 9 million in 2007;of UK government for creation of two whereas in the case of private firmsfunds – one to fund the mergers and losses increased from US$ 18acquisitions between smaller biotech million in 2007 to US$ 33.3 millionfirms, to drive consolidation; and the in 2008. Research & Developmentother to provide funds for “high- expenses too are higher in thepotential” firms. The UK Government public companies (US$ 1350.9has announced the introduction of a million in 2008) as compared to£750 million Strategic Investment private companies (US$ 512.1Fund for emerging technologies, million in 2008). In the privateincluding biotech. Swiss biotech sector, the R&D expenses increased from US$ 403Switzerland million in 2006 to US$ 559 millionAccording to Ernst & Young data, in 2008. The booming biotechSwitzerland had a total of 229 sector in Switzerland employed9 Phase III - Large scale controlled trials for efficacy/safety; also the last stage before a request for approval for commercial distribution is made to the FDA. Typically include 1,000 to 7,500 patients and are three to five years in length (given in detail about the other Phases in Chapter-4)10 UNU-MERIT CATI database, Maastricht, the Netherlands, April 200911 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide Statistical Patent database, September 200852
  • 48. 17993 people as on 2008, an innovative technologies employed byincrease by 15.9%, from 15,525 in the biotechnology companies have2006. been licensed and are protected by patents deposited in the name of theLATIN AMERICA REGION university/research institute or researcher. Brazil’s share in worldBrazil biotechnology patent applicationsThere are around 181 life sciences stood at 0.3% as on 200614. Thefirms in Brazil, of which 39% (or number of biotechnology patent71) are biotechnology companies applications has increased from 6operating in Brazil12, of which 63 during 1994-95 to 27 during thefirms have less than 50 employees. period 2004-200615.The share of biotechnology firmsactive in agriculture stood at 23% Cubain 2007 13 . Other biotechnology Over the last twenty years, Cubaareas include health, natural has established a prominentresources and environment. position in the biotechnology A key aspect concerning industry, which has become one ofbiotechnology companies is the most important driving forces ofinnovation. According to the the country’s economy. Since thedatabase of the Brazilian Patent 1980s, Cuba has built up world-Office (INPI) 84.5% of the companies class expertise in the biotechnologydo not have patents in Brazil; sector as part of a centralisedwhereas 10% have one, 2.8% have strategy to boost international tradetwo, and only 2.8% have three patent and to support domestic socialapplications. It is worth mentioning development - particularly in areasthat the number of patents deposited such as public health andby the companies is an important agriculture.parameter but does not necessarilymean that the degree of innovation The emergence and expansioninside the companies is of biotechnology in Cuba as a newproportionally low. As research branch of the economy has been aactivities and scientists are highly good model in improving the healthconcentrated in Brazilian universities of many persons in the country. Theand research institutes, many Centre for Genetic Engineering and12 Biomass Foundation, 200713 OECD, Biotechnology statistics database, January 200914 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide Statistical Patent database, September 200815 UNU-MERIT CATI database, Maastricht, the Netherlands, April 2009 53
  • 49. Biotechnology (CIGB), flagship British companies wishing to exploreorganization for biotechnology partnership opportunities.research in Cuba, was founded in Surprisingly, Cuba has eschewed the1986, and during the period 1990- venture-capital funding model that1996, the Cuban Government rich countries consider a prerequisiteinvested around US$1 bn to give rise for developing a premiereto what is currently known as ‘The biotechnology industry; the biotechWestern Havana BioCluster ’, industry in Cuba has grown rapidlycomprising 52 institutions. despite a strong venture capital funding model. Once described as “Cuba’sbillion dollar gamble,” the Cuban The country’s expertise in thisGovernment sponsored programme industry has already provided thehas successfully led to the basis for many internationalfoundation of more than 100 R&D partnerships - most typically, thefacilities and pharmaceutical centres, creation of joint companies abroad,over 150 international patents for where Cuban institutions contributenew drugs and treatments, and technology, know-how and technicalemployment of more than 30,000 assistance.workers in the field of scientificdevelopment16. As a result, Cuba SUMnow leads the world in many fields The biotech industry is becomingof specialist medical research. It is more competitive and is rapidlyalso one of the few countries to have expanding across the globe. Thebeen accredited by the World Health US biotech industry’s hegemonicOrganization for the production of status is slowly being challenged byHepatitis B vaccines. other countries in the world apart from relatively younger firms in The most important region of Europe and Asia Pacific regions,Cuban biotechnology is the area who are trying to catch up with theknown as Havana’s Western established ones.Scientific Pole, which comprises 52scientific institutions and where The resilience of the globalapproximately 4,000 scientists and biotech industry was even moreengineers are working on more than evident from the northward100 ongoing research projects. This movement of the industry as a whole,region provides the focus of UNIDO’s despite the implications and thenew investment programme, which spillover effects of the financialwill provide in-depth support for contagion of 2008-2009. The biotech16 www.americanchronicle.com/articles/view/104114, as accessed on Dec. 10, 200954
  • 50. industry is maturing and the market The biotechnology industry,valuations of most of the successful despite the emerging challenges,firms are challenging the has grown stronger with tremendouspharmaceutical firms. With many inventiveness and creativity.patented pharmaceutical products Globally, the industry has showedexpected to come out of the patent immense potential to cater to bettercover, many pharmaceutical firms health care, a better environmentare evincing keen interest to and more sustainable future, andleverage the potential of thereby fuelling economicbiotechnology for their survival. development and growth. 55
  • 51. 3. BIOTECHNOLOGY IN INDIA: CURRENT STATUS Adam Smith, in his classic Biotechnology is being promoted‘Wealth of Nations’, wrote, “A true in the country keeping in view itswealth of a nation is measured not enormous potential to improveby how much gold it possesses but agriculture, food, health,by what it can produce”. By this environment and energyyardstick, biotechnology brought an requirements of the population, andunprecedented global revolution, thereby to generate employment,through which the world’s hunger and contribute to the economicand diseases alike can be mitigated progress of the nation throughby creating new mechanisms. environmentally sustainable industrial development. Exhibit 11: INDIAN BIOTECH INDUSTRY IN 2008-0956
  • 52. The Indian biotech sector has It may be mentioned that thebeen growing by leaps and bounds evolution and growth ofwith the overall turnover in 2008-09 biotechnology firms has its roots inreaching Rs. 12137 crore. the pharmaceutical industry. KeyBioPharma contributed Rs. 7883 pharmaceutical firms established incrore; followed by BioServices pre-1980s in the country, like(Rs. 2062 crore), BioAgri (Rs. 1494 Wockhardt Ltd, Hindustan Antibioticscrore), BioIndustrial (Rs. 478 crore), Ltd, Lupin Ltd, and Gland Pharmaand BioInformatics (Rs. 220 crore) Ltd, have diversified or adaptedsegments. biotechnology at a later stage in their manufacturing and research. WithEVOLUTION OF THE the establishment of a dedicatedBIOTECHNOLOGY INDUSTRY Department of Biotechnology, toIN INDIA nurture and promote biotechnology in the country, the number of playersThe Indian Biotechnology industry in the sector started increasing. Post-has an interesting evolution that WTO period witnessed thehas spanned over three decades. emergence of a number of start-ups,The milestones of the evolution of along with large pharmaceuticalbiotech industry in India began in firms venturing into the biotech1978, in Bangalore, when the business, and emergence of spin-offcountry’s first biotech company, firms from the established pharmaBiocon, was established for majors, like Dabur, Ranbaxy,industrial enzymes and later Dr. Reddys, and Cadila joiningventuring into biotherapeutics. biotechnology majors like Biocon and The Government provided a Shantha Biotechnics. The firstmajor thrust to the industry with the successfully established spin-offestablishment of the National company from the Indian Institute ofBiotechnology Board (NBTB) under Science (IISc), Strand Genomics,the aegis of the Department of also emerged during this period. AScience and Technology (DST) in number of healthcare MNCs like Eli1982. The NBTB acted as an apex Lilly , GlaxoSmith- Kline, Pfizer, etc.body, which was given the task of have also set up biotech subsidiariesidentifying priority areas and evolving in the country.a long-term plan for the developmentof biotechnology. Four years later, in THE INDIA ADVANTAGE1986, the NBTB was upgraded to a The success and the progress offull-fledged Department of biotechnology sector in India isBiotechnology (DBT). This paved the possible due to the unique set ofway for furthering the growth of advantages that India offers.biotechnology in the country. Growth in the Indian biotechnology 57
  • 53. 58 Exhibit 12: EVOLUTION OF THE BIOTECHNOLOGY INDUSTRY IN INDIA SOURCE: Department of Biotechnology, Exim Bank Research
  • 54. industry is also supported by the research in a much more efficientdiverse flora and fauna, large gene and cost effective manner. Thepool, temperate climate, quality availability of rich biodiversity ismanpower and low-operational further enhanced by the country’scosts. Further, the proactive policies varied agro-climatic zones and aand measures taken by the diversified agricultural sector, bothGovernment and its agencies, have of which can play an important roleallowed the industry to capitalize in facilitating research andupon such advantages. development of different agribiotech products applicable worldwide.Biodiversity Large gene poolThe Indian sub-continent, which A ‘gene pool’ can be defined as alloccupies only 2.4% of the total of the genetic information, includingglobal surface area, has the most all variations, contained within avaried species of flora and fauna. population of a particular speciesThe country’s diverse flora and at a particular time. India, in thisfauna offers a goldmine of raw context, has a diverse gene poolinformation. Biotech companies, that holds significant potential.functioning in India, are in a Clusters of isolated genes can beposition to utilize this immense found in tribal groups and frombiodiversity, and can easily find cross-country marriages. India’ssamples, that facilitate field human gene pool provides lucrative Exhibit 13: KEY ADVANTAGES OF BIOTECHNOLOGY INDUSTRY IN INDIA SOURCE: Exim Bank Research 59
  • 55. prospects for genomic research. development and manufacturing,This not only helps domestic and thus generating outsourcingbiotechnology companies but also opportunities, especially inacts as a pull factor for foreign bioprocessing, drug discovery, andcompanies to shift base to India. clinical research. The cost differential for drug discoveryTemperature between the United States andIndia’s vast expanse is blessed with India is around 75%. In India, avaried climatic conditions, which is drug discovery process costsideal for the large-scale practice of around US$ 200 million asbiotechnology. India also has one compared to the cost estimate ofof the largest coastlines in the US$ 800 million in the US. Similarly,world. With at least seven distinct clinical trials cost 30% less to carryclimatic zones and one of the out in India than in Australia andlargest and most varied sets of about 50% less than in the US. Onmarine organisms, India offers an average, the annual salary fortremendous opportunity to the an Indian PhD biotechnologygrowth of biotech industry. This scientist in India, at the entry-levelambient temperature in most parts is much lesser as compared to aof the country provides enabling counterpart in the United States orconditions to develop biotech Singapore. With, academia-industryproduct using the living organisms. research partnerships gainingThis also curtails immensely the popularity, this will further augmentcost of cooling or heating, which the low cost of innovation. Indiabecomes obligatory for the practice therefore is gradually becoming aof biotechnology in most parts of key destination for outsourcing R&Dthe Western world. Apart from this, in biotechnology industry.India also has coastlines wherethere is an uninterrupted sunshine Quality Manpowerfor almost 340 days in the year, India’s rich human capital, havingwhich facilitates growth of marine a large English speaking skill base,organisms in open areas. is believed to be one of the strongest assets for this knowledge-Operational Costs based industry. Besides, IndiaIndia’s low cost base in research, produces 30 lakh graduates, 7 lakhdevelopment and manufacturing postgraduates, and 1500 qualifiedprovide the Indian biotech industry PhD’s in biosciences anda competitive edge over its engineering each year with thecounterpart in other countries. The industry employing approximatelylarge pool of scientists, engineers 20,000 scientists. The cost ofand medical professionals offer a skilled manpower in India is alsolow cost base in research, clinical relatively low. The low-cost and60
  • 56. large availability of skilled (DBT) has set up numerous top-manpower provides the Indian notch Centres of Excellence (COE)biotechnology industry a in the country. These centers aretremendous competitive manpower responsible for generating skilledadvantage over its counterpart firms manpower as well as supportingin other countries. Apart from this, R&D efforts of corporates. Thesethe Department of Biotechnology institutions have also been Box 3: CENTERS OF EXCELLENCE IN BIOTECHNOLOGY SECTOR IN INDIA Advanced Basic Research Tuberculosis Drug Resistance (Indian Institute of Science, Bangalore; The Foundation of Medical Research, Mumbai; Birla Institute of Technology & Science, Pilani) Designing inhibitors against infectious agents (National Institute of Immunology, New Delhi) Basic Molecular biology of a model microorganism, E.coli (Centre for DNA Fingerprinting and Diagnostics, Hyderabad) Advanced Science with Translational Research Systems Biology of Tuberculosis and Drug Development (International Centre for Genetic Engineering and Biotechnology, New Delhi; University of Delhi, South Campus, New Delhi; Central Research Institute of Jute & Allied Fibres, Barrackpore, W.B) Genetics and Genomics of Silkmoths, (Centre for DNA Fingerprinting and Diagnostics, Hyderabad) Antivirals Against Hepatitis C (Indian Institue of Science, Bangalore & others) Mesenchymal and Adult Stem Cell Therapies (Christian Medical College, Vellore) Platform Technologies for Designer Crops (International Crop Research Institute for the Semiarid Tropics, Hyderabad) Stem Cell Research: Basic and Translational (All India Institute of Medical Sciences, New Delhi) Partnership with Industry Heterosis Breeding in Rice (University of Delhi-South Campus, New Delhi & Mahyco Ltd., Jalna) DBT-University Institute of Chemical Technology (Energy Biosciences Centre), Mumbai SOURCE: Department of Biotechnology, Government of India, Annual Report 2009-10 61
  • 57. enhancing interactions between the layer; these firms are completelyacademia and the industry. Eleven focused on marketing of the biotechsuch COEs are under products, whereas pharmaceuticalimplementation in the areas of: and IT companies, which are at thegenome sciences and predictive next level, are carrying out certainmedicine; system biology and dedicated biotechnology relatedtuberculosis; genome-mapping and activities, either in the form ofmolecular breeding of Brassicas, solution providers or in the form ofStem Cell research, Anti-virals etc. facilitators.It is envisaged to fund 50 COEsmostly in Universities during Government Funding : TheEleventh Plan. Government has been investing significantly for the growth of theAttractive Domestic Market biotechnology industry since 1985. The Government has been fundingIndia’s large population of over a various research-based institutionsbillion people is a huge market for to carry out biotechnology researchbiotech products and services. work. The Government has alsoFurther, the domestic been increasing its budgetarypharmaceutical firms are leveraging allocation to the Department ofthe advantages of Indian biotech Biotechnology in its five-year planindustry in their activities ranging outlays. While most of this fundingfrom process innovation, product is for advanced research, there aredevelopment, and drug discovery.The growing pharmaceutical organizations like the Technologyindustry in India thus provides Development Board (TDB), undermarket for the Indian biotech the auspices of Department ofindustry. Science & Technology, that give out equity and soft loans towardsINDUSTRY STRUCTURE technology development, solely for commercial purposes. The TDB isBiotech Players: The Indian not exclusive to the healthcare orBiotechnology industry is divided biotechnology industry but has so farinto various segments, and each invested the largest share of its fundssegment has various layers that are in these sectors.playing a proactive role for thegrowth of the industry. Government, Venture Capital : Research andthe research labs, and institutions development is the backbone of theform one layer, which are carrying biotechnology industry as theout continuous research and industry is highly research intensive.development; companies who are Some of the researches carry on forsolely into biotech products on a years without any specific timeline.commercial basis form the second Most venture capitalists are typically62
