EXPORT-IMPORT BANK OF INDIA

OCCASIONAL PAPER NO. 137

BIOTECHNOLOGY INDUSTRY IN INDIA:

OPPORTUNITIES FOR GROWTH

EXIM Bank’s Occasional Paper Series is an attempt to disseminate the findings of

research studies carried out in the Bank. The results of research studies can interest
exporters, policy makers, industrialists, export promotion agencies as well as
researchers. However, views expressed do not necessarily reflect those of the Bank.
While reasonable care has been taken to ensure authenticity of information and data,
EXIM Bank accepts no responsibility for authenticity, accuracy or completeness of such
items.

© Export-Import Bank of India

Published by Quest Publications
January 2010
CONTENTS

Page No.
List of Tables 5
List of Exhibits 7
List of Boxes 9
Executive Summary 11
1. Introduction 32
2. Global Biotech Industry 37
3. Biotechnology in India: Current Status 56
4. Indian Biotech Segments: Emerging Opportunities 82
5. Challenges & Strategies 111

Project Team:
Mr. S. Prahalathan, General Manager, Research & Planning Group
Mr. Ashish Kumar, Chief Manager, Research & Planning Group
Mr. Rahul Mazumdar, Manager, Research & Planning Group

3
 List of Tables
Table Title Pg. No.
No.

1. Global Biotechnology Data for 2007 and 2008 42

2. Region-wise Biotechnology Data, 2008 43
3. Top 10 Biotech Products by Estimated Sales by 2014 48
4. Top Ten Biotech Drugs in 2008 49
5. Top Biotech Clusters in India - 2008-09 68
6. Top Biotech Cities in India - 2008-09 69
7. Biotech Parks in India 71
8. Understanding Key Segments in Biotechnology Industry 84
9. Select Key Firms in the Biopharma Business in India 86
10. Recombinant Therapeutic Drugs Approved for Marketing In India 90
11. Biotech Crops in Field Trial in India, 2008 94
12. Area, Production and Productivity of Cotton in India (2002-08) 97
13. Consumer Goods made with Industrial Biotech 100
14. Comparison of Generics, Biosimilars and Biologics 104
15. Key Biotech Products Losing Patent Protection in the US 122

5
 List of Exhibits
No. Title Pg. No.

1. Share of Population above 65 Years in Select Countries (in%) 34

2. Top Biotechnology Nations, 2008 (By Number of Firms) 38
3. Trend in Financing of Global Biotech Industry (US$ Bn) 39
4. Number of Greenfield FDI Projects in Biotech Industry 40
in the World- 2004–2009
5. Share of Regions in Global Biotechnology Revenues - 2008 42
(Public Company Data)
6. Share of Regions in Global Biotechnology 44
R&D Expenditure - 2008 (Public Company Data)
7. R&D intensity (%) and R&D Expenses Per Employee 44
(US$ 000), 2008 (Public Company Data)
8. Share of Regions in Global Biotechnology 45
Employment – 2008 (Public Company Data)
9. Share of Regions in Terms of Number of Players 46
10. Average Revenue Per Employee & Employee 47
Intensity Per Company
11. Indian Biotech Industry in 2008-09 56
12. Evolution of The Biotechnology Industry in India 58
13. Key Advantages of Biotechnology Industry in India 59
14. Indian Biotechnology Industry Structure 63
15. Indian Biotechnology Industry – Revenue by Segments 65
16. Domestic Business of Various Biotech Segments in India 66
17. Export Business of Various Biotech Segments in India 67
18. Top Biotech Regions in India - 2008-09 68
19. Budgetary Allocations in The Five-year Plans in India (Rs. Crore) 75
20. Growth of The Biotechnology Industry in India 83
21. Key Segments in Indian Biotechnology Industry 83
22. Biopharma Revenue By Segments in India 85
23. Segmentwise Shares of Biopharma Industry (2008-09) in India 86
24. UN Human Development Index Rank by Select Countries 112
25. Trends in Pharma-Biotech M&A Deals 119

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 List of Boxes
No. Title Pg. No.

1. DNA – Cornerstone of Biotechnology 33

2. Recombinant DNA Technology 36
3. Centers of Excellence in Biotechnology Sector in India 61
4. Biotechnology Patent Facilitating Cell 72
5. National Biotechnology Development Strategy 76
6. Biotechnology Institutional Infrastructre in India 77
(Existing and Proposed)
7. “Builder” Scheme 78
8. India’s First Nanotech Park 108
9. Umbilical Cord Blood Banking 109
10. Ramalingaswami Fellowship - An Initiative for Reversing Brain Drain 118
11. Exim Bank’s Support to Research & Development 121

