Medicine has never been more exciting than now. Thanks to advances in biotechnology, no longer will disease management and drug discovery be a 'hit and miss' or 'hunch and gut feeling' affair.
No wonder, these are very exciting times for the Indian biotech sector. The country counts among the top 12 global biotech hotspots and is the 3rd largest in Asia Pacific (in terms of number of biotech companies). The global biotech industry size is currently $54 billion, whereas the Indian biotech industry crossed the $1.07 billion mark last year. The industry has set a target of achieving $5 billion by 2010 and is currently growing at 36.55%.
Global partnering is expected to surge like never before, with India boosting intellectual property protection with the passing of the amended patent law in 2005 intellectual property will be shared between companies in the West and those in India. The arrival of stronger IP protection is also changing the rules of the game and is forcing companies to develop their own innovative pipelines. In an ongoing trend, more conglomerates and pharmaceutical companies are diversifying into biotechnology and established players are committing themselves to an aggressive expansion programme.
The year will be challenging for small and mid size biotech companies, who will look at entering into more M&As rather than trying to trim burn rates. The biotech industry will continue its heated opposition as regulatory bodies move towards establishing approval pathways for biogenerics. The potential cost savings of lower cost biogenerics will drive the agenda. Biotechnology now has a secure place on the economic growth agenda of national and state policymakers.
Here's a look at the expected developments and trends for India's biotech sector in 2006:
11 drugs are expected to go off-patent including blockbusters such as Epogen, Novolin and Humulin and this is likely to create a manufacturing opportunity of $13.5 billion in the near future. A large chunk of this opportunity can end up with the Indian companies. Generic versions of patent-protected biotech drugs could be the next big thing on the global generics market in two to three years, says Ernst & Young India's Utkarsh Palnitkar. Indian companies such as Wockhardt, DRL, Biocon, Panacea Biotech and Shantha Biotech are readying generic versions of biotech drugs. Legal framework in Europe is expected to be finalised soon and regulatory guidelines for biogenerics in India are being conceptualised. It is expected that the focus will mainly be on four biotech categories namely - EPO products, Human Insulin, Interferons and G-CSF.
Stem cell research
Focus has shifted on therapies used in the treatment of thalassemia, leukemia and sickle cell anaemia through stem cell research. Leading institutes such as LV Prasad Eye Institute, National Centre for Cell Science and the Indian Institute of Science among others are at the forefront of stem cell research. Reliance Life Sciences is investing in an animal house to conduct regulatory toxicology and preclinical efficacy studies for cell-based therapies.
Indian bioinformatics market has the potential to increase its current share of 2.5% to 5% of the global market. Companies are planning to increase the scale of businesses because they are investing more in R&D and product development. Hence to expand operations, there will be a huge demand for trained bio informaticians. There are three areas of opportunities At the highest level are the integrated research application service providers; then, there are the providers of database services and lastly, the discovery software providers.
The molecular diagnostics marketplace will offer a growth opportunity given the interest in utilising molecular tools to precisely target therapeutics. Biomarkers will play a pivotal role in novel target identification and validation, elucidation of mechanisms of action and candidate selection and ultimately provide valuable and objectively measured clinical markers of drug safety, efficacy and patient response.
There is an underlying confidence in Indian companies to identify areas of comparative advantage and leverage the same to compete globally. Indian firms are likely to scale up manufacturing capacity to be able to offer services globally. For instance Sterling Biotech, India and Asia's largest gelatin producer acquired Torrent Biotech's Penicillin manufacturing plant to enhance capacity to cater to the global gelatin market.
Novartis AG acquired the biotechnology firm Chiron Corp. Panacea Biotech had entered into a 50:50 joint venture with Chiron last year to provide new generation combination vaccines. In this case, there may not be any adverse effects since Novartis already owned equity before the complete acquisition. However in similar circumstances there is considerable risk to Indian companies going in for partnering when consolidation activity is at a high.
Indian companies may get involved in later stage processing of investigational vaccines while bulk vaccines would be provided by US/Europe. By these means, the development time to bring bio-pharmaceuticals to the market place can be considerably reduced. For instance, Bharat Biotech has entered into an agreement with Acambis Plc for a vaccine against Japanese Encephalitis (JE). JE is the leading cause of childhood encephalitis and viral encephalitis in Asia and around 3 billion people worldwide face the same risk. Companies are complementing strengths with a vision to cater to the world market for some of the disease segments.
Indian companies are securing exclusive and co-exclusive rights to market licensed drugs across the world especially if it is concerned with a New Drug Delivery System (NDDS). Licensing agreements may evolve into sourcing agreements and further clinical product development agreements. An instance is the Biocon's agreement with Bentley (Europe) for the latter's intranasal spray formulation for administering insulin. Biocon can now market the intra-nasal insulin in Asia, Africa and the Middle East.
Then, Indian companies/institutions are looking to forge strengths in the discovery of drugs related to diseases such as cancer and diabetes. An example could that be of IICT and Evolva (Switzerland).
The government has been receptive to the industry's growing demand for simplifying the complex regulatory framework and has initiated several proactive reforms. The draft National Biotechnology Development Strategy, which has set a target of a $5 billion biotech industry in India by 2010, addresses several industry concerns, including funding, hastening procedural clearances, and developing human resources. The government is also expected to introduce legislation for creating special economic zones for biotechnology parks and free trade warehouses. The National Biotechnology Strategy has called on banks to fund startup biotech companies. It has also outlined proactive support through incubator funds. The industry may witness an increase in seed funding through banks and VCs.
Further, to streamline the approval process for r-DNA products, the government has set up the Mashelkar panel which has suggested the setting up of a single-window National Biotech Regulatory Authority. To implement this, a National Biotechnology Commission must be setup, which merges all the 3 bodies ie, the DCGI, Environment protection Act and the Seeds Act. This can result in more streamlined approval and regulation processes. All these regulatory improvements should go a long way in creating a conducive environment for biotechnology in India.
Indian companies such as Bharat Biotech, Shantha Biotechnics and Serum Institute have approached WHO for pre-qualification certificates for new combination vaccines. A nod from the world body would mean approval to export the vaccines globally and compete in markets dominated by MNCs such as GSK.
India requires a biotech industrial training programme to facilitate recruitment of resources by the industry and to expedite traversing the learning curve. Currently inadequate education was being provided. Students are not exposed to experimentation, data recording, data interpretation, problem solving skills etc. The national biotechnology strategy has emphasised the importance of skilled resources. We may observe changes in curriculum and course design which would be more industry oriented.
Then, India is being touted as one of the key countries which will help drive the global adoption and acceptance of biotech crops in the future. Biotechnology has indeed transformed agriculture into a multifaceted hedge against hunger, sickness and environmental degradation. The agricultural biotechnology landscape will also show considerable signs of improvement with commercial acreage in GM crops increasing world wide.
The vision for a bio-based economy promises to make our country self sufficient in the production of energy, chemicals and materials while improving the quality of the environment. It is dealing with nothing less than the future of life itself.