  • 58. Exhibit 14: INDIAN BIOTECHNOLOGY INDUSTRY STRUCTURE SOURCE: Exim Bank Researchaverse to investing in biotech R&D, October 2008, compared withbut are open to funding companies around US$ 173 million for the samewhose products and markets are period in 2007.clearly identified. Their focus is on BioSuppliers: The biotechnologyfunding the commercialisation oftechniques that are already sector demands numerousdeveloped. Hence, most of the instruments from simple test tubesprivate sector firms are quite risk- to high-end equipments. Capitalizingaverse to investing in biotechnology on the demand bandwagon, aprojects in their gestation and early number of suppliers, including fromphases. However, it may be noted America and European regions,that private equity (PE) investments have entered the market. In fact, thein the life sciences sector clocked bio-suppliers market is currentlyUS$ 183 million during the 10-month dominated by MNCs that want toperiod, between January and take advantage of the increasing 63
  • 59. R&D investments by domestic recorded revenues of Rs. 12,137biotechnology and pharmaceutical crore. The BioPharmaceuticalcompanies. The growth in the sector accounted for Rs. 7883BioSuppliers segment of Indian crore, a growth of around 18% inbiotech industry was 15.5% in 2008- 2008-09; the BioServices sector09, to reach a revenue level of registered 31% growth to touchRs. 3621 crore in 2008-09. Some of Rs. 2062 crore; the BioAgri sectorthe leading domestic players include: grew by 24% to clock a revenue ofSpinco Biotech, Imperial Life Rs. 1,494 crore; the BioIndustrialSciences, RFCL, Genetix Biotech sector grew by 16% to reach aAsia and DSS Imagetech. Wafers level of Rs. 478 crore; and theIndia, Becton Dickenson, Thermo BioInformatics sector grew by 15 %Fisher Scientific and Millipore India to amass Rs. 220 crore revenues,are some of the major multinational during this year.biosupplier companies operating inIndia. RevenueBuyers : This is infact the major The Indian biotechnology industrysegment which drives the growth of has been growing at avarious sub-segments in the Compounded Annual Growth Ratebiotechnology industry. The specific (CAGR) of 31.5% during the periodrequirements and the needs of the 2001-02 and 2008-09. Thebuyer segment is particularly domestic biotechnology marketidentified and taken care of, and clocked revenues of Rs 4,985thereafter research on various end crore, registering a 10% growth inproducts is initiated. The initial target rupee terms. However in dollargroup is the Government, private terms (US$ 1.06 billion), there hashospitals, and ultimately the patient, been a negative growth of aboutwho uses the products for treatment 7% in 2008-09 as compared toand diagnostic purposes. Besides, US$ 1.14 billion revenuesthere are buyers in the industry, such generated in 2007-08.as pharmaceutical companies and As regards segment-wise dataresearch institutions, that use for the year 2008-09,biotechnology intermediates and BioPharmaceutical sector accountedproducts in the process of creating for the largest chunk of the biotechtheir own end products. industry, having a share of 65% in total revenues with vaccines beingINDIAN BIOTECH INDUSTRY: the largest contributor in theTHE MARKET SIZE BioPharmaceutical segment. TheThe Indian biotech industry in 2008- Bio Services and the BioAgri09 registered 18% growth, and segments followed the64
  • 60. Exhibit 15: INDIAN BIOTECHNOLOGY INDUSTRY – REVENUE BY SEGMENTS SOURCE: Biospectrum, ABLEBioPharmaceutical segment with a and BioAgri have the majority shareshare of 17% and 12.3%, in terms of domestic business in therespectively, in 2008-09. Segments country.like BioIndustrial and BioInformaticsgarnered a share of 3.9% and 1.8%, Exportsrespectively, of the total revenue in The very nature of the biotech2008-09. Interestingly, the share of industry, is export-driven. The risethe various segments of the in dollar value helped companies toBiotechnology industry remained up their topline. In rupee terms, thealmost the same with minor changes exports business went up by almostin 2008-09 as compared to 2007-08. 25% to Rs 7,152 crore, accounting It is also interesting to note that for 60% of the total business insegments like BioAgri, BioIndustrial 2008-09; yet, the total industry exports registered only 6% growthand BioInformatics generated more in dollar terms, over the export levelrevenues from the domestic market in 2007-08, to US$ 1.5 billion.as compared to the overseas market,in contrast to the BioPharma and Segments like BioPharma andBioServices segments, revenues of BioServices have had a majority ofwhich are largely generated from their revenues coming from exports,exports. However, the BioPharma with export revenue constituting 65
  • 61. Exhibit 16: DOMESTIC BUSINESS OF VARIOUS BIOTECH SEGMENTS IN INDIA * values within the oval are percentage share of the segment in the respective year SOURCE: Biospectrum, ABLEaround 62% and 95%, respectively, communication among scienceduring 2008-09. Infact, these two agencies, state governments,segments constitute over 95% of the research institutions, universities,total biotech exports from India. and industries through sharing ofBioInformatics, BioIndustrial, and experiences and expertise,BioAgri constitute a share of 2.37%, resources and infrastructure, and1.24%, and 0.85%, respectively, in thereby facilitating creation of atotal biotech exports in 2008-09. knowledge-based hub. The Indian biotechnologyBioclusters industry is spread across manyDevelopment of clusters is one of states in the country. These includethe critical success factors for many Maharashtra, Karnataka,countries that have achieved the Andhrapradesh, National Capitalhighest level of innovativeness in Region, and Gujarat. Many of thesethe field of biotechnology. These states have unveiled state-specificclusters, which are mostly region- biotech policies and have establishedspecific, essentially provide a biotech parks to attract investmentplatform for effective in this industry. The respective66
  • 62. Exhibit 17: EXPORT BUSINESS OF VARIOUS BIOTECH SEGMENTS IN INDIA * values within the oval are percentage share of the segment in the particular year SOURCE: Biospectrum ABLEgovernment policies in these states around 18% over the revenuesand scientific ambiences have been generated by the region in theresponsible for the growth of previous year. The western region’sbioclusters in these states. share in the total revenue generation stood at 43.35%. Serum Institute of It may however be noted that thewestern and the southern regions of India, led the western region’sthe country accounted for 85% of the contribution in 2008-09 with the firm’stotal revenues, cumulatively total revenue generation amountinggarnering more than Rs.10,000 crore to Rs. 1114 crore.in 2008-09. The southern region continued The Biocluster in the western to be the second with a share ofregion is the largest in terms of the 41.89%. The southern regionrevenue generated in the financial biocluster covered states like Andhrayear 2008-09. The western region, Pradesh, Karnataka and Tamil Naduwhich includes states like with combined revenues of Rs. 5084Maharashtra, Goa and Gujarat, had crore, recording a growth of 16.38%generated revenues worth over over the revenues generated by theRs. 5,260 crore, registering a rise of region in the previous year. 67
  • 63. Biotechnology Parks have been instrumental in fulfillingIndia has been witnessing the infrastructure requirements ofdevelopment of several biotech the rapidly growing Indian biotechparks in the last few years. Some industry. These parks haveof these Parks, such as Shapoorji emerged as a focal point of somePallonji Biotech Park, Hyderabad; of the leading biotech clusters, suchICICI Knowledge Park, Hyderabad; as Genome Valley in Hyderabad,International Biotech Park, Pune, and Hinjewadi in Pune. Exhibit 18: TOP BIOTECH REGIONS IN INDIA - 2008-09 SOURCE: Biospectrum, ABLE Table 5: TOP BIOTECH CLUSTERS IN INDIA - 2008-09 (in crore) Region Revenue in Revenue in % Share in 2008-09 2007-08 2008-09 Maharashtra 3978.10 3615.13 32.78 Karnataka 2535.71 2220.00 20.89 Andhra Pradesh 2188.23 1830.32 18.03 NCR 1792.14 1452.98 14.77 Gujarat 755.92 472.24 6.23 Top 5 Regions 11250.10 9590.67 92.69 Other States 886.90 683.33 7.31 Total Revenues 12137.00 10274.00 100 SOURCE: Biospectrum, ABLE68
  • 64. Table 6: TOP BIOTECH CITIES IN INDIA - 2008-09 (in crore) City Revenue in Revenue in % Share in 2008-09 2007-08 2008-09 Bangalore 2535.00 2220.00 20.89 Mumbai 2476.00 1974.83 20.40 Hyderabad 2188.00 1830.32 18.03 NCR 1792.14 1452.92 14.77 Pune 1461.00 1254.00 12.04 Ahmedabad 557.00 442.24 4.59 Others 1127.86 1099.69 9.29 Grand Total 12137.00 10274.00 100 SOURCE: Biospectrum, ABLE States such as Andhra Pradesh, and a phytomedicine park at MysoreKerala, Maharashtra, Punjab, Tamil aided by the CFTRI; a Rs. 30-croreNadu and Uttar Pradesh have made bio-agri centre at Dharwad; a Rs. 70-substantial progress in establishing crore marine biotech park inbiotech parks, whereas states such Mangalore; and a Rs. 30-croreas Himachal Pradesh, Karnataka, animal facility at Bidar.Madhya Pradesh, Rajasthan andUttarakhand are in development Andhra Pradesh Industrialstage. Infrastructure Corporation (APIIC) is planning to develop a biotech Special Karnataka, one of the first States Economic Zone (SEZ) in Hindupur,to pro-actively promote the in Anantapur district. Besides, abiotechnology industry with a biotech SEZ for livestock/animalseparate policy in 2001, rolled out a biotech sector is being developed byRs. 100-crore fund for manufacturing APIIC in Pulivendula, Kadapa district,companies and Rs. 50-crore corpus adjacent to the Indira Gandhi Centrefor encouraging R&D. The for Advanced Research on LivestockKarnataka Government has also (IGCARL).expressed its intension to driveinvestments in Tier II and Tier III cities With a large number ofby starting focused biotech parks international biotech and pharmawith the support of advanced companies initiating their R&D andresearch institutes; these include: a manufacturing operations in India,Rs. 110-crore nutrition or food park the demand for world-class 69
  • 65. infrastructure offered by biotech Government of India in the earlyparks has increased significantly. 1980s. Initially, the NationalEven Indian companies are attracted Biotechnology Board (NBTB) wasby the advantages of enabling set up in 1982, which was laterinfrastructure offered by the biotech elevated to a full-fledgedparks and are increasingly Department of Biotechnology (DBT)relocating/ locating their facilities into under the Ministry of Science andthese parks. These parks provide Technology in 1986. All thisseveral advantages and act as a provided an early impetus to thegeographic concentration/ cluster of development of biotechnology inlife sciences industry, research India.institutions, sci-tech academia andother amenities of scientific and Regulatory Approvalsgeneral purpose. The Government, on its part, has initiated certain far-reaching The parks provide R&D facilities legislations to promote the growthand manufacturing infrastructure of of the biotechnology industry in theinternational standards. Further, they country. In India, severaloffer affordable space, incentives organisations are involved in theand services for start-up, mid-stage, regulatory structure of the biotechlate-stage and manufacturing industry, which often resulted inpharma / biotech companies seeking overlap of functions. In order toto develop innovative products and streamline the regulatory process,services; attract international the Government has proposed theorganisations to locate their R&D establishment of the Nationalactivities in the parks, create and Biotechnology Regulatory Authoritymaintain international and national (NBRA), to provide a consistentlinkages. The biotech parks not only mechanism for regulatory approval.benefit the large firms but are also In July 2008, the DBT introducedinstrumental in promoting the setting the National Biotechnologyup of small and medium biotech Regulatory Act, which wouldenterprises which can initiate modern establish the NBRA as anbiotech products on a smaller scale, empowered body to approveespecially if the initiation comes from genetically modified crops, food,the academia with proper knowledge recombinant biologics, like DNA,and know-how of products. vaccines, recombinant gene therapy products, and recombinantGOVERNMENT INITIATIVES and transgenic plasma-derivedThe growth of the biotechnology products, such as clotting factors,sector in India is often attributed to veterinary biologics and industrialthe visionary initiative taken by the products.70
  • 66. Table 7: BIOTECH PARKS IN INDIAName of the Park Area (Acres) No. of Companies SpecializationShapoorji Pallonji 300 16 companies in Life Science, healthcareBiotech Park, Phase I and and pharmaceuticalHyderabad 10 companies in Phase IIICICI Knowledge Park, 200 35 R&D companies Life ScienceHyderabadAgri Science Park, 25 108 ventures have Agribiotech andHyderabad already been incubated agribusiness R&DBangalore Helix, 14 8 biotech incubators Sector specific SEZBangalore Biotech ParkBiotech Park, Lucknow 8 15 enterprises Healthcare, agriculture, environment, industrial application and energyKinfra Biotech Park, 50 Expected to house Bioinformatics andCochin 15-20 biotech units biotechnology with focus with shared facilities on marine, herbal and like biotech incubation agricultural biotechnology centerKinfra Biotech Park, 25 Developing Stage Agriculture, healthcare,Thiruvanthapuram diagnostic and industrial enzymesGolden Jubilee Biotech 20 10 enterprises Agro, food and nutrition,Park for Women medical, and healthcareSociety, Kanchipuram and environment & energyInspira Infrastructure 25 Developing Stage This biotech park isBiotech Park, designed for bipharmaAurangabad and agri-biotech companies who are into manufacturing and R&DInternational Biotech 100 12 enterprises Medical and PharmaPark, Pune BiotechnologySavli Biotech Park, 724 11 companies have All major sectors ofVadodara been recommended for Biotechnology land allotment in Phase -ITicell Bio Park, Chennai 5 12 enterprises Medical Biotechnology, nutraceuticals, agricultural biotechnology and bioinformaticsAgri Biotechnology Park, 124 — —Jalna 71
  • 67. The enactment of New Patents another, and further to establish theAct, 2005, brought a paradigm shift biological relationship between twoin research and development in the individuals, living or dead. With thesector. Previously, India had a patent objective to enhance protection ofprotection for process rather than the people in the society andproduct, which brought about administration of justice, analysis ofcomplacency without initiating much DNA found at the scene of crime,effort upon the development of new of the victim or offender has beenproducts. The New Patents Act of used to establish identity. The DNA2005 enforces product patents analysis offers sensitive informationthereby inspiring firms and research which, if, misused can harm ainstitutions to undertake the person or the society. There is needinnovation at their behest. to regulate the use of DNA profiles only for lawful purposes through anDNA Profiling Bill Act to be passed by the Parliament.The Deoxyribose Nucleic Acid The proposed legislation by DBT(DNA) analysis of body substances envisages to establish standards foris a powerful technology that makes laboratories, staff qualifications,it possible to determine whether the training, proficiency testing,source of origin of one body collection of body substances,substance is identical to that of custody trail from collection to Box 4: BIOTECHNOLOGY PATENT FACILITATING CELL Intellectual property protection plays an important role in gaining advantageous position in the competitive game for economic growth. India enjoys a large asset of R&D personnel and infrastructure facilities. Scientists and policy makers need information and facilities for protecting the products of intellectual power of Indian scientists. As a step in this direction, the Department of Biotechnology (DBT), Government of India established a Biotechnology Patent Facilitation Cell in July1999. Biotechnology Patent Facilitating Cell, a single window awareness -cum - facilitation mechanism, aims to create awareness and understanding about Intellectual Property Rights (IPRs) among scientists and researchers, by arranging workshops, seminars, conferences, etc. at all levels, and for introducing patent information as a vital input in the process of formulation of R&D programmes in biotechnology, and providing patenting facilities to biotechnologists in the country, for filing Indian and foreign patents on a continuous basis. The patent filing is done through National Research Development Corporation (NRDC). The total number of patent applications filed by DBT with PCT, USPTO and other countries, with potential commercial value is over two hundred.72
  • 68. reporting, and a Data Bank with absorption andpolicies of use and access to commercialization.information, its retention and The Government therefore hasdeletion. It has also been proposed envisaged to create a legalto have DNA Data Bank Manager framework in the form of Thewho would supervise, execute and Protection and Utilization of Publicmaintain the system, and a DNA Funded Intellectual Property Bill,Profiling Board of eminent scientists, 2008. The expected benefits of theadministrators and law enforcement Bill include:officers which would administer andcarry out other functions assigned to Establishment of uniform legalit under the proposed Act. framework for protection and utilization of the IP generatedThe Protection and Utilization out of public funded R&D;of Public Funded Intellectual Encouragement for innovationsProperty Bill, 2008 in private sector as well as inPublic funded research in Universities, academic andUniversities, academic and research institutions thatresearch institutions have often receive grants fromproduced innovations that hold Government;potential for public good. However,a large number of innovations have Promotion of collaboration between Government,not been reaching the industry or nongovernmental organizationsthe public. Important reasons that and private sector;have been identified for inadequatemovement of Intellectual Property Commercialization of IP(IP), from laboratory to market generated out of Governmentinclude: funded R&D, and promotion of innovation culture within the Possession of the IP country; generated remaining with the funding agency; Minimising the dependence of Universities, academic & Vague regulatory legal research institutions and other framework in Universities, recipient organizations for academic and research funding on the Government, as institutions for commerciali- the Bill provides for utilization zation, and limited financial of a portion of royalties or incentives to the researchers; income, generated out of the Procedural complexities in public funded IP for research technology transfer, its and educational purposes; 73