9
EXECUTIVE SUMMARY
INTRODUCTION
Biotechnology is a generic term that
encompasses a wide spectrum of
scientific and technological
applications used across a variety
of sectors. Biotechnology therefore
must be seen in the context of a
continuum of other disciplines and
technologies where its synchronized
application drives new products and
technologies. In the present day
context, the importance of the
biotechnology sector has assumed
increasing significance. The sector
today possesses the ability to
provide crucial leads, which can
help not only in curing critical
diseases but also reduce
widespread hunger. With a strong
and consistent research and
development thrust, the sector is
increasingly being viewed as an
answer to diseases, such as cancer
and AIDS; as an instrument to
enhance agricultural productivity;
and in providing solutions to climate
change and promoting sustainable
development through use of
biofuels.
The industry today has achieved
a global status through firm-level
strategies, active industry-level
participation, and most importantly,
due to the proactive and enabling
policies of the Government. In fact,
the various policies of the
Government over the last three
decades have enabled the Indian
biotechnology industry to carve out
a niche for itself in the globally
competitive environment and
consolidate its position.
GLOBAL BIOTECH INDUSTRY
The global biotech industry is
predominantly skewed in favour of
the developed countries, both in
terms of number of firms as also
in terms of revenues. USA tops the
list with over 1750 companies,
followed by France (824), South
Korea (773) and Spain (659). India,
with 325 biotech companies in
2008, was ranked 11th in the world
and fourth in the Asia-Pacific region
after South Korea, Japan and
Australia.
Notwithstanding the recent
economic meltdown, the revenues of
the public biotechnology companies
across the world increased from
US$ 84.7 bn in 2007 to US$ 89.6 bn
in 2008, an increase of 5.7%. In spite
of this increase in revenues, the
11
inudstry posted loss in operations,
although the loss in the year 2008
declined from US$ 2.6 billion in 2007
to US$ 1.4 billion in 2008. The R&D
expenditure in the biotech industry
registered a marginal decline of 0.3%
in 2008, reflecting the overall
recessionary situation prevailing in
the world economy. The total
employees engaged in the public
biotechnology companies also
exhibited similar trends registering a
marginal decline of 0.5% in 2008, to
reach a little over 2 million. The global
revenues per employee in the
biotech industry were to the tune of
US$ 0.44 million, while the global
employee intensity per company in
the biotech industry was at 42.5
employees. In the year 2008, there
were more than 4700 companies
operating in biotechnology industry
across the globe, with most of them
(83%) controlled by private entities.
BIOTECHNOLOGY IN INDIA:
CURRENT STATUS
The Indian Biotechnology industry
has been evolving over three
decades. The milestones of the
evolution of biotech industry in India
began in 1978, in Bangalore, when
the country’s first biotech company
Biocon was established for
producing industrial enzymes. The
Government provided a major
thrust to the sector with the
establishment of the National
Biotechnology Board (NBTB) under
the aegis of the Department of
12
Science and Technology (DST) in
1982. The NBTB acted as an apex
body, which was given the task of
identifying priority areas and
evolving a long-term plan for the
development of biotechnology. Four
years later in 1986, the NBTB was
upgraded to a full-fledged
Department of Biotechnology
(DBT). This paved the way for
furthering the growth of
biotechnology in the country.
The progress for biotechnology
industry in India has been possible
due to the inherent advantages that
the country has, including diverse
flora and fauna, large gene pool,
temperate climate, quality manpower
and low-operational costs. Further,
the proactive policies and measures
taken by the Government of India
and its agencies, have allowed the
industry to capitalize upon such
advantages. Today, biotechnology is
being promoted in the country
keeping in view its enormous
potential to improve agriculture, food,
health, environment and energy
requirements of the population.
In terms of market dynamics, the
Indian biotech sector had a healthy
growth in 2008-09 with its revenues
reaching Rs. 12137 crore. Within
this, BioPharma contributed
Rs. 7883 crore, followed by
BioServices (Rs. 2062 crore),
BioAgriculture (Rs. 1494 crore),
BioIndustrial segment (Rs. 478
crore), and BioInformatics (Rs. 220
crore). Recent trends in turnover of
the industry indicate that the Indian
biotechnology industry recorded a
CAGR of 31.5% during the period
2001-02 to 2008-09, increasing from
Rs.2345 crore to Rs. 12137 crore
during the period. The domestic
biotechnology market clocked
revenues of Rs 4,985 crore in 2008-
09, registering a 10% growth as
compared to the previous year, and
accounting for around 41% of
revenues generated in the industry.
As regards segment-wise data,
for the year 2008-09,
BioPharmaceutical sector accounted
for the largest chunk of the biotech
industry, garnering a share of 65%
in total revenues, with vaccines being
the largest contributor within the
BioPharmaceutical segment.
BioServices (17%) and BioAgri
(12.3%) are other major sub-
segments of Indian biotech industry.
Segments like BioIndustrial and
BioInformatics garnered a share of
3.9% and 1.8%, respectively of the
total revenue in 2008-09.
Interestingly, the share of the various
segments of the biotechnology
industry remained almost the same
with minor changes in 2008-09, as
compared to 2007-08.
The Indian biotech industry is
largely export-driven accounting for
60 % of the total revenues in 2008-
09. In rupee terms, the
exports business went up by almost
25% to Rs 7,152 crore. Sub-
segments like BioPharma and
BioServices have had a majority of
their revenues coming from exports,
with export revenue constituting
around 62% and 95%, respectively,
in these sub-segments during 2008-
09. In fact, these two segments
constitute over 95% of the total
biotech exports from India.
BioInformatics (2.37%), BioIndustrial
(1.24%), and BioAgri (0.89)% are
marginal contributors to overall
export of indian biotech industry.
The Indian biotechnology
industry is spread across many
states in the country. These states
have unveiled state-specific biotech
policies and have established biotech
parks to attract investment in this
industry. These parks have emerged
as a focal point of some of the
leading biotech clusters such as
Genome Valley in Hyderabad and
Hinjewadi in Pune. The respective
government policies in these states
and scientific ambiences have also
been responsible for the growth of
bioclusters.
Government of India on its part
has initiated certain far-reaching
legislations to promote the growth of
the biotechnology industry in the
country. In India, there are
involvement of several organisations
regulating the development of
biotechnology, which has often
resulted in overlap of functions. In
order to streamline the regulatory
13
process, the Government has
proposed the establishment of the
National Biotechnology Regulatory
Authority (NBRA), to provide a
consistent mechanism for regulatory
approval. In July 2008, the DBT
introduced the National
Biotechnology Regulatory Act, which
would establish the NBRA as an
empowered body to approve
genetically modified crops, food,
recombinant biologics like DNA,
vaccines, recombinant gene therapy
products, and recombinant and
transgenic plasma-derived products
such as clotting factors, veterinary
biologics and industrial products.
The enactment of New Patents
Act, 2005, brought a paradigm shift
in research and development in the
sector. Previously, India had a patent
protection for process rather than the
product, which brought about
complacency without initiating much
effort upon the development of new
products. The New Patents Act of
2005 enforces product patents
thereby inspiring firms and research
institutions to undertake the
innovation at their behest. Apart from
this, there are two bills, namely, DNA
Profiling Bill, and The Protection and
Utilization of Public Funded
Intellectual Property Bill, which are
on the anvil and are expected to be
passed by the Parliament shortly.
Government Funding
In addition to creating enabling
policies, the Government has also
14
been supporting the sector through
provision of funds. While
Government funding to the Science
& Technology sector increased
nearly three times from the Tenth
Five-Year Plan to the Eleventh Five-
Year Plan, support to the biotech
industry increased by as much as
four times during the same period
with the budgetary allocation
shooting up from Rs. 25301.35
crore in the Tenth Plan to
Rs. 75304 crore in the Eleventh
Plan. In fact, the Department of
Biotechnology received almost
8.5% (Rs. 6389 cr) of the total
budgetary outlay of the Ministry of
Science & Technology in the
Eleventh Plan. Though the DBT
remains the main funding
organization for the Biotech sector
in India, there are other scientific
departments, which have also
started contributing in this field.
Research & Development
Facilitation
The DBT and other organizations
have also proactively taken up a
number of initiatives in creating
institutional infrastructure and a
strong research base in the country
in areas relating to agriculture and
forestry, human health, animal
productivity, environmental safety
and industrial production.
DBT has also been at the
forefront of maintaining many
international collaborations and
introducing joint proposals with
countries like Australia, Canada,
Finland, Germany, Sweden, USA,
Japan and the EU. Under the
National Bioresource Development
Board, a major initiative has been
taken for the establishment of a
Microbial Culture Collection–
Biological Research Centre at Pune.
The Centre has provision to hold
more than 2,00,000 bacteria and
fungi following international
standards, with the gradual
upgradation of the facility as an
International Depository Authority on
microbial collections. Under the
programme on prospecting of drugs
from microbial sources, about one
lakh bacterial isolates have been
collected and screened. More than
two lakh extracts have been
prepared, and about 7,000 promising
hits obtained.
INDIAN BIOTECH SEGMENTS:
EMERGING OPPORTUNITIES
The biotechnology industry has a
global presence today. While the
industry has its roots in the
developed country markets,
emerging countries like India have
started playing an important role
leveraging upon its USPs (Unique
Selling Proposition) through better
coagulation of academic research
and commercial development,
coupled with the synchronization of
science and finance to emerge as
a strong contender in the global
biotech industry. Amidst an
environment of continuing cut-throat
competition, and ever changing
regulations, the Indian biotech
industry has been successful in
creating a niche for itself in the
world.
The biotech industry in India can
be broadly categorized under five
distinct segments - BioPharma,
BioServices, BioAgriculture,
BioIndustrial, and BioInformatics,
with each sub-segment contributing
to the growth of the biotechnology
industry.
BioPharmaceuticals
BioPharmaceutical products are
therapeutic or preventative
medicines that are derived from
materials naturally present in living
organisms using recombinant DNA
(rDNA) technology. The growth in
BioPharmaceutical drugs and
biologics has outperformed the
pharmaceutical market. This has
been so largely due to two factors
– firstly, the former addresses areas
of clinical needs that are
unmanageable with conventional
therapeutics, including cancers and
genetic diseases; and secondly,
they are able to command a
premium price. The total
BioPharma segment in India
registered a 14.3% growth in terms
of total revenues in 2008-09 to
aggregate Rs. 7883 crore as
against Rs. 6889 crore recorded in
2007-08. The segment has been
the single largest contributor to the
Indian biotech industry for many
15
years, especially due to its export
orientation. In 2008-09. exports
accounted for 62% of the
BioPharma revenue, while domestic
sales accounted for the remaining
38%. With India having a relatively
well developed pharmaceutical
sector, there are synergies that
exist between the two sectors. The
success strategies adopted by the
Indian pharmaceutical sector
therefore needs to be suitably
leveraged by the Indian biotech
players in order to realize the
untapped business potential.
The BioPharma sector can be
further classified into three broad
sub-segments, viz. vaccines,
therapeutics and diagnostics. The
vaccines sub-segment is the prime
contributor, accounting for close to
46% of the total revenues arising
from the BioPharma sector in 2008-
09. The vaccines segment has also
shown a healthy growth trends
recording a CAGR of 15.3% during
the period 2005-06 to 2008-09,
increasing from Rs. 2341 crore to
Rs. 3587 crore. On a yearly basis,
the revenue in 2008-09 increased at
10.2%, from Rs.3250 crore in 2007-
08.
The recent upsurge in demand
for vaccines, both in domestic and
international markets, is important
both from public health and
economic perspectives. According to
Department of Biotechnology,
Government of India, there are
around 15 companies involved in
marketing over 50 brands for
16
15 different vaccines. A BioSpectrum
estimate put the size of Indian
vaccine sub-segment at Rs 3,587
crore (US$ 737 million) in 2009, and
is expected to grow at about 20-25%
over the next few years; while
globally, the vaccine sub-segment is
valued at US$ 20.6 billion and is
growing faster than the pharma
industry. The world market size of
combination vaccine is projected to
cross US$ 2 billion mark in 2013,
which implies an annual
compounded growth of over 18%.
As far as the therapeutic sub-
segment is concerned, it contributed
around 37% of the total revenues
generated from BioPharma in 2008-
09. During 2008-09, the Indian
therapeutics market recorded a 19%
growth to record revenues worth Rs.
2956 crore. Human insulin was the
largest contributor to the therapeutics
market, a reflection of India’s large
diabetic population. With diabetes
now ranked as the fifth leading
disease causing death across
developed country markets, and
forecast to grow, the market for
once-a-day drug delivery and non-
invasive drug delivery systems
continues to offer significant potential
for expansion. India is predicted to
lead the way with 73.5 million people
expected to have diabetes by 2025.
The diagnostics business
accounted for close to 17% of the
total BioPharma business in 2008-
09, recording a CAGR of around
14% during the period 2005-2009
(from Rs. 905 crore to
Rs. 1340 crore). On a yearly basis,
the revenue increased at 16.5% -
from Rs.1150 crore in 2007-08.
However, this increase has been
lower as compared to the growth in
the previous year, which was around
21%. It is estimated that
approximately 60-70% of medical
treatments in India are based on
laboratory diagnostic tests.
Diagnostics revenue market
increased from Rs.905 crore in 2005-
06 to touch Rs.1340 crore in 2008-
09.
With increasing health
consciousness among the Indian
population and an increase in
awareness of diseases such as
AIDS, Hepatitis, coupled with the
Government’s efforts to promote
community health, such as
compulsory testing by blood banks
for AIDS, there exists enormous
potential for the diagnostic sub-
segment. It is also important to note
that with a higher disposable income
and with a growing middle class
population, the market for quality
medical facilities are increasing in
India. Hospitals and diagnostic
centres across the country are
therefore concentrating on equipping
themselves with the best in class
medical and diagnostic services.
This is likely to be another driver of
growth for this sub-segment.
BioServices
BioServices mainly include clinical
research and contract research
organizations (CRO) and to some
extent custom manufacturing. The
BioServices sector, which
accounted for about 17% to the
total biotechnology industry’s
revenues, and recorded a growth
of 31% in 2008-09, over the
previous year. Exports dominated
the BioServices segment
accounting for almost 95% of the
total BioServices revenues of
Rs. 2062 crore in 2008-09. In fact,
the BioServices segment
contributed to over 27% of the total
exports from the biotechnology
industry. Even in this sub-segment,
the country holds certain
advantages that could be suitably
leveraged. According to a recent AT
Kearney global survey, India is
ranked third across all countries
(after the USA and China) in terms
of its overall attractiveness as a
clinical trial destination. India, with
the availability of large scientific
pool is well placed to cater to a
significant part of this demand.
Of late, a new trend in
BioServices sub-segment is being
observed, where large companies
outsource their clinical
manufacturing facilities while
retaining commercial manufacturing
and control over cost of goods,
quality, and on supply. On the other
hand, it has also been observed that
some specialized clinical
manufacturing organizations prefer
to outsource the routine job of
commercial manufacturing, which
17
they may no longer perceive as their
core competence area, as also
outsource the core business of
research and development. As the
BioServices business expands,
many firms engaged in this segment
are offering services in areas like
data management, clinical trials, site
management, bio equivalence and
bio availability studies, toxicology
studies, apart from catering to
knowledge process outsourcing for
pharma industry. All these trends
offer significant opportunities for the
Indian biotech companies.
BioAgri
BioAgri contributed around 12% of
the total market value of
Biotechnology in India after
BioPharma and BioServices, in
2008-09, with a total revenue
generation of Rs. 1494 crore, of
which domestic revenues
constituted around 96%. The
BioAgri segment revenues
witnessed the second highest
growth rate after BioServices
segment, with over 24% growth in
2008-09, over the previous year.
The domestic market, combined
with a reasonable scientific
infrastructure in agriculture, rich bio-
diversity and skilled human-capital,
make India an important global
base for BioAgri research. The
surge in opportunities are expected
to improve agricultural productivity,
especially at a time when per capita
arable land and water resources
are diminishing.
18
Hybrid Seeds
The Indian population has already
crossed the 1 billion mark. To
provide food and nutritional security
for such a large population,
including protection against
malnutrition, it is important that
productivity levels are increased
through the use of right quality
seeds, which have the capacity to
produce more with lesser inputs. In
this context, the seed industry has
a critical role to play in
dissemination of latest agricultural
technology to the farmers, and
making good quality seeds
available to them. Adoption of
genetically modified (GM) crops
would assure higher productivity
and nutritional security. Presently,
GM plants are largely in use for
commercial agriculture and
predominantly linked with traits of
one or two transgenics that fosters
salinity and alkalinity resistance,
drought resistance, herbicide
tolerance, insecticide resistance,
and resistance to microbial
diseases. With the success of Bt
Cotton, the Government has
realised the enormous potential of
such technologies and has been
keen to put in place policies and
regulations, which would promote
responsible crop biotechnology.
Biopesticides and Biofertilisers
The biopesticides and biofertilisers
sub-segments, though constituting
a modest proportion of the BioAgri
segment, have been growing at a
healthy pace since the last few
years. The Government of India
has initiated a number of
programmes to control major
weeds and pest-diseases of
important crops, vegetables and
plants to increase their productivity
through various biocontrol agents.
A number of universities and
institutes have been working in the
area of biofertilisers. The agriculture
sector in India has been supported
by public research programmes in
varietal development, yield
improvement and disease
management. Several international
companies have set up research
and development facilities in India
for developing hybrid seeds and
other biotechnology-based
activities.
BioIndustrial
The BioIndustrial segment
predominantly consists of enzyme
manufacturing and marketing
companies. These enzymes are
used in manufacturing segments
such as detergents, textiles, food,
leather, paper and pharmaceuticals.
Although the use of enzymes is still
at a relatively low level, interest in
the benefits of using enzymatic
solutions in India has been showing
an upward trend. The BioIndustrial
segment is estimated to have
garnered revenues to the tune of
Rs. 478 crore in 2008-09, a growth
of 16.6% over the previous year.
While almost 81% of the revenue
in the year 2008-09 was generated
from the domestic market, this sub
segment contributed around 1% of
the total biotechnology exports from
the country during the year.
Indian BioIndustrial companies
produce various enzymes, which
include amylases, proteases,
cellulases, xylanases, gluco-
amylases, pectinases, papains,
bromelain and catalases among
others, with around 45% of total
enzyme production catering to the
pharmaceutical industry. It is worth
noting that the product range and
services offered by the firms in this
sub-segment are growing rapidly as
the use of enzymes is gaining
widespread acceptance. Firms today
are increasingly looking at producing
various types of industrial enzymes
using natural methods of production,
from plants and vegetable origin, and
fermentation.
BioInformatics
The share of BioInformatics in total
Biotechnology sector is around
1.8% in 2008-09. This sub segment
made a modest progress,
increasing from Rs. 75 crore in
2002-03 to Rs. 220 crore in 2008-
09, thereby growing at a CAGR of
19.64%. The sector is largely
export driven with almost 77% of
the total revenues coming from
offshore markets in the year
19
2008-09. Considering the rapid
diversification of software
applications and the continuous
quest for growth in the IT industry,
BioInformatics segment presents a
prospective area for IT application.
BioInformatics segment uses
computer software tools for
database creation, data
management, data warehousing,
data mining, and global
communication network. The Indian
firms have been strategically
devising tools so as to cater to the
world requirements. Some of the
firms based in India, such as
Strand Life Sciences, Molecular
Connections, Mascon Life Sciences
and Helix, have created indigenous
tools for various components
across the drug discovery value
chain that are being used all over
the world. Strand Life Sciences has
devised a software program called
‘Avadis’ for which it has received
awards from organizations like Red
Herring, Frost & Sullivan, and
World Economic Forum. “Avadis” is
an integrated decision analytics
program that deals with data mining
and analytics needs of the various
life sciences sector.
Emerging Niche Areas in
Biotechnology
Biosimilars
The expiry of patent protection and
regulatory data protection for
certain biotechnological medicines
has led to the development of what
20
are called as biosimilars.
Biosimilars attempt to copy the
process, which leads to the
production of the original innovative
biotechnological medicine.
As regulatory obstacles to
biosimilars development is
increasingly being resolved, a
growing number of opportunities are
being created for generic companies
in the BioPharmaceutical market.
According to IMS data, the world
BioPharmaceutical market was
valued at US$ 85.9 billion in 2007.
Conservative projections estimate
that sales of BioPharmaceutical
products would exceed US$135
billion by 2011. With some of the
earliest BioPharmaceutical products
having already lost patent protection,
the originators of BioPharmaceutical
products are facing intense
competition from generics
developers. In response, originators
are resorting to a range of defensive
tactics, including the reformulation of
existing products to improve efficacy,
the implementation of more efficient
delivery systems, and the pursuit of
high-level intellectual property (IP)
battles.
The US, one of the largest
biosimilar markets in the world,
recently introduced the Waxman
Biosimilars Bill in March 2009, which
provides the approval of biosimilar
products that are defined as “no
clinically meaningful differences
between the biological product and
the reference product”, as well as
“interchangeable” biosimilars,
defined as a product that can be
“switched one or more times” with the
reference product “without an
expected increase in the risk of
adverse events”. The Bill, upon
passing into an Act is expected to
provide immense opportunities for
Indian firms, especially those that
have already ventured into the
Biosimilars space, and have filed
Abbreviated New Drug Applications
(ANDAs) in the US. With a few
players in the Biosimilars space, the
competition is expected to be
comparatively low and thereby acts
as a great boost for biosimilar players
in the market.
According to Datamonitor, the
Indian biosimilars market is projected
to grow to more than US$ 2 billion
by 2014 as key patent expires for
drugs such as epoetin alpha,
filgrastim, interferon beta 1a,
interferon alpha, human growth
hormone (hGH), and insulin-
glargine. While many of these drugs
represent the low-hanging fruit of the
biologics world and are unlikely to
provide the monetary gains of more
complex drugs, they do offer
manufacturers the opportunity to
position themselves within the
biosimilars sector in anticipation of
more lucrative targets.
Nanotechnology
Nanotechnology is considered
widely as the most promising
technology of the 21 st century.
Recent years have witnessed a
convergence of nanotechnology
and biotechnology. From an Indian
context, nanotechnology is at a very
nascent stage, but given the
potential of the sector, it is expected
to grow at a robust pace in the
coming years. Nanotechnology also
has the potential to revolutionize
the Indian agriculture scenario. It is
predicted that nanotechnology will
transform the entire food industry,
changing the way food is produced,
processed, packaged, transported,
and consumed. Several Indian firms
and research institutes are working
on nanotechnology products for
drug delivery, water filters, arsenic
removal, reducing water and air
pollution, antimicrobial coatings and
river cleaning projects. The
Government on its part is
proactively promoting various
programs under nanotechnology
initiative. A ‘Vision Group’ has been
formed with members from
academia, industry and research, to
develop a national nanotechnology
policy. Government of India has
announced an investment of
Rs. 1,000 crore through a mission
on nanotechnology from 2006 to
2011. The Government has also
announced a US$ 250 million
programme to build three national
institutes for nanoscience.
Stem Cell Research
Stem cell research is being touted
as the next wave of biotechnology
not only in India but also across the
21
world, which could potentially
transfigure treatment of diseases in
the next couple of decades.
According to a study by Frost &
Sullivan, the global market for stem
cell therapy is projected to be
around US$ 20 billion by 2010.
There are almost 180 prominent
companies working on stem cell
research in the world, majority of
which are based in the US, followed
by the EU, Israel, Thailand,
Canada, and Australia. The Stem
Cell Research Forum India (SCRFI)
has predicted India to have a
market size of about US$ 540
million by 2010 with an annual
growth rate of 15%.
The potential of stem cell
technology to develop therapy for
many untreatable diseases through
cellular replacement or tissue
engineering is being widely
recognized. Therapies using stem
cells are giving hope to millions of
patients afflicted with chronic
diseases. Globally, stem cells are
used to treat over 130 diseases, and
it is estimated that more than 500
clinical trials are being done to
develop therapies using stem cells.
Indian companies are becoming
an important part of this revolution,
helping to treat patients with
diseases ranging from eye problems
to heart disorders. The Government
of India has supported more than 55
programmes on various aspects of
stem cell research. Apart from this,
the new initiative by the US
administration in 2009 frees up
22
hundreds of stem cell lines around
the world for US fund, and this is
expected to expand collaborations
with Indian researchers, who have
over the past decade, under fewer
restrictions, carried forward this
initiative with their own funding.
CHALLENGES & STRATEGIES
Challenges
Skill Development
In spite of mushrooming of
educational institutions offering a
range of courses in biotechnology,
the void between the needs of the
industry and skills taught at these
institutions still remain, though the
gap is being narrowed down. Most
of these institutions have limited
ability to provide the right
pedagogy, or the requisite
infrastructure. The challenge of
bridging the gap between the
needs of the industry and the
curricula taught at various
institutions needs to be addressed
by cohesive actions from the
Government, industry and
academia.
Basic Education &
Health System
Amongst the most critical building
blocks for biotechnology
development and its success, good
education and health systems are
very important. India has been
positioned low in terms of both
these measures as reflected by the
UN Human Development Index.
India’s ranking is 132 out of a total
of 153 countries, and also the
lowest as compared to other
competing countries in this sector.
Part of this can be attributed to the
low healthcare expenditure by the
Government.
Government Health Expenditure
Most Governments in developing
countries usually finance
programmes that support child
immunization against various
diseases as part of the basic public
health package. India too has such
immunization programmes, but, due
to relatively high birth rate and
population, the share of
Government health budget in total
healthcare expenditure is relatively
low (25% in 2009). In comparison,
other emerging countries like Brazil
(47.9%), Russia (63.2%), China
(40.7%) and South Africa (37.7%)
portray a better management of
Government healthcare system. It
may also be noted that as a
percentage of the GDP, the total
health expenditure in India is only
3.6%, far below than that of other
emerging economies. Thus, there
is an urgent need to augment
budgetary allocation to the health
sector, particularly in improving
primary health care facilities.
Funding
The inherent characteristics of the
biotechnology makes the industry a
high investment one with long
gestation period. Thus, funding
plays a crucial role in ensuring the
culmination of a concept into a
commercially viable product. Global
financial crisis has affected the
funding prospects of biotech
companies, as risk aversion
increased among venture
capitalists, angel investors as also
financing institutions. These have
been further exacerbated by the
slow activity in the IPO market due
to anaemic stock market. According
to the Biotechnology Industry
Organization (BIO), prospects for
biotech IPOs are likely to remain
dim in the year 2009, on the heels
of a very weak base (the year
2008), with amounts raised in 2008
through this instrument being only
US$ 116 million, as against US$
2.3 billion in 2007.
Ethical Issues in Genetic
Research
Biotechnology has been confronting
the world with some ethical issues,
which have raised numerous
challenges with no definite
solutions. Genetic research and its
applications like genetic
engineering, manipulation, testing,
therapy, eugenics, selective
abortion, GMOs, stem cell
research, and cloning, opened
significant ethical and consumer
issues, including the potential risks
that may be adversely impacting
the environment. The issue of
genetically modified food appears
to be of a particular concern. A
challenge for the Indian
23
biotechnology industry will be to
work and liaise widely with the
community and earn its confidence
and investors. Awareness may be
generated among the consumers
through provision of detailed
information, ranging from the basics
of gene technology to details of the
regulatory processes.
Concentration of IPRs
Intellectual property rights (IPRs)
are intended to promote research
and development by allowing
researchers to generate revenue to
meet the development costs.
However, there are concerns that
the current level of biotechnology
IPRs are concentrated mainly in the
hands of the private sector. It is
reported that globally, few
companies are responsible for the
vast majority of agri-biotech
research. These companies have
focused on crops and traits (such
as herbicide resistance) that are
having commercial significance,
and thus, may not be willing to
transfer it to others. Globally,
Mergers & Acquisitions trends
among biotechnology companies
have also been on similar lines,
encouraging the concentration of
IPRs, which may affect the ability
of developing countries like India,
to negotiate for access to
proprietary technologies at a
reasonable price. This challenge
stems largely from patents that
confer broad rights over GMOs and
plant varieties.
24
Biosecurity
Biosecurity is another challenge
and there is a growing debate and
discussions among the academic
and policy spheres with regard to
bioterrorism, biosafety, and
emergence and re-emergence of
infectious diseases as concerns to
the society as a whole. The threats
associated with misuse of
biotechnology affect the growth
prospects of this industry, which
otherwise present potential benefits
for global populace at large,
especially in area such as health,
food and environment.
Bio-hacking
Biohackers are a group of
enthusiasts who are involved in
working with cells and genes
without any sound knowledge. With
the fall in the cost of equipments
capable of manipulating DNA, the
threat of growing number of
biohackers is significant. The work
raises fears that people could
create a deadly microbe on
purpose, just as computer hackers
have unleashed crippling viruses or
hacking into various websites. Such
a scenario may lead to “bio-spam,
bio-spyware, bio-adware” and other
bio-nuisances. An unrestricted
biohackery scenario could put the
health of the biohackers, the
community around them, and the
environment, under unprecedented
risk, and poses significant
challenge that needs to be suitably
addressed.
Patenting of Micro-organisms
Another associated challenge to the
biotech industry is patenting of
micro-organisms and associated
biosafety requirements, as strict
biosafety norms have to be
followed while handling micro-
organisms. The regulations for
accessing strains from a depository
have to be carefully worked out to
ensure that these do not land into
wrong and/ or technically
incompetent hands. India too needs
to bring in a patent law for
protecting micro-organisms and
rules for accessing strains from a
depository. In this context, the
Department of Biotechnology,
Government of India, has proposed
to build an internationally
recognized depository in the
country. It is hoped that following
the establishment of the depository,
a law in this regard would be
enacted based on similar laws
prevailing in other countries.
Strategies
Public-Private Partnerships
Public-private partnership needs to
be encouraged and supported in
areas that are vital to national
development, from a scientific,
economic or social perspective. The
focus needs to be on technology
and product development. India has
a wide network of universities,
departments and specialized
institutes that have been promoted
by various authorities providing
numerous specialised science
degrees at the Masters’ level.
These institutions also provide an
effective network of research
laboratories. Efforts should be
made to bring in a seamless
transfer of knowledge and people
among these universities, institutes,
and corporates for better
coordination, and to share their
research-based information on an
ongoing basis. Corproates could
have preferential access to the
intellectual property generated in
such jointly funded projects.
Another alternative could be
encouraging public-funded
successful R&D institutions to
establish ‘not for profit’ companies
to facilitate collaborative work with
industry. There should be an
industry-academia alliance wherein
the industry could have an active
participation when it comes to
planning curriculum and methods of
evaluation. Private firms may also
share the responsibility to promote
academic excellence by creating
Chairs in Universities and further
strengthen the industry – academia
relationship.
Need for enhancing Venture
Capital funding in India
One of the biggest challenges for
the Indian biotech industry is
attracting investment through
venture capital mode. With the
corporate sector being risk averse
25
to investing in biotechnology
projects, especially in their
gestation and early phases, the
need of VC funding becomes
critical for the growth of the biotech
industry in India. Venture capital
firms typically source majority of
their funding from large investment
institutions such as pension funds
and financial institutions, who like
to invest long term only with
assurance of high returns. Thus,
venture capitalists make careful
investment decisions, which leads
to high risk aversion rates. Instead,
India may consider promoting
venture capital investment on the
lines of Russian model. Russia has
been boosting venture capital
sector from scratch, by seeding
funds with Government support,
through the Russian Venture
Company (RVC). Israel has also
adopted similar approach of state-
backed venture capital model to
boost the investments in knowledge
based industry.
Strategy to Move to a Higher
Value Chain
Indian biotechnology industry, over
the years, has developed a number
of biotech products, but has been
found to perform tremendously well
in the vaccine segment. The
players in this industry as well as
the research institutions should
increasingly focus upon moving up
the value chain by enhancing
strengths in new products and
applications, and by offering R&D
26
solutions in drug discovery and
validation based on genomics,
proteomics, pathway analysis
(determining how toxic or
radioactive substances reach
humans), and clinical trials on
humans. Drug discovery and
innovations in drug delivery,
especially in areas like diabetes,
cancer, and inflammatory ailments
could take the industry into greater
heights. Indian biotech industry
should also look forward to moving
up the value chain in terms of
geographies so that India is present
in more premium markets.
Enhancing Biotech Applications
Modern research finds application
of biotechnology in various
industries, and thereby adds value
to the products and processes of
such industries, including
agriculture, forestry, marine,
environmental management, pest
management, and management of
human and animal healthcare. To
capitalize on the potential benefits
and to ensure international
competitiveness, it is important to
promote speedy and widespread
diffusion of biotechnology to the
broader industrial community, while
maintaining its responsible and
sustainable use. Industry initiatives
and entrepreneurship commitments
are particularly essential in this
regard. The Government could
promote research-industry linkages
and facilitate market information
including technological and
commercial trends and
opportunities. Integration of
biotechnology with various
manufacturing sectors could also
be encouraged through better
synergy and coordination of
activities among various
departments / institutions, with the
Department of Biotechnology,
Government of India, serving as
focal point.
Lucrative Domestic Market
The domestic biotech market is
expected to post robust growth with
rising income levels, improving
living standards, growing medical
infrastructure, increasing health
insurance penetration, enabling
regulatory framework and
institutional infrastructure, and the
growing number of organized
pharma-retail chains. For example,
in a country like India (which is
often referred to as the diabetic
capital of the world), it is certain to
find a market for products like
insulin. With more and more people
leading a sedentary lifestyle, there
may be opportunities for the Indian
biotech industry to innovate
products that cater to the demand
for controlling such chronic
diseases.
Biotech Skill Development
Biotechnology industry is highly
R&D intensive. In order to remain
globally competitive, the industry
requires a pool of highly skilled
manpower. India has already made
its mark in scientific research in the
world, with a large pool of scientific
manpower. The education system
in India, with its wide network of
universities providing quality
science education has helped
immensely in this regard. However,
with the changing composition of
economic growth there is an
emerging trend of students not
preferring science stream for career
opportunities. This may lead to
shortage of qualified manpower in
highly research oriented activities
such as biotechnology. Thus, it is
important to devise policies that
would attract more students to the
science stream. Many countries
give both financial and fiscal
incentives in the form of grants and
preferential loans, to encourage
students to opt for science streams.
A similar scheme could be thought
of, particularly for encouraging
students to take up biotechnology
as a subject of their specialisation.
Reversing Brain Drain
Shortage of manpower due to
brain-drain is another challenge
faced by the Indian biotech industry.
The expected shortage of
scientists / skilled professionals in
OECD countries may enhance the
brain-drain from India in the coming
years, unless suitable policy
measures are taken to reverse the
trend. There is an urgent need to
expand the current research
27
programmes with attractive
compensation package in order to
attract world-class talent. In this
context, it may mentioned that
Government has initiated a
programme ‘Ramalingaswamy
Fellowship’, aimed at bringing back
scientists of Indian origin working
abroad in various fields of
biotechnology, and who are
desirous of pursuing R&D in Indian
institutions. It may be mentioned
that China Academy of Sciences
(CAS) has established
programmes, such as Specially
Hired Foreign Research Fellows,
and Young Foreign Scientist
Project, through which the country
would arrract over 600 Chinese
scientists working abroad, annually;
each returning scientist would
receive funding of around
US$300,000 per annum. Corporate
entities too may get involved by
providing adequate exposure to the
budding talents through training and
placements. This would also
provide the Indian biotechnology
industry a tremendous manpower
advantage over its competitors.
Symbiotic Relationship between
Pharma and Biotech Sectors
Use of organisms for the
improvement of medical processes
constitutes one of the major
business segments of the
biotechnology industry. This
provides significant opportunities for
pharmaceutical firms also. In
general, biotech firms would
28
concentrate their business models
in covering a part of the product
development value chain. Biotech
firms are often not much engaged
in entire product development value
chain due to shortage of funds and
necessary know-how.
Pharmaceutical firms could
complement the biotech sector
through their knowledge and
financial power. Also,
pharmaceutical firms, which require
continuous innovation, could benefit
cooperating with biotech firms who
provide new product concepts and
innovative technologies.
Strengthening North-South
Collaborations
Many Indian firms use services
contracts with foreign firms to fund
their operations, develop
commercialization capabilities and
access valuable international
technology and expertise. Services
provided include R&D, clinical trials
and manufacturing. Multinational
corporations are increasingly
conducting clinical trials in India and
rely on Indian contract research
organizations to manage these
trials. It will be vital for the Indian
biotech firms to expand their
capabilities in clinical trial
management, and pay close
attention, not only to good clinical
practice guidelines, but also to
bioethical principles, providing a
high level of care and protecting the
rights of patients. This will not only
facilitate achieving of global
standards for the Indian contract
research firms, but will also help to
bring in more foreign exchange
earnings, through enhanced exports
of services. Though the
Government of India in this regard
has taken a number of steps by
collaborating with a number of
institutions in various countries
abroad, a lot more needs to be
done in furthering this initiative.
Encouragement to Innovative
Funding Models
Pharma / biotech firms could set
up Special Purpose Vehicles
(SPVs) which could be contracted
by the parent firms for product
development work in areas such as
specialty generics, topicals,
steroids, hormones, and
biopharmaceuticals, which may
have high initial product
development costs, and which are
non-infringing process, based on
regulatory compliances. Such
funding models may not stretch the
balance sheets of the parent
companies, nor result in equity
dilution. An agreed percentage of
revenues from the SPV funded
projects could be returned back to
the parent company, or funding
bank, towards the investment. In
the case of institutional financing,
once the funding bank recovers its
investment or IRR, the ownership
of the products would flow back to
the company without any
complications what so ever.
Emerging Biosimilar Market
Biotechnology industry in India has
a well-developed foundation with a
strong pharmaceutical and
biosupplier sectors. The global
market for biosimilars is expected
to grow significantly in the next few
years as several ‘blockbuster’ drugs
lose patent protection. A record
number of drug patents expire over
the next few years, which should
lead to stiff competition from
generics and a drop in prices.
Evaluate Pharma, an industry
consultancy, estimates that about
half of the US$ 383 billion-worth of
patented drugs to be sold in the
world in 2009 may lose patent
protection within five years. In 2010
alone, the industry is likely to be
put at risk with nearly 15% drop in
its revenues from patented drugs.
Indian companies appear well
positioned to leverage upon their
cost-effective manufacturing
capabilities to compete on a global
scale and garner some of this
market.
In the context of patent expiry on
bio-pharmaceuticals, it may be noted
that USA would emerge as one of
the largest biosimilar markets after
approval of Waxman Biosimilar Bill,
providing opportunities for Indian
firms. Biosimilars is a term used to
assign a sense of similarity between
the originator biologic and a generic
version. According to industry
sources, there are at least 75
29
proteins and peptide therapeutics
identified in the US as potential
profitable targets for new products.
Most of these were approved as New
Drug Applications (NDAs) to facilitate
biopharma companies to develop
biosimilar products. It is expected
that stringent regulatory approval
would be put in place to permit
marketing of biosimilar products at
an affordable costs.
Catalysing Coherence in
Clusters
Cluster development is a key
strategy to promote innovation,
accelerate technology transfer and
facilitate product development.
Biotechnology, being inter-
disciplinary in nature (encouraging
scientific and engineering
research), requires enabling
infrastructure for promoting and
nurturing innovation for building
successful enterprises. The
clustering concept maximises
synergy and efficiency of firms
located in the cluster. Although this
approach has already been
emerging in the country, it is
important to ensure that such
strategies deliver desired results
through a coherent effort of all the
stakeholders. Existing biotech
clusters could also be examined
with respect to any voids that could
be plugged to achieve the desired
results. Efforts could also be made
to set up clusters around the
existing institutions of excellence,
and to integrate them deeply into
30
the economic, entrepreneurial and
social fabric of the region.
Leveraging International
Partnerships
Biotechnology is globally
recognized as a rapidly emerging,
complex and far reaching
technology, and therefore a strong
international partnership, both at the
levels of research institutions and
at corporate front, is essential.
International cooperation and
partnerships can be leveraged to
achieve global best practices in the
country’s science and technological
efforts for joint intellectual property
generation, harmonization of
regulatory processes, smooth cross
border movement of biological
materials, and access to global
markets for the country’s products
and processes. Such an approach
would not only bring in better
technical know-how, but would also
help in enhancing India’s research
and development resulting in
quicker and faster outcomes.
Efforts have already been taken at
the Government level to leverage
the institutional strengths across the
countries. Such efforts should be
enhanced with collaboration
measures on continuous basis.
Biotechnology Usage in
Biofuels
Biotechnology could also be one of
the most effective and innovative
tools to make sustainable use of
biofuel, reducing the adverse
environmental impacts of green
house gas emissions, and limiting
the diversion of land from food
crops to fuel crops. Biotechnology
could also be critical to increase
land productivity both in fuel crops
and food crops, through plant
science, modern plant breeding
techniques and with state-of-the-art
application of crop protection. Since
the introduction of biotechnology in
agriculture and food production in
the early-1990s, biotechnology has
been utilized to develop new tools
for improving productivity. In 2005,
twenty-one countries planted
biotech crops covering a total of
222 million acres. These crops
include soybeans, corn, cotton,
canola, papaya, and squash that
are improved versions of the
traditional varieties. In addition,
rapid-rise yeast, and an enzyme
used to make cheese, are both
commonly produced through
biotechnology.
SUM UP
India is already being reckoned as
a frontrunner in the biotechnology
industry. With a huge base of
talented, skilled and cost
competitive manpower, and a well-
developed scientific infrastructure,
India is poised to become a leading
global player in biotechnology. The
vast population of India helps not
only in creating significant domestic
demand, but also provides biotech
research companies with a vast
gene pool. The institutional
infrastructure in the country offers
a strong foundation for these
strengths to get transformed into
business opportunities. Indian firms
could focus on acquiring overseas
biotechnology units in countries like
the US, which have seen plunging
valuations due to the global
meltdown. Though India has a long
way to go in terms of innovations
in processes, instruments, and
funding, the future looks bright for
the industry with India poised to
become one of the global leaders
in this industry. India, with all its
inherent strengths, can definitely
use biotechnology as a vehicle to
improve the lives of billions across
the world.
31
1. INTRODUCTION
Biotechnology is a generic term
that encompasses a wide spectrum
of scientific and technological
applications used across a variety of
sectors. Biotechnology therefore
must be seen in the context of a
continuum of other disciplines and
technologies where its synchronized
application drives new products and
technologies.
To quote Former US Senator,
Robert F Kennedy, “we live in
interesting times” - it is indeed a
matter of great awe that an industry
as nascent as Biotechnology (i.e.
during the 1970s) has come a long
way by changing the way living
beings across the globe perceive and
live life. It is worth noting that the
biotechnology industry began amidst
a lot of regulatory hurdles, but in due
course of scientific breakthroughs, it
proved its mettle and has today
settled the doubts of most sceptics,
to emerge as a successful
instrument in fostering the
endeavours of the scientific
community for the betterment of the
human populace at large.
In the present day context, the
importance of the biotechnology
32
industry has assumed increasing
significance. The industry today
possesses the ability to provide
crucial leads, which could help in
curing critical diseases, as also
reducing widespread hunger. With a
strong and consistent research and
development thrust, the industry is
increasingly being viewed as a
solution provider to diseases such as
cancer and AIDS; as an instrument
to enhance agricultural productivity;
and in providing solutions to climate
change and promoting sustainable
development through the use of
biofuels.
With such a wide array of end
use, and more still under study, the
realms of biotechnology today are in
an expansion mode, entering into
other emerging contours like
nanotechnology, stem cell research,
etc. The global biotechnology
industry today is at the beginning of
a technology curve whose limits are
still being explored and
comprehended.
Realising the potential of the
biotech industry, the Indian players
have been prompt in embracing
biotechnology. Today, Indian
 Box 1:
DNA – CORNERSTONE OF BIOTECHNOLOGY
DNA, or deoxyribonucleic acid, is the hereditary material in humans and almost all
other living organisms. Nearly every cell in a persons body has the same DNA.
Most DNA is located in the cell nucleus (where it is called nuclear DNA), but a
small amount of DNA can also be found in another part of the cell called the
mitochondria (mitochondrial DNA or mtDNA)
Considering that all cells virtually speak the same genetic language, DNA from
one cell can be read and acted on in another one—even a different cell type from
a different specie. This feature is what makes DNA the cornerstone of modern
biotechnology. Scientists can, for example, use a yeast cell to make human insulin
by inserting the human insulin gene into the yeast.
DNA is also the foundation for hundreds of diagnostic tests for genetic diseases
and predisposition to disease. Some new tests can even identify which treatment,
and what dosage, is best for a particular patient.
Because DNA and related cellular processes are so specific, biotechnology
products can often solve problems with fewer unintended consequences than
other approaches. In fact, the best words to describe today’s biotechnology are
specific, precise and predictable.

