Biotechnology in India - DFAIT Sector Report

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February 2009

Biotechnology Sector Profile
[
1
]

-

New Delhi, India

1. Sector Overview

Biotechnology Industry in India

The biotechnology industry in India currently holds about two percent share of the global market
and has immense potential to emerge as a global key player. According to a forecast in 'B
io
Reality in India: Report 2008', by international real estate consultants Cushman & Wakefield, the
industry is expected to exceed US$ 5 billion, through its products as well as services by 2010
and is estimated to occupy 140 million square feet of indust
rial space.

An Ernst & Young survey projects India as one of the emerging biotech leaders, ranked third in
the Asia
-
Pacific region, based on the number of biotech companies in the country.

Market Size and the Key Opportunity Segments

The Indian Association

of Biotech Led Enterprises (ABLE) reported that the biotechnology
industry in India grew by 20 percent during 2007
-
08 and the revenues earned were worth US$
2.56 billion, against US$ 2.1 billion during the previous year. Research services amounted to US$
500 million and bio IT (bioinformatics) reached US$ 250 million.

Out of the five broad categories
-
biopharma, agri
-
biotech, bioinformatics, bioindustrial and
bioservices
-

the first three are the most important segments of the industry according to their
r
evenue contribution.

While the bio
-
pharma segment accounts for two
-
thirds of the total sector revenue, the agri
-
biotech sector in India witnessed a growth of 30 percent for the last five years, being the fastest
growing industry among all the biotech indus
tries in the country.

The Indian bioinformatics market, which deals with the creation and maintenance of extensive
electronic databases on various biological systems, is set to double by 2010, from US$ 32 million
to US$ 62 million, according to a report by

research firm ValueNotes Outsourcing Practice.

The bioinformatics segment derives 90 percent of its revenue from outsourcing. Since the global
bioinformatics market is expected to grow at a “ CAGR”
-
of 16 percent over 2007
-
10, it would
actually be conduciv
e to its growth in India at a rate of 25 percent.

Biotech Hubs

Being home to 200 diverse companies, the biotech cluster in Bangalore alone leads the segment,
whereas other cities like Hyderabad, Chennai, Pune and Mumbai also have come up as preferred
desti
nations to set up a biotech facilities.

According to the Cushman & Wakefield analysis, Bangalore is estimated to witness approximately
6.5 million square feet demand from this sector alone between 2007 and 2010.

Hyderabad has witnessed infrastructural deve
lopment in the biotech domain wherein the
Knowledge Park, the Biotech Park, Genome Valley and other projects have come up giving the
city an advantage over others. More than 53 international biotech companies have established
their operations in the Genome

Valley (Hyderabad) over the last year. Additionally, this city will
witness development of two biotech Special Economic Zones (SEZs) and three biotech parks in
the next two years.

A genomics centre is being set up at Tidel Park in Chennai to explore the I
ndian genetic pool,
leverage on the pool of Indian bioinformatics scientists and low cost software skills, facilitate
research and enable entrepreneurs to commercialise their findings. The city will witness
development of three more biotech parks and a bio
tech SEZ in the coming years.

In addition to the above, tier II and tier III cities like Vadodara, Coimbatore, Goa, Mysore,
Madurai, Kolkata, Gurgaon, Thrissur, Nagpur and Thiruchirapalli have significant potential to
emerge as biotech corridors, attractin
g investments from various stakeholders of the industry.

Investment Scenario

Investment alongside the outsourcing activities (i.e. export) has remained the key driver for
growth in the biotech sector.

In the last year, investments increased by 21 percent a
t US$ 637 million with 48 percent of the
total biotech market shared between the 20 leading Indian companies.

According to official sources, Bangalore's biotech companies have maintained a 35 percent
growth rate with investment of US$ 250 million in 2007
-
0
8.

Spread over 700 acre of land, Western India's first ever largest biotech park, which is being
established in Savli town near Vadodara, Gujarat, is expected to attract investments of over US$
900 million in the next five years.

In addition, the Indian bi
otech market has seen a surge of investment through the FDI route,
private equity and hedge funds, for collaborative R&D, bioinformatics, contract research and
manufacturing as well as clinical research.

Indian companies have been bullish in expanding fore
ign base through joint ventures, mergers
and acquisitions and other investment channels. Some of such developments include :


Indian company Jubilant Organosys Ltd., through its subsidiary Clinsys
Clinical Research, Inc. in New Jersey a global contract rese
arch
organization (CRO) has acquired Canadian company TrialStat
ClinicalAnalytics from TrialStat.


Canadian company Draxis Health Inc. was acquired by wholly owned
subsidiary of Jubilant Organosys Ltd.