  • 69. Generation of employment in Several State Governments niche areas, with unique skills (e.g. Andhra Pradesh, Karnataka, required for the IP Maharashtra, Himachal Pradesh, management, development Uttar Pradesh, Kerala and Gujarat) and marketing; have also come up with added financial (e.g. tax concessions) and Transfer of technologies from policy incentives (biotech parks, research laboratories to market incubators of their own) to spur place (nationally and investment in biotechnology. internationally). The Government of India hasGovernment Funding also introduced a number of fiscal incentives, from time to time, byGovernment funding to the Science relaxing price controls for drugs,& Technology sector increased by investment incentives, and taxnearly three times from the Tenth holidays for R&D spending. ThisFive-Year Plan to the Eleventh Five- amply corroborates the serious roleYear Plan, while support to the the Government has been playing inbiotech industry steadily increased promoting institutions and firmsby four times during the same involved in biotechnology.period. The budgetary allocationincreased from Rs. 25301.35 crores Department ofin the 10th Plan to Rs. 75304 croresin the 11 th Plan. Infact, the Biotechnology’s Vision forDepartment of Biotechnology 2009-10received almost 8.5% of the total The year 2009-10 has beenbudgetary outlay of the Ministry of identified for reforming theScience & Technology. The competitive grants system andDepartment of Biotechnology was governance. It is aimed at:allocated an amount of Rs. 901.50 Expanding capacity forcrore (Rs. 879.00 crore (Plan) and translation research in health,Rs. 22.50 crore (Non-Plan)) for the agriculture, industry andyear 2008-09. The budget environment sectors;allocation for 2009-10 is Rs. 924crore (Rs. 900.00 crore (Plan) and Advancing standards inRs. 24.00 crore (Non-Plan)). manufacturing of biologicals;Though the DBT remains the main Rapidly responding to newfunding organization for the Biotech opportunities in newer areasindustry in India, there are other i.e. nano-sciences, stem cellscientific departments, which have biology, genetics and genomicsalso started contributing in this field, based healthcare andalbeit in a small level. agriculture;74
  • 70. Exhibit 19: BUDGETARY ALLOCATIONS IN THE FIVE-YEAR PLANS IN INDIA (RS. CRORE) SOURCE: Planning Commission, Exim Bank Research Expanding the use of the people and to regulate the safe Information Technology; development and deployment of Focussing on young scientists; biotechnology products and Creating a pipeline of products. processes. The new legislation is expected to provide an opportunity Remodeling of DBT is on the to consolidate and enhance theanvil. The infrastructure built over the efficiency and effectiveness ofpast decade has supported so far the biotechnology regulation, increasebottom-up research. However with collaboration with statethe current strength, mid-and high- governments in this area, promotelevel inventions may result into bed- public confidence in the regulatoryto-bench technologies. system, and facilitate internationalUnderstanding the national trade.requirements, DBT is making effortsto deliver them. Biotechnology Industry Partnership Programme (BIPP)National Biotechnology In February 2009, DBTRegulatory Authority (NBRA) implemented a new scheme “BIPP”The National Biotechnology for enhancing the scope of public-Regulatory Bill, 2008 seeks to set private partnership, which isup the NBRA as an independent, expected to provide a fillip forautonomous, statutory agency to research, more so in light ofsafeguard the health and safety of industry facing a credit squeeze 75
  • 71. Box 5: NATIONAL BIOTECHNOLOGY DEVELOPMENT STRATEGY The National Biotechnology Development Strategy approved in November 2007 by the Government of India aims at: creating tools and technologies that address the challenges of the large sections of the society; providing products and services at affordable prices; and making India globally competitive in the emerging bio-economy. The basic goal of the National Biotechnology Development Strategy is to enable emergence of an eco-system that promotes innovation. The priority is to promote innovation in biotechnology in Small and Medium sized Enterprises (SMEs). To promote R&D in SMEs, a ‘Small Business Innovation Research Initiative’ (SBIRI) scheme has been launched for funding early stage, pre-proof of concept research. Sectoral priorities have also been identified in the areas of agriculture, health, industry and environment. The Strategy provides for producing more world class researchers; establishing centres of excellence and interdisciplinary networks in the university system; strengthening technology transfer and patenting skills; promoting Biotech clusters and parks; building a strong regulatory system; improving transnational movement of biologicals, building new institutes in a few key areas where there is deficiency; and linking international partnerships to national goals.following the global financial crisis. and for limited and large scale fieldThe scheme is a Government trials in the case of agriculturepartnership with industries for public products. The Rs 350-croresupport on a cost-sharing basis for: package will underwrite the risk of(i) Path-breaking research in research and development offuturistic technologies with major innovating molecules andeconomic and global advantage; processes. It will also be open toand (ii) Development of nationally all innovative biotechnologyrelevant technologies in the areas companies, who are looking to doof agriculture, health, bio-energy research in agriculture, health,and green manufacturing. BIPP bioenergy and greenscheme has proposed to address manufacturing.the crucial product evaluation andvalidation processes, i.e BioPharma Biotechnology Industryproducts by human clinical trials,and agriculture products by field Research Assistance Counciltrials. Upto 100% grant-in-aid (BIRAC)support is proposed to be provided In order to have an interfacefor Phase-I, II and III clinical trials between industry, and academia,of biotech based research leads; and to help promote start-ups,76
  • 72. SMEs can facilitate innovative cum-Advisory Board for BIRAP hasresearch in large industries. The also been constituted andDepartment has also planned to modalities for implementation areestablish a Biotechnology Industry being worked out.Research Assistance Council-(BIRAC), as an autonomous body Research & Developmentaiming to provide financial, Facilitationinfrastructural, social, professional Government of India hasand institutional network support. proactively taken up a number ofDuring the year, a “Pilot BIRAP”- initiatives in creating institutionalBiotechnology Industry Research & infrastructure (e.g. microbial cultureDevelopment Assistance collections, cell and tissue lines,Programme – has been launched gene banks, laboratory animals,in partnership with the Association facilities for oligonucleotideof Biotechnology Led Enterprises synthesis, etc.) and a strong(ABLE), and Biotech Consortium research base in the country inIndia Ltd. (BCIL). A Management- areas relating to agriculture and Box 6: BIOTECHNOLOGY INSTITUTIONAL INFRASTRUCTRE IN INDIA (existing and proposed) National Institute of Immunology, New Delhi National Centre for Cell Sciences, Pune National Brain Research Centre, Manesar, Haryana Centre for DNA Fingerprinting & Diagnostics, Hyderabad National Institute of Plant Genome Research, New Delhi Institute of Life Sciences, Bhubaneshwar Institute of Bioresources & Sustainable Development, Imphal Rajiv Gandhi Centre for Biotechnology, Thiruvananthapuram Institute of Stem Cell Sciences & Regeration Medicine, Bangalore National Institute of Biomedical Genomics, Kalyani, West Bengal Translational Health Science & Technology Institute, Faridabad UNESCO Regional Centre for Biotechnology Training and Education, Faridabad National Agri-food Biotechnology Institute, Mohali, Punjab National Institute of Marine Biotechnology Chennai National Institute of Animal Biotechnology Institute of Silk and Biomaterial Technology Bio-clusters Agri-food Biotechnology Cluster, Mohali, Punjab Health Biotech Science Cluster, Faridabad (NCR) Bangalore Biotech Cluster, Bangalore SOURCE: Department of Biotechnology Annual Report 2008-09. 77
  • 73. forestry, human health, animal are developing new databases andproductivity, environmental safety tools; creating human resource; andand industrial production. conducting research in different areas of “Bioinformatics andBiotechnology Information Computational Biology”. For theSystem (BTISnet) purpose of sharing the hardwareRecognizing the importance of and software/ database resourcesinformation technology for pursuing within the centres under BTISnet,advanced research in modern a Virtual Private Network (VPN), inbiology and biotechnology, a the form of BioGrid India, has beenbioinformatics programme, set up.envisaged as a distributeddatabase and network organisation, International Collaborationswas launched during 1986-87. The The Department of BiotechnologyBiotechnology Information System has been at the forefront of(BTISnet) is the National maintaining many internationalBioinformatics Network in the form collaborations and introducing jointof Distributed Network. The network proposals with countries likehas been established linking more Australia, Canada, Finland,than 150 centres/institutions spread Germany, Sweden, USA, Japanall over India. The BTISnet centres and the EU. Box 7: “BUILDER” SCHEME Boost to University Interdisciplinary Life Science Departments for Education and Research During 11th Five Year Plan, the Department of Biotechnology, Government of India, has launched a scheme known as DBT University Interdisciplinary School of Life Sciences for Advanced Research and Education (DBT-ISLS) to strengthen the universities in their efforts towards building globally competitive bio-economy. The aim is to promote networking of existing life sciences departments of universities and invigorating interdisciplinary bioscience research. The scheme would be to upgrade the post-graduate teaching and training, laboratories in terms of infrastructure, new faculty, fellowships for students, training programmes and re-grouping research activities. The academia-industry interaction would be promoted taking advantage of the strengths and weaknesses of specific universities. A scheme called “Bioinformatics Infrastructure Facilities (BIF)” has been initiated under BTISnet with a purpose to promote innovation in biology through informatics. Under the BIF scheme of BTISnet, over eighty educational institutions have already been provided with the infrastructure. Centres of Excellence (COEs) in Bioinformatics are at University of Pune, Pune; JNU, New Delhi; Bose Institute, Kolkata; IISc, Bangalore; and Madurai Kamaraj University, Madurai.78
  • 74. Some notable collaborations launch a three-tier fellowshipwith countries and institutions abroad programme on biomedicalconcluded in recent years include: research at postdoctoral level; An Indo-Australian The INDO-US Vaccine Action Biotechnology Fund was Programme (INDO-US VAP) created with an aim to develop has been developed with the and support collaborative aim to provide vaccines of research activities in the fields national health relevance in a of biomedical devices and collaborative manner; implants, stem cells, vaccines/ DBT and Advanced Industrial medical diagnostics, transgenic Science and Technology crops, nutraceuticals and (AIST), Japan have signed functional foods, and MoU to work jointly in the field bioremediation. A Joint of Life Sciences and workshop on Nutraceutical and Biotechnology; and Functional Foods was also The Biotechnology YES convened in Australia in March, (Young Entrepreneurs 2008. Scheme) is an innovative DBT will be part of the programme with the objective International ERA-net project of raising awareness of the (European Research Area- commercialization of ERA) named NEW INDIGO, bioscience ideas amongst which is aimed at fostering and postgraduate/postdoctoral coordinating the scientific scientists. The University of Nottingham Institute for cooperation between ERA and Enterprise and Innovation and India. This will also strengthen Biotechnology, (UK), and the almost negligible multi- Biological Sciences Research lateral S&T cooperation Council (UK), organize the between EU and India. The programme. European Community has committed 1.5 million Euros for In the Fifteenth Session of the various programmes with India; Indo-Russian Joint Council for the implementation and An Indo-Finnish Diagnostic coordination of the Integrated Research Centre has been Long-Term Programme (ILTP) proposed with commitment of Science & Technology from Tekes, a funding agency (October, 2008 in New Delhi), of the Government of Finland; both the countries expressed DBT has partnered with UK their keenness to have based Wellcome Trust (WT) to scientific collaboration in the 79
  • 75. areas of biotechnology. Bharat Chandigarh, in collaboration Immunologicals and Biologicals with Åbo Akademi University, Ltd. (BIBCOL), a public sector Turku, (Finland); undertaking under DBT, has also evinced keenness to International Centre for collaborate with Russia for Genetic Engineering and production of IPV, BCG, DPT+, Biotechnology (ICGEB), New JEV Vaccine and Rabies. Delhi; and University of Turku, Finland; The Indo-Swiss programme in Biotechnology (ISCB), jointly Indian Institute of Technology funded by DBT and the Swiss (IIT), Kharagpur; and The Agency for Development and European Molecular Biology Cooperation (SDC), launched Laboratory (EMBL), Hamburg in 1998, has completed two Outstation (Germany); Phases till March 2008, and Institute of Genomics and currently Phase–III (2007- Integrative Biology (IGIB), New 2011) is under implementation. Delhi; and University at The current phase is aimed at Gottingen, Gottingen, technology advancement and Germany; product development. National EnvironmentalSelect Institutional Engineering Research InstituteCollaborations (NEERI), Nagpur; and Rudolf Osmania University, Boem Institute of Hyderabad; and The Royal & Pharmacology and Toxicology, Agricultural University, Leipzig, Germany; Copenhagen, Denmark; Talwar Research Foundation, Madurai Kamaraj University, New Delhi; with the National Madurai; and Aalborg Cancer Institute, National University, Denmark; Institute of Health (NIH), USA; Department of Plant Molecular Indian Institute of Science Biology, University of Delhi (IISc.), Bangalore; and South Campus, New Delhi; Morehouse School of and Department of Biological Medicine, USA. and Environmental Sciences, Under the National Bioresource University of Helsinki, Finland; Development Board, a Microbial National Institute of Culture Collection– Biological Pharmaceutical Education and Research Centre has been Research (NIPER), established in Pune. The Centre80
  • 76. would have provision to hold more (ATCC). Under the programme onthan 2,00,000 bacteria and fungi. prospecting of drugs from microbialAdopting international standards, the sources, about one lakh bacterialcentre has been gradually upgraded isolates have been collected andas an International Depository screened. More than two lakhAuthority on microbial collections, like extracts have been prepared andAmerican Type Culture Collection about 7,000 promising hits obtained. 81
  • 77. 4. INDIAN BIOTECH SEGMENTS: EMERGING OPPORTUNITIES The biotechnology industry has INDIAN BIOTECH INDUSTRY:a global presence today. While the AN OVERVIEWindustry has its roots in the With the Government endeavoringdeveloped country markets, an an enabling environment, the Indianemerging country like India, realising biotech industry has been growingthe benefits that could be derived at a healthy pace. The robustfrom the biotech sector, was one of growth in the Indian biotechthe few developing countries to industry has resulted in the creationembrace the industry at an early of a plethora of opportunities, bothstage. In fact, India has been playing at the domestic and internationalan important role in the global biotech arena, for biotech businesses,industry through better coagulation especially in the areas ofof academic research and BioPharmaceuticals, biosimilars,commercial development, coupled bio-agriculture, food and nutritionwith the synchronization of science sectors. The revenues of the Indianand finance to emerge as a strong biotech industry quintupled duringcontender in the global biotech the period 1997-98 to 2008-09 –industry. Amidst an environment of from US$ 0.5 billion to US$ 2.5growing competition and ever billion.changing regulations, the Indian The Indian biotech industry is wellbiotech industry has been successful positioned to leverage on thein creating a niche for itself in the country’s clinical and strongworld. In fact, Indian firms through research capabilities, relatively lowcontinuous Research & operational costs, institutionalDevelopment (R&D) have been able infrastructure, as also access to ato create their own brands of diverse patient profile. Biodiversityrecombinant DNA (rDNA), which has of human gene pools and uniqueresulted in an increase in their share plant, animal and microbial diversityin global market, while according also offer significant opportunitiesvisibility to the Indian biotech sector for undertaking research in variousat the global level. emerging areas.82