biotechnology industry is one of the 21 st century, the pressure on the

high performing knowledge-based
segments. The industry has
achieved a global status through firm
level strategies, active industry
participation, and most importantly,
due to the proactive and enabling
policies of the Government. In fact,
the various policies of the
Government over the last two
decades have helped the Indian
biotechnology industry to carve out
a niche in the globally competitive
environment and consolidate its
position.
With the country emerging as
one of the fastest growing
economies and projected to be
ranked among the top three
economies by the middle of the
country’s resources would be
immense. Under such
circumstances, biotechnology is
expected to act as a powerful enabler
that can revolutionize agriculture,
healthcare, industrial processing,
while promoting environmental
sustainability.
It must be noted that while India
currently has a demographic
advantage, being home to young
population, who are less than
25 years of age, in due course (by
the year 2050), they would graduate
to the old-age group (of around 65
years) which would have its own
pitfalls and challenges. A robust
biotechnology industry, under such
circumstances, can act as a strong

33
and critical medium to help gear the
country to face such challenging
situations.
Another important aspect of
India’s demography is the
burgeoning population, for whom the
country has to find possible avenues
of feeding. This is where the role of
the biotechnology industry becomes
even more critical. Biotechnology is
ideally positioned to help improve the
efficiency and profitability of the
agricultural sector through higher
yields and reduced dependence on
pesticides. This is crucial in an age
when despite progress in agriculture,
millions of people in India still do not
have access to adequate food
supplies. In the coming years,
enhanced yields and increased
nutritive value of crops using
agricultural biotechnology is
Exhibit 1:
SHARE OF POPULATION ABOVE 65 YEARS IN SELECT COUNTRIES
(in%)
SOURCE: World Population Prospects 2008, Exim Bank Research
34
expected to feed India’s burgeoning
population and ensure the nutritional
security of the nation.
In India, an admirable start has
already been made through
measures like a well-conceived
regulatory framework being put in
place to approve bioagricultural
crops and recombinant DNA
products for human health. Based on
sound ethical guidelines, a policy that
allows stem cell research is also in
place. Some of the recent initiatives
by the Indian government to promote
biotechnology such as 100% rebate
on R&D expenditures, and allowing
100% foreign direct investment in the
biotech industry, are also contributing
to the growth of the industry.
The patent reforms have
exposed the domestic firms to
compete with foreign firms and this growth in this industry is inevitable.
has enhanced innovation. Western The biotechnology industry therefore
companies, lured by strong skilled can act as a long-term sustainable
manpower and lower cost research, competitive strength for India with its
have boosted investments into the enormous potential to improve
industry along with strong linkages agriculture, food, health,
and partnerships. With the environment and energy
announcement of the National requirements of the population.
Biotechnology Development Further, the shrinking physical
Strategy, and the likely establishment boundaries enable biotech
of a nodal authority, National companies to tap large markets
Biotechnology Development around the world.
Authority, the emergence of strong

35
 Box 2:
RECOMBINANT DNA TECHNOLOGY
Recombinant DNA is the foundation of modern biotechnology. The term
recombinant DNA literally means the joining—or recombining— of two pieces of
DNA from different sources, such as from two different organisms.
Human beings began to change the genetic material of domesticated plants
and animals thousands of years ago by breeding individuals with valuable genetic
traits while excluding others from reproduction; as a result, the genetic makeup of
the plants and animals was changed. Now, in addition to using selective breeding,
genes at the molecular level are recombined using more precise techniques of
recombinant DNA technology. Making manipulations more precise and outcomes
more certain, biotechnology decreases the risk of producing organisms with
unexpected traits and avoids the time-consuming, trial-and-error approach of
selective breeding.
Genetic modification through selective breeding and recombinant DNA
techniques resemble each other, but there are important differences:
 Genetic modification using recombinant DNA techniques allows movement
of single genes whose functions are known from one organism to another.
 In selective breeding, large sets of genes of unknown function are transferred
between related organisms.
Techniques for making selective breeding, more predictable and precise, have
been evolving over the years. In the early 1900s, Hugo DeVries, Karl Correns and
Eric Tshermark rediscovered Mendel’s laws of heredity. In 1953, James Watson
and Francis Crick, deduced DNA’s structure from experimental clues and model
building. In 1972, Paul Berg and colleagues created the first recombinant DNA
molecules, using restriction enzymes. Ten years later, the first recombinant DNA-
based drug (recombinant human insulin) was introduced to the market. By 2000,
the human genome had been sequenced and today recombinant DNA techniques
are used in conjunction with molecular cloning to:
 Produce new medicines and safer vaccines;
 Enhance biocontrol agents in agriculture;
 Increase agricultural yields and decrease production costs;
 Reduce allergy-producing characteristics of some foods;
 Improve food’s nutritional value;
 Develop biodegradable plastics and other biobased products;
 Decrease water and air pollution; and
 Slow food spoilage.

36
2. GLOBAL BIOTECH INDUSTRY
The 21st century is witnessing
consolidation and expansion in the
global biotechnology industry, with
new inventions of its wider
applications and use. Biotechnology,
if used to its optimal capacity, is
expected to have a significant impact
on the healthcare and agriculture
sector for the betterment of the world
population, in addition to providing
commercial and industrial benefits.
This untapped potential in this
industry has been encouraging
countries across the world to invest
and design programmes promoting
the industry, especially in research
and development.
GLOBAL RANKINGS
Major countries, based on the
number of biotechnology
companies, both public and private,
are illustrated in Exhibit-2. USA tops
the list with over 1750 companies,
followed by France (824), South
Korea (773) and Spain (659). India,
with 325 biotech companies in
2008, was ranked 11th in the world
and fourth in the Asia-Pacific region
after South Korea, Japan and
Australia. However, it may be noted
that European Union, as a single
entity, has the largest number of
biotech firms in the world,
estimated at 1836 in 2008.
GLOBAL FINANCING
The ongoing economic meltdown,
amongst the severest in recent
times, has had a visible impact on
a number of industries across the
globe. The main manifestation of
the crisis, especially in 2008 and
early 2009, has been a total credit
squeeze and liquidity crunch in the
global financial markets. This
resulted in deferment of expansion
plans of various companies,
including those in the biotech
sector. In fact, in 2008, it was for
the first time in five years that the
global biotech industry witnessed a
decline in funds raised. It has been
observed that the major sources of
financing the biotech sector was
largely through initial public
offerings (IPO), follow-on, private
investment in public equities
(PIPEs), partnerships or through
debt and other instruments. Clearly,
the economic crisis has had a
major bearing on these instruments
of raising funds, reflected by a
37
 Exhibit 2:
TOP BIOTECHNOLOGY NATIONS, 2008 (BY NUMBER OF FIRMS)
SOURCE: Ernst & Young 2009, OECD Report 2009; JETRO; UK Trade and
Investment; Exim Bank Research.
sharp fall in actual funds raised by
firms in the biotech industry.
According to BioCentury (a US-
based publishing house), the overall
capital raised by biotech companies
across the globe declined by around
36% from US$ 52.79 bn in 2007 to
US$ 33.76 bn in 2008. It was quite
evident that the most drastic fall was
in funds raised from public investors.
Data for the year 2008 revealed that
in spite of the drastic market
conditions, IPOs constituted over
60% of the total funding of the
industry. However, the total amount
of capital raised from IPO, combined
with follow-on, dropped by 32%, from
38
US$ 34 bn in 2007 to US$ 23 bn in
2008. Venture funding, constituting
over 9% of the total capital raised by
global biotech industry in 2008,
declined modestly in absolute values
globally, by around US$ 1.6 bn in
2008, to touch US$ 3.1 bn.
However, it may be noted that
the decline in funding is expected to
continue in the coming few years and
thereby creating a challenge for the
biotech firms to source funds for
sustaining its growth. Though
venture capitalists are still in the
market, they are expected to be more
selective in their ventures.
 Exhibit 3:
TREND IN FINANCING OF GLOBAL BIOTECH INDUSTRY (US$ BN)

SOURCE: BioCentury, Nature Biotechnology Journal 2009.

MERGER AND ACQUISITION increase in M&A activity among

(M&A) DEALS biotechnology firms of similar size to
M&A activity in Biotech industry was improve cash positions, but does not
necessarily see increased M&A
robust in the US and Europe in
activity in the Biotech industry by
2008. According to a Ernst & Young
pharma firms. However, it is believed
report, there were 53 M&A
that large companies may not start
transactions involving US
buying assets in large numbers that
biotechnology companies in 2008,
do not fit their strategic objectives just
representing a total value of US$
because the valuations are relatively
28.5 billion, a record high, not
cheaper. Instead, the pharma firms
counting megadeals in recent years
may remain interested in more
(the previous megadeal was in
mature biotech companies, on the
2007 with the acquisition of
lines of the recent biotech
Medlmmune by AstraZeneca). In
acquisitions such as Genentech,
Europe, M&A activity in Biotech
MedImmune (Gaithersburg, MD),
industry was valued US$ 5.0 billion;
Millennium Pharmaceuticals, and
the value of strategic alliances have
ImClone. Roche acquired
also increased. Overall, the
Genentech in 2009, and
potential value of strategic alliances
AstraZeneca (London) acquired
involving companies in US and
MedImmune in 2007. Takeda
Europe still remains immense.
acquired Millennium in 2008, and Eli
The Ernst & Young 2008 report Lilly acquired ImClone in 2008. It may
observes that there has been an also be observed that owing to the

39
expiry of many patented products in
the next couple of years, the
propensity of big pharmaceutical
firms acquiring biotech companies
may increase.
GLOBAL DIRECT
INVESTMENTS
Unlike the funding scenario, direct
investments, especially the
Greenfield investments, in the
biotech sector have maintained
their pace even in the current
economic turmoil. With
governments across the world
striving to develop the
biotechnology industry, and
perceiving it as a basis for long-
term development, multinational
companies in the biotechnology
arena have been actively exploring
newer markets. While the R&D
activities of global multinationals in
life sciences still remain
concentrated in the developed
Exhibit 4:
NUMBER OF GREENFIELD FDI PROJECTS IN BIOTECH INDUSTRY
IN THE WORLD - 2004–2009
SOURCE: World Investment Report 2009, Exim Bank Research
40
economies, these companies
increasingly seek new locations in
the emerging countries to tap the
wide knowledge base that are
available at competitive prices.
Even in difficult market
conditions, cross-border investment
in biotechnology continues to grow,
and has not shown a decline from
the investment level of the year 2008.
The number of greenfield FDI
projects in the biotech sector has
been increasing over the last five
years. In 2008, an estimated US$ 2.9
bn of biotech investment was
recorded.
Growth is also being fuelled by
investment to, and from, emerging
markets. This trend is expected to
continue as emerging market
countries are likely to display their
advantages over the developed
countries, in terms of cost
competitiveness and availability of
talent pool. However, developed
countries (especially USA) still
dominate the world in innovation in
the biotech sector, and thus would
remain as attractive destinations for
R&D investments. Asia-Pacific
showed prowess as a location for
biotechnology investments in 2008 -
overtaking Western Europe to
become the number one region in the
world for investment projects. From
an Indian perspective, FDI would
pave way for increased
infrastructure, scaling up of local
facilities, increased market size and
facilitate R&D, which translates into
more “local content”.
INDUSTRY PERFORMANCE
Most countries today have well-
developed biotechnology programs
and a proactive strategic vision
which has, to a certain extent,
negated the fall in capital funds
during the current times of
economic meltdown. The revenues
of the public biotech companies
across the world increased from
US$ 84.7 bn in 2007 to US$ 89.6
bn in 2008, an increase of 5.7%,
according to a report by Ernst &
Young. It is worth noting that this
growth was witnessed in spite of
the global financial crisis hitting
economies across the world.
However, this modest growth was
unevenly distributed across the
globe with varying performance in
regions.
USA’s public biotech firms grew
by 8.4% in 2008, in terms of product
sales, which was much lower as
compared to the 11.3% growth
witnessed in 2007, and significantly
lower than the industry’s
compounded annual growth rate
(CAGR) of about 17% during the
period 2003-2008. This lowering of
the overall revenue in the US was
largely because of the acquisitions
of many successful biotech firms by
companies which cannot be strictly
classified as being within the realms
of biotech industry. Revenues also
diminished because of slower growth
of a number of top firms in the US,
such as Amgen, and Thousand
Oaks.
Revenues of European biotech
firms increased by 13% in 2008, to
touch Euro 15.3 billion as compared
to the revenue level of Euro 13.5
billion in 2007. The growth in the
European biotech industry was
boosted by a top-line growth in
excess of 20% by Elan (Ireland),
Eurofins Scientific (France), Meda
(Sweden) and Qiagen (the
Netherlands), while Switzerland
based Actelion, and UK based Shire
Pharma grew by 16% in 2008. As
regards the performance of Asian
(including Pacific) biotech industry is
concerned, revenues have recorded
a growth of 25% in 2008. This healthy
growth was mainly led by strong
growth in Australia, where revenues
grew by 26% in 2008.
Total Income
Despite the 5.7% surge in global
biotechnology revenues in 2008,
41
 Exhibit 5:
SHARE OF REGIONS IN GLOBAL BIOTECHNOLOGY REVENUES - 2008
(Public Company Data)

SOURCE: Ernst & Young 2009

Table 1:
GLOBAL BIOTECHNOLOGY DATA FOR 2007 AND 2008
Units Parameter Year % Change
2007 2008 2008 over 2007
Public Company Data
USD Billion Revenue 84.7 89.6 5.7
USD Billion R&D Expense 31.8 31.7 -0.3
USD Billion Net Income (Loss) -2.6 -1.4 - 46.1
Number Employees 204930 200760 -2.0

Number Public Sector Companies 798 776 -2.8

Number Private Sector Companies 4001 3941 -1.4
Number Total Companies 4799 4717 -1.7

SOURCE: Ernst & Young 2009

over the revenues generated in the in losses in 2008; the global net
year 2007, the profit remained loss that had climbed to US$ 2.6
negative for the global billion in 2007 abated to US$ 1.4
biotechnology industry as a whole. billion in 2008. This reduction in net
However, there has been a decline loss in 2008, over 2007, was

42
 Table 2:
REGION-WISE BIOTECHNOLOGY DATA, 2008
Units Parameter USA Europe Canada Asia-Pacific
Public Company Data
USD Billion Revenue 66.12 16.51 2.04 4.96
(73.7) (18.4) (2.2) (5.5)
USD Billion R&D Expense 25.27 5.17 0.70 0.60
(79.7) (16.3) (2.2) (1.8)
USD Billion Net Income (Loss) 0.41 -0.70 -1.14 0.01
Number Employees 128200 49060 7970 15530
(63.8) (24.4) (3.9) (7.7)
Number Public Sector 371 178 72 155
Companies (47.8) (22.9) (9.2) (19.9)
Number Private Sector 1383 1658 286 614
Companies (35.0) (42.0) (7.2) (15.5)
Number Total Companies 1754 1836 358 769
(37.1) (38.9) (7.5) (16.3)

Figures in the parantheses are share in world.

