The Hindu : Business : Biotechnology: India emerging as a partner of choice

Online edition of India's National Newspaper
Wednesday, Jun 09, 2004

Business

Business

Biotechnology: India emerging as a partner of choice

By K. T. Jagannathan

CHENNAI, JUNE 8. India is among the five emerging biotech leaders in the Asia-Pacific region, according to the regional edition of the Global Biotech Report titled "On The Threshold" released by Ernst and Young, a well-known professional services company.

The Asia-Pacific perspective provides insights into the current state of the biotechnology industry in the region.

The report has selected India as one of the five emerging biotech leaders in Asia Pacific. The others are Singapore, Taiwan, Japan, Korea and Mainland China. India is currently ranked third in the region based on the number of biotech companies (96), trailing behind Australia (228) and China, including Hong Kong, (136).

The report said that the events of the past year "clearly indicate that Indian biotech companies are getting their fundamentals firmly in place. Business models are maturing and product commercialisation capabilities are improving." While noting several policy changes and fresh sources of capital, the report pointed out that "India's position as a biotech player in Asia-Pacific is assuming greater eminence as it continues to build critical mass in terms of skills and capabilities."

The decision of IRDA (Insurance Regulatory Development Authority of India) to let insurance firms invest in biotech ventures, the move to allow, on a case-by-case basis, increased foreign direct investment by venture funds to $50 million and the move to let Phase I and II multi-centre trials in India by multi-national firms had all gone down positively in promoting biotech ventures, the report pointed out. Besides budget-induced incentives, the federal governments, too, competed with each other in promoting biotech ventures, it said. All these had resulted in the emergence of "regional bio-clusters," it said.

The report said "the biotechnology has now the potential to replace information technology as the engine of economic development in the 21st century." In this context, it pointed to the success of Biocon India's public offering.

Bio-partnering between industry and academia was a highly evolved model globally, it said. Yet, in India, these linkages were weak or missing. Nonetheless, the report noted that these linkages had received a major boost in recent years. According to the report, India's growth would come on the back of increased partnering activity, transition to a product-driven model, growth in the bio-generics market and government initiatives to encourage investment and expansion.

With its abundant high quality low cost technical manpower, India was emerging as a partner of choice. Though intellectual property protection in the country continued to be a bugbear, several Indian companies had managed to cross IPR hurdles to work with international partners through confidentiality and non-disclosure agreements, the report said.

Partnering, it said, was equally an imperative for Indian companies as they were increasingly pursuing a resource-intensive, product-driven model for sustainable growth in the wake of the new IPR regime. Indian biotech companies had initially emulated the information technology sector's service based model to earn early revenues. "India's major biopharmaceutical companies are now accelerating efforts to get bio-equivalent versions of patented, well-characterised recombinant proteins onto the market before the window closes in 2005. The small biotech companies are focusing on innovative research, and are picking niches where there is little competition," the report said.

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