  • 78. Exhibit 20: GROWTH OF THE BIOTECHNOLOGY INDUSTRY IN INDIA Value in Rs. Crores SOURCE: BioSpectrum 2009.INDIAN BIOTECH INDUSTRY: each of which is contributing to theMAJOR SEGMENTS growth of the biotechnology industry. The following sectionsThe biotech industry in India canbe broadly categorised under five attempt to highlight the scope anddistinct segments - BioPharma, potential of the major segments ofBioServices, BioAgriculture, biotechnology as classified above,BioIndustrial, and BioInformatics, and the opportunities they offer. Exhibit 21: KEY SEGMENTS IN INDIAN BIOTECHNOLOGY INDUSTRY SOURCE: Exim Bank Research 83
  • 79. Table 8: UNDERSTANDING KEY SEGMENTS IN BIOTECHNOLOGY INDUSTRY BioPharmaceutical These are medical drugs produced using biotechnology. They are proteins (including antibodies), nucleic acids (DNA,RNA) used for therapeutic or diagnostic purposes, and are produced by means other than direct extraction from a native (non-engineered) biological source. A large majority of BioPharmaceutical products are pharmaceuticals that are derived from life forms. BioServices BioServices mainly include clinical research and contract research organizations (CRO) and to some extent custom manufacturing. BioServices today are also covering areas like data management, clinical trials, site management, bio equivalence and toxicology studies apart from catering to knowledge process outsourcing for pharma industry. BioAgriculture The spectrum of biotechnology application in agriculture is very wide and includes generation of improved crops, animals, plants of agro forestry importance and microbes. The important area in BioAgri is the hybrid seeds business followed by BioPesticides and BioFertilizers. BioIndustrial The BioIndustry predominantly consists of enzyme manufacturing and marketing companies. The use of enzymes is still limited in the country, but India holds significant potential for growth. These enzymes are used in industries such as detergents, textiles, food, leather, paper and pharmaceuticals. BioInformatics BioInformatics now entails the creation and advancement of databases, algorithms, computational and statistical techniques, and theory to solve formal and practical problems arising from the management and analysis of biological data. It is basically construction of databases on genomes, protein sequences; modelling complex biological processes, including systems biology. SOURCE: Industry Sources, Exim Bank Research84
  • 80. Biopharmaceutical secondly, they are able toBioPharmaceutical products are command a premium price.therapeutic or preventativemedicines that are derived from BioPharma: Sectorwise Revenuesmaterials naturally present in livingorganisms using recombinant DNA The total BioPharma sub-segment(rDNA) technology. Conventional in India, comprising vaccines,pharmaceuticals are generally therapeutics and diagnostics havesmall molecules, whereas registered a 14.3% growth in 2008-BioPharmaceuticals are typically 09, over the previous year, in termsproteins, peptides, nucleic acids or of total revenues. The segment hasinactivated viruses or bacteria. been the single largest contributorAccording to a PwC report, the to the Indian biotech industry forgrowth in BioPharmaceutical drugsand biologics have outperformed many years. The total BioPharmathe pharmaceutical market largely sector grew from Rs. 6889 crore indue to two factors – firstly, they 2007-08 to Rs. 7883 crore in 2008-address areas of clinical need 09. In 2008-09 exports accountedthat are unmanageable with for 62% of the BioPharma revenue,conventional therapeutics, including while domestic sales accounted forcancers and genetic diseases, and the rest (38%). Exhibit 22: BIOPHARMA REVENUE BY SEGMENTS IN INDIA SOURCE: BioSpectrum, Exim Bank Research 85
  • 81. Exhibit 23: SEGMENTWISE SHARES OF BIOPHARMA INDUSTRY (2008-09) IN INDIA SOURCE: BioSpectrum, Exim Bank Research Though there has been a of the largest in the world, and aconsistent growth in the Indian relatively developed, with a rankingBioPharma sector, most of its of 4 th in terms of volume ofrevenues come from export sales. In production, and 13 th in terms ofother words, there is a huge potential value. The success strategiesin the domestic market yet to be adopted by the Indian pharma-tapped by the Indian BioPharma ceutical sector could be suitablysector. In this context, it may be leveraged by the Indian biotechmentioned that India has a thriving players to garner the businesspharmaceutical industry, which is one potential emerging in this segment. Table 9 : SELECT KEY FIRMS IN THE BIOPHARMA BUSINESS IN INDIA Vaccine Diagnostics Therapeutic Serum Institute Tulip Novo Nordisk Panacea TransAsia Biomedical Eli Lilly Bharat Biotec Bayer Reliance Life Sciences Bharat Serums Span Diagnostics Bharat Biotec Biological E Becon Diagnostics Haffkine Bio-Pharmaceutical Bharat Biotech Pfizer Qualigens Diagnostics Smithkline Beecham J. Mitra & Co. Sanofi Pasteur xCyton Diagnostics Wockhardt SOURCE: Compiled from BioSpectrum86
  • 82. Vaccines nationwide vaccination programme,The vaccines segment is the prime and FMD control programme tocontributor, accounting for close to make “disease-free zones”. While46% of the total BioPharma sector the Government agencies arein 2008-09. The vaccines segment supplying vaccines free of cost to thegrew at a compounded annual farmers, the growing demand isgrowth rate (CAGR) of around lilkely to be filled by the private sector15.3% in the last four years, from players as well. Companies likeRs. 2341 crore in 2005-06 to Bharat Biotech, one of the leadingRs. 3587 crore in 2008-09. On names in human biologics, Brilliantyearly basis, the revenue in 2008- Industries (mainly into pet vaccines),09 increased at 10.2%, from Venkateshwara Hatcheries andRs.3250 crore in 2007-08. Hester Pharmaceuticals (mainly into poultry vaccines) are also entering The recent upsurge in demand the large animals vaccine segment.for vaccines, both in domestic andinternational markets is important Human vaccines preventboth from public health and spreading of many life-threateningeconomic perspectives. According to diseases (mainly through effectiveDepartment of Biotechnology, public health interventions), and playMinistry of Science Technology, a major role in significantly increasingGovernment of India, there are human life expectancy. India with aaround 15 companies involved in vast population is increasingly beingmarketing over 50 brands for 15 perceived as a major market fordifferent vaccines. The vaccines human vaccines in the world. Owingsegment under BioPharma can to an improved Intellectual Propertyfurther be classified as Animal Rights (IPR) law, increase in healthcare spending, and a relativelyVaccines (used on animals) and high annual birth rate, coupled withHuman Vaccines (used on humans). a large prevalence of infectious and The animal biologicals market is chronic diseases, the demand forgenerally derived from the need to vaccines in the country is expectedcontrol animal diseases and thereby to grow manifold. In the years toenhance productivity of the livestock come, new diseases (like H1N1 flu)sector. In animals, BioPharma could also possibly be mitigatedsegment vaccines are widely used through vaccination. In this context,for diseases in the poultry sector, and it may be noted that, recently, infoot and mouth disease (FMD) of September 2009, the U.S. Food andcattle. There is a manifold increase Drug Administration approvedin the demand for vaccines after the vaccines made by CSL Limited,Indian Government launched a MedImmune LLC, Novartis Vaccines 87
  • 83. and Diagnostics Limited, and Sanofi vaccine manufacturers in the countryPasteur Inc., for preventing H1N1 may witness manifold increase ininfluenza virus. demand for vaccines if the Government includes combination Another important trend is the vaccine, and newer vaccines toincrease in the production of high prevent diseases, like Japanesevalue combination vaccines (DPT Encephalitis and Dengue, in itswith Hepatitis B, Hib, and injectible immunization program.polio vaccine), instead of the stand-alone customary vaccines. By According to the DBT, Shantareducing the number of injections, Biotechnics supplies over 40% of thecombination vaccines help to global requirement of Hepatitis-Bfacilitate immunization against a vaccine under UNICEF programmevariety of diseases with lesser cost in many countries. The Serumand better coverage. According to Institute of India is the largestan estimate by BioSpectrum, the size supplier of vaccines to theof Indian vaccine sub-segment is Government of India’s Expandedexpected to grow at about 20-25 % Programme of Immunization (EPI),over the next few years, while and is also the largest exporter ofglobally the vaccine sub-segment is vaccines with a distribution networkvalued at US$ 20.6 billion and is in 138 countries. It is also estimatedgrowing faster than the pharma by DBT that every second child in theindustry. BioSpectrum infact predicts world is vaccinated by the Serumthat the world market size of Institute’s measles and diphteria,combination vaccine to cross US$ 2 pertussis and tetanus (DPT)billion mark in 2013, which implies vaccines. Serum Institute has alsoan annual compound growth of over been commissioned by World Health18%. Organisation (WHO) to develop the It is worth noting that India has vaccines against the latest strain ofone of the largest immunization H1N1. Panacea Biotec is anotherprogrammes in the world, in terms firm supplying under the UNICEFof volume of vaccines used, number programme and to the EPI. Otherof beneficiaries, number of notable Indian firms that areimmunization sessions organized, manufacturing vaccines includeand the geographical diversity. With Bharat Biotech, Bharat Serums,USFDA-compliant facilities, Indian Biological E, Haffkine Bio-vaccine makers also have a critical Pharmaceutical, Pfizer of India,edge in terms of the cost and quality Smithkline Beecham andof R&D. It is anticipated that the Wockhardt.88
  • 84. Therapeutics driven by rapidly developingA therapeutic vaccine normally technology. Every company isprevents a disease from flourishing striving for two common goals,after it has taken hold. The patient convenience and bettertherapeutic segment contributed control of the disease. In the lastaround 37% of the total revenues couple of years, Indian firms haveof BioPharma in 2008-09. The launched rDNA insulin productsIndian therapeutics market recorded under different brands at lowera 19% growth to reach revenues prices, which have intensified theworth Rs. 2956 crore in 2008-09. competition in the domestic market.Human insulin is the largest Indian biotech major, Biocon, is alsocontributor to the therapeutics looking at the market space formarket owing to India’s large insulin in India.diabetic population. With diabetes Plasma proteins have alsonow ranked at fifth leading disease carved their own niche in the Indiancausing death across developed BioPharma sector. India is a potentialmarkets, and forecast from market for manufacturing plasmaPricewaterhouseCoopers (PwC) protein owing to the presence of asuggesting the disease to grow by quarter of the world’s haemophilic7.1 % across the globe by 2013, patients in the country. With overthe market for once-a-day drug 100,000 patients, the countrydelivery, and non-invasive drug requires approximately 900,000 litresdelivery systems continue to offer of plasma protein per year. Over thesignificant potential for expansion. years, India’s main source has beenIndia is predicted to lead the way Baxter Healthcare, USA. However,with 73.5 million people expected Reliance Life Sciences, eyeing anto have the disease by 2025. opportunity, has successfully Having recognized the growth launched five sets of plasma proteinspotential for anti-diabetic products, in 2005, namely Albumin (AlbuRel),Indian companies have invested Immunoglobin (ImmunoRel), Anticonsiderably in developing Haemophilic Factor VIII (HemoRel),indigenous human insulin. As such, Fibrin Sealant (ReliSeal), and Viruscompanies like US-based Eli Lilly, by inactivated plasma (ReliPlasma), atannouncing a joint venture with a considerably lower price. Given theIndian company, Jubilant Organosys, nascent stage of the therapeuticsin October 2008, are looking to sub segment in the BioPharmasecure their place in this market. The sector, this area providesnext few years promise dramatic tremendous opportunity for newchanges in the treatment of diabetes, investments through further researchmuch of which are expected to be and development. 89
  • 85. Table 10: RECOMBINANT THERAPEUTIC DRUGS APPROVED FOR MARKETING IN INDIA (till October 2008) Molecules Therapeutic Application Hepatitis B vaccine Immunization against Hepatitis B Granulocyte Colony Stimulating Factor Netropenia Erythroprotein Anaemia Interferon alpha 2B Leukemia, Hep – B, Hep – C Epidermal Growth Factor (EGF) Organ morphogenesis, Mitogenesis Streptokinase Dissolution of clot in acute mycordial infarction Human Insulin Diabetes GM-CSF Chemotherapy induced neutropenia Interferon alpha 2A Chronic myeloid leukemia Human growth hormone Dwarfism in children Nimotuzumab Breast cancer Rituximab Non – Hodgkin’s lymphoma, arthritis Tissue Plasminogen Activator Dissolution of clot in acute myocardial infarction Blood Factor VIII Hemophilia Type A Follicle stimulating hormone Reproductive disorders Teriparatide (Forteo) Parathyroid hormone for treating osteoporosis Drerecogin alpha Burns and severe sepsis Platelet Derived Growth Factor Receptor antagonist in certain types of cancer Interleukin 2 Renal cell caricinoma Blood Factor VII (Eptacogalpha) Control bleeding in Haemophilic patients Iterferon gamma Chronic granulomatous disesse, osteopetrosis Iterleukin 11 Thromobocytopenia SOURCE: Indian GMO Research Information System90
  • 86. Diagnostics of quality. Hospitals and diagnosticThe diagnostics business accounts centres across the country arefor close to 17% of the total therefore concentrating on equippingBioPharma business in 2008-09. themselves with the best in classThe diagnostics business grew at medical and diagnostic services.a compounded annual growth rate Companies that offer these(CAGR) of around 14% during the devices are increasing theirperiod 2005-2009 - from Rs. 905 investments and product portfolio incrore in 2005-06 to Rs. 1340 crore the country. According to Nationalin 2008-09. On a yearly basis, the Institute of Pharmaceuticalrevenue increased at 16.5%, from Education and Research (NIPER),Rs.1150 crore in 2007-08. However, the level of R&D spending in thethis increase has been lower as medical device and diagnosticscompared to the growth in the industry as a percentage of sales hasprevious year, which was around been consistently increasing - from21%. According to Netscribes, 60- 5.4% in 1990 to 8.4% in 1995, and70% of medical treatments in India further to 12.9% post-2000. NIPER,are based on laboratory diagnostic in January 2009, predicted thetests. Diagnostics revenue market medical devices supplies market inincreased from Rs.2341 crore in India to grow at 23 % annually.2005-06 to touch Rs.3587 crore in Today, there are many local2008-09. companies that produce diagnostic With India becoming more kits, reagents, and kits for bloodhealth conscious and with increase grouping, serology, clinicalin awareness of diseases such as chemistry, pregnancy detection, HIVAIDS, Hepatitis, etc., along with the detection and other rapid tests thatGovernment’s efforts to promote are accepted globally, and importscommunity health, such as of such products by India in finishedcompulsory testing by blood banks form is almost negligible. While overfor AIDS, the potential of the 50 companies are already doingdiagnostic sub-segment is expected business in this segment, includingto grow further in the days to come. multinationals, many large playersIt is also important to note that the are still entering the Indian diagnosticincrease in per capita income in the market. The top firms havecountry along with an increase in the consolidated their market presencemiddle class population, Indians are and are growing between 15-20%.seeking better medical facilities. Some of the leading diagnosticIndividuals today are not ready to companies are Tulip, TransAsiaforego medical treatment at the cost Biomedical, Bayer, Span 91
  • 87. Diagnostics, Becon Diagnostics, since January 2005. The mainBharat Biotech, Qualigens advantage of India as a pre-clinicalDiagnostics, J. Mitra & Co., and work and research destination lies inxCyton Diagnostics, among others. the high quality of knowledge base and low infrastructure cost.BioServices Companies looking for outsourcingBioServices mainly include clinical work to India are mainly small toresearch and contract research medium sized pharmaceutical andorganizations (CRO) and to some biotechnology companies fromextent custom manufacturing17. The developed countries. WithBioServices sector, which genetically diverse population and well-developed clinics and labs, Indiaaccounted for about 17% to the is also strategically placed to emergetotal biotechnology industry’s as a front-runner destination forrevenues of Rs 12137 crore, has outsourcing of clinical trials. Further,recorded a growth of 31% over the Indian companies, hospitals andprevious year. The BioServices clinics are endeavouring to complyrevenue for 2008-09 was estimated with the guidelines of Good Clinicalat Rs 2062 crore. Exports dominate Practices (GCP), thereby makingthe BioServices sector with almost clinical trials a potential sector for95% of the total BioServices investments .revenues in 2008-09. TheBioServices segment has According to a recent ATcontributed, infact, to over 27% of Kearney global survey, India isthe total exports from the ranked third across all countriesbiotechnology industry. (after the USA and China) in terms of its overall attractiveness as a The contract research space clinical trial destination. Also, Mcopened up in India after the country Kinsey, in a study has predicted thatentered into the new patent regime the demand for trained17 With India being a base for large number of plants approved by USFDA out side the US and low manpower costs, the country is becoming an important destination for many leading pharma companies for both custom manufacturing and contract research. Custom manufacturing is now a growing area with slowdown in sales of patented drugs and drying of R&D pipelines. So MNCs are looking for alternatives to reduce the costs on R&D and manufacturing. Companies like Nicholas Piramal, Shasun Chemicals, Dishman Pharma, Dr Reddy’s Labs, Jubilant Organosys, GVK Biosciences, Suven Lifesciences, and Bharat Biotech are leading names in the custom manufacturing business. Similarly, Sun Pharmaceuticals and Torrent Pharmaceuticals are into contract manufacturing of recombinant products for multinationals like Eli Lilly and Novo Nordisk, respectively. Chiron Behring Vaccines, a joint venture of Aventis, has been manufacturing Rabipur, anti-rabies vaccines for supplying to Aventis Pharma.92
