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Biotechnology: the revolution begins

India's efforts to attain a leadership position in biotechnology look achievable given the human biodiversity that exists here.



A medicinal biotechnology laboratory. With skilled resource pool, India is in a good position to create a sustainable biotechnology business.

THE INDIAN biotechnology industry is gaining momentum. With revenues of over $700 million (Rs. 3,265 crores) in 2003-04, the fledgling industry, despite all hurdles, is well on its way to cross the psychological barrier of $1 billion in the current year. It is poised to leverage its scientific skills and technical expertise to make a global impact from a strong innovation led platform.

There are 40 National Research Laboratories in the country employing 15,000 scientists. There are more than 300 college level educational and training institutes offering degrees and diplomas in biotechnology, bio-informatics and the biological sciences, producing nearly five lakh students annually.

There are over 100 medical colleges churning out 17,000 medical practitioners a year. Given this skilled resource pool, India is in a good position to create a sustainable biotechnology business. The sector is gradually building critical mass both in terms of infrastructure and markets.

There have been many significant developments in this sector over the last few years. The year 2004 is proving to be a watershed year for Indian biotechnology: it witnessed the sector's first IPO being oversubscribed over 30 times indicating overwhelming investor interest in this new segment. The year will see three mega biotech events: BioAsia, Bangalore Bio and CII's India Biotech, apart from summits addressing global partnering, drug discovery, biogenerics, genomics and other biotech areas. ABLE, the Association of Biotechnology Led Enterprises, and Biospectrum have been raising the profile of the Indian biotech sector through various collaborative programmes with national and international bodies including WIPO (World International Patents Organization) and PhRMA (Pharmaceutical Research & Manufacturers of America).

Other important statistics include: the vaccine producers from India (Serum Institute, Bharat Biotech, Shantha Biotechnics, Panacea Biotech, Wockhardt, Bharat Immunologicals and a few others) command a global leadership position which has been well recognised by international organisations such as the World Health Organisation, The Gates Foundation and others. Biogenerics is another area where Indian companies are rapidly gaining a global vantage position. Biocon and Wockhardt, between them, can address Asia's insulin requirements. In agri-biotech, India has the potential to be a leading supplier of genetically modified (GM) seeds to the world. India's chemical engineering skills offer a real potential to be world leaders in biotech equipment. The potential is endless but the opportunities are real.

Given this impressive backdrop, biotechnology is certainly the next big frontier for the Indian economy. The current market size is estimated at Rs. 6,500 crores ($1.5 billion) encompassing agri, pharma and industrial biotechnology.

Competitive advantages

Leadership position possible

India's efforts to attain a leadership position in biotechnology look achievable given the human biodiversity that exists here. This offers unique human gene pools as powerful as those of Iceland, for exclusive genomic and pharmaco-genomic studies. Indian companies have a golden opportunity to unravel high value IPR by way of disease-linked genes and the diagnostic and therapeutic products emanating thereof.

For example, thalessemia is a genetic disease prevalent in many inbred Indian societies. Given the proper approach, India can convert the disadvantage of a diseased population into a strong research advantage, which can translate into therapies and cures for thousands in India and others across the globe.

India's plant and microbial biodiversities also provide a treasure trove for drug discovery. Many of the international pharma majors have collaborative HTS (high-throughput screening) programmes with universities worldwide and are now entering into similar prospecting partnerships with several Indian companies. Added to this is India's inherent knowledge base of ayurvedic and unani medicine, which offer a unique mining opportunity for new drug molecules.

India's vast and diverse disease and patient population also provides an enormous clinical development opportunity. The cost of drug development is largely attributed to the cost of conducting clinical trials. Indian CROs (Clinical Research Organisations) have an opportunity to access the $10 billion global market for clinical trials. The presence of a large talent pool of medical and para-medical professionals is conducive to building a strong clinical development infrastructure. International CROs have already recognised this opportunity and have set up operations in anticipation of policy changes that will enable clinical trials to be carried out in India on equivalent lines of those conducted elsewhere. The `India Advantage' in clinical development is clearly the speed of patient enrolment and thereby shorter time lines for clinical trials. Apart from Phase 1-4 clinical trials, Indian companies have a large commercial opportunity in pre-clinical and `proof of concept' studies.

There thus exists an exciting opportunity for biotech companies in the U.S. and Europe to forward integrate their drug development programmes at lower cost and shorter time lines in India which would provide them with a lower cost validation option over trials conducted in the more expensive research environs of the west. Alternatively, the monetary risk could be shared with an Indian partner who is keenly seeking to backward integrate into research and discovery. Such bio-partnering opportunities need to be encouraged strongly by the venture capitalists as a de-risking strategy.

The biotechnology sector is already showcasing India's potential to attaining leadership in vaccine production, genetically modified crops and clinical development.

Global success for Indian biotechnology will largely depend on creating the lowest cost base for innovation.

It is therefore imperative to evolve fiscal and regulatory policies that support capital-intensive research and manufacturing, long gestation time for product commercialisation and investments in patenting and technology licensing.

A strong patenting regime, regulatory reforms that permit Phase I clinical trials and pragmatic fiscal support to research and development will enable India to realise its global aspirations for biotechnology.

Kiran Mazumdar-Shaw

(The author is CMD, Biocon)

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