Biotechnology

Last Updated: November 2011 The Indian biotechnology industry has witnessed a remarkable drive and notable modifications have spread a fresh aura of wellbeing, prosperity and sustainability. The Indian Biotechnology sector essays a strategic role in the economic development of the country by offering affordable healthcare services such as medicines and therapies while meeting the challenges of food and energy security. As per the Biospectrum-ABLE industry survey (20102011), the Indian biotechnology industry posted revenues of US$ 2.9 billion, in spite of the global recession during 2009 and measured recovery during 2010. The sector has shown consistent development in double digits since the last decade with average revenue growth figures rising to more than 20 per cent. It has been estimated that the industry is poised to target a total turnover of US$ 8.6 billion by the end of 2015 which would only be possible if there will be a growth rate of about 30 per cent year on year basis. The biotechnology industry can be classified into five different segments - agri-biotech, bio-industrial, bio-informatics, bio-pharma and bio-services with each concentrating on a particular niche area. Within the Bio-technology sector, the bio-pharma segment remains to preserve the first position, closely followed by the bio-industrial segment which has registered the fastest growing rate within the sector, surging from less than 5 per cent market share five years ago to over 14 per cent. The states of Karnataka, Andhra Pradesh and Tamil Nadu added to 44.22 per cent share of the Biotechnology industry, which was marginally higher than Gujarat and Maharashtra share of 43.60 per cent. Major Investments The Bio-technology sector witnessed 40 deals that were completed during 2010, and they have given a lot of impetus to the sector in India. Accompanied with low-cost manufacturing facilities and research and development capabilities in the field of small-molecule generics, the Indian Bio-technology sector is well placed on the global scenario. Amongst the most prominent deals in the sector, Ranbaxy Laboratories acquired Biovel Lifesciences, Biocons commercialization agreement with Pfizer (the company also announced plans to establish R&D centers in Malaysia) and Cipla acquired a large stake in MabPharma and BioMab. Bangalore-based Biocon will set up a bio-pharmaceutical manufacturing and research and development facility in Bio-XCell, a custom-built biotechnology park and ecosystem in Iskandar Malaysia, Johor. The new facility will become operational by 2014. The project will also focus on research and development and production of other biopharmaceutical products at a later phase. Ticel Biopark is a 1.5 lakh sq ft facility dedicated for biotechnology companies, and has been set up in a joint venture between Tidco (Tamil Nadu Industrial Development Corporation) and Tidel Park, another joint venture between Tidco and the Electronics Corporation of Tamil Nadu. Ticel is now being expanded by an additional 6 lakh sq ft making it the largest biotechnology specific infrastructure facility in Asia. The expanded facility is expected to be completed by the year-end at a cost of US$ 28.7 million. US-India Business Council (USIBC) will participate in the 12th edition of Bangalore India Bio, an annual biotech show, to explore business opportunities both in the US and in India. They are expected to bring a sizeable team to participate at the biotech event, Ms Kiran Mazumdar Shaw, Chairperson, Karnataka's Vision Group on Biotechnology said at the launch of Bangalore India Bio 2012. Alexandria Real Estate, the US$ 5.2 billion US-based life science company will set up a biotech research and development (R&D) and incubation facility in the state of Gujarat at a cost of US$ 107 million for the project. Avesthagen, a Bangalore-based life sciences firm, has entered into a joint venture with Limagrain, a French international cooperative group to build an agri-biotech business model for field crops. Government Initiatives In the wake of increased government initiatives through several funding schemes and venture capital funds that

support the growth of the bio-technology sector in the country, significant improvement in the innovation in biotechnology has been registered. Set up by the Department of Biotechnology (DBT), the Small Business Innovative Research Initiative (SBIRI) and Biotech Industry partnership Program (BIPP) aims to offer financial support as earlystage investment and business support to biotech and medical device set ups in the country. In addition, a number of charitable organisations such as Bill & Mellinda Gates Foundations and Wellcome trust have offered funds for research and innovation in the bio-technology sector. The Central government has taken an initiative to secure the domestic market of the fake drugs and for this purpose, a number of companies have been forced to adopt an SMS-based tracking facility to ensure genuineness of their medicines. Following this development initiative by the government, US-based PharmaSecure, a leading global player in providing SMS-based authentication services to pharmaceutical manufacturers, has reported greater acceptance of its track-and trace facility in India. In addition, the Directorate General of Foreign Trade (DGFT), Government of India has also made it compulsory for all drug exports to bear serial numbers with track-and-trace capability. Similarly, the Drug Consultative Committee (DCC) of the ministry of health has also permitted an exceptional identifier for all local drugs so that they can be substantiated by customers through SMS, which is one of the path-breaking initiatives taken in the best interest of millions of customers in the country. "The recent DGFT notification and DCC approval are indications of how the Indian government is positioning itself as a global leader in adopting with latest technologies to protect its consumers, both domestic and export, against fraudulent practices," said Nathan Sigworth, chief executive officer (CEO), PharmaSecure. Road Ahead The advantage of economical manufacturing costs, high quality drug research facilities, skilled and cost-competitive manpower has promoted India on the global platform of the bio-technology sector and is considered to be one of the major competitors in the race to become a leading global player. Besides offering a fast expanding domestic market, India provides a number of benefits to attract multinational companies from across the globe. Exchange Rate used: INR 1= US$ 0.0191 as on November 25, 2011