  • 88. professionals, including scientists, actively involved in doingwill reach upto 50,000 by 2013, from bioequivalence and bioavailabilitythe current level of 10,000. studies with a handful of them into clinical trials (Phase I-IV)18. Of late, a new trend inBioServices sub-segment is being Quintiles Spectral,observed, where large companies SiroClinpharm and Syngene are theoutsource their clinical three key independent CROsmanufacturing facilities, while offering services in India in theretaining commercial manufacturing biotech field apart from others. Withand control over cost of goods, clinical trials in India costing less thanquality and on supply. On the other one-tenth of the levels in developedhand, it has also been observed that markets, clinical researchsome specialized clinical organizations in India could seekmanufacturing organizations prefer research and trial projects fromto outsource the routine job of international companies. However,commercial manufacturing which they may need to demonstrate bestthey may no longer perceive as their practices and follow up procedurescore competence area, as also prescribed to meet internationaloutsource the core business of standards, especially the WHOresearch and development. prescribed Good Clinical Practices. As the BioServices businessexpands, many firms engaged in this Bioagri Segmentsub-segment are offering services in Biotechnology has emerged as aareas like data management, clinical critical instrument that seeks totrials, site management, bio maintain India’s agricultureequivalence and bioavailability competitiveness and in achievingstudies, toxicology studies, apart nutrition security in the face offrom catering to knowledge process major challenges such as loweroutsourcing for pharma industry. productivity of crops, livestock andInfact, most of the Indian clinical fisheries; heavy production lossesresearch organizations today are due to biotic (insects pests, weeds)18 Phase I — Small-scale human trials to determine safety. Typically include 20 to 60 patients and are six months to one year in length. Phase II — Preliminary trials on a drug’s safety/efficacy. Typically include 100 to 500 patients and are one and a half to two years in length. Phase III — Large-scale controlled trials for efficacy/safety; also the last stage before a request for approval for commercial distribution is made to the FDA. Typically include 1,000 to 7,500 patients and are three to five years in length. Phase IV — Follow-up trials after a drug is released to the public. 93
  • 89. and abiotic (salinity, drought, BioAgri also offers solutions foralkalinity) stresses; heavy post- growing vegetables and fruits. As theharvest crop damage; and declining use of pesticide sprays and pesticideavailability of water as an residues remain a dauntingagricultural input. The spectrum of challenge, especially in fruit andbiotechnology application in vegetable cultivation, extending theagriculture is wide and includes proven benefits of Bt from a fibredevelopment of improved variety of crop to a food crop is the obviouscrops, animals, plants of agro next step. R&D in food crop is alsoforestry importance and microbes. expected to contribute to higher andThe important sub-segment in more stable yields apart fromBioAgri business is the hybrid enhanced nutrition. India, today, hasseeds business, followed by come a long way since its adoptionBioPesticides and BioFertilizers. of Bt cotton in 2002. It is ranked BioAgri contributed around 12% fourth in the world among theof the total market value of countries that are growing Bt crops,Biotechnology in India, after in terms of area under production.BioPharma and BioServices, in Reflecting on the importance and the2008-09, with a total revenue potential of this segment, researchgeneration of Rs. 1494 crore, of on GoldenRice and mustard withwhich domestic revenues increased levels of beta-carotene isconstituting around 96% of the total. also being undertaken. TheThe BioAgri segment revenues development of Bt brinjal (eggplant)witnessed the second highest growth is an appropriate and timely steprate after BioServices segment, with since it is an important crop for small,over 24% growth in 2008-09, over resource-poor farmers, consumersthe previous year. and the Indian society at large. Research and field trials are also India offers significant market for being undertaken for other food andBioAgri segment given the fact that horticultural crops, especiallyIndia is largely an agrarian economy. vegetables.The domestic market potential,combined with scientific Some of the companies activeinfrastructure in agriculture, rich bio- in this segment include Vibhadiversity and skilled human-power is Agrotech, Rasi Seeds, Krishidhan,poised to make India an important Pioneer, and DuPont. Some Indianglobal base for BioAgri research. The MNCs present here include Mahyco,surge in opportunity is expected to Bejo Sheetal, JK Agrigenetics,improve agricultural productivity Krishidhan and Syngenta. MNCsespecially at a time when there is a from abroad operating in Indiadiminishing per capita arable land include Monsanto and Bayer. Alland water resources. these firms are increasing their94
  • 90. Table 11: Biotech Crops in Field Trial in India, 2008CROP ORGANIZATIONBrinjal Indian Agricultural Research Institute, New Delhi Sungro Seeds Ltd. Mahyco, Jalna Tamil Nadu Agriculture University, Coimbatore University of Agricultural Sciences, Dharwad Bejo Sheetal, JalnaCabbage Numhems, Gurgaon Sungro Seeds Ltd., New DelhiCastor Directorate of Oilseeds Research, HyderabadCauliflower Sungro Seeds Ltd., New Delhi Numhems, GurgaonCorn Monsanto, MumbaiGroundnut International Crops Research Institute for Semi-Arid Tropics, HyderabadOkra Mahyco, Mumbai Sungro Seeds Ltd., New Delhi Bejo Sheetal, Jalna Arya Seeds, GurgaonPotato Central Potato Research Institute, Shimla National Institute of Plant Genome Research, New DelhiRice Indian Agricultural Research Institute, New Delhi Tamil Nadu Agriculture University, Coimbatore M.S. Swaminathan Research Foundation, Chennai Directorate of Rice Research, Hyderabad Mahyco, Mumbai Bayer CropScience, Hyderabad Avestagen, BangaloreTomato Indian Agricultural Research Institute, New Delhi Mahyco, Mumbai Avestagen, BangaloreSOURCE: Indian GMO Research Information System (IGMORIS), 2008; Departmentof Biotechnology, ISAAA, 2008 95
  • 91. existing R&D and commercialising several Government and privatetheir infrastructure base in different laboratories. Monsanto’s ‘Bollgard’parts of the country. Bt-gene, introduced by Monsanto- Mahyco into the Indian cottonHybrid Seeds hybrids, by backcrossing with aThe Indian population has crossed transgenic line, was cleared forthe 1 billion mark already, and by commercial use in 2001, after seventhe year 2010, it is expected to years of trials at various levels. Fromtouch 1.2 billion. To provide food about 50,000 ha of production areaand nutritional security for such a in the year 2002, the Bt cottonlarge population, including acreage increased to 7.6 millionprotection against malnutrition, it is hectares in 2008, thereby registeringimportant that productivity levels are a CAGR of over 130% over 6 yearsincreased through the use of right in India. In 2008, 30 seed companiesquality seeds, which have the were engaged in the production ofcapacity to produce more with 274 Bt cotton hybrids in nine states20.lesser inputs. In this context, the Majority of the increase inseed industry has a critical role toplay in dissemination of latest production is attributed to Bt cottonagricultural technology to the hybrids, which have generatedfarmers, and by making available impressive results. The usage ofgood quality seeds to them. biotech crops has also contributedAdoption of genetically modified to the growth in farm income in India.(GM) crops would assure higher According to the Internationalproductivity and nutritional security. Service for the Acquisition of Agri-Presently, GM plants are largely in Biotech Applications (ISAAA),use for commercial agriculture and farmers have benefited with anpredominantly linked with traits of additional Rs. 12,800 crore farmone or two transgenics 19 that income generated due to Bt cottonmanifest resistance to salinity, technology during the period 2002-alkalinity, drought resistance, 2007.herbicide tolerance, insecticide With the success of Bt Cotton,resistance or microbial diseases. the Government has realised the In India, research on transgenic enormous potential of suchplants has been in progress in technologies and has been keen to19 Transgenic, a subset of GMOs, are organisms which have inserted DNA that originated in a different species20 Global status of commercialized biotech/GM crops - ISAAA Brief No. 39, International Service for the Acquisition of Agri-biotech Applications, Ithaca, New York, 200896
  • 92. Table 12: AREA, PRODUCTION AND PRODUCTIVITY OF COTTON IN INDIA (2002-08) Year Area Production Productivity (lakh ha) (lakh bales; 1 bale=170 kg) (kg / ha) 2002-03 76.67 136 302 2003-04 76.30 179 399 2004-05 87.86 243 470 2005-06 86.77 244 478 2006-07 91.44 280 521 2007-08 94.39 315 567 2008-09 93.73 290 526 SOURCE: Cotton Advisory Board, Government of India, 2009put in place policies and regulations, building the capabilities in-house, orwhich would promote responsible by striking partnerships with othercrop biotechnology. According to institutions.ISAAA, public sector investments in Investment in agricultural relatedcrop biotechnology in India alone are biotechnology has resulted inestimated to be around US$ 1.5 enhanced R&D capability andbillion over the last 5 years (2004- institutional building over the years.2009). The private sector is slowly By 2010, India has the potential topicking up by establishing new state- become a major grower of transgenicof-the-art R&D infrastructure, biotechlabs, high-tech green house and field rice and several geneticallytesting facilities, seed conditioning, engineered vegetables. In the areaand processing and packaging of agribiotech research, institutes likeplants. Further, many seed Delhi University, Indian Agriculturalcompanies in the country are Research Institute (IARI), Nationalendeavouring to invest significantly Centre for Plant Genome Researchin crop biotechnology. Several of (NCPGR) are playing a critical rolethem already have capabilities to in pursuing studies in various areas.leverage Marker Assisted Selection21technologies to augment their crop Biopesticides and Biofertilisersimprovement programmes. They are The biopesticides and biofertilisersnow moving towards crop genetic sub-segments, though constitutingtransformation approaches, either by a modest proportion of the BioAgri21 Marker-assisted selection is a tool for genetic improvement of crops, livestock, forestry and fish. 97
  • 93. segment, have been growing at a research programmes in varietalhealthy pace since the last few development, yield improvement andyears. The Government of India disease management. Further, Indiahas initiated a number of also has a large base of manpower,programmes to control major trained in agriculture sciences toweeds and pest diseases of provide extension services. Severalimportant crops, vegetables and international companies have set upplants to increase their productivity research and development facilitiesthrough various biocontrol agents. in India for developing hybrid seedsA number of universities and and other biotechnology-basedinstitutes have been working in the activities. Leading players inarea of biofertilisers. The University biopesticides and biofertilisers areaof Hyderabad, National Research are Biotech International, andCentre for Plant Biotechnology, IARI Multiplex Biotech, among others.(Indian Agricultural ResearchInstitute), BARC (Bhabha Atomic BioIndustrialResearch Centre) and TERI (TataEnergy Research Institute), along The BioIndustry predominantlywith New Delhi based International consists of enzyme manufacturingCentre for Genetic Engineering and and marketing companies. TheseBiotechnology (ICGEB), are enzymes are used in industriesworking on various programmes in such as detergents, textiles, food,this field. leather, paper and pharmaceuticals. Although the use of enzymes is still India and the US have signed a at a relatively low level, interest infive-year agreement in the area of the benefits of using enzymaticagribiotech research. The agreement solutions in India is intensifying.signed is tripartite in nature; while thenodal agencies will be the United The BioIndustrial segment isStates Agency for International estimated to have garneredDevelopment (USAID), and the revenues to the tune of Rs. 478 croreDepartment of Biotechnology (DBT), in 2008-09, a growth of 16.6% overGovernment of India, the research the previous year. Almost 81% of thewill be pursued with support from revenue in the year 2008-09 wasCornell University, USA. India has generated from the domestic marketalso signed a MoU with the alone; this sub segment constitutesNetherlands for cooperation in around 1% of the total biotechnologybiotechnology in the areas of exports from the country in 2008-09.agriculture and health. Beer and brew industry finds a The agriculture sector in India large potential for use of enzymeshas been supported by public for improving their quality, yields and98
  • 94. process efficiency. The Government, Government of India has also beenon its part, has been encouraging the supporting this industry by fundingestablishment of wine parks, which many projects related to industrialwould facilitate the processing of enzymes, thus helping the industrygrapes for value addition. Indian to grow and compete with globalBioIndustrial companies produce players.various enzymes, which includeamylases, proteases, cellulases, BioInformaticsxylanases, glucoamylases, BioInformatics is a scientificpectinases, papains, bromelain and discipline that encompasses allcatalases among others, with around aspects of biological information45% of total enzyme productioncatering to the pharmaceutical acquisition, processing, storage,industry. It is worth noting that the distribution, analysis andproduct range and services offered interpretation. BioInformaticsby the firms in this sub-segment are bridges many disciplines andgrowing rapidly as the use of amalgamates disciplines likeenzymes is gaining widespread Biology, Chemistry, Mathematics,acceptance. Firms today are Statistics and Informationincreasingly looking at producing Technology so as to understand lifevarious types of industrial enzymes and its processes.using natural methods of production, The share of BioInformatics infrom plants and vegetable origin and total Biotechnology industry is aroundfermentation. 1.8% in 2008-09. This sub segment Several domestic enzyme made a modest progress, increasingmanufacturers are building new from Rs. 190 crore in 2007-08 to Rs.facilities. Apart from India-based 220 crore in 2008-09, therebyAdvancedEnzymes, Rossari Biotech growing by 15.7%. The industry hasand Zytex, Denmark based been found to be more exportNovozyme, are among the top oriented with almost 77% of the totalcompanies in this segment in India. revenues coming from offshoreOther global players having a direct markets in the year 2008-09.or indirect presence in the country With the IT sector eyeing forare Genencor International, Enzyme diversification of softwareDevelopment Corp., Dyadic applications, BioInformatics posesInternational, and Quest as potential area for IT application.International. BioInformatics uses computer Opportunities exist in the software tools for database creation,manufacturing of industrial enzymes data management, datafor export purposes. The warehousing, data mining, and 99
  • 95. Table 13:100 CONSUMER GOODS MADE WITH INDUSTRIAL BIOTECH CONSUMER OLD PROCESS BIOTECH PROCESS TECHNOLOGY CONSUMER BENEFIT PRODUCT Detergent Phosphates added as Addition of biotechnology Genetically enhanced -Elimination of water brightening and cleaning enzymes as brightening microbes or fungi pollution from phosphates agents and cleaning agents: engineered to make -Brighter, cleaner clothes - Proteases remove enzymes with lower-temperature protein stains wash water - Lipases remove - Energy savings grease stains - Amylases remove starch stains Bread Potassium bromate, a Addition of biotechnology Microorganisms genetically -High-quality bread suspected cancer-causing enzymes to: enhanced to produce -Longer shelf life agent at certain levels, - enhance rising baking -No potassium bromate added as a preservative - strengthen dough enzymes (directed evolution and a dough strengthening - prolong freshness & recombinant DNA) agent Polyester Bedding Polyester produced Biotech polyester (PLA) Existing bacillus microbe -PLA polyester does not chemically from petroleum produced from corn sugar used to ferment corn sugar harbor body odor like other feedstock feedstock to lactic acid; lactic acid fibers converted to a -Biodegradable biodegradable polymer by -Not made from petroleum heating; -Does not give off toxic polymer made into plastic smoke if burned products and polyester Vitamin B2 Toxic chemicals, such as One-step fermentation Genetically enhanced -Biologically produced aniline, used in a process uses vegetable microbe developed to without chemicals nine-step chemical oil as a feedstock produce vitamin -Greatly reduces hazardous synthesis process B2(directed evolution) waste generation and disposal Contd...