SOURCE: Ernst & Young 2009

helped by the reduction in net The life-science companies in

losses in Europe, and turnaround
to profit in USA. However net loss
has grown in Canada, with the
industry witnessing more than 50%
rise in net losses in the year 2008.
R&D Expenditure
The R&D expenditure in the biotech
industry, due to the financial crisis,
registered a marginal decline of
around 0.3%, in 2008, over the
year 2007. The R&D expenditure in
the biotech industry was the highest
in USA (accounting for a share of
80%), followed by European region
(16%), and Canada and Asia-
Pacific (2% each).
the Asia-Pacific region on an average
spent 12% of their revenue, on R&D
in 2008. China led the region with the
average R&D spend of 19.14%. In
China, the companies in the revenue
range of US$ 1 million – US$ 5
million spent almost 30% of their
revenues in R&D. South Korea
ranked second with an average R&D
spend of 17.8% of revenue, with the
companies in the revenue range of
US$ 1 million – US$ 5 million were
spending an average of 24% on
R&D. India followed at the third
position with average R&D spending
of 10.55%. The average R&D
spending for Taiwan, Singapore,
Malaysia and Australia was in the
range on 1% - 6%.

43
 Analysis of R&D expenditure per US$ 158,120. Interestingly, USA had
employee for the globe and across the highest R&D expenses per
regions yielded interesting results. In employee, of US$ 197,110, followed
the year 2008, the R&D expenditure by Europe (US$ 105,400) and
per employee for the global Canada (US$ 88,210). R&D
biotechnology industry was expenses per employee in
Exhibit 6:
SHARE OF REGIONS IN GLOBAL BIOTECHNOLOGY
R&D EXPENDITURE - 2008 (Public Company Data)

SOURCE: Ernst & Young 2009

Exhibit 7:
R&D INTENSITY (%) AND R&D EXPENSES PER EMPLOYEE
(US$ 000), 2008 (Public Company Data)

SOURCE: Ernst & Young 2009

44
Asia-Pacific was modest at US$
38,700 in 2008. Global R&D
expenditure as a percentage of
global revenues (R&D intensity) was
as high as 35% in the year 2008.
USA again topped the list with its
R&D intensity at 38%, while Canada
and Europe had R&D intensity of
34% and 31%, respectively. R&D
intensity of Asia Pacific Region was
only 12% in the year 2008.
Employee Numbers
The total employees engaged in
the public biotechnology companies
decreased marginally by 0.5% in
2008 over the year 2007, to reach
a little over 2 million. This decrease
in growth was essentially due to a
decrease in number of employees
Exhibit 8:
SHARE OF REGIONS IN GLOBAL BIOTECHNOLOGY
EMPLOYMENT – 2008
(Public Company Data)
SOURCE: Ernst & Young 2009
in USA, by 2.4%; however, the
number of employees in both
Europe and Canada increased by
3% and 9%, respectively. In the
year 2008, 64% of the employees
engaged in the biotechnology
industry belonged to USA, followed
by Europe (24%), Canada (4%),
and Asia-Pacific (8%).
Number of Players
The Ernst & Young report states
that during 2008, there were more
than 4700 companies operating in
biotechnology industry across the
globe with most of them (83%)
controlled by private entities.
Interestingly, bulk of these private
controlled companies belonged to
Europe, with a share of 39% in the
45
total number of biotech companies
across the globe, followed by USA
(37%), Asia-Pacific (16%), and
Canada (8%). In relative terms,
USA had the maximum number of
publicly traded companies as
compared to other regions. The
spurt in the number of private
companies was led by Europe, and
was followed by USA, with the Asia-
Pacific region being a distant third.
Average Revenue per
Employee & Employee
Intensity per Company
An analysis of the average revenue
per employee for the year 2008,
based on the Ernst & Young data,
shows that the global revenue per
Exhibit 9:
SHARE OF REGIONS IN TERMS OF NUMBER OF PLAYERS
SOURCE: Ernst & Young 2009
46
employee in the biotech industry
was to the tune of US$ 0.44 million,
while the global employee intensity
per company in the biotech industry
(total employees divided by number
of companies) was at
42.5 employees. In absolute terms
(region wise), for the period 2008,
USA had the highest average
revenue per employee, of about
US$ 0.5 million, followed by Europe
at US$ 0.33 million and Asia-Pacific
at US$ 0.32 million. Canada’s
performance was modest with
average revenue per employee
being only US$ 0.25 million in
2008. USA topped the list in terms
of employee intensity also, with an
average 73 employees per
 Exhibit 10:
AVERAGE REVENUE PER EMPLOYEE & EMPLOYEE
INTENSITY PER COMPANY

SOURCE: Ernst & Young, 2009;

company, as compared to an making occasional breakthroughs,

average of 26.7 employees in
Europe, 22.3 employees in Canada,
and 20.2 employees in Asia-Pacific.
MAJOR BIOTECHNOLOGY
PLAYERS: COUNTRY ANALYSIS
ASIA PACIFIC REGION
China
The Chinese Government has been
a key investor in the biotechnology
industry, and has helped the
industry to tide over the ongoing
financial crisis. According to a
report 1 , China’s biotechnology
industry has maintained an annual
growth rate of 30%, since 2005.
China has a reputation of being a
leading medical science innovator
including the world’s first
commercialized gene therapy
product. According to the China
National Center for Biotechnology
Development (CNCBD), there are
about 20 biotech parks throughout
China, with most companies
focusing on human therapeutics
and agriculture.
As far as biotech financing is
concerned, the venture capital
community is relatively small in China
as compared to the Western
countries. Companies that raised
venture capital in 2008 included
Sanghai based NovaMed
Pharmaceuticals, which secured
US$ 14 million from Atlas Ventures,
and Fidelity Asia Ventures. Apart

1 Nature Biotechnology Journal, January 2009

47
 Table 3:
TOP 10 BIOTECH PRODUCTS BY ESTIMATED SALES BY 2014
(US$ Million)
Rank Companies Total Sales

1 Avastin (Roche) 9232

2 Humira (Abott and Elsai) 9134
3 Rituxan (Roche) 7815
4 Enbrel (Wyeth, Amgen, Takeda) 6583
5 Lantus (Sanofi-Aventis) 6386
6 Herceptin (Roche) 5796
7 Crestor (AstraZeneca) 5739
8 Sprivla (Boehringer Ingelheim) 5552
9 Remicade (SGP, J&J, Misubashi Tanable) 5220
10 Gleevec (Novartis) 5136

SOURCE: BioWorld, EP Vantage

from this, Futaste Pharmaceuticals, Government of Beijing, operating

a supplier of APIs, raised funds from
3i Group. IPOs in China were few
during 2008-09. Jiangsu Nhwa
Pharamceutical, a company
developing drugs for the central
nervous system completed a US$ 25
million IPO in July 2008.
In 2006, the Government
adopted the Medium and Long-Term
National Plan for Science and
Technology (S&T) - 2006-2020,
which aims to make China a leading
S&T power and innovation economy.
The plan identifies biotechnology,
alongside seven other frontier
technologies, as a priority for
funding. Despite the continuing
economic crisis, the Chinese
Government has pledged to help the
biotech business. The Municipal
2 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide
Statistical Patent database, September 2008
under the 11th Five Year Plan (2006-
2010), has promised to invest US$
74 million in the biotech sector during
2009-10, funding eight major
projects. The goal is to foster an
annual output from Beijing’s biotech
sector of US$ 7.4 billion by the end
of 2010. It must be noted that the
number of biotechnology patents
filed in China have also seen an
increase from 22 during the period
1994-96 to 423 during the period
2004-062.
Japan
According to the Japan External
Trade Organization (JETRO) the
number of biotechnology firms in
2006 stood at 586. Although Japan
has been an industrialized country,

48
 Table 4:
TOP TEN BIOTECH DRUGS IN 2008
(US$ million)
Trade (generic)/ Indicative Usage for 2008 2007
Drug maker Revenues Revenues

Enbrel (etanercept)/ Rheumatoid arthritis, psoriatic arthritis, 6,191 5,273

Amgen ankylosing spondylitis, plaque psoriasis,
juvenile rheumatoid arthritis
Rituxan (rituximab)/ Non-Hodgkin’s lymphoma, rheumatoid 5,480 4,604
Genentech, arthritis
Biogen Idec
Remicade Crohn’s disease, ankylosing spondylitis, 5,273 4,420
(infliximab)/ psoriatic arthritis, ulcerative colitis,
Johnson & Johnson rheumatoid arthritis, psoriasis
Avastin Colorectal cancer, non-small-cell lung 4,807 3,431
(bevacizumab)/ cancer, breast cancer, brain cancer
Genentech (approved May 2009)
Humira Rheumatoid arthritis, psoriatic arthritis, 4,521 3,064
(adalimumab)/ psoriasis, Crohn’s disease,
Abbott ankylosing spondylitis, juvenile
rheumatoid arthritis
Gleevec/Glivec Chronic myelogenous leukemia, 3,700 3,050
(imatinib mesylate)/ gastro-intestinal stromal tumors,
Novartis acute lymphocytic leukemia, hypereosinophilic
syndrome, mastocytosis, dermatofibrosarcoma
protuberans, myelodysplastic syndrome,
myeloproliferative disorders
Lantus Types I and II diabetes 3,668 2,840
(insulin glargine
(rDNA origin)
injection/Sanofi
Aventis
Neulasta Infection associated with chemotherapy- 3,318 3,000
(pegfilgrastim)/Amgen induced neutropenia

Aranesp Anemia 3,137 3,614a

(darbepoetin alfa)/
Amgen
Prevnar
pneumococcal 7- Prevention of diseases caused by 2,716 2,439
valent conjugate Streptococcus pneumoniae
vaccine/Wyeth

aAranesp, in fourth place in terms of revenue in 2007, fell to ninth place in 2008.

SOURCE: BioMed Tracker - Nature Biotechnology 2009

49
it is still trying to catch up with its
peers in the West as far as the
biotech industry is concerned. For
instance, venture capitalists in
Japan unlike in other parts tend to
be less interested. Most of them in
Japan are a subsidiary of banks or
security companies with hardly any
exposure in biotech. However, in
spite of the recession, three biotech
IPOs materialised in 2008. These
were NanoCarrier, Carna
Biosciences and R-Tech Uneo.
The formation and nurturing of
biotech hubs in combination with
regulatory reforms are expected to
create better conditions for the
biotech sector in Japan. However,
the country still faces several
challenges such as expensive clinical
trials and government-mandated
pricing of prescription drugs. These
challenges reduce the growth
prospects in domestic markets. A
rather inflexible academic system
also tends to restrain the flow of
professional expertise and
information among the academic
institutions and corporate players.
Main challenge faced by the
Japanese biotech companies,
irrespective of the sizes, during
economic meltdown would be to
develop new and innovative
products. With the Japanese Yen
strengthening against the US dollar,
3 UNU-MERIT CATI database, Maastricht, the Netherlands, April 2009
4 UNU-MERIT CATI database, Maastricht, the Netherlands, April 2009
5 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide
Statistical Patent database, September 2008
50
devaluation of assets in the
developed countries could bring in
new buying opportunities and
increased cross-border deals. Some
of the deals concluded by the
Japanese companies in 2008 include
Eisai’s acquisition of US-based MGI
Pharma, collaboration of Takeda
Pharmaceuticals with Amgen, Daiichi
Sankyo acquiring German-based
biotech firm U3 Pharma, followed by
64% stake in India-based Ranbaxy.
It may be noted that the number of
biotechnology alliances for research
and technology transfer in Japan
have increased from 20 in 1996 to
53 in 2006 3 . The number of
biotechnology patent applications
has also increased from 894 during
1994-95 to 3720 during the period
2004-20064. Apart from this, Japan’s
global share in biotechnology patent
applications stood at around 11% in
2006 and was amongst the highest
in the world.5
Australia
The biotech industry in Australia
comprises a range of companies,
from start-ups to more developed
companies, selling products in
Australia and abroad, and applying
biotechnology to health, industrial
processing, agriculture and
environmental issues. The biotech
industry includes a large number of
research intensive SMEs, including
many spin-offs from universities
and other publicly funded research
organisations.
According to the OECD
Biotechnology Statistics, 2009, the
total number of biotechnology firms
in Australia stood at 527. The
employment by publicly listed biotech
companies in Australia has increased
from 9770 in 2007 to 10480 in 2008.
The sector ’s major exports
continue to be IP, through licensing
deals with large international
pharmaceutical and biotechnology
companies. The number of
biotechnology patent applications
has also increased from 297 during
1994-95 to 556 during the period
2004-20066. In fact, Australia’s global
share in biotechnology patent
applications was around 2.1% in
2006.7
The Australian Government has
responded to the current economic
crisis with the announcement of new
measures that are intended to help
the players to tide over the
challenges. In March 2009, the
Government announced the
establishment of an AUS$ 59.15
million ‘Innovation Investment
Follow-on Fund’ to provide much
needed support for innovative
6 UNU-MERIT CATI database, Maastricht, the Netherlands, April 2009
7 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide
Statistical Patent database, September 2008
8 UK Trade & Investment
companies requiring capital for
growth. Follow-on funding was made
available to companies participating
in the Government’s existing early-
stage venture capital programs. This
initiative is aimed to ensure that
these companies remain viable and
continue to operate in Australia. On
May 21, 2009, as an additional boost
to medium and small biotech firms,
the Australian Government has
announced 45% refundable tax
credits for R&D. The AUS$ 6.11
billion budget package for science
and innovation in 2009 constituted a
25% increase over the previous year,
the largest annual increase in the
budget for science and innovation,
since 1978-79.
EUROPEAN REGION
United Kingdom
UK has around 435 biotech
companies, plus service and
technology providers, cumulatively
employing around 19000 people,
with revenues of around £2.5 billion
(US$3.6 billion)8.
According to Ernst & Young, UK
was the leading player in the
European region, in 2008,
accounting for 20% of the total
clinical pipeline, and 23% of Phase
51
III9 assets. However, it may be noted companies with 159 biotech
that UK is losing out the leading developers and the rest as biotech
position it commanded few years suppliers. The total investments into
ago. In 2006, the UK accounted for the biotech industry in Switzerland
35% of all products in development, declined following the global
and 41% of Phase III products. financial crisis, in 2008. From a
United Kingdom was also a hot spot level of US$ 885 million in 2007,
for cross-border transactions investments went down to touch
accounting for 38% of the European US$ 205.2 million in 2008 – a
M&A activity by value. The number decline of over 74%. As far as
of biotechnology patent applications revenues are concerned, the public
has also increased from 985 during Swiss biotech firms fared far well
1994-95 to 1264 during the period than the private firms. Revenues of
2004-200610. Apart from this, UK’s public firms increased by 8.8%
global share in biotechnology patent whereas the revenue for private
applications stood at around 7% in firms increased marginally by
2006 and was amongst the highest around 2% in 2008 over the year
in Europe.11 2007. Profits too increased for
Following the global financial public firms to touch US$ 228
crisis, in December 2008, the UK million in 2008, as compared to a
biotech industry sought the support loss of US$ 9 million in 2007;
of UK government for creation of two whereas in the case of private firms
funds – one to fund the mergers and losses increased from US$ 18
acquisitions between smaller biotech million in 2007 to US$ 33.3 million
firms, to drive consolidation; and the in 2008. Research & Development
other to provide funds for “high- expenses too are higher in the
potential” firms. The UK Government public companies (US$ 1350.9
has announced the introduction of a million in 2008) as compared to
£750 million Strategic Investment private companies (US$ 512.1
Fund for emerging technologies, million in 2008). In the private
including biotech. Swiss biotech sector, the R&D
expenses increased from US$ 403
Switzerland million in 2006 to US$ 559 million
According to Ernst & Young data, in 2008. The booming biotech
Switzerland had a total of 229 sector in Switzerland employed
9 Phase III - Large scale controlled trials for efficacy/safety; also the last
stage before a request for approval for commercial distribution is made to
the FDA. Typically include 1,000 to 7,500 patients and are three to five years
in length (given in detail about the other Phases in Chapter-4)
10 UNU-MERIT CATI database, Maastricht, the Netherlands, April 2009
11 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide
Statistical Patent database, September 2008

52
17993 people as on 2008, an
increase by 15.9%, from 15,525 in
2006.
LATIN AMERICA REGION
Brazil
There are around 181 life sciences
firms in Brazil, of which 39% (or
71) are biotechnology companies
operating in Brazil12, of which 63
firms have less than 50 employees.
The share of biotechnology firms
active in agriculture stood at 23%
in 2007 13 . Other biotechnology
areas include health, natural
resources and environment.
A key aspect concerning
biotechnology companies is
innovation. According to the
database of the Brazilian Patent
Office (INPI) 84.5% of the companies
do not have patents in Brazil;
whereas 10% have one, 2.8% have
two, and only 2.8% have three patent
applications. It is worth mentioning
that the number of patents deposited
by the companies is an important
parameter but does not necessarily
mean that the degree of innovation
inside the companies is
proportionally low. As research
activities and scientists are highly
concentrated in Brazilian universities
and research institutes, many
12 Biomass Foundation, 2007
13 OECD, Biotechnology statistics database, January 2009
14 OECD, Patent and REGPAT databases, January 2009; and EPO Worldwide
Statistical Patent database, September 2008
15 UNU-MERIT CATI database, Maastricht, the Netherlands, April 2009
innovative technologies employed by
the biotechnology companies have
been licensed and are protected by
patents deposited in the name of the
university/research institute or
researcher. Brazil’s share in world
biotechnology patent applications
stood at 0.3% as on 200614. The
number of biotechnology patent
applications has increased from 6
during 1994-95 to 27 during the
period 2004-200615.
Cuba
Over the last twenty years, Cuba
has established a prominent
position in the biotechnology
industry, which has become one of
the most important driving forces of
the country’s economy. Since the
1980s, Cuba has built up world-
class expertise in the biotechnology
sector as part of a centralised
strategy to boost international trade
and to support domestic social
development - particularly in areas
such as public health and
agriculture.
The emergence and expansion
of biotechnology in Cuba as a new
branch of the economy has been a
good model in improving the health
of many persons in the country. The
Centre for Genetic Engineering and
53
Biotechnology (CIGB), flagship
organization for biotechnology
research in Cuba, was founded in
1986, and during the period 1990-
1996, the Cuban Government
invested around US$1 bn to give rise
to what is currently known as ‘The
Western Havana BioCluster ’,
comprising 52 institutions.
Once described as “Cuba’s
billion dollar gamble,” the Cuban
Government sponsored programme
has successfully led to the
foundation of more than 100 R&D
facilities and pharmaceutical centres,
over 150 international patents for
new drugs and treatments, and
employment of more than 30,000
workers in the field of scientific
development16. As a result, Cuba
now leads the world in many fields
of specialist medical research. It is
also one of the few countries to have
been accredited by the World Health
Organization for the production of
Hepatitis B vaccines.
The most important region of
Cuban biotechnology is the area
known as Havana’s Western
Scientific Pole, which comprises 52
scientific institutions and where
approximately 4,000 scientists and
engineers are working on more than
100 ongoing research projects. This
region provides the focus of UNIDO’s
new investment programme, which
will provide in-depth support for
16 www.americanchronicle.com/articles/view/104114, as accessed on Dec. 10,
2009
54
British companies wishing to explore
partnership opportunities.
Surprisingly, Cuba has eschewed the
venture-capital funding model that
rich countries consider a prerequisite
for developing a premiere
biotechnology industry; the biotech
industry in Cuba has grown rapidly
despite a strong venture capital
funding model.
The country’s expertise in this
industry has already provided the
basis for many international
partnerships - most typically, the
creation of joint companies abroad,
where Cuban institutions contribute
technology, know-how and technical
assistance.
SUM
The biotech industry is becoming
more competitive and is rapidly
expanding across the globe. The
US biotech industry’s hegemonic
status is slowly being challenged by
other countries in the world apart
from relatively younger firms in
Europe and Asia Pacific regions,
who are trying to catch up with the
established ones.
The resilience of the global
biotech industry was even more
evident from the northward
movement of the industry as a whole,
despite the implications and the
spillover effects of the financial
contagion of 2008-2009. The biotech
industry is maturing and the market
valuations of most of the successful
firms are challenging the
pharmaceutical firms. With many
patented pharmaceutical products
expected to come out of the patent
cover, many pharmaceutical firms
are evincing keen interest to
leverage the potential of
biotechnology for their survival.
The biotechnology industry,
despite the emerging challenges,
has grown stronger with tremendous
inventiveness and creativity.
Globally, the industry has showed
immense potential to cater to better
health care, a better environment
and more sustainable future, and
thereby fuelling economic
development and growth.
55
3. BIOTECHNOLOGY IN INDIA:
CURRENT STATUS

Adam Smith, in his classic Biotechnology is being promoted

‘Wealth of Nations’, wrote, “A true in the country keeping in view its
wealth of a nation is measured not enormous potential to improve
by how much gold it possesses but agriculture, food, health,
by what it can produce”. By this environment and energy
yardstick, biotechnology brought an requirements of the population, and
unprecedented global revolution, thereby to generate employment,
through which the world’s hunger and contribute to the economic
and diseases alike can be mitigated progress of the nation through
by creating new mechanisms. environmentally sustainable
industrial development.