The Department of Biotechnology (DBT) was set up by the Government of India under the Ministry of Science and Technology in 1986, to give a boost to the Biotech industry in India. Since then there has been no looking back. The funding and initiatives of DBT have been successful in generating a rich pool of academicians and scientists. India has become a hub of Biotechnology activity in the last decade. It is an ideal ground to set up biotech companies not only by Indian ventures, but also MNCs. India provides a sound knowledge base combined with skilled manpower. It is also a great place to set up manufacturing units, not to mention research laboratories. Success didnt come early to the biotech industry in India. Due to the prolonged period of research involved in the development of the processes and products, it was difficult for the industry to sustain itself in the face of scant funding. The high initial investment required and the uncertain nature of research made investors wary of funding activities, till a developed and tested product was available. But India could not afford to lag behind in the face of the huge benefits of Biotechnology. The science of biotechnology is a dynamic one, adopting the principles of various disciplines such as Biology, Biochemistry, Genetics, Cytology, Chemistry, Pharmacology, Bioinformatics and impacting important areas such as medicine, agriculture and environment. The applications of biotech research are many, some of which are cited below.

The field of medicine is making rapid progress and breakthroughs, thanks to new biotechnological processes and products. Traditional medicine cured the symptoms of various diseases. But biotechnological processes, in combination with pharmacology have the capability to develop proteins or molecules, which target the pathway of the disease and provide a permanent cure. Microorganisms can be manipulated to produce insulin, human growth factors, blood clotting factors, fertility drugs, antibiotics, vaccines and enzymes, which can be used to cure many human disorders. Gene therapy, a gift of biotechnology can cure genetically acquired diseases. It involves replacing defective genes, which may (somatic treatment) or may not (germline treatment) be transmitted to the next generation, as the need may be. Genetic testing can confirm paternity in the case of disputed parentage or help in solving a crime using DNA manipulative techniques available. A whole range of diseases like AIDS, cancer, sickle cell anemia, hemophilia, cystic fibrosis, diabetes, etc., can be detected and treated using biotechnological procedures which can detect mutations and address them at a genetic level. The production of high yielding and disease resistant crops through biotechnological means is a real boon to agriculture. Plants can be engineered with new genes for a favorable trait. They can be induced to form more nutritious fruits and/or vegetables. Their color and size too can be manipulated by altering their genetic constitution, viz. replacing defective genes or incorporating new genes. Banana and tomato plants have been engineered to produce vaccines. If clinical trials are successful, we are in for a revolution in biopharmaceuticals. Disease resistance crop varieties can be produced by incorporating Bt (Bacillus thuringiensis) gene in the crops, which when expressed produces the Bt toxin. When the insect feeds on the plant, the toxin acts on its metabolism and causes the death of the pest. Crops can also be engineered to tolerate biotic and abiotic stress conditions. Biotechnology has erased the divide of the seasons, allowing us to enjoy our favorite fruits, vegetables and flowers all through the year. The environment around us is undergoing a lot of change due to increased amounts of pollutants and climatic changes around the globe. To maintain a sustainable environment, it is necessary to cleanse our habitat. Biotechnology helps us to study the existing degradation pathways and improvise on them. For example, the oil spills in coastal regions and petroleum seepage into water bodies, can be controlled by bioengineered microorganisms, which can degrade these harmful pollutants. Biotechnology in conjunction with environmental sciences provides valuable insights into the different pathways and networks of important elements in nature, thereby helping in bioremediation. The Government of India is going all out to embrace the biotech industry and its products. Funds are flowing through Venture Capitalists (VCs) to biotech startups. Rebate on R&D, 100% foreign direct investment, excise and customs duty waiver on certain products, etc., are some of the incentives introduced by the government. India has made great strides in all the above biotechnological applications. The Indian biotech industry today encompasses 325 companies, some of them including Biocon, Serum Institute of India and Panacea Biotec alone, contributing to 27% of revenues. According to the 5th BioSpectrum-ABLE (Association of Biotechnology Led Enterprises) Biotech Industry Survey, of April-May 2007, the industry has grown by 30.9% in 2006-2007 alone. The contract research industry in India could reach as high as US $ 270 million by 2009 (Asia Specific Biotechnology Market 2007-2010, June 2007).