  • 96. Contd... CONSUMER OLD PROCESS BIOTECH PROCESS TECHNOLOGY CONSUMER BENEFIT PRODUCT Stonewashed Jeans Open-pit mining of pumice; Fabric washed with Textile enzymes produced -Less mining fabric washed with biotechnology enzyme by genetically enhanced -Softer fabric crushed pumice stone (cellulase) to fade and microbe (extremophiles -Reduces energy and/or acid soften jeans or khakis and recombinant DNA) consumption -Lower cost Paper Bleaching Wood chips boiled in a Enzymes selectively Wood-bleaching enzymes -Reduces use of chlorine harsh chemical solution degrade lignin and break produced by genetically bleach and reduces toxic to yield pulp for paper down wood cell-walls enhanced microbes dioxin in the environment making during pulping (recombinant DNA) -Cost savings due to lower energy and chemical costs Ethanol Fuel Food and feed grains Cellulase enzyme Genetically enhanced -Renewable feedstock fermented into ethanol technology allows organism developed to -Reduces greenhouse gas (a technology that is conversion of crop produce enzymes that emissions thousands of years old) residues (stems, leaves, convert agricultural wastes -Increases domestic energy straw and hulls) to sugars into fermentable sugars production that are then converted (directed evolution, -Is more energy efficient to to ethanol gene shuffling) produce than old process Contact Lens Solution Surfactants and/or saline Protease enzymes remove Genetically enhanced -More effective contact lens solutions (do not remove protein deposits from the microbes engineered to cleaning protein deposits) used to contact lens make protease enzymes -Less eye irritation clean lenses (directed evolution) Antibiotics Chlorinated solvents and One-step biological Genetically enhanced -65% reduction in energy hazardous chemicals used process uses direct organism developed to consumption to produce antibiotics fermentation to produce produce the key -Overall cost savings through chemical synthesis antibiotic intermediate intermediate of certain antibiotics (recombinant DNA) SOURCE: Biotechnology Industry Organization 2008101
  • 97. global communication network. The disciplinary gaps on biotechnologymajor goal of BioInformatics is to information and establish link amongobtain the complete sequences of as scientists in organisations involvedmany different genomes as possible. in R&D and manufacturing activitiesBy having the sequence information, in the country. The network hascompanies and research presently grown to over sixty centresorganizations initiates what is covering major parts of the country.commonly referred to as “sequencebased biology”. The sequence The international client base forinformation is then taken, and used Indian BioInformatics companies hasto give scientists more direction as expanded rapidly. These entitiesto how they should design include the National Institute ofexperiments, and how these Health (NIH), University of Mexico;scientists should analyze the National Institute for Cellular Biology,experiments. Functional genomics, Dublin; National Research Council,biomolecular structure, cell Sequencing Center at Halifax; andmetabolism, biodiversity, David Eisenberg’s Research Lab atdownstream processing in chemical DOE Institute for Genomics andengineering, drug design, vaccine Proteomics, UCLA22; among others.design are some of the areas where Apart from domestic financialBioInformatics forms an integral institutions, multilateral institutionscomponent. like International Finance Corporation (IFC) have also been Many Indian entrepreneurs have investing in the biotech spectrum.set up companies to take advantage For example, IFC has invested US$of the emerging opportunities in the 6.5 million of equity for a minorityBioInformatics segment. The stake and debt in Hyderabad based,Government on its part has alsoinitiated a number of programs to Ocimum Biosolutions in 2006.facilitate the growth of this Earlier, in May 2005, IFC hadspecialized segment. The BTISnet invested US$ 4 million equity to APIDC Biotechnology Fund 23 with(Biotechnology Information System a focus on early stage life-sciencesNetwork) program of Department of businesses.Biotechnology, Government of Indiahas taken various initiatives to The Indian firms have beenprovide a national bioinformation strategically devising tools so as tonetwork designed to bridge the inter cater to the world requirements.22 University of California, Los Angeles23 APIDC Biotechnology Fund is the first fund in India focusing on early stage, novel IP-driven firms that have a strong presence in the domestic market.102
  • 98. Some of the firms based in India used in the diagnosis of diseasessuch as Strand Life Sciences, such as eye infection, meningitis andMolecular Connections, Mascon Life meningoencephalitis, etc. whichSciences, and Helix have created helps to detect the presence of theindigenous tools for various nucleic acid of the causativecomponents across the drug organism. Because of the extensivediscovery value chain that are being research being done in India, theused all over the world. Strand Life demand for DNA chips have alsoSciences has devised a software been increasing. Some of the firmsprogram called ‘Avadis’ for which it involved in DNA chips are Agilenthas received awards from Technologies, Affymetrix, andorganizations like Red Herring, Frost Ocimum Biosolutions.& Sullivan and World EconomicForum. “Avadis” is an integrated EMERGING NICHE AREAS INdecision analytics program that deals BIOTECHNOLOGYwith data mining and analytics needsof the various life sciences sector. BioSimilars The pure-play BioInformatics The expiry of patent protection andcompanies in India include Strand regulatory data protection forGenomics, Ocmium Biosolutions, certain biotechnological medicinesSysArris, SciNova India, has led to the development ofCytoGenomics, Mascon and medicines what are calledMolecular Connections. These firms biosimilars. Biosimilars attempt tohave come out with products catering copy the process, which leads tomainly to the needs of pharma and the production of the originalbiotechnology companies abroad.Strand Life Sciences has also tied innovative biotechnologicalup with London based Pharmidex to medicine. The term ‘biosimilars’ iscreate software to predict the ability in use in the European Union, butof molecules to cross physical in the US the term ‘follow-onbarriers in the central nervous biologics’ is much popular. In Indiasystem. TCS has also signed a multi however the terminology ‘biosimilar’billion dollar contract with US based is prevalent.Sequenom24, to develop software As regulatory obstacles tosolutions. development of biosimilars is Another emerging area is DNA increasingly being resolved, achips market that is currently being growing number of opportunities are24 SEQUENOM is committed to providing the best genetic analysis products that translate genomic science into superior solutions for biomedical research, agricultural applications, molecular medicine and non-invasive prenatal diagnostics research, and potentially, clinical utility. 103
  • 99. Table 14:104 COMPARISON OF GENERICS, BIOSIMILARS AND BIOLOGICS Generic Biosimilar Biologic Manufacturing Mostly smaller chemical Sensitive to production Sensitive to production molecules-less sensitive process changes- process changes- to production process expensive and expensive and specialized changes specialized production production facilities Produced by using facilities handling living handling living cells chemical properties cells (mammalian, (mammalian, yeast, Reproducibility-easy yeast, bacteria) bacteria) to establish Highly sensitive to Highly sensitive to manufacturing changes manufacturing changes Reproducibility-difficult Reproducibility-difficult to establish to establish Clinical Development Limited clinical activities, Extensive clinical trial Extensive clinical trial often only Phase I studies activities, including activities, including Short timeline for approval Phase-I and III studies Phase-I and III studies Development costs upto Pharmacovigilance and Pharmacovigilance and US $ 5 mn periodic safety updates periodic safety updates Enrollment of around after launch needed after launch needed 20-100 subjects Development costs Development costs around around US $ 80 mn to US $ 350 mn to US $ 120 mn US $ 800 mn Timeline of 6-10 years Timeline of 6-15 years Enrolment of around Enrolment of around >1000 100-1500 patients/subjects patients/subjects Regulation Needs to show Regulatory pathway Highly regulated like all bioequivalence defined for Europe innovator drugs Abbreviated registration (EMEA); not yet in procedures in US (BLA) Europe & US Needs to demonstrate Automatic substitution ‘comparability’; currently no allowed automatic substitution intended. SOURCE: Accenture Research
  • 100. being created for generic companies Specifically, similar to the currentin the BioPharmaceutical market. structure for approved drugs, the billAccording to IMS data, the world would provide five years of exclusivityBioPharmaceutical market was for a novel molecular structure beforevalued at US$ 85.9 billion in 2007. any biosimilar could be approved.ABLE (Association of Biotechnology The Bill also provides three-yearLed Enterprises), put the sales of exclusivity for certain modificationsBioPharmaceutical products of a previously approved productexceeding US$ 135 billion by 2011. (such as a new condition of use) andWith some of the earliest a six-month paediatric exclusivityBioPharmaceutical products having period. Waxman’s Bill also providesalready lost patent protection, the first biosimilar applicants with at leastoriginators of BioPharmaceutical six-month exclusivity period if anproducts are facing intense interchangeable biosimilar product iscompetition from generics approved.developers. In response, originatorsare resorting to a range of defensive The Bill, if converted into an Act,tactics, including the reformulation of will provide immense opportunitiesexisting products to improve efficacy, for Indian firms, especially those thatthe implementation of more efficient have already ventured into thedelivery systems, and the pursuit of Biosimilars space and have filedhigh-level intellectual property (IP) Abbreviated New Drug Applicationsbattles. (ANDAs) in the US. With a few players in the Biosimilars space, the The US, one of the largest competition is expected to bebiosimilar markets in the world, comparatively low and thereby actsrecently introduced the Waxman as a great boost for biosimilar playersBiosimilars Bill in March 2009, which in the market.provides the approval of biosimilarproducts that are defined as “no According to Datamonitor, theclinically meaningful differences Indian biosimilars market will growbetween the biological product and to more than US$ 2 billion by 2014the reference product”, as well as as patent of key products, such as“interchangeable” biosimilars, epoetin alpha, filgrastim, interferondefined as a product that can be beta 1a, interferon alpha, human“switched one or more times” with the growth hormone (hGH), and insulin-reference product “without an glargine are expected to expire byexpected increase in the risk of then. While many of these drugsadverse events”. The Bill also represent the low-hanging fruit of theprovides incentives for brand biologics world and are unlikely tocompanies to develop new therapies. provide the monetary gains of more 105
  • 101. complex drugs, they do offer Nanotechnologymanufacturers the opportunity to Nanotechnology is consideredposition themselves within the widely as the most promisingbiosimilars sector in anticipation of technology of the 21st century. Themore lucrative targets. concept of nanotechnology evolved India has a strong presence of in 1959, when US based Nobelfirms engaged in the biosimilar Laureate Richard P Feynmanspace. For example, Reliance Life suggested, in his book, titled “ThereSciences launched three biosimilars is Plenty of Room at the Bottom”,- ReliPoietin [Erythropoietin (EPO)], that manufacturing in theReliGrast [Granulocyte colony submicrometer scale would bestimulating factor (GCSF)], and possible. Though he never used theReliFeron (Interferon Alpha 2b) in the word ‘nanotechnology’, thedomestic market in 2008. Reliance concepts he propounded were laterLife Sciences is currently working on coined into a new worda range of biosimilars, which are at ‘nanotechnolgy’.different stages of development viz. Recent years, in fact, have seenclinical trials, pre-clinical studies, a convergence of nanotechnologyprocess development and molecular and biotechnology. The convergencebiology. They are also concurrently of nanotechnology andconducting clinical trials for two biotechnology opens the possibilitybiosimilars - EPO and GCSF - in for a wide variety of biologicalEurope. Further, Reliance Life research topics and medical uses atSciences has built significant the molecular and cellular level. Themanufacturing capacity for application of nanotechnology inBioPharmaceuticals and all these biotechnology provides informationfacilities are compliant with USFDA with unprecedented precision andand EMEA standards. Currently, the sensitivity. It leads to theglobal biosimilars market is highly development of new revolutionaryfragmented with major players, such modalities of bi-molecularas Biocon, Dr. Reddy’s Lab, Intas, manufacturing, early diagnostics,LG LifeSciences, Ranbaxy, Reliance medical treatment, and diseaseLifeSciences, Sandoz, Teva, and prevention, beyond the cellular levelWockhardt, engaged in diverse to that of DNA and individual proteinsproducts. However, with the - the building blocks of the lifecomplexity of the biosimilar business process.and the technological and intellectualchallenges that companies may face, Infact, this convergence hascompetition is not expected to be brought outcomes in research wheresignificant. new kinds of drug delivery systems106
  • 102. can pervade the blood stream, target promoting various programs undercontaminated cells, and even deliver nanotechnology initiative. A ‘Visionthe desired medication in Group’ has been formed withprogrammable quantities at desired members from academia, industryintervals. Artificial replacements and and research, to develop a nationalplacebos at the nanoscale have been nanotechnology policy. Governmentother major developments. Rapid of India has announced anadvancements in biotechnology and investment of Rs 1,000 crore throughinformation technology have further a mission on nanotechnology fromboosted medical diagnostics, 2006 to 2011.The Government hasbiomedical research, genomics, announced a US$ 250 milliongenetic testing and new drug program to build three nationaldiscovery. Nanotechnology has led institutes for nanoscience as well.to major developments in health andmedicine. The long-term goal of this Stem Cell Researchconvergence is to contribute to the Stem cell research is being toutedoverall human development and as the next wave of biotechnologyimprovise on fictional revolutionary not only in India but also across theconcepts to reality. world, which could potentially From an Indian context, revolutionize treatment of diseasesnanotechnology is at a very nascent in the next couple of decades.stage; but given the potential of the Stem cells are ‘master’ cells thatsector, it is expected to grow at a have been found to possess therobust pace in the coming years. In potential to repair tissues or growfact, nanotechnology has the organs. Their sources vary. Whilepotential to revolutionize the Indian embryonic stem cells can replicateagriculture scenario. It is also any cell type without exception,predicted that nanotechnology will those from other sources such astransform the entire food industry, bone marrow or blood cord, thechanging the way food is produced, adult stem cells, though restrictedprocessed, packaged, transported, in their differentiation capacity, areand consumed. multipotent. Several Indian firms and According to a study by Frost &research institutes are working on Sullivan, the global market for stemnanotechnology products for drug cell therapy is expected to be arounddelivery, water filters, arsenic US$ 20 billion by 2010. There areremoval, reducing water and air around 180 prominent companiespollution, antimicrobial coatings and working on stem cell research in theriver cleaning projects. The world, majority of which are basedGovernment on its part is proactively in the US, followed by the EU, Israel, 107
  • 103. Box 8: INDIA’S FIRST NANOTECH PARK Nanobiosym Inc, a globally recognized nanotechnology firm is setting up India’s first Nanotech park, The Nanobiosym Technology Park (NTP), in Ahmedabad under public-private partnership involving the state Government. The 500 acre nanotech park will include: a Nanobiosym incubator for research and development, a manufacturing engine, a global health village, a global business center, an institute for education and human resource development, and green living space. The Nanobiosym Technology Park aims to be an innovation epicenter that will bring together top talent from around the globe for cutting edge research, learning and incubation, and commercialization of new nano-enabled technologies and products. The innovative public-private partnership between Nanobiosym and the Government of Gujarat would maximize the benefits of the park for both the state and the country. The park will bring the latest medical developments including the GeneRADAR, to improve the state’s healthcare infrastructure and attract world- class talent to stimulate world class development. Nanobiosym is also forming a global consortium comprising of best of breed partners from a variety of sectors like R&D, education, healthcare, infrastructure development, finance and banking, knowledge partners, multinationals and small/ medium enterprises. The park is expected to act as a global powerhouse with a focus on hi-tech innovation and entrepreneurship.Thailand, Canada, and Australia. The clinical trials are being done toStem Cell Research Forum India develop therapies using stem cells.(SCRFI) has predicted India to have Indian companies are becominga market size of about US$ 540 an important part of this revolution,million by 2010, with an annual helping to treat patients withgrowth rate of 15%. diseases ranging from eye problems The potential of stem cell to heart disorders. The Governmenttechnology to develop therapy for of India has supported more than 55many untreatable diseases through programmes on various aspects ofcellular replacement or tissue stem cell research. These includeengineering is being widely generation of human embryonicrecognized. Therapies using stem stem cell lines, differentiation ofcells are giving hope to millions of pancreatic progenitor cells to insulinpatients afflicted with chronic secreting cells, isolation of multidiseases. Globally, stem cells are potential adult progenitor cells fromused to treat over 130 diseases and bone marrow and their clonalit is estimated that more than 500 expansion, use of banana lectins for108