Indian biotech firm Biocon acquired up to 70 percent st
ake in German
pharma player AxiCorp in a bid to acquire strong footing in the
European market.


Nicholas Piramal India Ltd. (Mumbai) acquired 17 percent of Canada's
Biosyntech. Nicholas Piramal is doing Phase I clinical trials for their
new oncology molecul
e at Biosyntech and expect to announce Phase II
clinical trials soon.

Government Initiative

The Indian government is attempting to boost the sector by providing sector
-
specific promotion
policy and requisite infrastructure in terms of biotech parks (some e
xamples are TICEL Bio Park
in Hyderabad, Tidel Park in Chennai) and SEZs.

The Indian government has already initiated a project to conduct genome
-
wide research on a
range of agronomically important crops.

Nanoelectronics Centres have been launched by the g
overnment, as a joint project of the Indian
Institute of Science (IISc) Bangalore and Indian Institute of Technology, Bombay (IITB) with an
investment of US$ 90 million.

The country gave its nod for commercial cultivation of genetically modified cotton (Bt

cotton) in
early 2002. Since then, the Bt cotton acreage today accounts for about 70 percent of the total
area under cotton cultivation. Agri
-
biotech continues to be the fastest growing industry among all
the biotech industries in the country.

Recent Deve
lopments

India’s leading biotech company, Biocon Limited, according to a report released by Med Ad News,
has been ranked among the top 20 global companies in the biotech sector. It also is the only
Asian company to be featured in this ranking . done accord
ing to revenue and income.

Asia's first and the world's second human DNA bank has been set up at the Biotech Park in Uttar
Pradesh's Lucknow district. The members of the DNA bank will receive a microchip
-
based DNA
card containing information of their finge
rprints, and anthropological details.

Biovet, an integrated biotechnology firm, launched Asia's first Bio Safety Level
-
4 (BSL
-
4)
manufacturing facility, specifically designed to facilitate product development and manufacturing
of vaccines like Foot and Mou
th Disease vaccine (FMD) in Malur, near Bangalore.

Biotechnology firm Avesthagen's Founder, Dr Villoo Morawala
-
Patell, has been awarded France's
national award, Officer of the National Order of Merit.

Moving up the Value Chain

Indian biotech companies are
moving beyond providing only low
-
end R&D services, such as pre
-
clinical and clinical services, which have typically been offered at 40 to 60 percent of the cost of
similar services from developed countries.

Instead, they are steadily moving up the value ch
ain by offering research and development
(R&D) services in drug discovery and validation based on genomics, proteomics, pathway
analysis (determining how toxic or radioactive substances reach humans) and clinical trials on
humans. Several global pharma com
panies are now partnering with India
-
based biotech firms,
involving significant cost arbitrage and quicker turnaround time.

Trends: Nanotech & Stem cell Bank

With the global nanotech market expected to exceed US$ 1 trillion by 2010, the billed is billed as

“the next big thing” in India. Significant research in nanotechnology is taking place in the
biotechnology and medicine segments. The Indian government has allocated nearly US$ 350
million for the development of nanotechnology facilities involving the stu
dying and working with
matter on an ultra
-
small scale.

Virtuous Innovation, a group company of Khandelwal Laboratories in Mumbai, has already
invested close to US$ 34 million in four companies in the last five years to develop nanotech
drugs, related techn
ologies and other products. It has also developed a patented technology on
Gene Repair Therapy (GRT) to stimulate dormant genes in an attempt to cure diseases like
cancer and AIDS.

Indian firm, Dabur has commercialised Nanoxel, an injectible vial for dispe
nsing the cancer drug
Paclitaxel, in India and abroad, last year.

Another biotech segment which has attracted considerable corporate interest is the development
of stem cell therapy. Estimates suggest that 15
-
20 million patients will undergo stem cell
ther
apies every year in India.

Manipal Group in Bangalore has invested close to US$ 12 million for research into stem cell
therapy.

LifeCell, who has recently started a stem cell transplantation centre in Chennai, plans to set up
another five facilities by 200
9.

Cryobanks International India plans to invest close to US$ 114 million to develop five therapy
centres in the country.

Players like the Reliance Group, Apollo Hospitals and Fortis are among the other large local
corporates venturing into the sector.

It
is expected that India may soon emerge as the global hub to cure to deadly diseases such as
diabetes, cancer, neurology and cardiac problems with the help of regenerative medicine,
comprising stem cell therapies and tissue engineering.