The top ten biotech companies of India listed below have broken new grounds and given new products and technologies to the world. 1. Biocon 2. Serum Institute of India 3. Panacea Biotec 4. Nicholas Piramal 5. Wockhadrt Limited 6. GlaxoSmithKline 7. Bharat Serum 8. Krebs Biochemicals and Industries Limited 9. Zydus Cadila 10. Indian Immunologicals Close on the heels of the companies listed above, are Shantha Biotechnics, Biological E, Mahyco Monsanto, Bharat Biotech, Ranbaxy and Novozymes to name a few. Biocon is the first and presently the leading biotech company in India. Initially it brought in revenues by manufacturing enzymes. But it has gradually become more research oriented with the goal of introducing new drugs to the market. Its manufacturing capabilities include microbial and mammalian cell culture fermentation, synthetic chemistry and therapeutic drugs for the treatment of cancer, autoimmune and metabolic diseases. Serum Institute of India, Indian Immunologicals and Bharat Biotech specialize in the production of vaccines. Serum Institute of India is the worlds largest producer of measles and DTP vaccines. Panacea Biotec has recently set up a plant in Himachal Pradesh, India, for production of bacterial and viral vaccines. Wockhardt is a biopharma powerhouse with 11 world class manufacturing plants in India. Shantha Biotechnics is located in Hyderabad and its products include Hepatitis B vaccine, Streptokinase drug and Interferon alpha-2b. The big player in agro-biotech, MAHYCO Monsanto has released a number of Bt cotton hybrids, which have been approved for commercial cultivation. The significant reduction in the use of pesticides and higher and better quality yields will result in increased incomes to farmers. Genetically modified field crops like rice, mustard, groundnut, maize, tubers like potato, vegetables like tomato, cabbage, okra, etc., are also under various stages of field trial led by Indian biotech companies. Development of products tailored to the needs of the Indian agricultural sector, will go a long way in making the country self-sufficient. The above-mentioned achievements of Indian biotech companies have started attracting overseas partners and investors. Indian biotech firms have started scaling up their capabilities to become global players. With proactive government schemes, VC funding, new products and groundbreaking research, India is fast emerging as a biotech leader in the Pacific, alongside Singapore, Japan, Taiwan, Korea and China.

BIOTECHNOLOGY With its large pool of scientific talent, world-class information technology industry, and vibrant pharmaceutical sector, India is well positioned to emerge as a significant player in the global biotech arena. Biotechnology is perceived as a revolution throughout the world. Scientists, through Research and Development (R&D), have developed and are continuing to develop cures for diseases that have affected people for decades and even centuries. With its large population of over a billion people there is a huge market for products and services. India 's population has a very interesting demography that creates almost a perfect environment for biotech companies to shift bases here. In addition the Indian sub-continent, which occupies only 2.4% of the total global surface area, has the most varied species of flora and fauna. Indian Advantage Promising potential to be a global player in the arena of biotechnology Large pool of skilled and cost competitive manpower Well developed and integrated scientific infrastructure Advanced chemical synthesis technologies Manufacturing practices conforming to US and EU norms Diverse biological resources Globally recognized as a producer of low cost, high quality bulk drugs and formulations. Overview of Biotech Industry The Biotech Industry in India in FY 2010-11 clocked US$ 3927.6 million, excluding life sciences education (with which the biotech industry has crossed US$ 4 billion) , growing 21.5 percent over the last years revenue of US$ 3233.2 million. The revenue split between exports and domestic sales has also recorded minor shifts ranging between two-to-five percent. The exports across segment made up 51 percent of the overall revenue contributing a total of US$ 2015.7 million. The ratio between exports and domestic sales stands at 51:49, which is a sign of a robust industry. Indian Biopharma Sector India BioPharma market comprising primarily of vaccines, therapeutic drugs, insulin, animal biologicals, stations and diagnostics, continued to grab the largest share of the total biotech industry revenue of US$ 3924.4 million in 2010-11. The biopharma market accounted for US$ 2424.8 million , with 61.8 percent of market share in 2010-11.It accounted for US$ 2008.7 million, taking 62 percent market share in 2009-10. Vaccines: Vaccines sector within biopharma segment witnessed a continued growth of 12 percent during 2010-11. With the revenue of US$ 555.4 million in 2010-11, vaccines sector claimed the largest pie in the biopharma segment. In 2009-10 the vaccines sector had sales of US$ 495.9 million. Diagnostics: Driven by a rise and investments in the healthcare infrastructure, diagnostics and therapeutics business had a positive impact on the diagnostic sector. The diagnostic market is estimated to be at US$ 555.2 million for 2010-11 registering growth of 22 percent over last years market of US$ 455.1 million. Therapeutics: The total biologics market in India witnessed a growth of over 35 percent and stood at over US$ US$ 455.1 million for year ending 2010 as against US$ 336.8 million for the year ending