Exhibit 11:
INDIAN BIOTECH INDUSTRY IN 2008-09

56
 The Indian biotech sector has
been growing by leaps and bounds
with the overall turnover in 2008-09
reaching Rs. 12137 crore.
BioPharma contributed Rs. 7883
crore; followed by BioServices
(Rs. 2062 crore), BioAgri (Rs. 1494
crore), BioIndustrial (Rs. 478 crore),
and BioInformatics (Rs. 220 crore)
segments.
EVOLUTION OF THE
BIOTECHNOLOGY INDUSTRY
IN INDIA
The Indian Biotechnology industry
has an interesting evolution that
has spanned over three decades.
The milestones of the evolution of
biotech industry in India began in
1978, in Bangalore, when the
country’s first biotech company,
Biocon, was established for
industrial enzymes and later
venturing into biotherapeutics.
The Government provided a
major thrust to the industry with the
establishment of the National
Biotechnology Board (NBTB) under
the aegis of the Department of
Science and Technology (DST) in
1982. The NBTB acted as an apex
body, which was given the task of
identifying priority areas and evolving
a long-term plan for the development
of biotechnology. Four years later, in
1986, the NBTB was upgraded to a
full-fledged Department of
Biotechnology (DBT). This paved the
way for furthering the growth of
biotechnology in the country.
It may be mentioned that the
evolution and growth of
biotechnology firms has its roots in
the pharmaceutical industry. Key
pharmaceutical firms established in
pre-1980s in the country, like
Wockhardt Ltd, Hindustan Antibiotics
Ltd, Lupin Ltd, and Gland Pharma
Ltd, have diversified or adapted
biotechnology at a later stage in their
manufacturing and research. With
the establishment of a dedicated
Department of Biotechnology, to
nurture and promote biotechnology
in the country, the number of players
in the sector started increasing. Post-
WTO period witnessed the
emergence of a number of start-ups,
along with large pharmaceutical
firms venturing into the biotech
business, and emergence of spin-off
firms from the established pharma
majors, like Dabur, Ranbaxy,
Dr. Reddys, and Cadila joining
biotechnology majors like Biocon and
Shantha Biotechnics. The first
successfully established spin-off
company from the Indian Institute of
Science (IISc), Strand Genomics,
also emerged during this period. A
number of healthcare MNCs like Eli
Lilly , GlaxoSmith- Kline, Pfizer, etc.
have also set up biotech subsidiaries
in the country.
THE INDIA ADVANTAGE
The success and the progress of
biotechnology sector in India is
possible due to the unique set of
advantages that India offers.
Growth in the Indian biotechnology
57
58
Exhibit 12:
EVOLUTION OF THE BIOTECHNOLOGY INDUSTRY IN INDIA

SOURCE: Department of Biotechnology, Exim Bank Research

industry is also supported by the
diverse flora and fauna, large gene
pool, temperate climate, quality
manpower and low-operational
costs. Further, the proactive policies
and measures taken by the
Government and its agencies, have
allowed the industry to capitalize
upon such advantages.
Biodiversity
The Indian sub-continent, which
occupies only 2.4% of the total
global surface area, has the most
varied species of flora and fauna.
The country’s diverse flora and
fauna offers a goldmine of raw
information. Biotech companies,
functioning in India, are in a
position to utilize this immense
biodiversity, and can easily find
samples, that facilitate field
Exhibit 13:
KEY ADVANTAGES OF BIOTECHNOLOGY INDUSTRY IN INDIA
SOURCE: Exim Bank Research
research in a much more efficient
and cost effective manner. The
availability of rich biodiversity is
further enhanced by the country’s
varied agro-climatic zones and a
diversified agricultural sector, both
of which can play an important role
in facilitating research and
development of different agribiotech
products applicable worldwide.
Large gene pool
A ‘gene pool’ can be defined as all
of the genetic information, including
all variations, contained within a
population of a particular species
at a particular time. India, in this
context, has a diverse gene pool
that holds significant potential.
Clusters of isolated genes can be
found in tribal groups and from
cross-country marriages. India’s
human gene pool provides lucrative
59
prospects for genomic research.
This not only helps domestic
biotechnology companies but also
acts as a pull factor for foreign
companies to shift base to India.
Temperature
India’s vast expanse is blessed with
varied climatic conditions, which is
ideal for the large-scale practice of
biotechnology. India also has one
of the largest coastlines in the
world. With at least seven distinct
climatic zones and one of the
largest and most varied sets of
marine organisms, India offers
tremendous opportunity to the
growth of biotech industry. This
ambient temperature in most parts
of the country provides enabling
conditions to develop biotech
product using the living organisms.
This also curtails immensely the
cost of cooling or heating, which
becomes obligatory for the practice
of biotechnology in most parts of
the Western world. Apart from this,
India also has coastlines where
there is an uninterrupted sunshine
for almost 340 days in the year,
which facilitates growth of marine
organisms in open areas.
Operational Costs
India’s low cost base in research,
development and manufacturing
provide the Indian biotech industry
a competitive edge over its
counterpart in other countries. The
large pool of scientists, engineers
and medical professionals offer a
low cost base in research, clinical
60
development and manufacturing,
and thus generating outsourcing
opportunities, especially in
bioprocessing, drug discovery, and
clinical research. The cost
differential for drug discovery
between the United States and
India is around 75%. In India, a
drug discovery process costs
around US$ 200 million as
compared to the cost estimate of
US$ 800 million in the US. Similarly,
clinical trials cost 30% less to carry
out in India than in Australia and
about 50% less than in the US. On
an average, the annual salary for
an Indian PhD biotechnology
scientist in India, at the entry-level
is much lesser as compared to a
counterpart in the United States or
Singapore. With, academia-industry
research partnerships gaining
popularity, this will further augment
the low cost of innovation. India
therefore is gradually becoming a
key destination for outsourcing R&D
in biotechnology industry.
Quality Manpower
India’s rich human capital, having
a large English speaking skill base,
is believed to be one of the
strongest assets for this knowledge-
based industry. Besides, India
produces 30 lakh graduates, 7 lakh
postgraduates, and 1500 qualified
PhD’s in biosciences and
engineering each year with the
industry employing approximately
20,000 scientists. The cost of
skilled manpower in India is also
relatively low. The low-cost and
large availability of skilled (DBT) has set up numerous top-
manpower provides the Indian notch Centres of Excellence (COE)
biotechnology industry a in the country. These centers are
tremendous competitive manpower responsible for generating skilled
advantage over its counterpart firms manpower as well as supporting
in other countries. Apart from this, R&D efforts of corporates. These
the Department of Biotechnology institutions have also been

Box 3:
CENTERS OF EXCELLENCE IN BIOTECHNOLOGY SECTOR IN INDIA
Advanced Basic Research
 Tuberculosis Drug Resistance (Indian Institute of Science, Bangalore; The
Foundation of Medical Research, Mumbai; Birla Institute of Technology &
Science, Pilani)
 Designing inhibitors against infectious agents (National Institute of
Immunology, New Delhi)
 Basic Molecular biology of a model microorganism, E.coli (Centre for DNA
Fingerprinting and Diagnostics, Hyderabad)
Advanced Science with Translational Research
 Systems Biology of Tuberculosis and Drug Development (International Centre
for Genetic Engineering and Biotechnology, New Delhi; University of Delhi,
South Campus, New Delhi; Central Research Institute of Jute & Allied Fibres,
Barrackpore, W.B)
 Genetics and Genomics of Silkmoths, (Centre for DNA Fingerprinting and
Diagnostics, Hyderabad)
 Antivirals Against Hepatitis C (Indian Institue of Science, Bangalore & others)
 Mesenchymal and Adult Stem Cell Therapies (Christian Medical College,
Vellore)
 Platform Technologies for Designer Crops (International Crop Research
Institute for the Semiarid Tropics, Hyderabad)
 Stem Cell Research: Basic and Translational (All India Institute of Medical
Sciences, New Delhi)
Partnership with Industry
 Heterosis Breeding in Rice (University of Delhi-South Campus, New Delhi &
Mahyco Ltd., Jalna)
 DBT-University Institute of Chemical Technology (Energy Biosciences
Centre), Mumbai

SOURCE: Department of Biotechnology, Government of India, Annual Report

2009-10

61
enhancing interactions between the
academia and the industry. Eleven
such COEs are under
implementation in the areas of:
genome sciences and predictive
medicine; system biology and
tuberculosis; genome-mapping and
molecular breeding of Brassicas,
Stem Cell research, Anti-virals etc.
It is envisaged to fund 50 COEs
mostly in Universities during
Eleventh Plan.
Attractive Domestic Market
India’s large population of over a
billion people is a huge market for
biotech products and services.
Further, the domestic
pharmaceutical firms are leveraging
the advantages of Indian biotech
industry in their activities ranging
from process innovation, product
development, and drug discovery.
The growing pharmaceutical
industry in India thus provides
market for the Indian biotech
industry.
INDUSTRY STRUCTURE
Biotech Players: The Indian
Biotechnology industry is divided
into various segments, and each
segment has various layers that are
playing a proactive role for the
growth of the industry. Government,
the research labs, and institutions
form one layer, which are carrying
out continuous research and
development; companies who are
solely into biotech products on a
commercial basis form the second
62
layer; these firms are completely
focused on marketing of the biotech
products, whereas pharmaceutical
and IT companies, which are at the
next level, are carrying out certain
dedicated biotechnology related
activities, either in the form of
solution providers or in the form of
facilitators.
Government Funding : The
Government has been investing
significantly for the growth of the
biotechnology industry since 1985.
The Government has been funding
various research-based institutions
to carry out biotechnology research
work. The Government has also
been increasing its budgetary
allocation to the Department of
Biotechnology in its five-year plan
outlays. While most of this funding
is for advanced research, there are
organizations like the Technology
Development Board (TDB), under
the auspices of Department of
Science & Technology, that give out
equity and soft loans towards
technology development, solely for
commercial purposes. The TDB is
not exclusive to the healthcare or
biotechnology industry but has so far
invested the largest share of its funds
in these sectors.
Venture Capital : Research and
development is the backbone of the
biotechnology industry as the
industry is highly research intensive.
Some of the researches carry on for
years without any specific timeline.
Most venture capitalists are typically
 Exhibit 14:
INDIAN BIOTECHNOLOGY INDUSTRY STRUCTURE
SOURCE: Exim Bank Research
averse to investing in biotech R&D,
but are open to funding companies
whose products and markets are
clearly identified. Their focus is on
funding the commercialisation of
techniques that are already
developed. Hence, most of the
private sector firms are quite risk-
averse to investing in biotechnology
projects in their gestation and early
phases. However, it may be noted
that private equity (PE) investments
in the life sciences sector clocked
US$ 183 million during the 10-month
period, between January and
October 2008, compared with
around US$ 173 million for the same
period in 2007.
BioSuppliers: The biotechnology
sector demands numerous
instruments from simple test tubes
to high-end equipments. Capitalizing
on the demand bandwagon, a
number of suppliers, including from
America and European regions,
have entered the market. In fact, the
bio-suppliers market is currently
dominated by MNCs that want to
take advantage of the increasing
63
R&D investments by domestic
biotechnology and pharmaceutical
companies. The growth in the
BioSuppliers segment of Indian
biotech industry was 15.5% in 2008-
09, to reach a revenue level of
Rs. 3621 crore in 2008-09. Some of
the leading domestic players include:
Spinco Biotech, Imperial Life
Sciences, RFCL, Genetix Biotech
Asia and DSS Imagetech. Wafers
India, Becton Dickenson, Thermo
Fisher Scientific and Millipore India
are some of the major multinational
biosupplier companies operating in
India.
Buyers : This is infact the major
segment which drives the growth of
various sub-segments in the
biotechnology industry. The specific
requirements and the needs of the
buyer segment is particularly
identified and taken care of, and
thereafter research on various end
products is initiated. The initial target
group is the Government, private
hospitals, and ultimately the patient,
who uses the products for treatment
and diagnostic purposes. Besides,
there are buyers in the industry, such
as pharmaceutical companies and
research institutions, that use
biotechnology intermediates and
products in the process of creating
their own end products.
INDIAN BIOTECH INDUSTRY:
THE MARKET SIZE
The Indian biotech industry in 2008-
09 registered 18% growth, and
64
recorded revenues of Rs. 12,137
crore. The BioPharmaceutical
sector accounted for Rs. 7883
crore, a growth of around 18% in
2008-09; the BioServices sector
registered 31% growth to touch
Rs. 2062 crore; the BioAgri sector
grew by 24% to clock a revenue of
Rs. 1,494 crore; the BioIndustrial
sector grew by 16% to reach a
level of Rs. 478 crore; and the
BioInformatics sector grew by 15 %
to amass Rs. 220 crore revenues,
during this year.
Revenue
The Indian biotechnology industry
has been growing at a
Compounded Annual Growth Rate
(CAGR) of 31.5% during the period
2001-02 and 2008-09. The
domestic biotechnology market
clocked revenues of Rs 4,985
crore, registering a 10% growth in
rupee terms. However in dollar
terms (US$ 1.06 billion), there has
been a negative growth of about
7% in 2008-09 as compared to
US$ 1.14 billion revenues
generated in 2007-08.
As regards segment-wise data
for the year 2008-09,
BioPharmaceutical sector accounted
for the largest chunk of the biotech
industry, having a share of 65% in
total revenues with vaccines being
the largest contributor in the
BioPharmaceutical segment. The
Bio Services and the BioAgri
segments followed the
 Exhibit 15:
INDIAN BIOTECHNOLOGY INDUSTRY – REVENUE BY SEGMENTS
SOURCE: Biospectrum, ABLE
BioPharmaceutical segment with a
share of 17% and 12.3%,
respectively, in 2008-09. Segments
like BioIndustrial and BioInformatics
garnered a share of 3.9% and 1.8%,
respectively, of the total revenue in
2008-09. Interestingly, the share of
the various segments of the
Biotechnology industry remained
almost the same with minor changes
in 2008-09 as compared to 2007-08.
It is also interesting to note that
segments like BioAgri, BioIndustrial
and BioInformatics generated more
revenues from the domestic market
as compared to the overseas market,
in contrast to the BioPharma and
BioServices segments, revenues of
which are largely generated from
exports. However, the BioPharma
and BioAgri have the majority share
in terms of domestic business in the
country.
Exports
The very nature of the biotech
industry, is export-driven. The rise
in dollar value helped companies to
up their topline. In rupee terms, the
exports business went up by almost
25% to Rs 7,152 crore, accounting
for 60% of the total business in
2008-09; yet, the total industry
exports registered only 6% growth
in dollar terms, over the export level
in 2007-08, to US$ 1.5 billion.
Segments like BioPharma and
BioServices have had a majority of
their revenues coming from exports,
with export revenue constituting
65
 Exhibit 16:
DOMESTIC BUSINESS OF VARIOUS BIOTECH SEGMENTS IN INDIA
* values within the oval are percentage share of the segment in the respective
year
SOURCE: Biospectrum, ABLE
around 62% and 95%, respectively,
during 2008-09. Infact, these two
segments constitute over 95% of the
total biotech exports from India.
BioInformatics, BioIndustrial, and
BioAgri constitute a share of 2.37%,
1.24%, and 0.85%, respectively, in
total biotech exports in 2008-09.
Bioclusters
Development of clusters is one of
the critical success factors for many
countries that have achieved the
highest level of innovativeness in
the field of biotechnology. These
clusters, which are mostly region-
specific, essentially provide a
platform for effective
66
communication among science
agencies, state governments,
research institutions, universities,
and industries through sharing of
experiences and expertise,
resources and infrastructure, and
thereby facilitating creation of a
knowledge-based hub.
The Indian biotechnology
industry is spread across many
states in the country. These include
Maharashtra, Karnataka,
Andhrapradesh, National Capital
Region, and Gujarat. Many of these
states have unveiled state-specific
biotech policies and have established
biotech parks to attract investment
in this industry. The respective
 Exhibit 17:
EXPORT BUSINESS OF VARIOUS BIOTECH SEGMENTS IN INDIA
* values within the oval are percentage share of the segment in the particular
year
SOURCE: Biospectrum ABLE
government policies in these states
and scientific ambiences have been
responsible for the growth of
bioclusters in these states.
It may however be noted that the
western and the southern regions of
the country accounted for 85% of the
total revenues, cumulatively
garnering more than Rs.10,000 crore
in 2008-09.
The Biocluster in the western
region is the largest in terms of the
revenue generated in the financial
year 2008-09. The western region,
which includes states like
Maharashtra, Goa and Gujarat, had
generated revenues worth over
Rs. 5,260 crore, registering a rise of
around 18% over the revenues
generated by the region in the
previous year. The western region’s
share in the total revenue generation
stood at 43.35%. Serum Institute of
India, led the western region’s
contribution in 2008-09 with the firm’s
total revenue generation amounting
to Rs. 1114 crore.
The southern region continued
to be the second with a share of
41.89%. The southern region
biocluster covered states like Andhra
Pradesh, Karnataka and Tamil Nadu
with combined revenues of Rs. 5084
crore, recording a growth of 16.38%
over the revenues generated by the
region in the previous year.
67
Biotechnology Parks
India has been witnessing
development of several biotech
parks in the last few years. Some
of these Parks, such as Shapoorji
Pallonji Biotech Park, Hyderabad;
ICICI Knowledge Park, Hyderabad;
International Biotech Park, Pune,
have been instrumental in fulfilling
the infrastructure requirements of
the rapidly growing Indian biotech
industry. These parks have
emerged as a focal point of some
of the leading biotech clusters, such
as Genome Valley in Hyderabad,
and Hinjewadi in Pune.

Exhibit 18:
TOP BIOTECH REGIONS IN INDIA - 2008-09

SOURCE: Biospectrum, ABLE

Table 5:
TOP BIOTECH CLUSTERS IN INDIA - 2008-09
(in crore)
Region Revenue in Revenue in % Share in
2008-09 2007-08 2008-09
Maharashtra 3978.10 3615.13 32.78
Karnataka 2535.71 2220.00 20.89
Andhra Pradesh 2188.23 1830.32 18.03
NCR 1792.14 1452.98 14.77
Gujarat 755.92 472.24 6.23
Top 5 Regions 11250.10 9590.67 92.69
Other States 886.90 683.33 7.31
Total Revenues 12137.00 10274.00 100

SOURCE: Biospectrum, ABLE

68
 Table 6:
TOP BIOTECH CITIES IN INDIA - 2008-09
(in crore)
City Revenue in Revenue in % Share in
2008-09 2007-08 2008-09
Bangalore 2535.00 2220.00 20.89
Mumbai 2476.00 1974.83 20.40
Hyderabad 2188.00 1830.32 18.03
NCR 1792.14 1452.92 14.77
Pune 1461.00 1254.00 12.04
Ahmedabad 557.00 442.24 4.59
Others 1127.86 1099.69 9.29
Grand Total 12137.00 10274.00 100

SOURCE: Biospectrum, ABLE

States such as Andhra Pradesh, and a phytomedicine park at Mysore

Kerala, Maharashtra, Punjab, Tamil
Nadu and Uttar Pradesh have made
substantial progress in establishing
biotech parks, whereas states such
as Himachal Pradesh, Karnataka,
Madhya Pradesh, Rajasthan and
Uttarakhand are in development
stage.
Karnataka, one of the first States
to pro-actively promote the
biotechnology industry with a
separate policy in 2001, rolled out a
Rs. 100-crore fund for manufacturing
companies and Rs. 50-crore corpus
for encouraging R&D. The
Karnataka Government has also
expressed its intension to drive
investments in Tier II and Tier III cities
by starting focused biotech parks
with the support of advanced
research institutes; these include: a
Rs. 110-crore nutrition or food park
aided by the CFTRI; a Rs. 30-crore
bio-agri centre at Dharwad; a Rs. 70-
crore marine biotech park in
Mangalore; and a Rs. 30-crore
animal facility at Bidar.
Andhra Pradesh Industrial
Infrastructure Corporation (APIIC) is
planning to develop a biotech Special
Economic Zone (SEZ) in Hindupur,
in Anantapur district. Besides, a
biotech SEZ for livestock/animal
biotech sector is being developed by
APIIC in Pulivendula, Kadapa district,
adjacent to the Indira Gandhi Centre
for Advanced Research on Livestock
(IGCARL).
With a large number of
international biotech and pharma
companies initiating their R&D and
manufacturing operations in India,
the demand for world-class

69
infrastructure offered by biotech
parks has increased significantly.
Even Indian companies are attracted
by the advantages of enabling
infrastructure offered by the biotech
parks and are increasingly
relocating/ locating their facilities into
these parks. These parks provide
several advantages and act as a
geographic concentration/ cluster of
life sciences industry, research
institutions, sci-tech academia and
other amenities of scientific and
general purpose.
The parks provide R&D facilities
and manufacturing infrastructure of
international standards. Further, they
offer affordable space, incentives
and services for start-up, mid-stage,
late-stage and manufacturing
pharma / biotech companies seeking
to develop innovative products and
services; attract international
organisations to locate their R&D
activities in the parks, create and
maintain international and national
linkages. The biotech parks not only
benefit the large firms but are also
instrumental in promoting the setting
up of small and medium biotech
enterprises which can initiate modern
biotech products on a smaller scale,
especially if the initiation comes from
the academia with proper knowledge
and know-how of products.
GOVERNMENT INITIATIVES
The growth of the biotechnology
sector in India is often attributed to
the visionary initiative taken by the
70
Government of India in the early
1980s. Initially, the National
Biotechnology Board (NBTB) was
set up in 1982, which was later
elevated to a full-fledged
Department of Biotechnology (DBT)
under the Ministry of Science and
Technology in 1986. All this
provided an early impetus to the
development of biotechnology in
India.
Regulatory Approvals
The Government, on its part, has
initiated certain far-reaching
legislations to promote the growth
of the biotechnology industry in the
country. In India, several
organisations are involved in the
regulatory structure of the biotech
industry, which often resulted in
overlap of functions. In order to
streamline the regulatory process,
the Government has proposed the
establishment of the National
Biotechnology Regulatory Authority
(NBRA), to provide a consistent
mechanism for regulatory approval.
In July 2008, the DBT introduced
the National Biotechnology
Regulatory Act, which would
establish the NBRA as an
empowered body to approve
genetically modified crops, food,
recombinant biologics, like DNA,
vaccines, recombinant gene
therapy products, and recombinant
and transgenic plasma-derived
products, such as clotting factors,
veterinary biologics and industrial
products.
 Table 7:
BIOTECH PARKS IN INDIA
Name of the Park Area (Acres) No. of Companies Specialization
Shapoorji Pallonji 300 16 companies in Life Science, healthcare
Biotech Park, Phase I and and pharmaceutical
Hyderabad 10 companies
in Phase II