2. Business Opportun
ities, Challenges and Market Access
Consideration

Some of the industry’s growth drivers constitute bio
-
pharmaceuticals, vaccines, monoclonal
antibodies, stem cells and biomedical components in medical biotechnology. India is a leading
producer of recombina
nt vaccines and is gaining specialisation in the area of stem cell research
contributed by some leading institutes such as Deccan Medical College, LV Prasad Eye Institute,
All India Institute of Medical Sciences (AIIMS), Centre for Cellular and Molecular B
iology (CCMB)
and Live Research Institute.

An important factor for the growth of the Indian biotech industry is a strong and committed
government support in the form of incentives given at both state and central levels (federal and
provincial) . The Nation
al Biotechnology Board (NBTB) Strategy was approved by the
Government of India in 2007 and includes the following key elements:


30 percent of the budget of the Indian Department of Biotechnology is
to be spent on public
-
private partnership programs


A Biote
chnology Industry Partnership Programme (BIPP) for Advanced
Technology is to be launched


Expansion of Small Business Innovation Research Industry (SBIRI)
scheme


A Biotechnology Industry Research Assistance Council (BIRAC) will act
as an interface between a
cademic and the private sector.


A National Biotechnology Regulatory Authority will provide a single
window mechanism for bio
-
safety clearance of genetically modified
products and processes.

Other factors influencing growth include the large local populatio
n with a high consumer base
(300 million) comprising middle and upper income groups, a third of which can afford private
healthcare and speciality therapies, making India the 11th largest pharmaceutical market in
value terms. Also included are factors such

as regulatory and health care reforms (22 percent
increase in government spending, 200 clinical trial approvals in last three years), and the ability
of biopharmaceutical companies to reverse
-
engineer the drug development process. With the
enforcement of
the product patent regime in 2005, the skill sets have fast progressed from
reverse engineering of drugs to research and development of novel drugs. India also has the
potential to generate high output value per dollar spent, making it an attractive destin
ation for
several global companies to set up a R&D base in India or tie
-
up with Indian companies in order
to lower the drug development cost.

India faces competition from other evolving biotech markets in Asia, particularly China and
Singapore. However, In
dia has surpassed China as a destination for manufacturing outsourcing.
With strong growth in the Indian market, foreign biotech firms and governments are looking to
strengthen their relationship with India in the area of biotechnology .


3. Sub
-
sector Ide
ntification

The biotech sector in India listed over 325 companies in 2006
-
07, across the industry value
chain. The sector is divided into the following subsectors


Biopharma (vaccines, therapeutic drugs, animal biologicals)


Bioservices (data management, cli
nical trials, site management
bioequivalence and bioavailability studies, toxicology studies,
knowledge process outsourcing)


Bioagri (Bt cotton)


Bioindustrial (industrial enzymes)


Bioinformatics

Larger numbers of biotech companies are involved in bio
-
pharm
aceuticals, followed by bio
-
services and bio
-
agri. Bio
-
industrial companies are still a minority in the Indian market at five
percent.

Companies (%) involved in each Biotech segment 2006
-
07

Bio
-

Pharmaceuticals

40%

Bio
-

Services

21%

Bio
-

Agri

20%

Bio
-

I
nformatics

14%

Bio
-

industrial

5%

Source: Biospectrum
-

ABLE survey 2007

The bio
-
pharma segment continues to contribute more than two
-
thirds of the biotech sector
revenues. It recorded sales of around US$ 1.46 billion in 2006
-
07 and a growth of about 27
p
ercent and accounts for 71 percent of the total industry revenues.

Contributions of Various segments to the Total Biotech
Revenues 2006
-
07

Bio
-

Pharmaceuticals

71%

Bio
-

Services

13.10%

Bio
-

Agri

9.48%

Bio
-

industrial

4.70%

Bio
-

Informatics

1.72%

Sourc
e: Biospectrum
-

ABLE survey 2007

Bio
-
agri and bio
-
services, showed the most robust growth among the biotech segment and
recorded 55 percent and 53 percent growth respectively. The bio
-
industrial sector grew by a
relatively modest 5 percent.


Some success s
tories for the sector in India are:


Apotex Inc. of Canada in collaboration with Intas Biopharmaceuticals
Limited (IBPL) of India is developing biosimilar proteins that can be
used to treat neutropenia (a side effect of cancer chemotherapy).


Montreal based
Ethica Clinical Research Inc., a Contract Research
Organization (CRO) has formed a joint venture with the Hyderabad
-
based Matrix Biosciences Ltd. The new company, Ethicamatrix CRO Pvt
Ltd, manages contract research services in India on behalf of North
Amer
ican and European pharmaceutical and biotechnology companies,
as well as on behalf of domestic Indian life sciences companies.


Canadian company Viropro International Inc, subsidiary of Viropro Inc,
and Intas Biopharmaceuticals Limited (IBPL) of India have
signed a
final contract for the development and production of an undisclosed
therapeutic protein.