2009. For 2010, the human insulin and analogues market stood at over US$ 177.5 million and erythropoietin stood at US$ 23.4 million. Indian Bioservices Sector The bioServices sector clocked total revenues of US$ 738.4 million in 2010-11, registering a growth of 23 percent over last years (2009-10) total segment revenue of US$ 600.2 million.This constitutes about 19 percent of the total biotech industry revenue for the fiscal. Looking into the future, the contract research organization (CRO) industry will continue to grow at a rate of 20-30 percent in the next three years. The segment will also see the entry of a number of small-sized homegrown CROs into the market looking at BA/BE studies. Also, being on the growth mode, Indian CROs will look at outbound acquisitions both big and small. Mandatory registration of all clinical trials in India has brought about the much-needed transparency into the system and this in turn will lead to a rise in the number of global companies outsourcing clinical trials to India. Indian BioAgri Sector The BioAgri market clocked total revenue sales of US$ 564 million in 2010-2011 as against US$ 440.3 million in 2009-2010. This accounts for 14.4 percent of the total biotech revenues. Bt cotton has been a roaring success with 95 percent of Indian farmers adopting the technology. India today is the fourth largest country in the world under Bt cotton cultivation. The total land area under Bt cotton in 2010-2011 was 9.5 million hectare, which is over 85 percent of the total land under cotton cultivation in the country. In the fiscal 2009-2010, the total land acreage under Bt cotton cultivation was 8.4 million hectare. Maharashtra with about 3.142 million hectare has the highest area under Bt cotton acreage followed by Gujarat at 2.354 million hectare and Andhra Pradesh at 1.399 million hectare. Punjab, Haryana, Rajasthan and Karnataka are other important states undertaking Bt cotton cultivation. Indian BioIndustrial Sector The bioIndustrial market in India clocked US$ 142.3 million in 2010-2011, growing at a rate of 10.9 percent for 2010-2011, as against US$ 128.2 million in 2009-2010. India has a marginal share in the global market for industrial enzymes, which is estimated to be at about US$ 3387.30 million.The segment is forecasted to grow at a CAGR of 15 percent till 2015. Though there is a prevailing domestic demand, the segment is largely export driven. Major export markets include the US (global share of 40 per cent), Europe (global share 25 percent) China (Global share: 20 percent). Others include Rest of Asia (Global share of 15 percent). Realizing the potential of the opportunities outside India, many Indian companies are expanding their base outside the country even into difficult markets such as China. Advanced Enzymes for instance, will start its European and Chinese subsidiaries for market expansion. And this is how the company expects to achieve its US$ 227.4 million revenue-milestone in the next five years. Indian BioInformatics Sector The bioInformatics segment, which is the smallest of industry segments constituting barely two percent of the market share in the overall industry revenue, grew by 4.9 percent in FY 2010-11. The segment clocked US$ 55.1 million in this fiscal as compared to US$ 52.5 million in FY 2009-10. The major players in the segment, Strand Life Sciences and Ocimum Biosolutions collectively contributed US$ 24.3 million to the overall revenue.

The factors contributing to this growth include tracking of discovery activities, data analysis, and pharma research. The different sub verticals covered under it are Informatics, Omics, Lab information, Clinical Data Management and Biostatistics. Biotech Industry Exports of different sectors during FY 2009-10 Segment 2009-10 Exports Rs Crore (US$ Million) BioPharma BioServices BioAgri 4767.7 (1081.7) 2507 (569) 58.1 (13.2) 124.1 (28.2) 73.9 (16.8) 170.9 (38.8) Percentage Share (%) 54 95 3 2010-11 Exports Rs Crore (US$ Million) 5535.4 (1255.6) 2986.3 (677.4) 74.4 (16.9) 150.2 (34.1) 106.02 (24) 8852.3 ( 2008) Percentage Share (%) 52 92 3

BioIndustrial Bioinformatics Total

22 32 53

24 42 51.3

Source: Association of Biotechnology led Enterprises (Able)