ICICI Knowledge Park, 200 35 R&D companies Life Science

Hyderabad
Agri Science Park, 25 108 ventures have Agribiotech and
Hyderabad already been incubated agribusiness R&D
Bangalore Helix, 14 8 biotech incubators Sector specific SEZ
Bangalore Biotech Park
Biotech Park, Lucknow 8 15 enterprises Healthcare, agriculture,
environment, industrial
application and energy
Kinfra Biotech Park, 50 Expected to house Bioinformatics and
Cochin 15-20 biotech units biotechnology with focus
with shared facilities on marine, herbal and
like biotech incubation agricultural biotechnology
center
Kinfra Biotech Park, 25 Developing Stage Agriculture, healthcare,
Thiruvanthapuram diagnostic and industrial
enzymes
Golden Jubilee Biotech 20 10 enterprises Agro, food and nutrition,
Park for Women medical, and healthcare
Society, Kanchipuram and environment & energy
Inspira Infrastructure 25 Developing Stage This biotech park is
Biotech Park, designed for bipharma
Aurangabad and agri-biotech
companies who are into
manufacturing and R&D
International Biotech 100 12 enterprises Medical and Pharma
Park, Pune Biotechnology
Savli Biotech Park, 724 11 companies have All major sectors of
Vadodara been recommended for Biotechnology
land allotment in
Phase -I
Ticell Bio Park, Chennai 5 12 enterprises Medical Biotechnology,
nutraceuticals, agricultural
biotechnology and
bioinformatics
Agri Biotechnology Park, 124 — —
Jalna

71
 The enactment of New Patents
Act, 2005, brought a paradigm shift
in research and development in the
sector. Previously, India had a patent
protection for process rather than the
product, which brought about
complacency without initiating much
effort upon the development of new
products. The New Patents Act of
2005 enforces product patents
thereby inspiring firms and research
institutions to undertake the
innovation at their behest.
DNA Profiling Bill
The Deoxyribose Nucleic Acid
(DNA) analysis of body substances
is a powerful technology that makes
it possible to determine whether the
source of origin of one body
substance is identical to that of
another, and further to establish the
biological relationship between two
individuals, living or dead. With the
objective to enhance protection of
people in the society and
administration of justice, analysis of
DNA found at the scene of crime,
of the victim or offender has been
used to establish identity. The DNA
analysis offers sensitive information
which, if, misused can harm a
person or the society. There is need
to regulate the use of DNA profiles
only for lawful purposes through an
Act to be passed by the Parliament.
The proposed legislation by DBT
envisages to establish standards for
laboratories, staff qualifications,
training, proficiency testing,
collection of body substances,
custody trail from collection to

Box 4:
BIOTECHNOLOGY PATENT FACILITATING CELL
Intellectual property protection plays an important role in gaining advantageous
position in the competitive game for economic growth. India enjoys a large asset
of R&D personnel and infrastructure facilities. Scientists and policy makers need
information and facilities for protecting the products of intellectual power of Indian
scientists. As a step in this direction, the Department of Biotechnology (DBT),
Government of India established a Biotechnology Patent Facilitation Cell in
July1999.
Biotechnology Patent Facilitating Cell, a single window awareness -cum -
facilitation mechanism, aims to create awareness and understanding about
Intellectual Property Rights (IPRs) among scientists and researchers, by arranging
workshops, seminars, conferences, etc. at all levels, and for introducing patent
information as a vital input in the process of formulation of R&D programmes in
biotechnology, and providing patenting facilities to biotechnologists in the country,
for filing Indian and foreign patents on a continuous basis. The patent filing is
done through National Research Development Corporation (NRDC). The total
number of patent applications filed by DBT with PCT, USPTO and other countries,
with potential commercial value is over two hundred.

72
reporting, and a Data Bank with
policies of use and access to
information, its retention and
deletion. It has also been proposed
to have DNA Data Bank Manager
who would supervise, execute and
maintain the system, and a DNA
Profiling Board of eminent scientists,
administrators and law enforcement
officers which would administer and
carry out other functions assigned to
it under the proposed Act.
The Protection and Utilization
of Public Funded Intellectual
Property Bill, 2008
Public funded research in
Universities, academic and
research institutions have often
produced innovations that hold
potential for public good. However,
a large number of innovations have
not been reaching the industry or
the public. Important reasons that
have been identified for inadequate
movement of Intellectual Property
(IP), from laboratory to market
include:
 Possession of the IP
generated remaining with the
funding agency;
 Vague regulatory legal
framework in Universities,
academic and research
institutions for commerciali-
zation, and limited financial
incentives to the researchers;
 Procedural complexities in
technology transfer, its
absorption and
commercialization.
The Government therefore has
envisaged to create a legal
framework in the form of The
Protection and Utilization of Public
Funded Intellectual Property Bill,
2008. The expected benefits of the
Bill include:
 Establishment of uniform legal
framework for protection and
utilization of the IP generated
out of public funded R&D;
 Encouragement for innovations
in private sector as well as in
Universities, academic and
research institutions that
receive grants from
Government;
 Promotion of collaboration
between Government,
nongovernmental organizations
and private sector;
 Commercialization of IP
generated out of Government
funded R&D, and promotion of
innovation culture within the
country;
 Minimising the dependence of
Universities, academic &
research institutions and other
recipient organizations for
funding on the Government, as
the Bill provides for utilization
of a portion of royalties or
income, generated out of the
public funded IP for research
and educational purposes;
73
 Generation of employment in
niche areas, with unique skills
required for the IP
management, development
and marketing;
 Transfer of technologies from
research laboratories to market
place (nationally and
internationally).
Government Funding
Government funding to the Science
& Technology sector increased by
nearly three times from the Tenth
Five-Year Plan to the Eleventh Five-
Year Plan, while support to the
biotech industry steadily increased
by four times during the same
period. The budgetary allocation
increased from Rs. 25301.35 crores
in the 10th Plan to Rs. 75304 crores
in the 11 th Plan. Infact, the
Department of Biotechnology
received almost 8.5% of the total
budgetary outlay of the Ministry of
Science & Technology. The
Department of Biotechnology was
allocated an amount of Rs. 901.50
crore (Rs. 879.00 crore (Plan) and
Rs. 22.50 crore (Non-Plan)) for the
year 2008-09. The budget
allocation for 2009-10 is Rs. 924
crore (Rs. 900.00 crore (Plan) and
Rs. 24.00 crore (Non-Plan)).
Though the DBT remains the main
funding organization for the Biotech
industry in India, there are other
scientific departments, which have
also started contributing in this field,
albeit in a small level.
74
Several State Governments
(e.g. Andhra Pradesh, Karnataka,
Maharashtra, Himachal Pradesh,
Uttar Pradesh, Kerala and Gujarat)
have also come up with added
financial (e.g. tax concessions) and
policy incentives (biotech parks,
incubators of their own) to spur
investment in biotechnology.
The Government of India has
also introduced a number of fiscal
incentives, from time to time, by
relaxing price controls for drugs,
investment incentives, and tax
holidays for R&D spending. This
amply corroborates the serious role
the Government has been playing in
promoting institutions and firms
involved in biotechnology.
Department of
Biotechnology’s Vision for
2009-10
The year 2009-10 has been
identified for reforming the
competitive grants system and
governance. It is aimed at:
 Expanding capacity for
translation research in health,
agriculture, industry and
environment sectors;
 Advancing standards in
manufacturing of biologicals;
 Rapidly responding to new
opportunities in newer areas
i.e. nano-sciences, stem cell
biology, genetics and genomics
based healthcare and
agriculture;
 Exhibit 19:
BUDGETARY ALLOCATIONS IN THE FIVE-YEAR PLANS IN INDIA
(RS. CRORE)
SOURCE: Planning Commission, Exim Bank Research
 Expanding the use of
Information Technology;
 Focussing on young scientists;
 Creating a pipeline of products.
Remodeling of DBT is on the
anvil. The infrastructure built over the
past decade has supported so far the
bottom-up research. However with
the current strength, mid-and high-
level inventions may result into bed-
to-bench technologies.
Understanding the national
requirements, DBT is making efforts
to deliver them.
National Biotechnology
Regulatory Authority (NBRA)
The National Biotechnology
Regulatory Bill, 2008 seeks to set
up the NBRA as an independent,
autonomous, statutory agency to
safeguard the health and safety of
the people and to regulate the safe
development and deployment of
biotechnology products and
processes. The new legislation is
expected to provide an opportunity
to consolidate and enhance the
efficiency and effectiveness of
biotechnology regulation, increase
collaboration with state
governments in this area, promote
public confidence in the regulatory
system, and facilitate international
trade.
Biotechnology Industry
Partnership Programme (BIPP)
In February 2009, DBT
implemented a new scheme “BIPP”
for enhancing the scope of public-
private partnership, which is
expected to provide a fillip for
research, more so in light of
industry facing a credit squeeze
75
 Box 5:
NATIONAL BIOTECHNOLOGY DEVELOPMENT STRATEGY
The National Biotechnology Development Strategy approved in November
2007 by the Government of India aims at:
 creating tools and technologies that address the challenges of the large
sections of the society;
 providing products and services at affordable prices; and
 making India globally competitive in the emerging bio-economy.
The basic goal of the National Biotechnology Development Strategy is to enable
emergence of an eco-system that promotes innovation. The priority is to promote
innovation in biotechnology in Small and Medium sized Enterprises (SMEs). To
promote R&D in SMEs, a ‘Small Business Innovation Research Initiative’ (SBIRI)
scheme has been launched for funding early stage, pre-proof of concept research.
Sectoral priorities have also been identified in the areas of agriculture, health,
industry and environment. The Strategy provides for producing more world class
researchers; establishing centres of excellence and interdisciplinary networks in
the university system; strengthening technology transfer and patenting skills;
promoting Biotech clusters and parks; building a strong regulatory system;
improving transnational movement of biologicals, building new institutes in a few
key areas where there is deficiency; and linking international partnerships to national
goals.

following the global financial crisis.
The scheme is a Government
partnership with industries for public
support on a cost-sharing basis for:
(i) Path-breaking research in
futuristic technologies with major
economic and global advantage;
and (ii) Development of nationally
relevant technologies in the areas
of agriculture, health, bio-energy
and green manufacturing. BIPP
scheme has proposed to address
the crucial product evaluation and
validation processes, i.e BioPharma
products by human clinical trials,
and agriculture products by field
trials. Upto 100% grant-in-aid
support is proposed to be provided
for Phase-I, II and III clinical trials
of biotech based research leads;
and for limited and large scale field
trials in the case of agriculture
products. The Rs 350-crore
package will underwrite the risk of
research and development of
innovating molecules and
processes. It will also be open to
all innovative biotechnology
companies, who are looking to do
research in agriculture, health,
bioenergy and green
manufacturing.
Biotechnology Industry
Research Assistance Council
(BIRAC)
In order to have an interface
between industry, and academia,
and to help promote start-ups,

76
SMEs can facilitate innovative
research in large industries. The
Department has also planned to
establish a Biotechnology Industry
Research Assistance Council-
(BIRAC), as an autonomous body
aiming to provide financial,
infrastructural, social, professional
and institutional network support.
During the year, a “Pilot BIRAP”-
Biotechnology Industry Research &
Development Assistance
Programme – has been launched
in partnership with the Association
of Biotechnology Led Enterprises
(ABLE), and Biotech Consortium
India Ltd. (BCIL). A Management-
cum-Advisory Board for BIRAP has
also been constituted and
modalities for implementation are
being worked out.
Research & Development
Facilitation
Government of India has
proactively taken up a number of
initiatives in creating institutional
infrastructure (e.g. microbial culture
collections, cell and tissue lines,
gene banks, laboratory animals,
facilities for oligonucleotide
synthesis, etc.) and a strong
research base in the country in
areas relating to agriculture and

Box 6:
BIOTECHNOLOGY INSTITUTIONAL INFRASTRUCTRE IN INDIA
(existing and proposed)
 National Institute of Immunology, New Delhi
 National Centre for Cell Sciences, Pune
 National Brain Research Centre, Manesar, Haryana
 Centre for DNA Fingerprinting & Diagnostics, Hyderabad
 National Institute of Plant Genome Research, New Delhi
 Institute of Life Sciences, Bhubaneshwar
 Institute of Bioresources & Sustainable Development, Imphal
 Rajiv Gandhi Centre for Biotechnology, Thiruvananthapuram
 Institute of Stem Cell Sciences & Regeration Medicine, Bangalore
 National Institute of Biomedical Genomics, Kalyani, West Bengal
 Translational Health Science & Technology Institute, Faridabad
 UNESCO Regional Centre for Biotechnology Training and Education,
Faridabad
 National Agri-food Biotechnology Institute, Mohali, Punjab
 National Institute of Marine Biotechnology Chennai
 National Institute of Animal Biotechnology
 Institute of Silk and Biomaterial Technology
Bio-clusters
 Agri-food Biotechnology Cluster, Mohali, Punjab
 Health Biotech Science Cluster, Faridabad (NCR)
 Bangalore Biotech Cluster, Bangalore

SOURCE: Department of Biotechnology Annual Report 2008-09.

77
forestry, human health, animal are developing new databases and
productivity, environmental safety tools; creating human resource; and
and industrial production. conducting research in different
areas of “Bioinformatics and
Biotechnology Information Computational Biology”. For the
System (BTISnet) purpose of sharing the hardware
Recognizing the importance of and software/ database resources
information technology for pursuing within the centres under BTISnet,
advanced research in modern a Virtual Private Network (VPN), in
biology and biotechnology, a the form of BioGrid India, has been
bioinformatics programme, set up.
envisaged as a distributed
database and network organisation, International Collaborations
was launched during 1986-87. The The Department of Biotechnology
Biotechnology Information System has been at the forefront of
(BTISnet) is the National maintaining many international
Bioinformatics Network in the form collaborations and introducing joint
of Distributed Network. The network proposals with countries like
has been established linking more Australia, Canada, Finland,
than 150 centres/institutions spread Germany, Sweden, USA, Japan
all over India. The BTISnet centres and the EU.
Box 7:
“BUILDER” SCHEME
Boost to University Interdisciplinary Life Science Departments for
Education and Research
During 11th Five Year Plan, the Department of Biotechnology, Government of
India, has launched a scheme known as DBT University Interdisciplinary School
of Life Sciences for Advanced Research and Education (DBT-ISLS) to strengthen
the universities in their efforts towards building globally competitive bio-economy.
The aim is to promote networking of existing life sciences departments of
universities and invigorating interdisciplinary bioscience research. The scheme
would be to upgrade the post-graduate teaching and training, laboratories in terms
of infrastructure, new faculty, fellowships for students, training programmes and
re-grouping research activities. The academia-industry interaction would be
promoted taking advantage of the strengths and weaknesses of specific
universities.
A scheme called “Bioinformatics Infrastructure Facilities (BIF)” has been
initiated under BTISnet with a purpose to promote innovation in biology through
informatics. Under the BIF scheme of BTISnet, over eighty educational institutions
have already been provided with the infrastructure. Centres of Excellence (COEs)
in Bioinformatics are at University of Pune, Pune; JNU, New Delhi; Bose Institute,
Kolkata; IISc, Bangalore; and Madurai Kamaraj University, Madurai.

78
 Some notable collaborations
with countries and institutions abroad
concluded in recent years include:
 An Indo-Australian
Biotechnology Fund was
created with an aim to develop
and support collaborative
research activities in the fields
of biomedical devices and
implants, stem cells, vaccines/
medical diagnostics, transgenic
crops, nutraceuticals and
functional foods, and
bioremediation. A Joint
workshop on Nutraceutical and
Functional Foods was also
convened in Australia in March,
2008.
 DBT will be part of the
International ERA-net project
(European Research Area-
ERA) named NEW INDIGO,
which is aimed at fostering and
coordinating the scientific
cooperation between ERA and
India. This will also strengthen
the almost negligible multi-
lateral S&T cooperation
between EU and India. The
European Community has
committed 1.5 million Euros for
various programmes with India;
 An Indo-Finnish Diagnostic
Research Centre has been
proposed with commitment
from Tekes, a funding agency
of the Government of Finland;
 DBT has partnered with UK
based Wellcome Trust (WT) to
launch a three-tier fellowship
programme on biomedical
research at postdoctoral level;
 The INDO-US Vaccine Action
Programme (INDO-US VAP)
has been developed with the
aim to provide vaccines of
national health relevance in a
collaborative manner;
 DBT and Advanced Industrial
Science and Technology
(AIST), Japan have signed
MoU to work jointly in the field
of Life Sciences and
Biotechnology; and
 The Biotechnology YES
(Young Entrepreneurs
Scheme) is an innovative
programme with the objective
of raising awareness of the
commercialization of
bioscience ideas amongst
postgraduate/postdoctoral
scientists. The University of
Nottingham Institute for
Enterprise and Innovation and
Biotechnology, (UK), and
Biological Sciences Research
Council (UK), organize the
programme.
 In the Fifteenth Session of the
Indo-Russian Joint Council for
the implementation and
coordination of the Integrated
Long-Term Programme (ILTP)
of Science & Technology
(October, 2008 in New Delhi),
both the countries expressed
their keenness to have
scientific collaboration in the
79
 areas of biotechnology. Bharat
Immunologicals and Biologicals
Ltd. (BIBCOL), a public sector
undertaking under DBT, has
also evinced keenness to
collaborate with Russia for
production of IPV, BCG, DPT+,
JEV Vaccine and Rabies.
 The Indo-Swiss programme in
Biotechnology (ISCB), jointly
funded by DBT and the Swiss
Agency for Development and
Cooperation (SDC), launched
in 1998, has completed two
Phases till March 2008, and
currently Phase–III (2007-
2011) is under implementation.
The current phase is aimed at
technology advancement and
product development.
Select Institutional
Collaborations
 Osmania University,
Hyderabad; and The Royal &
Agricultural University,
Copenhagen, Denmark;
 Madurai Kamaraj University,
Madurai; and Aalborg
University, Denmark;
 Department of Plant Molecular
Biology, University of Delhi
South Campus, New Delhi;
and Department of Biological
and Environmental Sciences,
University of Helsinki, Finland;
 National Institute of
Pharmaceutical Education and
Research (NIPER),
80
Chandigarh, in collaboration
with Åbo Akademi University,
Turku, (Finland);
 International Centre for
Genetic Engineering and
Biotechnology (ICGEB), New
Delhi; and University of Turku,
Finland;
 Indian Institute of Technology
(IIT), Kharagpur; and The
European Molecular Biology
Laboratory (EMBL), Hamburg
Outstation (Germany);
 Institute of Genomics and
Integrative Biology (IGIB), New
Delhi; and University at
Gottingen, Gottingen,
Germany;
 National Environmental
Engineering Research Institute
(NEERI), Nagpur; and Rudolf
Boem Institute of
Pharmacology and Toxicology,
Leipzig, Germany;
 Talwar Research Foundation,
New Delhi; with the National
Cancer Institute, National
Institute of Health (NIH), USA;
 Indian Institute of Science
(IISc.), Bangalore; and
Morehouse School of
Medicine, USA.
Under the National Bioresource
Development Board, a Microbial
Culture Collection– Biological
Research Centre has been
established in Pune. The Centre
would have provision to hold more
than 2,00,000 bacteria and fungi.
Adopting international standards, the
centre has been gradually upgraded
as an International Depository
Authority on microbial collections, like
American Type Culture Collection
(ATCC). Under the programme on
prospecting of drugs from microbial
sources, about one lakh bacterial
isolates have been collected and
screened. More than two lakh
extracts have been prepared and
about 7,000 promising hits obtained.
81
4. INDIAN BIOTECH SEGMENTS:
EMERGING OPPORTUNITIES
The biotechnology industry has
a global presence today. While the
industry has its roots in the
developed country markets, an
emerging country like India, realising
the benefits that could be derived
from the biotech sector, was one of
the few developing countries to
embrace the industry at an early
stage. In fact, India has been playing
an important role in the global biotech
industry through better coagulation
of academic research and
commercial development, coupled
with the synchronization of science
and finance to emerge as a strong
contender in the global biotech
industry. Amidst an environment of
growing competition and ever
changing regulations, the Indian
biotech industry has been successful
in creating a niche for itself in the
world. In fact, Indian firms through
continuous Research & operational costs, institutional
Development (R&D) have been able
to create their own brands of
recombinant DNA (rDNA), which has
resulted in an increase in their share
in global market, while according
visibility to the Indian biotech sector
at the global level.
82
INDIAN BIOTECH INDUSTRY:
AN OVERVIEW
With the Government endeavoring
an enabling environment, the Indian
biotech industry has been growing
at a healthy pace. The robust
growth in the Indian biotech
industry has resulted in the creation
of a plethora of opportunities, both
at the domestic and international
arena, for biotech businesses,
especially in the areas of
BioPharmaceuticals, biosimilars,
bio-agriculture, food and nutrition
sectors. The revenues of the Indian
biotech industry quintupled during
the period 1997-98 to 2008-09 –
from US$ 0.5 billion to US$ 2.5
billion.
The Indian biotech industry is well
positioned to leverage on the
country’s clinical and strong
research capabilities, relatively low
infrastructure, as also access to a
diverse patient profile. Biodiversity
of human gene pools and unique
plant, animal and microbial diversity
also offer significant opportunities
for undertaking research in various
emerging areas.
 Exhibit 20:
GROWTH OF THE BIOTECHNOLOGY INDUSTRY IN INDIA

Value in Rs. Crores

SOURCE: BioSpectrum 2009.