  • 104. Box 9: UMBILICAL CORD BLOOD BANKING The emergence of umbilical cord blood banking has created more than a dozen companies globally in a span of 2-3 years. Cord-blood cell transplants are becoming common as a therapy for diseases of the blood as scientists are finding that stem cells from umbilical cord blood may be able to grow into other kinds of cells as well. Storage of the stem cells derived from umbilical cord blood means one can preserve and use genetically matched stem cells on hand, in case the child or someone else in the family suffers from a treatable blood disorder or needs a bone marrow transplant. There is a 25% genetic match between the siblings and parents, which proves to be the most alluring prospect for expectant couples to bank their child’s cord blood (thus ultimately their stem cells). The use of these stem cells more or less ensures absence of graft versus host reaction, which is a huge drawback in cases of organ transplantation. Such advances are casting cord blood, previously regarded as medical waste after childbirth, in a new light. Today doctors use cord blood cells to treat about 70 diseases, mostly anemias or cancers of the blood, such as leukemias and lymphomas. Yet another area of future research concerns the delivery of stem cells to the tissues in which they are needed. Current practice involves either the injection of stem cells directly into the targeted tissue, or injection of the stem cells into the bloodstream without any guarantee that they will actually find their way to the appropriate tissues. Targeted delivery would ensure that the therapeutic stem cells are introduced to the organs and tissues that need them, where they need them.stem cell preservation, conduct human clinical trials tohematopoietic stem cells (HSC) for develop drugs using stem cells. Withhaplo-identical HSC transplantation, this, India became the firstuse of limbal stem cells for ocular developing country, after the US, tosurface disorders, isolation and allow human clinical trials to developcharacterization of mesenchymal drugs by using dormant cells in theand liver stem cells, in-vitro body that have natural regenerationdifferentiation of human embryonic capabilities. Once injected into astem cells to neural and non-neural patient, the stem cells can belineages, cardiac stem cells, controlled with a simple magnet toembryonic stem cells etc. direct them to the damaged area and cure it. In March 2009, Bangalore-based Stempeutics Research Reliance Life Sciences, thereceived clearance from the Drug pioneer in stem cell-based researchController General of India to in India on a commercial scale, has 109
  • 105. already commercialised two together to explore using theproducts. In 2008, the company patient’s own stem cells for curinglaunched ReliNethra, a first-of-its- the disease.kind treatment in India for corneal A ‘Draft Guidelines for Stem Cellblindness. Recently, the company Research’ on regulatory aspects oflaunched ReliHeal-G, which quickly stem cell research and itsheals wounds. The company has applications, prepared by the Indiancompleted clinical trials for treatment Council of Medical Research (ICMR)for heart attack using stem cells from is on the anvil. The guidelines for thethe bone marrow of the patient. It is stem cell research have beencarrying out clinical trials for finalized and have been submittedapplication of stem cell-based to the Ministry of Health and Familytherapies for skin disorder, stable Welfare, Government of India. Avitiligo, non-healing diabetic ulcers, National Apex Committee for StemParkinson’s disease, and spinal cord Cell Therapy (NAC-SCRT) is beinginjury. constituted jointly by the DBT and Apart from this, India’s largest ICMR as per these guidelines.stem cell banking company, LifeCell, The new initiative by the USand the US-based Harvest administration in 2009 frees upTechnologies, which manufactures hundreds of stem cell lines arounddevices for stem cell harvesting, are the world for US funding which wasdeveloping a unique treatment for frozen in 2001. This effort is expectedheart attack in association with to expand collaborations with Indiancardiologist Dr. Naresh Tehran in researchers, who have over the pastNew Delhi, and Dr. Ramachandra decade, under fewer restrictions,Medical College, Chennai. carried forward with their ownParkinson’s patients in the country research. Given these instances, itwould be able to avail stem cell is quite but natural that stem celltherapy services for treatment as the research in a country like India isMumbai-based Jaslok Hospital and poised to bring about a sea changeReliance Life Sciences are working in healthcare.110
  • 106. 5. CHALLENGES & STRATEGIESCHALLENGES (whopping cough) and tetanus (DPT), as part of the basic publicSkill Development health package. Though India tooIndustry sources have mentioned has such immunization programme,that despite a mushrooming because of a relatively higheducational institutions offering a birthrate and population, the sharerange of courses in biotechnology, of Government health budget ingap between the needs of the total healthcare expenditure isindustry and skills taught at these relatively low (at 25%), accordinginstitutions still remain, though the to the World Developmentgap is being narrowed down. It has Indicators – 2009. In comparison,also been mentioned that most of other developing countries likethese institutions have limited ability Brazil (47.9%), Russia (63.2%),to provide the right pedagogy, or China (40.7%) and South Africathe requisite infrastructure. The (37.7%) portrays a betterchallenge of bridging the gap management of Governmentbetween the needs of the industry healthcare system. It may also beand the curricula taught at various noted that as a percentage of theinstitutions should be collectively GDP, the total health expenditure25addressed by the Government, in India is around 3.6%, far belowindustry and academia. than that of other emerging economies.Government HealthExpenditure Basic Education & Health SystemMost Governments in developingcountries usually finance Amongst the most critical buildingprogrammes that support child blocks for biotechnologyimmunization against diseases like development and its success, ameasles and diphtheria, pertussis good education and health system is25 Total health expenditure is the sum of public and private health expenditure. It covers the provision of health services (preventive and curative), family planning and nutrition activities, and emergency aid for health, but excludes provision of water and sanitation 111
  • 107. a must. India fares low in terms of plays a key role in ensuring theboth these measures as reflected concept to develop into a product.by the UN Human Development Global financial crisis has affectedIndex – an index measuring the the funding prospects of biotechaccomplishments made by a companies, as risk aversioncountry in life expectancy, increased among the ventureeducational attainment, and capitalists, angel investors, as alsostandard of living. India’s ranking is financing institutions. These have132 out of a total of 153 countries, been further exacerbated by theand also one of the lowest as slow activity in the IPO market duecompared to other competing to an anemic stock market. According to the Biotechnologycountries in this sector. Industry Organization (BIO), prospects for biotech IPOs areFunding likely to remain dim in the yearThe inherent characteristics of the 2009, on the heels of a very weakbiotechnology make the industry a base (the year 2008), raising US$high investment one with a long 116 million, as compared to raisinggestation period. Thus, funding US$ 2.3 billion in 200726. Exhibit 24: UN HUMAN DEVELOPMENT INDEX RANK BY SELECT COUNTRIES SOURCE: UN Human Development Report 2008, Exim Bank Research26 Beyond Borders – Global Biotechnology Report 2009112
  • 108. Ethical Issues in Genetic companies are responsible for theResearch vast majority of agri-biotechBiotechnology has been confronting research. These companies havethe world with some ethical issues, focused on crops and traits (suchwhich have raised numerous as herbicide resistance) that arechallenges with no definite having commercial significance,solutions. Genetic research and its and thus, may not be willing toapplications like genetic transfer to others. Globally, Mergersengineering, manipulation, testing, & Acquisitions (M&A) trendstherapy, eugenics, selective among biotechnology companiesabortion, GMOs, stem cell have also been on similar lines,research, and cloning, opened encouraging the concentration ofsignificant ethical and consumer IPRs, which may affect the abilityissues, including the potential risks of developing countries, like India,that may be adversely impacting to negotiate for access tothe environment. The issue of proprietary technologies at agenetically modified food appears reasonable price. This challengeto be of a particular concern. A stems largely from patents thatchallenge for the Indian confer broad rights over GMOs andbiotechnology industry will be to plant varieties.work and liaise widely with thecommunity and earn its confidence Biosecurityand investors. Awareness may be Biosecurity is another challengegenerated among the consumers with growing debate andthrough provision of detailed discussions among the academicinformation, ranging from the basics and policy spheres, withof gene technology to details of the bioterrorism, biosafety, andregulatory processes. emergence and re-emergence of infectious diseases as concerns toConcentration of IPRs the society as a whole. AnotherIntellectual property rights (IPRs) challenge faced by biotech industryare intended to promote research is the proliferation of bioweaponsand development by allowing which can create havoc to humanresearchers to generate revenue to civilization. The threats associatedmeet the development costs. with misuse of biotechnology affectHowever, there are concerns that the growth prospects of thisthe current level of biotechnology industry, which otherwise presentIPRs are concentrated mainly at the potential benefits for globalhands of private sector. It is priorities, such as health, food andreported that, globally, few environment. 113
  • 109. Bio-hacking depository. In this context, theBiohackers are a group of Department of Biotechnology,enthusiasts who are involved in Government of India, has proposedworking with cells and genes to build an internationallywithout any sound knowledge and recognized depository in thelack of proper infrastructure. With country. It is hoped that followingthe fall in the cost of equipments the establishment of the depository,that are capable of manipulating a law in this regard would beDNA, the threat of growing number forthcoming. In this respect, lawsof biohackers is significant. The of other countries could also bework raises fears that people could referred.create a deadly microbe onpurpose, just as computer hackers STRATEGIEShave unleashed crippling viruses or Public-Private Partnershipshacking into various websites. Sucha scenario may lead to “bio-spam, Public-Private Partnership may bebio-spyware, bio-adware” and other encouraged and supported in areasbio-nuisances. An unrestricted that are vital to the nationalbiohackery scenario could put the development, from a scientific,health of the biohackers, the economic or social perspective, andcommunity around them, and the focused on technology and productenvironment, under unprecedented development. Establishing a strongrisk. industry academia linkage through collaboration would also bringPatenting of Micro-organisms multifold benefits to the biotechAnother associated challenge to the industry. India has a wide networkbiotech industry is patenting of of universities, departments andmicro-organisms and associated specialized institutes that havebiosafety requirements, as strict been promoted by variousbiosafety norms have to be authorities (Department offollowed while handling micro- Biotechnology, Department oforganisms. The regulations for Science & Technology, Council ofaccessing strains from a depository Scientific and Industrial Research,have to be carefully worked out to Indian Council for Medicalensure that these do not land into Research, Indian Council ofwrong and/ or technically Agricultural Research, etc.)incompetent hands. India too needs providing numerous specialisedto bring in a patent law for science degrees at the Masters’protecting micro-organisms and level. These institutions also providerules for accessing strains from a an effective network of research114
  • 110. laboratories. Efforts should be venture capital mode. With themade to bring in a seamless corporate sector being risk aversetransfer of knowledge and people to investing in biotechnologyamong these universities, institutes, projects, especially in theirand corporate for a better gestation and early phases, thecoordination among themselves, need of VC funding becomesand to share their research-based critical for the growth of the biotechinformation on a continuous basis. industry in India. Venture capitalThe company could have turns typically source majority ofpreferential access to the their funding from large investmentintellectual property generated in institutions such as pension fundssuch jointly funded projects. and financial institutions, who likeAnother alternative could be to invest long term only withencouraging public-funded assurance of high returns. Thus,successful R&D institutions to venture capitalists make carefulestablish not for profit companies investment decisions, which leadsto facilitate collaborative work with to high risk aversion rates. Instead,industry. In these facilities, India may consider promotingresearchers could pursue innovative venture capital investment on theprojects for defined periods on user lines of Russian model. Russia hascharge basis, providing access to been boosting venture capitalcentralized equipments and sector from scratch, by seedingscientific consultation. There should funds with Government support,be an industry-academia through the Russian Venturearrangement wherein the industry Company (RVC). Israel has alsocould have an active participation adopted similar approach of state-when it comes to planning backed venture capital model tocurriculum and methods of boost the investments in knowledgeevaluation. Private firms may also based industry.share the responsibility to promoteacademic excellence by creating Strategy to Move to a HigherChairs in Universities and further Value Chainstrengthen the industry – academia Indian biotechnology industry, overrelationship. the years, has developed a number of biotech products, but has beenNeed for enhancing Venture found to perform tremendously wellCapital funding in India in the vaccine segment. TheOne of the biggest challenges for players in this industry as well asthe Indian biotech industry is the research institutions shouldattracting investment through increasingly focus upon moving up 115
  • 111. the value chain by enhancing are particularly essential in thisstrengths in new products and regard. The Government mayapplications, and by offering R&D promote research-industry linkagessolutions in drug discovery and and facilitate market informationvalidation based on genomics, including technological andproteomics, pathway analysis commercial trends and(determining how toxic or opportunities. Integration ofradioactive substances reach biotechnology with varioushumans), and clinical trials on manufacturing sectors could alsohumans. Drug discovery and be encouraged through betterinnovations in drug delivery, synergy and coordination ofespecially in areas like diabetes, activities among variouscancer, and inflammatory ailments departments / institutions, with thecould take the industry into greater Department of Biotechnology,heights. Indian biotech industry Government of India, serving asshould also look forward to movingup the value chain in terms of focal point.geographies so that India is presentin more premium markets. Lucrative Domestic Market The domestic biotech market isEnhancing Biotech expected to post robust growth withApplications rising income levels, improvingModern research finds application living standards, growing medicalof biotechnology in various infrastructure, increasing healthindustries, and thereby add value insurance penetration, enablingto the products and processes of regulatory framework andsuch industries, including institutional infrastructure, and theagriculture, forestry, marine, growing number of organizedenvironmental management, pest pharma-retail chains. For example,management, and management of in a country like India (which ishuman and animal healthcare. To often referred to as the diabeticcapitalize on the potential benefits capital of the world), it is certain toand to ensure international find a market for products likecompetitiveness, it is important to insulin. With more and more peoplepromote speedy and widespread leading a sedentary lifestyle, therediffusion of biotechnology to the may be opportunities for the Indianbroader industrial community, while biotech industry to innovatemaintaining responsible and products that cater to the demandsustainable use. Industry initiatives for controlling such chronicand entrepreneurship commitments diseases.116
  • 112. Biotech Skill Development expand the current researchBiotechnology industry is highly programmes with attractiveR&D intensive. In order to remain compensation package in order toglobally competitive, the industry attract world-class talent. In thisrequires a pool of highly skilled context, it may mentioned thatmanpower. India has already made Government has initiated aits mark in scientific research in the programme ‘Ramalingaswamyworld, with a large pool of scientific Fellowship’, aimed at bringing backmanpower. The education system scientists of Indian origin workingin India, with its wide network of abroad in various fields ofuniversities providing quality biotechnology, and who arescience education, has helped desirous of pursuing R&D in Indianimmensely in this regard. However, institutions. It may be mentionedwith the changing composition of that China Academy of Scienceseconomic growth there is an (CAS) has establishedemerging trend of students not programmes, such as Speciallypreferring science stream for career Hired Foreign Research Fellows,opportunities. This may lead to and Young Foreign Scientistshortage of qualified manpower in Project, through which the countryhighly research oriented activities would arrract over 600 Chinesesuch as biotechnology. Thus, it is scientists working abroad, annually;important to devise policies that each returning scientist wouldwould attract more students to the receive funding of aroundscience stream. Many countries US$300,000 per annum. Corporategive both financial and fiscal entities too may get involved byincentives in the form of grants and providing adequate exposure to thepreferential loans, to encourage budding talents through training andstudents to opt for science streams. placements. This would also provide the Indian biotechnologyReversing Brain Drain industry a tremendous competitive manpower advantage over itsShortage of manpower due toBrain-Drain is another challenge competitors.faced by the Indian biotech industry.The expected shortage of scientists / Symbiotic Relationshipskilled professionals in OECD between Pharma and Biotechcountries may enhance the Brain- SectorsDrain from India in the coming Use of organisms for theyears, unless suitable policy improvement of medical processesmeasures are taken to reverse the (red-biotechnology) constitutes onetrend. There is an urgent need to of the major business segment of 117