Mumbai based Ajanta Pharma Limited has entered into an in
-
licensing
agreement with Ontario based Prollenium Medical Technologies of
Canada and will have exclu
sive marketing rights for Prollenium's highly
successful dermal filler 'Revanesse®' in India.


Mumbai
-
based Glenmark Pharmaceuticals Limited acquired two New
Biological Entities (NBE’s) from Chromos Molecular Systems Inc. of
British Columbia, Canada. These
two NBE’s are monoclonal therapeutic
antibodies for the treatment of Multiple Sclerosis and Acute Stroke.


Hyderabad
-
based LV Prasad Eye Inst in collaboration with University of
Ottawa researchers are working to reduce the process of Clinical
indications fo
r corneal transplantation to a single surgery, using the
tissue engineered substitutes developed at the university. This will
later be implemented in India in collaboration with Operation Eyesight
Universal, Canada.


Emcure Pharmaceuticals of Pune, India ha
s entered into a marketing
and licensing agreement with Dragon Pharmaceuticals Inc Canada for
distribution of Erythropoietin (EPO) in India.


Fytokem of Saskatoon, Canada has an agreement with United Pharma
-

Mohali for formulating various herb
-
based natura
l pharmaceuticals
which have anti
-
irritant, anti
-
inflammatory, anti
-
oxidant properties.


Bioriginal Food & Science Corp. located in Saskatoon have partnered
up with Beckons India, Mohali for Essential Fatty Acids (EFAs) from
fatty acid rich crops.


Apotex Ph
arma, the largest generic pharma company from Canada has
a 100 % Indian subsidiary in form of a formulation plant and clinical
research facility.


Apotex has a joint venture with Orchid Chemicals of Chennai for
contract manufacturing of their bulk drugs.


Ap
otex also has an agreement with Biocon, Bangalore for the
development of enzymes and other biotech products.


Gangagen Lifesciences, Bangalore has a 100 percent subsidiary in
Ottawa engaged in biotech related R&D.


MDS Sciex in Concord, Ontario, had entered
into a strategic alliance
with MPhasis, a Bangalore based leading software company for the
development of Bioinformatics.

Canadian Government Contacts

Canadian High Commission in Delhi

Contact: Prashanth Nair, Trade Commissioner

Email:
india.commerce@international.gc.ca

Website:
www.india.gc.ca/

Canadian Trade Office, Hyderabad

Contact : Vikram Jain, Trade Commissioner

Email:
india.commerce@international.gc.ca

Website:
www.india.gc.ca/

Consulate of Canada in Chennai

Contact: Subha Sundarajan, Trade Commissioner

Email:
india.commerce@international.gc.ca

Website:
www.india.gc.ca/

Consulate General of Canada in Mumbai

Contact: Ms Yasmine Dubash, Trade Commissioner

Email:
india.commerce@international.gc.ca

Website:
www.india.gc.ca/

Export Development Canada (EDC)

Canadian High Commission in Delhi

Contact: Peter Nesbitt, Counsellor and EDC Representative

Email:
pnesbitt@edc.ca

Website:
www.edc.ca/

Foreign Affairs and International Trade Canada

125 Sussex Dr.

Ottawa, ON K1A 0G2

Website:
tradecommissioner.gc.ca/

I
ndustry Canada

Website:
strategis.gc.ca/

Websites of key Indian trade associations

All India Biotech Association

Internet :
www.aibaonline.com/

Association of Biotechnology
Led Enterprises (ABLE)

Internet :
www.ableindia.org/

Biotech Consortium India Limited

Internet :
www.biotech.co.in/

Confederation of Indian Industry

Internet :
www.ciionline.org/

Organisation of Pharmaceutical Producers of India (OPPI)

Website:
www.indiaoppi.com/

Useful Internet Sites


www.ibef.org/

-

India

Brand Equity Foundation


www.dbtindia.nic.in/
: Department of Biotechnology, Government of
India


www.dst.gov.in/
: Department of Science and Technology, Government
of India


www.gita.org.in/

: Global Innovative and Technology Alliance


biospectrumindia.ciol.com/

-

Biospectrum Magazine


www.patent
office.nic.in/

-

Intellectual Property Office India


www.nppaindia.nic.in/index1.html

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National Pharmaceutical Pricing
Authority


www.cdsco.nic.in/

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Central D
rugs Standard Control Organization


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The Government of Canada has prepared this report based on primary and secondary
sources of information.

Readers should take

note that the Government of Canada does not
guarantee the accuracy of any of the information contained in this report, nor does it necessarily
endorse the organizations listed herein.

Readers should independently verify the accuracy and
reliability of the

information.