INDIAN BIOTECH INDUSTRY: each of which is contributing to the

MAJOR SEGMENTS
The biotech industry in India can
be broadly categorised under five
distinct segments - BioPharma,
BioServices, BioAgriculture,
BioIndustrial, and BioInformatics,
growth of the biotechnology
industry. The following sections
attempt to highlight the scope and
potential of the major segments of
biotechnology as classified above,
and the opportunities they offer.

Exhibit 21:
KEY SEGMENTS IN INDIAN BIOTECHNOLOGY INDUSTRY

SOURCE: Exim Bank Research

83
 Table 8:
UNDERSTANDING KEY SEGMENTS IN
BIOTECHNOLOGY INDUSTRY
BioPharmaceutical These are medical drugs produced using biotechnology.
They are proteins (including antibodies), nucleic acids
(DNA,RNA) used for therapeutic or diagnostic purposes,
and are produced by means other than direct extraction
from a native (non-engineered) biological source. A large
majority of BioPharmaceutical products are
pharmaceuticals that are derived from life forms.
BioServices BioServices mainly include clinical research and contract
research organizations (CRO) and to some extent custom
manufacturing. BioServices today are also covering areas
like data management, clinical trials, site management,
bio equivalence and toxicology studies apart from catering
to knowledge process outsourcing for pharma industry.
BioAgriculture The spectrum of biotechnology application in agriculture
is very wide and includes generation of improved crops,
animals, plants of agro forestry importance and microbes.
The important area in BioAgri is the hybrid seeds business
followed by BioPesticides and BioFertilizers.
BioIndustrial The BioIndustry predominantly consists of enzyme
manufacturing and marketing companies. The use of
enzymes is still limited in the country, but India holds
significant potential for growth. These enzymes are used
in industries such as detergents, textiles, food, leather,
paper and pharmaceuticals.
BioInformatics BioInformatics now entails the creation and advancement
of databases, algorithms, computational and statistical
techniques, and theory to solve formal and practical
problems arising from the management and analysis of
biological data. It is basically construction of databases
on genomes, protein sequences; modelling complex
biological processes, including systems biology.

SOURCE: Industry Sources, Exim Bank Research

84
Biopharmaceutical
BioPharmaceutical products are
therapeutic or preventative
medicines that are derived from
materials naturally present in living
organisms using recombinant DNA
(rDNA) technology. Conventional
pharmaceuticals are generally
small molecules, whereas
BioPharmaceuticals are typically
proteins, peptides, nucleic acids or
inactivated viruses or bacteria.
According to a PwC report, the
growth in BioPharmaceutical drugs
and biologics have outperformed
the pharmaceutical market largely
due to two factors – firstly, they
address areas of clinical need
that are unmanageable with
conventional therapeutics, including
cancers and genetic diseases, and
Exhibit 22:
BIOPHARMA REVENUE BY SEGMENTS IN INDIA
SOURCE: BioSpectrum, Exim Bank Research
secondly, they are able to
command a premium price.
BioPharma: Sectorwise
Revenues
The total BioPharma sub-segment
in India, comprising vaccines,
therapeutics and diagnostics have
registered a 14.3% growth in 2008-
09, over the previous year, in terms
of total revenues. The segment has
been the single largest contributor
to the Indian biotech industry for
many years. The total BioPharma
sector grew from Rs. 6889 crore in
2007-08 to Rs. 7883 crore in 2008-
09. In 2008-09 exports accounted
for 62% of the BioPharma revenue,
while domestic sales accounted for
the rest (38%).
85
 Exhibit 23:
SEGMENTWISE SHARES OF BIOPHARMA INDUSTRY (2008-09) IN INDIA

SOURCE: BioSpectrum, Exim Bank Research

Though there has been a of the largest in the world, and a

consistent growth in the Indian relatively developed, with a ranking
BioPharma sector, most of its of 4 th in terms of volume of
revenues come from export sales. In production, and 13 th in terms of
other words, there is a huge potential value. The success strategies
in the domestic market yet to be adopted by the Indian pharma-
tapped by the Indian BioPharma ceutical sector could be suitably
sector. In this context, it may be leveraged by the Indian biotech
mentioned that India has a thriving players to garner the business
pharmaceutical industry, which is one potential emerging in this segment.
Table 9 :
SELECT KEY FIRMS IN THE BIOPHARMA BUSINESS IN INDIA
Vaccine Diagnostics Therapeutic
Serum Institute Tulip Novo Nordisk
Panacea TransAsia Biomedical Eli Lilly
Bharat Biotec Bayer Reliance Life Sciences
Bharat Serums Span Diagnostics Bharat Biotec
Biological E Becon Diagnostics
Haffkine Bio-Pharmaceutical Bharat Biotech
Pfizer Qualigens Diagnostics
Smithkline Beecham J. Mitra & Co.
Sanofi Pasteur xCyton Diagnostics
Wockhardt

SOURCE: Compiled from BioSpectrum

86
Vaccines
The vaccines segment is the prime
contributor, accounting for close to
46% of the total BioPharma sector
in 2008-09. The vaccines segment
grew at a compounded annual
growth rate (CAGR) of around
15.3% in the last four years, from
Rs. 2341 crore in 2005-06 to
Rs. 3587 crore in 2008-09. On
yearly basis, the revenue in 2008-
09 increased at 10.2%, from
Rs.3250 crore in 2007-08.
The recent upsurge in demand
for vaccines, both in domestic and
international markets is important
both from public health and
economic perspectives. According to
Department of Biotechnology,
Ministry of Science Technology,
Government of India, there are
around 15 companies involved in
marketing over 50 brands for 15
different vaccines. The vaccines
segment under BioPharma can
further be classified as Animal
Vaccines (used on animals) and
Human Vaccines (used on humans).
The animal biologicals market is
generally derived from the need to
control animal diseases and thereby
enhance productivity of the livestock
sector. In animals, BioPharma
segment vaccines are widely used
for diseases in the poultry sector, and
foot and mouth disease (FMD) of
cattle. There is a manifold increase
in the demand for vaccines after the
Indian Government launched a
nationwide vaccination programme,
and FMD control programme to
make “disease-free zones”. While
the Government agencies are
supplying vaccines free of cost to the
farmers, the growing demand is
lilkely to be filled by the private sector
players as well. Companies like
Bharat Biotech, one of the leading
names in human biologics, Brilliant
Industries (mainly into pet vaccines),
Venkateshwara Hatcheries and
Hester Pharmaceuticals (mainly into
poultry vaccines) are also entering
the large animals vaccine segment.
Human vaccines prevent
spreading of many life-threatening
diseases (mainly through effective
public health interventions), and play
a major role in significantly increasing
human life expectancy. India with a
vast population is increasingly being
perceived as a major market for
human vaccines in the world. Owing
to an improved Intellectual Property
Rights (IPR) law, increase in
healthcare spending, and a relatively
high annual birth rate, coupled with
a large prevalence of infectious and
chronic diseases, the demand for
vaccines in the country is expected
to grow manifold. In the years to
come, new diseases (like H1N1 flu)
could also possibly be mitigated
through vaccination. In this context,
it may be noted that, recently, in
September 2009, the U.S. Food and
Drug Administration approved
vaccines made by CSL Limited,
MedImmune LLC, Novartis Vaccines
87
and Diagnostics Limited, and Sanofi
Pasteur Inc., for preventing H1N1
influenza virus.
Another important trend is the
increase in the production of high
value combination vaccines (DPT
with Hepatitis B, Hib, and injectible
polio vaccine), instead of the stand-
alone customary vaccines. By
reducing the number of injections,
combination vaccines help to
facilitate immunization against a
variety of diseases with lesser cost
and better coverage. According to
an estimate by BioSpectrum, the size
of Indian vaccine sub-segment is
expected to grow at about 20-25 %
over the next few years, while
globally the vaccine sub-segment is
valued at US$ 20.6 billion and is
growing faster than the pharma
industry. BioSpectrum infact predicts
that the world market size of
combination vaccine to cross US$ 2
billion mark in 2013, which implies
an annual compound growth of over
18%.
It is worth noting that India has
one of the largest immunization
programmes in the world, in terms
of volume of vaccines used, number
of beneficiaries, number of
immunization sessions organized,
and the geographical diversity. With
USFDA-compliant facilities, Indian
vaccine makers also have a critical
edge in terms of the cost and quality
of R&D. It is anticipated that the
88
vaccine manufacturers in the country
may witness manifold increase in
demand for vaccines if the
Government includes combination
vaccine, and newer vaccines to
prevent diseases, like Japanese
Encephalitis and Dengue, in its
immunization program.
According to the DBT, Shanta
Biotechnics supplies over 40% of the
global requirement of Hepatitis-B
vaccine under UNICEF programme
in many countries. The Serum
Institute of India is the largest
supplier of vaccines to the
Government of India’s Expanded
Programme of Immunization (EPI),
and is also the largest exporter of
vaccines with a distribution network
in 138 countries. It is also estimated
by DBT that every second child in the
world is vaccinated by the Serum
Institute’s measles and diphteria,
pertussis and tetanus (DPT)
vaccines. Serum Institute has also
been commissioned by World Health
Organisation (WHO) to develop the
vaccines against the latest strain of
H1N1. Panacea Biotec is another
firm supplying under the UNICEF
programme and to the EPI. Other
notable Indian firms that are
manufacturing vaccines include
Bharat Biotech, Bharat Serums,
Biological E, Haffkine Bio-
Pharmaceutical, Pfizer of India,
Smithkline Beecham and
Wockhardt.
Therapeutics
A therapeutic vaccine normally
prevents a disease from flourishing
after it has taken hold. The
therapeutic segment contributed
around 37% of the total revenues
of BioPharma in 2008-09. The
Indian therapeutics market recorded
a 19% growth to reach revenues
worth Rs. 2956 crore in 2008-09.
Human insulin is the largest
contributor to the therapeutics
market owing to India’s large
diabetic population. With diabetes
now ranked at fifth leading disease
causing death across developed
markets, and forecast from
PricewaterhouseCoopers (PwC)
suggesting the disease to grow by
7.1 % across the globe by 2013,
the market for once-a-day drug
delivery, and non-invasive drug
delivery systems continue to offer
significant potential for expansion.
India is predicted to lead the way
with 73.5 million people expected
to have the disease by 2025.
Having recognized the growth
potential for anti-diabetic products,
Indian companies have invested
considerably in developing
indigenous human insulin. As such,
companies like US-based Eli Lilly, by
announcing a joint venture with
Indian company, Jubilant Organosys,
in October 2008, are looking to
secure their place in this market. The
next few years promise dramatic
changes in the treatment of diabetes,
much of which are expected to be
driven by rapidly developing
technology. Every company is
striving for two common goals,
patient convenience and better
control of the disease. In the last
couple of years, Indian firms have
launched rDNA insulin products
under different brands at lower
prices, which have intensified the
competition in the domestic market.
Indian biotech major, Biocon, is also
looking at the market space for
insulin in India.
Plasma proteins have also
carved their own niche in the Indian
BioPharma sector. India is a potential
market for manufacturing plasma
protein owing to the presence of a
quarter of the world’s haemophilic
patients in the country. With over
100,000 patients, the country
requires approximately 900,000 litres
of plasma protein per year. Over the
years, India’s main source has been
Baxter Healthcare, USA. However,
Reliance Life Sciences, eyeing an
opportunity, has successfully
launched five sets of plasma proteins
in 2005, namely Albumin (AlbuRel),
Immunoglobin (ImmunoRel), Anti
Haemophilic Factor VIII (HemoRel),
Fibrin Sealant (ReliSeal), and Virus
inactivated plasma (ReliPlasma), at
a considerably lower price. Given the
nascent stage of the therapeutics
sub segment in the BioPharma
sector, this area provides
tremendous opportunity for new
investments through further research
and development.
89
 Table 10:
RECOMBINANT THERAPEUTIC DRUGS APPROVED
FOR MARKETING IN INDIA
(till October 2008)
Molecules Therapeutic Application

Hepatitis B vaccine Immunization against Hepatitis B

Granulocyte Colony Stimulating Factor Netropenia
Erythroprotein Anaemia
Interferon alpha 2B Leukemia, Hep – B, Hep – C
Epidermal Growth Factor (EGF) Organ morphogenesis, Mitogenesis
Streptokinase Dissolution of clot in acute mycordial
infarction
Human Insulin Diabetes
GM-CSF Chemotherapy induced neutropenia
Interferon alpha 2A Chronic myeloid leukemia
Human growth hormone Dwarfism in children
Nimotuzumab Breast cancer
Rituximab Non – Hodgkin’s lymphoma, arthritis
Tissue Plasminogen Activator Dissolution of clot in acute myocardial
infarction
Blood Factor VIII Hemophilia Type A
Follicle stimulating hormone Reproductive disorders
Teriparatide (Forteo) Parathyroid hormone for treating
osteoporosis
Drerecogin alpha Burns and severe sepsis
Platelet Derived Growth Factor Receptor antagonist in certain types
of cancer
Interleukin 2 Renal cell caricinoma
Blood Factor VII (Eptacogalpha) Control bleeding in Haemophilic patients
Iterferon gamma Chronic granulomatous disesse,
osteopetrosis
Iterleukin 11 Thromobocytopenia

SOURCE: Indian GMO Research Information System

90
Diagnostics
The diagnostics business accounts
for close to 17% of the total
BioPharma business in 2008-09.
The diagnostics business grew at
a compounded annual growth rate
(CAGR) of around 14% during the
period 2005-2009 - from Rs. 905
crore in 2005-06 to Rs. 1340 crore
in 2008-09. On a yearly basis, the
revenue increased at 16.5%, from
Rs.1150 crore in 2007-08. However,
this increase has been lower as
compared to the growth in the
previous year, which was around
21%. According to Netscribes, 60-
70% of medical treatments in India
are based on laboratory diagnostic
tests. Diagnostics revenue market
increased from Rs.2341 crore in
2005-06 to touch Rs.3587 crore in
2008-09.
With India becoming more
health conscious and with increase
in awareness of diseases such as
AIDS, Hepatitis, etc., along with the
Government’s efforts to promote
community health, such as
compulsory testing by blood banks
for AIDS, the potential of the
diagnostic sub-segment is expected
to grow further in the days to come.
It is also important to note that the
increase in per capita income in the
country along with an increase in the
middle class population, Indians are
seeking better medical facilities.
Individuals today are not ready to
forego medical treatment at the cost
of quality. Hospitals and diagnostic
centres across the country are
therefore concentrating on equipping
themselves with the best in class
medical and diagnostic services.
Companies that offer these
devices are increasing their
investments and product portfolio in
the country. According to National
Institute of Pharmaceutical
Education and Research (NIPER),
the level of R&D spending in the
medical device and diagnostics
industry as a percentage of sales has
been consistently increasing - from
5.4% in 1990 to 8.4% in 1995, and
further to 12.9% post-2000. NIPER,
in January 2009, predicted the
medical devices supplies market in
India to grow at 23 % annually.
Today, there are many local
companies that produce diagnostic
kits, reagents, and kits for blood
grouping, serology, clinical
chemistry, pregnancy detection, HIV
detection and other rapid tests that
are accepted globally, and imports
of such products by India in finished
form is almost negligible. While over
50 companies are already doing
business in this segment, including
multinationals, many large players
are still entering the Indian diagnostic
market. The top firms have
consolidated their market presence
and are growing between 15-20%.
Some of the leading diagnostic
companies are Tulip, TransAsia
Biomedical, Bayer, Span
91
Diagnostics, Becon Diagnostics,
Bharat Biotech, Qualigens
Diagnostics, J. Mitra & Co., and
xCyton Diagnostics, among others.
BioServices
BioServices mainly include clinical
research and contract research
organizations (CRO) and to some
extent custom manufacturing17. The
BioServices sector, which
accounted for about 17% to the
total biotechnology industry’s
revenues of Rs 12137 crore, has
recorded a growth of 31% over the
previous year. The BioServices
revenue for 2008-09 was estimated
at Rs 2062 crore. Exports dominate
the BioServices sector with almost
95% of the total BioServices
revenues in 2008-09. The
BioServices segment has
contributed, infact, to over 27% of
the total exports from the
biotechnology industry.
The contract research space
opened up in India after the country
entered into the new patent regime
since January 2005. The main
advantage of India as a pre-clinical
work and research destination lies in
the high quality of knowledge base
and low infrastructure cost.
Companies looking for outsourcing
work to India are mainly small to
medium sized pharmaceutical and
biotechnology companies from
developed countries. With
genetically diverse population and
well-developed clinics and labs, India
is also strategically placed to emerge
as a front-runner destination for
outsourcing of clinical trials. Further,
Indian companies, hospitals and
clinics are endeavouring to comply
with the guidelines of Good Clinical
Practices (GCP), thereby making
clinical trials a potential sector for
investments .
According to a recent AT
Kearney global survey, India is
ranked third across all countries
(after the USA and China) in terms
of its overall attractiveness as a
clinical trial destination. Also, Mc
Kinsey, in a study has predicted that
the demand for trained

17 With India being a base for large number of plants approved by USFDA out side the
US and low manpower costs, the country is becoming an important destination for
many leading pharma companies for both custom manufacturing and contract
research. Custom manufacturing is now a growing area with slowdown in sales of
patented drugs and drying of R&D pipelines. So MNCs are looking for alternatives
to reduce the costs on R&D and manufacturing. Companies like Nicholas Piramal,
Shasun Chemicals, Dishman Pharma, Dr Reddy’s Labs, Jubilant Organosys, GVK
Biosciences, Suven Lifesciences, and Bharat Biotech are leading names in the custom
manufacturing business. Similarly, Sun Pharmaceuticals and Torrent Pharmaceuticals
are into contract manufacturing of recombinant products for multinationals like Eli
Lilly and Novo Nordisk, respectively. Chiron Behring Vaccines, a joint venture of
Aventis, has been manufacturing Rabipur, anti-rabies vaccines for supplying to Aventis
Pharma.

92
professionals, including scientists,
will reach upto 50,000 by 2013, from
the current level of 10,000.
Of late, a new trend in
BioServices sub-segment is being
observed, where large companies
outsource their clinical
manufacturing facilities, while
retaining commercial manufacturing
and control over cost of goods,
quality and on supply. On the other
hand, it has also been observed that
some specialized clinical
manufacturing organizations prefer
to outsource the routine job of
commercial manufacturing which
they may no longer perceive as their
core competence area, as also
outsource the core business of
research and development.
As the BioServices business
expands, many firms engaged in this
sub-segment are offering services in
areas like data management, clinical
trials, site management, bio
equivalence and bioavailability
studies, toxicology studies, apart
from catering to knowledge process
outsourcing for pharma industry.
Infact, most of the Indian clinical
research organizations today are
actively involved in doing
bioequivalence and bioavailability
studies with a handful of them into
clinical trials (Phase I-IV)18.
Quintiles Spectral,
SiroClinpharm and Syngene are the
three key independent CROs
offering services in India in the
biotech field apart from others. With
clinical trials in India costing less than
one-tenth of the levels in developed
markets, clinical research
organizations in India could seek
research and trial projects from
international companies. However,
they may need to demonstrate best
practices and follow up procedures
prescribed to meet international
standards, especially the WHO
prescribed Good Clinical Practices.
Bioagri Segment
Biotechnology has emerged as a
critical instrument that seeks to
maintain India’s agriculture
competitiveness and in achieving
nutrition security in the face of
major challenges such as lower
productivity of crops, livestock and
fisheries; heavy production losses
due to biotic (insects pests, weeds)

18 Phase I — Small-scale human trials to determine safety. Typically include 20 to 60

patients and are six months to one year in length.
Phase II — Preliminary trials on a drug’s safety/efficacy. Typically include 100 to
500 patients and are one and a half to two years in length.
Phase III — Large-scale controlled trials for efficacy/safety; also the last stage before
a request for approval for commercial distribution is made to the FDA. Typically
include 1,000 to 7,500 patients and are three to five years in length.
Phase IV — Follow-up trials after a drug is released to the public.