  • 113. the biotechnology industry. This data compiled by Deloitte, whichprovides significant opportunities for indicates that the number of dealspharmaceutical firms also. In between pharma and biotech firmsgeneral, biotech firms would increased from 20 in 2000 to 64 inconcentrate their business models 2008. Infact, the median value ofin covering a part of the product deals between pharma and biotechdevelopment value chain. Biotech firms rose from US$ 80 million infirms are often not much engaged 2000 to US$ 400 million in 2008. Thisin entire product development value substantial growth also reflectschain due to shortage of funds greater maturity and perceived worthand necessary know-how. of target biotech companies and theirPharmaceutical firms could pipelines.complement the biotech firmsthrough their knowledge Strengthening North-Southand financial power. Also, Collaborationspharmaceutical firms, which require Many Indian firms use servicescontinuous innovation, could benefit contracts with foreign firms to fundcooperating with biotech firms who their operations, developprovide new product concepts and commercialization capabilities andinnovative technologies. access valuable international Such a trend is increasingly technology and expertise. Servicesrelevant for collaboration between provided include R&D, clinical trialscash-rich pharma firms and cash- and manufacturing. Bharat Biotechdried biotech firms to sustain International, for example, is one ofthemselves with a win-win strategy. the first developing country firms toThis is amply corroborated by the manufacture a foreign proprietary Box 10: RAMALINGASWAMI FELLOWSHIP - AN INITIATIVE FOR REVERSING BRAIN DRAIN Ramalingaswami Fellowship supports distinguished non-resident scientists of Indian origin who wish to return to India and pursue research of high calibre in Life/ Agricultural Sciences, Biotechnology, Bio-engineering, Translational Health Science, etc. The initial duration of the fellowship is 5 years which is extendable for another 5 years in exceptional cases. The awardee (s) get a consolidated fellowship amount of Rs 50,000 per month for the first three years and Rs 60,000 per month for the next two years along with an annual contingency grant of Rs. 5 lakhs. Ramalingaswami fellows have the freedom to work in any of the scientific institutions/universities in the country and also continue to be eligible for regular research grants through extramural/other schemes of various S&T agencies of the Government of India.118
  • 114. Exhibit 25: TRENDS IN PHARMA-BIOTECH M&A DEALS SOURCE: Deloitte, Exim Bank Researchvaccine product, which is Encouragement to Innovativecontracted by the U.S. company, Funding ModelsWyeth, to produce its Haemophilis Encouraging innovative fundingB (Hib) vaccine. Multinational models in the biotech industry iscorporations are increasingly essential given the financialconducting clinical trials in India and constraints of this industry, Forrely on Indian contract research example, pharma / biotech firmsorganizations to manage these may set up Special Purposetrials. It will be vital for the Indianbiotech firms to expand their Vehicles (SPVs) which shall becapabilities in clinical trial contracted by the parent firms formanagement, and pay close product development work in areasattention, not only to good clinical such as specialty generics, topicals,practice (GCP) guidelines, but also steroids, hormones, andto bioethical principles, to provide biopharmaceuticals, which maya high level of care and protect the have high initial productrights of patients. This will not only development costs, and which aremake the Indian contract research non-infringing process, based onfirms to achieve global standards, regulatory compliances. Suchbut will also help to bring in more funding models may not stretch theforeign exchange earnings, through balance sheets of the parentenhanced exports of services. companies, nor equity dilution. An 119
  • 115. Box 11: EXIM BANK’S SUPPORT TO RESEARCH & DEVELOPMENT Exim Bank has been closely associated with the promotion of R&D in the pharmaceutical / biotech sectors in India. The Bank has been providing integrated financing for R&D activities of the pharmaceutical and bio-pharmaceutical companies. The financing is in the form of either term loan / equity participation or hybrid product, and would facilitate R&D expenditure and approvals in regulated markets. This facility is primarily extended to pharmaceutical and bio- pharmaceutical companies. The eligible R&D activities under this financing programme include: Development and commercialisation of new product / process / application; Significant improvements in existing product / process / application/ design; Development of technology or design to satisfy domestic or international environment, technical requirements/ standards, specifications; Setting up, expansion of pilot plants; Research studies necessary for obtaining regulatory approvals, product registrations, cost of filing and maintaining international patents; R&D centers. The eligible R&D expenditures under this financing programme include: Acquisition of technology at the ‘proof of concept’ or design stage which will be used to develop new product/ process; Land and building, civil works for housing eligible R&D activities; Dies, tools, laboratory and other R&D equipment, mould, computer hardware, software, miscellaneous fixed assets; Salaries of R&D personnel, support staff during the R&D project phase including training costs; Cost of regulatory approvals, filing and maintenance of patent registration; Expenditure on external consultants for outsourcing a component of R&D project; Product documentation and allied costs during the R&D project phase; Costs of materials, surveys, technology demonstration studies, field trials.agreed percentage of revenues of the products would flow back tofrom the SPV funded projects could the company without anybe returned back to the parent complications what so ever.company, or funding bank, towardsthe investment. In the case of Emerging Biosimilarinstitutional financing, once the Market in USfunding bank recovers its Biotechnology industry in India hasinvestment or IRR, the ownership a well-developed foundation with120
  • 116. strong pharmaceutical and profitable targets for new products.biosupplier sectors. The global Most of these were approved as Newmarket for generics BioPharma- Drug Applications (NDAs) to facilitateceuticals are expected to grow BioPharma companies to developsignificantly in the next few years, biosimilar products. It is expectedas several ‘blockbuster’ drugs are that stringent regulatory approvallikely to lose patent protection. A would be put in place to permitrecord number of drug patents marketing of biosimilar products atexpire over the next few years, an affordable costs.which should lead to stiffcompetition from generics, and Catalysing Coherence insignificant fall in prices. Evaluate ClustersPharma, an industry consultancy, Cluster development is a keyestimates that about half of the strategy to promote innovation,US$ 383 billion-worth of patented accelerate technology transfer anddrugs to be sold in the world in facilitate product development.2009 may lose patent protection Biotechnology, being inter-within five years. In 2010 alone the disciplinary in nature promotingindustry is expected to be put at scientific and engineering research,risk with nearly 15% drop in its requires enabling infrastructure forrevenue from patented drugs. In promoting and nurturing innovationsuch a situation Indian companies for building successful enterprises.appear well positioned to leverage The clustering concept maximisesupon their cost-effective synergy and efficiency of firmsmanufacturing capabilities to located in the cluster. Across thecompete on a global scale and world, especially in countries likegarner some of this market. USA, Canada, UK and Ireland, In the context of patent expiry on biotech clusters have been foundBioPharmaceuticals, it may be noted to be improving the performance ofthat USA would emerge as one of the firms. Although this approachthe largest bio-similar markets after has already been emerging in theapproval of Waxman Biosimilar Bill, country, it is important to ensureproviding opportunities for Indian that such strategies deliver desiredfirms. Biosimilars is a term used to results through a coherent effort ofassign a sense of similarity between all the stakeholders. Existingthe originator biologic and a copycat biotech clusters could also beversion. According to industry examined with respect to any voidssources, there are at least 75 that could be plugged to achieveproteins and peptide therapeutics the desired results. Efforts couldidentified in the US as potential also be made to set up clusters 121
  • 117. Table 15: KEY BIOTECH PRODUCTS LOSING PATENT PROTECTION IN THE US Brand Name Manufacturer Patent Expiry Beneflix Wyeth 2009 Kogenate FS Bayer 2011 Novoseven Novo Nordisk 2011 ReFacto Wyeth 2014 Interleukin-2 Novartis 2012 Aranesp Amgen 2014 Procrit Ortho Biotech 2006 Neumega Wyeth 2011 Neulasta Amgen 2015 Genotropin Amgen 2006 Genotropin Pfizer 2008 Infergen InterMune 2009 Betaseron/Betaferon Novartis 2007 Amevive Astellas 2013 Enbrel Amgen/Wyeth 2012 Humira Abbott 2010 Remicade J&J 2018 SOURCE: Avendus Research, Industry Sourcesaround the existing institutions of International cooperation andexcellence, and to integrate them partnerships can be leveraged todeeply into the economic, achieve global best practices in theentrepreneurial and social fabric of country’s science and technologicalthe region. efforts, for joint intellectual property generation, harmonization ofLeveraging International regulatory processes, smooth crossPartnerships border movement of biologicalBiotechnology is globally materials, and access to globalrecognized as a rapidly emerging, markets for the country’s productscomplex, and far reaching and processes. Such an approachtechnology, and therefore a strong would not only bring in betterinternational partnership, both at the technical know-how, but would alsolevels of research institutions and help in enhancing India’s researchat corporate front, is essential. and development resulting in122
  • 118. quicker and faster outcomes. as drought, wind, salinity)Efforts have already been taken at stresses;the Government level to leverage Contribute to the cultivation ofthe institutional strengths across the energy crops in areas withcountries. Such efforts should be marginal conditions;enhanced with collaborationmeasures on continuous basis. Develop efficient microorganisms and enzymesBiotechnology Usage in to convert the (hemi) celluloseBiofuels to sugars, which can then beBiotechnology could also be one of fermented into biofuel.the most effective and innovative Since the introduction oftools to make sustainable use of biotechnology in agriculture and foodbiofuel, reducing the adverse production in the early-1990s,environmental impacts of GHG biotechnology has been utilized toemissions, and limiting the diversion develop new tools for improvingof land from food crops to fuel productivity. In 2005, twenty-onecrops. Biotechnology would also be countries planted biotech cropscritical to increase land productivity covering a total of 222 million acres.both in fuel crops and food crops, These crops include soybeans, corn,through plant science, modern plant cotton, canola, papaya, and squashbreeding techniques and with state- that are improved versions of theof-the-art application of crop traditional varieties. In addition, rapid-protection. rise yeast, and an enzyme used to For fuel crops biotechnology make cheese, are both commonlycould help to: produced through biotechnology.27 Increase biomass yield per There are three main categories hectare while reducing the of biotechnology-enhanced crops in needs for production inputs; use or development. Improve crop quality (higher Enhanced input traits, such as biofuel yields); herbicide tolerance, insect and virus protection, and tolerance Reduce land-use competition to environmental stressors, through higher productivity and such as drought; reduced losses from biotic attacks (insect, viruses, etc), Value-added output traits, such and biotic (environmental such as corn with higher amounts of27 International Food Information Council 123
  • 119. lysine for animal feed, or research companies with a vast vegetable oils with increased gene pool. The institutional levels of omega-3 fatty acids; infrastructure in the country offers a strong foundation for these Crops that produce strengths to get transformed into pharmaceuticals or improve business opportunities. Indian firms the processing of bio-based could focus on acquiring overseas fuels. biotechnology units in countries like the US, which have seen plungingSUM UP valuations due to the globalIndia is already being reckoned as meltdown. Though India has a longa frontrunner in the biotechnology way to go in terms of innovationsindustry. With a huge base of in processes, instruments, andtalented, skilled and cost funding, the future looks bright forcompetitive manpower, and a well- the industry with India poised todeveloped scientific infrastructure, become one of the global leadersIndia is poised to become a leading in this industry. India, with all itsglobal player in biotechnology. The inherent strengths, can definitelyvast population of India helps not use biotechnology as a vehicle toonly in creating significant domestic improve the lives of billions acrossdemand, but also provides biotech the world.124
  • 120. RECENT OCCASIONAL PAPERSOP. No. Title73. lnstitutional Support Systems for SMEs in India and International Experiences74. Export Processing Zones in Select Countries : Critical Success Factors75. Essays in International Economics76. Institutional Support to SMEs : A Study of Select Sectors77. Indian Handicrafts : A New Direction for Exports78. Israel and India : A Study of Trade and Investment Potential79. Indian Handloom : A Sector Study80. Mumbai as an International Financial Centre - A Roadmap81. Indian Export and Economic Growth Performance in Asian Perspective82. The Architecture of the International Capital Markets : Theory and Evidence83. International Technology Transfer and Stability of Joint Ventures in Developing Economies : A Critical Analysis84. The People’s Republic of Bangladesh : A Study of India’s Trade and Investment Potential85. Australia and New Zealand: A Study of India’s Trade and Investment Potential86. Machine Tools: A Sector Study87. Agro and Processed Foods: A Sector Study88. Currency Risk Premia and Unhedged, Foreign-Currency Borrowing in Emerging Market89. Mercosur: A Gateway to Latin American Countries90. Indian Silk Industry: A Sector Study91. Select COMESA Countries: A Study of India’s Trade and Investment Potential92. Sri Lanka: A Study of India’s Trade and Investment Potential93. Potential for Export of IT Enabled Services from North Eastern Region of India94. Potential for Export of Horticulture Products from Bihar and Jharkhand95. Increasing Wage Inequality in Developed Countries: Role of Changing Trade, Technology and Factor Endowments96. Essays on Trade in Goods and Factor Movements Under Increasing Returns to Scales97. Export of Organic Products from India: Prospects and Challenges98. Export Potential of Indian Medicinal Plants and Products99. Select Southern African Countries: A Study of India’s Trade and Investment Potential100. BIMST-EC Initiative: A Study of Indias Trade and Investment Potential with Select Asian Countries 125
  • 121. 101. Some Aspects of Productivity Growth and Trade in Indian Industry 102. Intra-Industry Trade In India’s Manufacturing Sector 103. Export Potential of Indian Plantation Sector: Prospects and Challenges 104. Fresh Fruits, Vegetables and Dairy Products: Indias Potential For Exports to Other Asian Countries 105. Biotechnology: Emerging Opportunities for India 106. ASEAN Countries: A Study of Indias Trade and Investment Potential 107. Essays on Globalisation and Wages in Developing Countries 108. Select West African Countries: A Study of Indias Trade and Investment Potential 109. Indian Leather Industry: Perspective and Export Potential 110. GCC Countries: A Study of India’s Trade and Export Potential 111. Indian Petroleum Products Industry : Opportunities and Challenges 112. Floriculture : A Sector Study 113. Japanese & U.S. Foreign Direct Investments in Indian Manufacturing : An Analysis 114. Maghreb Region: A Study of India’s Trade and Investment Potential 115. Strengthening R & D Capabilities in India 116. CIS Region: A Study of India’s Trade and Investment Potential 117. Indian Chemical Industry: A Sector Study 118. Trade and Environment: A Theoretical and Empirical Analysis 119. Indian Pharmaceutical Industry : Surging Globally 120. Regional Trade Agreements: Gateway to Global Trade 121. Knowledge Process Outsourcing: Emerging Opportunities for India 122. Indian Mineral Sector and its Export Potential 123. SAARC: An Emerging Trade Bloc 124. Indian Capital Goods Industry - A Sector Study 125. Financial Liberalization and Its Distributional Consequences 126. ECOWAS: A Study of India’s Trade and Investment Potential 127. Indian Textile and Clothing Industry in Global Context: Salient Features and Issues 128. Fair Trade : Fair Way of Enhancing Export Value 129. Indian Automotive Industry: At The Crossroadss 130. CARICOM : A Gateway to the America 131. IBSA : Enhancing Economic Co-operation Across Continents 132. MSMEs and Globalisation: Analysis of Institutional Support System in India and In Select Countries 133. International Trade, Finance and Money: Essays in Uneven Development 134. Sikkim: Export Potential and Prospects 135. Mizoram: Export Potential and Prospects 136. Floriculture - A Sector Study126
  • 122. EXPORT-IMPORT BANK OF INDIA HEADQUARTERS Centre One Building, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005. Phone : (91 22) 22172600 Fax : (91 22) 22182572 E-mail: cag@eximbankindia.in Website : www.eximbankindia.inIndian Offices Overseas OfficesAHMEDABAD DAKARSakar II, Floor 1, 1st Floor, 7,Next to Ellisbridge Shopping Centre, rue Fe,lix Faure,Ellisbridge P. O., Ahmedabad 380 006. B. P. 50666,Phone : (079) 26576852/43; Fax : (079) 26578271 Dakar, SenegalE-mail : eximahro@eximbankindia.in Phone : (00 221 33) 8232849BANGALORE Fax : (00 221 33) 8232853Ramanashree Arcade, Floor 4, E-mail : eximdakar@eximbankindia.in18 M. G. Road, Bangalore 560 001.Phone : (080) 25585755/25589101-04; Fax : (080) 25589107 DUBAIE-mail : eximbro@eximbankindia.in Level 5, Tenancy 1B,CHANDIGARH Gate Precinct Building No. 3,PHD House, Floor 1, Sector 31-A, Dubai International Financial Centre,Dakshin Marg, Chandigarh 160 031 PO Box No. 506541,Phone: (91 172) 2641910 /12/39/49 Dubai, UAE.Fax: (91 172) 2641915 Phone : (00 97 14) 3637462Email: eximcro@eximbankindia.in Fax : (00 97 14) 3637461 E-mai : eximdubai@eximbankindia.inCHENNAIUTI House, Floor 1, DURBAN29, Rajaji Salai, Chennai 600 001. Suite 117, Aldrovande Palace,Phone : (044) 25224714/49; Fax : (044) 25224082 6, Jubilee GroveE-mail : eximchro@eximbankindia.in Umhlanga Rocks,GUWAHATI 4320 Durban,Sanmati Plaza, Floor 4, Near Sentinel Building, South Africa.G. S. Road, Guwahati 781 005. Phone : (00 27 31) 5846118/19Phone : (0361) 2462951/2450618; Fax : (0361) 2462925 Fax : (00 27 31) 5846117E-mail : eximgro@eximbankindia.in E-mail : eximdurban@eximbankindia.inHYDERABADGolden Edifice, Floor 2, LONDON6-3-639/640, Raj Bhavan Road, 88/90, Temple Chambers,Khairatabad Circle, Hyderabad 500 004. 3-7, Temple Avenue,Phone : (040) 23307816-21; Fax : (040) 23317843 London EC4Y OHP,E-mail : eximhro@eximbankindia.in United Kingdom.KOLKATA Phone : (00 44) 20 73538830Vanijya Bhawan, Floor 4, (International Trade Facilitation Centre), Fax : (00 44) 20 735388311/1 Wood Street, Kolkata - 700 016. E-mail : eximlondon@eximbankindia.inPhone : (033) 22833419/22833420; Fax : (033) 22891727E-mail : eximkro@eximbankindia.in SINGAPOREMUMBAI 20, Collyer Quay, # 10-02,Maker Chambers IV, Floor 8, Tung Centre,222, Nariman Point, Mumbai 400 021. Singapore 049319.Phone : (022) 22823320/92/94; Fax : (022) 22022132 Phone : (00 65) 65326464E-mail : eximwrro@eximbankindia.in Fax : (00 65) 65352131NEW DELHI E-mail : eximsingapore@eximbankindia.inGround Floor, Statesman House,148, Barakhamba Road, New Delhi 110 001. WASHINGTON D.C.Phone : (011) 23326625/6254; Fax : (011) 23322758/23321719 1750 Pennsylvania Avenue NW,E-mail : eximndro@eximbankindia.in Suite 1202, Washington D.C. 20006,PUNE United States of America.44, Shankarseth Road, Pune 411 037. Phone : (00 1) 202 2233238Phone : (020) 26403000; Fax : (020) 26458846 Fax : (00 1) 202 7858487E-mail : eximpro@eximbankindia.in E-mail : eximwashington@eximbankindia.in 127

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