93
and abiotic (salinity, drought,
alkalinity) stresses; heavy post-
harvest crop damage; and declining
availability of water as an
agricultural input. The spectrum of
biotechnology application in
agriculture is wide and includes
development of improved variety of
crops, animals, plants of agro
forestry importance and microbes.
The important sub-segment in
BioAgri business is the hybrid
seeds business, followed by
BioPesticides and BioFertilizers.
BioAgri contributed around 12%
of the total market value of
Biotechnology in India, after
BioPharma and BioServices, in
2008-09, with a total revenue
generation of Rs. 1494 crore, of
which domestic revenues
constituting around 96% of the total.
The BioAgri segment revenues
witnessed the second highest growth
rate after BioServices segment, with
over 24% growth in 2008-09, over
the previous year.
India offers significant market for
BioAgri segment given the fact that
India is largely an agrarian economy.
The domestic market potential,
combined with scientific
infrastructure in agriculture, rich bio-
diversity and skilled human-power is
poised to make India an important
global base for BioAgri research. The
surge in opportunity is expected to
improve agricultural productivity
especially at a time when there is a
diminishing per capita arable land
and water resources.
94
BioAgri also offers solutions for
growing vegetables and fruits. As the
use of pesticide sprays and pesticide
residues remain a daunting
challenge, especially in fruit and
vegetable cultivation, extending the
proven benefits of Bt from a fibre
crop to a food crop is the obvious
next step. R&D in food crop is also
expected to contribute to higher and
more stable yields apart from
enhanced nutrition. India, today, has
come a long way since its adoption
of Bt cotton in 2002. It is ranked
fourth in the world among the
countries that are growing Bt crops,
in terms of area under production.
Reflecting on the importance and the
potential of this segment, research
on GoldenRice and mustard with
increased levels of beta-carotene is
also being undertaken. The
development of Bt brinjal (eggplant)
is an appropriate and timely step
since it is an important crop for small,
resource-poor farmers, consumers
and the Indian society at large.
Research and field trials are also
being undertaken for other food and
horticultural crops, especially
vegetables.
Some of the companies active
in this segment include Vibha
Agrotech, Rasi Seeds, Krishidhan,
Pioneer, and DuPont. Some Indian
MNCs present here include Mahyco,
Bejo Sheetal, JK Agrigenetics,
Krishidhan and Syngenta. MNCs
from abroad operating in India
include Monsanto and Bayer. All
these firms are increasing their
 Table 11:
Biotech Crops in Field Trial in India, 2008
CROP ORGANIZATION
Brinjal Indian Agricultural Research Institute, New Delhi
Sungro Seeds Ltd.
Mahyco, Jalna
Tamil Nadu Agriculture University, Coimbatore
University of Agricultural Sciences, Dharwad
Bejo Sheetal, Jalna
Cabbage Numhems, Gurgaon
Sungro Seeds Ltd., New Delhi
Castor Directorate of Oilseeds Research, Hyderabad
Cauliflower Sungro Seeds Ltd., New Delhi
Numhems, Gurgaon
Corn Monsanto, Mumbai
Groundnut International Crops Research Institute for Semi-Arid
Tropics, Hyderabad
Okra Mahyco, Mumbai
Sungro Seeds Ltd., New Delhi
Bejo Sheetal, Jalna
Arya Seeds, Gurgaon
Potato Central Potato Research Institute, Shimla
National Institute of Plant Genome Research,
New Delhi
Rice Indian Agricultural Research Institute, New Delhi
Tamil Nadu Agriculture University, Coimbatore
M.S. Swaminathan Research Foundation, Chennai
Directorate of Rice Research, Hyderabad
Mahyco, Mumbai
Bayer CropScience, Hyderabad
Avestagen, Bangalore
Tomato Indian Agricultural Research Institute, New Delhi
Mahyco, Mumbai
Avestagen, Bangalore

SOURCE: Indian GMO Research Information System (IGMORIS), 2008; Department

of Biotechnology, ISAAA, 2008

95
existing R&D and commercialising
their infrastructure base in different
parts of the country.
Hybrid Seeds
The Indian population has crossed
the 1 billion mark already, and by
the year 2010, it is expected to
touch 1.2 billion. To provide food
and nutritional security for such a
large population, including
protection against malnutrition, it is
important that productivity levels are
increased through the use of right
quality seeds, which have the
capacity to produce more with
lesser inputs. In this context, the
seed industry has a critical role to
play in dissemination of latest
agricultural technology to the
farmers, and by making available
good quality seeds to them.
Adoption of genetically modified
(GM) crops would assure higher
productivity and nutritional security.
Presently, GM plants are largely in
use for commercial agriculture and
predominantly linked with traits of
one or two transgenics 19 that
manifest resistance to salinity,
alkalinity, drought resistance,
herbicide tolerance, insecticide
resistance or microbial diseases.
In India, research on transgenic
plants has been in progress in
19 Transgenic, a subset of GMOs, are organisms which have inserted DNA that
originated in a different species
20 Global status of commercialized biotech/GM crops - ISAAA Brief No. 39, International
Service for the Acquisition of Agri-biotech Applications, Ithaca, New York, 2008
96
several Government and private
laboratories. Monsanto’s ‘Bollgard’
Bt-gene, introduced by Monsanto-
Mahyco into the Indian cotton
hybrids, by backcrossing with a
transgenic line, was cleared for
commercial use in 2001, after seven
years of trials at various levels. From
about 50,000 ha of production area
in the year 2002, the Bt cotton
acreage increased to 7.6 million
hectares in 2008, thereby registering
a CAGR of over 130% over 6 years
in India. In 2008, 30 seed companies
were engaged in the production of
274 Bt cotton hybrids in nine states20.
Majority of the increase in
production is attributed to Bt cotton
hybrids, which have generated
impressive results. The usage of
biotech crops has also contributed
to the growth in farm income in India.
According to the International
Service for the Acquisition of Agri-
Biotech Applications (ISAAA),
farmers have benefited with an
additional Rs. 12,800 crore farm
income generated due to Bt cotton
technology during the period 2002-
2007.
With the success of Bt Cotton,
the Government has realised the
enormous potential of such
technologies and has been keen to
 Table 12:
AREA, PRODUCTION AND PRODUCTIVITY OF COTTON IN INDIA
(2002-08)
Year Area
(lakh ha) (lakh bales; 1 bale=170 kg)
2002-03 76.67
2003-04 76.30
2004-05 87.86
2005-06 86.77
2006-07 91.44
2007-08 94.39
2008-09 93.73
SOURCE: Cotton Advisory Board, Government of India, 2009
put in place policies and regulations,
which would promote responsible
crop biotechnology. According to
ISAAA, public sector investments in
crop biotechnology in India alone are
estimated to be around US$ 1.5
billion over the last 5 years (2004-
2009). The private sector is slowly
picking up by establishing new state-
of-the-art R&D infrastructure, biotech
labs, high-tech green house and field
testing facilities, seed conditioning,
and processing and packaging
plants. Further, many seed
companies in the country are
endeavouring to invest significantly
in crop biotechnology. Several of
them already have capabilities to
leverage Marker Assisted Selection21
technologies to augment their crop
improvement programmes. They are
now moving towards crop genetic
transformation approaches, either by
21 Marker-assisted selection is a tool for genetic improvement of crops, livestock, forestry
and fish.
Production Productivity
(kg / ha)
136 302
179 399
243 470
244 478
280 521
315 567
290 526
building the capabilities in-house, or
by striking partnerships with other
institutions.
Investment in agricultural related
biotechnology has resulted in
enhanced R&D capability and
institutional building over the years.
By 2010, India has the potential to
become a major grower of transgenic
rice and several genetically
engineered vegetables. In the area
of agribiotech research, institutes like
Delhi University, Indian Agricultural
Research Institute (IARI), National
Centre for Plant Genome Research
(NCPGR) are playing a critical role
in pursuing studies in various areas.
Biopesticides and Biofertilisers
The biopesticides and biofertilisers
sub-segments, though constituting
a modest proportion of the BioAgri
97
segment, have been growing at a
healthy pace since the last few
years. The Government of India
has initiated a number of
programmes to control major
weeds and pest diseases of
important crops, vegetables and
plants to increase their productivity
through various biocontrol agents.
A number of universities and
institutes have been working in the
area of biofertilisers. The University
of Hyderabad, National Research
Centre for Plant Biotechnology, IARI
(Indian Agricultural Research
Institute), BARC (Bhabha Atomic
Research Centre) and TERI (Tata
Energy Research Institute), along
with New Delhi based International
Centre for Genetic Engineering and
Biotechnology (ICGEB), are
working on various programmes in
this field.
India and the US have signed a
five-year agreement in the area of
agribiotech research. The agreement
signed is tripartite in nature; while the
nodal agencies will be the United
States Agency for International
Development (USAID), and the
Department of Biotechnology (DBT),
Government of India, the research
will be pursued with support from
Cornell University, USA. India has
also signed a MoU with the
Netherlands for cooperation in
biotechnology in the areas of
agriculture and health.
The agriculture sector in India
has been supported by public
98
research programmes in varietal
development, yield improvement and
disease management. Further, India
also has a large base of manpower,
trained in agriculture sciences to
provide extension services. Several
international companies have set up
research and development facilities
in India for developing hybrid seeds
and other biotechnology-based
activities. Leading players in
biopesticides and biofertilisers area
are Biotech International, and
Multiplex Biotech, among others.
BioIndustrial
The BioIndustry predominantly
consists of enzyme manufacturing
and marketing companies. These
enzymes are used in industries
such as detergents, textiles, food,
leather, paper and pharmaceuticals.
Although the use of enzymes is still
at a relatively low level, interest in
the benefits of using enzymatic
solutions in India is intensifying.
The BioIndustrial segment is
estimated to have garnered
revenues to the tune of Rs. 478 crore
in 2008-09, a growth of 16.6% over
the previous year. Almost 81% of the
revenue in the year 2008-09 was
generated from the domestic market
alone; this sub segment constitutes
around 1% of the total biotechnology
exports from the country in 2008-09.
Beer and brew industry finds a
large potential for use of enzymes
for improving their quality, yields and
process efficiency. The Government,
on its part, has been encouraging the
establishment of wine parks, which
would facilitate the processing of
grapes for value addition. Indian
BioIndustrial companies produce
various enzymes, which include
amylases, proteases, cellulases,
xylanases, glucoamylases,
pectinases, papains, bromelain and
catalases among others, with around
45% of total enzyme production
catering to the pharmaceutical
industry. It is worth noting that the
product range and services offered
by the firms in this sub-segment are
growing rapidly as the use of
enzymes is gaining widespread
acceptance. Firms today are
increasingly looking at producing
various types of industrial enzymes
using natural methods of production,
from plants and vegetable origin and
fermentation.
Several domestic enzyme
manufacturers are building new
facilities. Apart from India-based
AdvancedEnzymes, Rossari Biotech
and Zytex, Denmark based
Novozyme, are among the top
companies in this segment in India.
Other global players having a direct
or indirect presence in the country
are Genencor International, Enzyme
Development Corp., Dyadic
International, and Quest
International.
Opportunities exist in the
manufacturing of industrial enzymes
for export purposes. The
Government of India has also been
supporting this industry by funding
many projects related to industrial
enzymes, thus helping the industry
to grow and compete with global
players.
BioInformatics
BioInformatics is a scientific
discipline that encompasses all
aspects of biological information
acquisition, processing, storage,
distribution, analysis and
interpretation. BioInformatics
bridges many disciplines and
amalgamates disciplines like
Biology, Chemistry, Mathematics,
Statistics and Information
Technology so as to understand life
and its processes.
The share of BioInformatics in
total Biotechnology industry is around
1.8% in 2008-09. This sub segment
made a modest progress, increasing
from Rs. 190 crore in 2007-08 to Rs.
220 crore in 2008-09, thereby
growing by 15.7%. The industry has
been found to be more export
oriented with almost 77% of the total
revenues coming from offshore
markets in the year 2008-09.
With the IT sector eyeing for
diversification of software
applications, BioInformatics poses
as potential area for IT application.
BioInformatics uses computer
software tools for database creation,
data management, data
warehousing, data mining, and
99
 Table 13:

100
CONSUMER GOODS MADE WITH INDUSTRIAL BIOTECH
CONSUMER OLD PROCESS BIOTECH PROCESS TECHNOLOGY CONSUMER BENEFIT
PRODUCT

Detergent Phosphates added as Addition of biotechnology Genetically enhanced -Elimination of water

brightening and cleaning enzymes as brightening microbes or fungi pollution from phosphates
agents and cleaning agents: engineered to make -Brighter, cleaner clothes
- Proteases remove enzymes with lower-temperature
protein stains wash water
- Lipases remove - Energy savings
grease stains
- Amylases remove
starch stains
Bread Potassium bromate, a Addition of biotechnology Microorganisms genetically -High-quality bread
suspected cancer-causing enzymes to: enhanced to produce -Longer shelf life
agent at certain levels, - enhance rising baking -No potassium bromate
added as a preservative - strengthen dough enzymes (directed evolution
and a dough strengthening - prolong freshness & recombinant DNA)
agent
Polyester Bedding Polyester produced Biotech polyester (PLA) Existing bacillus microbe -PLA polyester does not
chemically from petroleum produced from corn sugar used to ferment corn sugar harbor body odor like other
feedstock feedstock to lactic acid; lactic acid fibers
converted to a -Biodegradable
biodegradable polymer by -Not made from petroleum
heating; -Does not give off toxic
polymer made into plastic smoke if burned
products and polyester
Vitamin B2 Toxic chemicals, such as One-step fermentation Genetically enhanced -Biologically produced
aniline, used in a process uses vegetable microbe developed to without chemicals
nine-step chemical oil as a feedstock produce vitamin -Greatly reduces hazardous
synthesis process B2(directed evolution) waste generation and
disposal
Contd...
 Contd...
CONSUMER OLD PROCESS BIOTECH PROCESS TECHNOLOGY CONSUMER BENEFIT
PRODUCT

Stonewashed Jeans Open-pit mining of pumice; Fabric washed with Textile enzymes produced -Less mining
fabric washed with biotechnology enzyme by genetically enhanced -Softer fabric
crushed pumice stone (cellulase) to fade and microbe (extremophiles -Reduces energy
and/or acid soften jeans or khakis and recombinant DNA) consumption
-Lower cost
Paper Bleaching Wood chips boiled in a Enzymes selectively Wood-bleaching enzymes -Reduces use of chlorine
harsh chemical solution degrade lignin and break produced by genetically bleach and reduces toxic
to yield pulp for paper down wood cell-walls enhanced microbes dioxin in the environment
making during pulping (recombinant DNA) -Cost savings due to lower
energy and chemical costs
Ethanol Fuel Food and feed grains Cellulase enzyme Genetically enhanced -Renewable feedstock
fermented into ethanol technology allows organism developed to -Reduces greenhouse gas
(a technology that is conversion of crop produce enzymes that emissions
thousands of years old) residues (stems, leaves, convert agricultural wastes -Increases domestic energy
straw and hulls) to sugars into fermentable sugars production
that are then converted (directed evolution, -Is more energy efficient to
to ethanol gene shuffling) produce than old process
Contact Lens Solution Surfactants and/or saline Protease enzymes remove Genetically enhanced -More effective contact lens
solutions (do not remove protein deposits from the microbes engineered to cleaning
protein deposits) used to contact lens make protease enzymes -Less eye irritation
clean lenses (directed evolution)
Antibiotics Chlorinated solvents and One-step biological Genetically enhanced -65% reduction in energy
hazardous chemicals used process uses direct organism developed to consumption
to produce antibiotics fermentation to produce produce the key -Overall cost savings
through chemical synthesis antibiotic intermediate intermediate of certain
antibiotics
(recombinant DNA)

SOURCE: Biotechnology Industry Organization 2008

101
global communication network. The
major goal of BioInformatics is to
obtain the complete sequences of as
many different genomes as possible.
By having the sequence information,
companies and research
organizations initiates what is
commonly referred to as “sequence
based biology”. The sequence
information is then taken, and used
to give scientists more direction as
to how they should design
experiments, and how these
scientists should analyze the
experiments. Functional genomics,
biomolecular structure, cell
metabolism, biodiversity,
downstream processing in chemical
engineering, drug design, vaccine
design are some of the areas where
BioInformatics forms an integral
component.
Many Indian entrepreneurs have
set up companies to take advantage
of the emerging opportunities in the
BioInformatics segment. The
Government on its part has also
initiated a number of programs to
facilitate the growth of this
specialized segment. The BTISnet
(Biotechnology Information System
Network) program of Department of
Biotechnology, Government of India
has taken various initiatives to
provide a national bioinformation
network designed to bridge the inter
22 University of California, Los Angeles
23 APIDC Biotechnology Fund is the first fund in India focusing on early stage, novel
IP-driven firms that have a strong presence in the domestic market.
102
disciplinary gaps on biotechnology
information and establish link among
scientists in organisations involved
in R&D and manufacturing activities
in the country. The network has
presently grown to over sixty centres
covering major parts of the country.
The international client base for
Indian BioInformatics companies has
expanded rapidly. These entities
include the National Institute of
Health (NIH), University of Mexico;
National Institute for Cellular Biology,
Dublin; National Research Council,
Sequencing Center at Halifax; and
David Eisenberg’s Research Lab at
DOE Institute for Genomics and
Proteomics, UCLA22; among others.
Apart from domestic financial
institutions, multilateral institutions
like International Finance
Corporation (IFC) have also been
investing in the biotech spectrum.
For example, IFC has invested US$
6.5 million of equity for a minority
stake and debt in Hyderabad based,
Ocimum Biosolutions in 2006.
Earlier, in May 2005, IFC had
invested US$ 4 million equity to
APIDC Biotechnology Fund 23 with
a focus on early stage life-sciences
businesses.
The Indian firms have been
strategically devising tools so as to
cater to the world requirements.
Some of the firms based in India
such as Strand Life Sciences,
Molecular Connections, Mascon Life
Sciences, and Helix have created
indigenous tools for various
components across the drug
discovery value chain that are being
used all over the world. Strand Life
Sciences has devised a software
program called ‘Avadis’ for which it
has received awards from
organizations like Red Herring, Frost
& Sullivan and World Economic
Forum. “Avadis” is an integrated
decision analytics program that deals
with data mining and analytics needs
of the various life sciences sector.
The pure-play BioInformatics
companies in India include Strand
Genomics, Ocmium Biosolutions,
SysArris, SciNova India,
CytoGenomics, Mascon and
Molecular Connections. These firms
have come out with products catering
mainly to the needs of pharma and
biotechnology companies abroad.
Strand Life Sciences has also tied
up with London based Pharmidex to
create software to predict the ability
of molecules to cross physical
barriers in the central nervous
system. TCS has also signed a multi
billion dollar contract with US based
Sequenom24, to develop software
solutions.
Another emerging area is DNA
chips market that is currently being
24 SEQUENOM is committed to providing the best genetic analysis products that translate genomic
science into superior solutions for biomedical research, agricultural applications, molecular
medicine and non-invasive prenatal diagnostics research, and potentially, clinical utility.
used in the diagnosis of diseases
such as eye infection, meningitis and
meningoencephalitis, etc. which
helps to detect the presence of the
nucleic acid of the causative
organism. Because of the extensive
research being done in India, the
demand for DNA chips have also
been increasing. Some of the firms
involved in DNA chips are Agilent
Technologies, Affymetrix, and
Ocimum Biosolutions.
EMERGING NICHE AREAS IN
BIOTECHNOLOGY
BioSimilars
The expiry of patent protection and
regulatory data protection for
certain biotechnological medicines
has led to the development of
medicines what are called
biosimilars. Biosimilars attempt to
copy the process, which leads to
the production of the original
innovative biotechnological
medicine. The term ‘biosimilars’ is
in use in the European Union, but
in the US the term ‘follow-on
biologics’ is much popular. In India
however the terminology ‘biosimilar’
is prevalent.
As regulatory obstacles to
development of biosimilars is
increasingly being resolved, a
growing number of opportunities are
103
 Table 14:
104
COMPARISON OF GENERICS, BIOSIMILARS AND BIOLOGICS
Generic
Manufacturing  Mostly smaller chemical
molecules-less sensitive
to production process
changes
 Produced by using
chemical properties
 Reproducibility-easy
to establish
Clinical Development  Limited clinical activities,
often only Phase I studies
 Short timeline for approval
 Development costs upto
US $ 5 mn
 Enrollment of around
20-100 subjects
Regulation  Needs to show
bioequivalence
 Abbreviated registration
procedures in
Europe & US
 Automatic substitution
allowed
SOURCE: Accenture Research
Biosimilar
 Sensitive to production
process changes-
expensive and
specialized production
facilities handling living
cells (mammalian,
yeast, bacteria)
 Highly sensitive to
manufacturing changes
 Reproducibility-difficult
to establish
 Extensive clinical trial
activities, including
Phase-I and III studies
 Pharmacovigilance and
periodic safety updates
after launch needed
 Development costs
around US $ 80 mn to
US $ 120 mn
 Timeline of 6-10 years
 Enrolment of around
100-1500 patients/subjects
 Regulatory pathway
defined for Europe
(EMEA); not yet in
US (BLA)
 Needs to demonstrate
‘comparability’; currently no
automatic substitution
intended.
Biologic
 Sensitive to production
process changes-
expensive and specialized
production facilities
handling living cells
(mammalian, yeast,
bacteria)
 Highly sensitive to
manufacturing changes
 Reproducibility-difficult
to establish
 Extensive clinical trial
activities, including
Phase-I and III studies
 Pharmacovigilance and
periodic safety updates
after launch needed
 Development costs around
US $ 350 mn to
US $ 800 mn
 Timeline of 6-15 years
 Enrolment of around >1000
patients/subjects
 Highly regulated like all
innovator drugs
being created for generic companies
in the BioPharmaceutical market.
According to IMS data, the world
BioPharmaceutical market was
valued at US$ 85.9 billion in 2007.
ABLE (Association of Biotechnology
Led Enterprises), put the sales of
BioPharmaceutical products
exceeding US$ 135 billion by 2011.
With some of the earliest
BioPharmaceutical products having
already lost patent protection, the
originators of BioPharmaceutical
products are facing intense
competition from generics
developers. In response, originators
are resorting to a range of defensive
tactics, including the reformulation of
existing products to improve efficacy,
the implementation of more efficient
delivery systems, and the pursuit of
high-level intellectual property (IP)
battles.
The US, one of the largest
biosimilar markets in the world,
recently introduced the Waxman
Biosimilars Bill in March 2009, which
provides the approval of biosimilar
products that are defined as “no
clinically meaningful differences
between the biological product and
the reference product”, as well as
“interchangeable” biosimilars,
defined as a product that can be
“switched one or more times” with the
reference product “without an
expected increase in the risk of
adverse events”. The Bill also
provides incentives for brand
companies to develop new therapies.
Specifically, similar to the current
structure for approved drugs, the bill
would provide five years of exclusivity
for a novel molecular structure before
any biosimilar could be approved.
The Bill also provides three-year
exclusivity for certain modifications
of a previously approved product
(such as a new condition of use) and
a six-month paediatric exclusivity
period. Waxman’s Bill also provides
first biosimilar applicants with at least
six-month exclusivity period if an
interchangeable biosimilar product is
approved.
The Bill, if converted into an Act,
will provide immense opportunities
for Indian firms, especially those that
have already ventured into the
Biosimilars space and have filed
Abbreviated New Drug Applications
(ANDAs) in the US. With a few
players in the Biosimilars space, the
competition is expected to be
comparatively low and thereby acts
as a great boost for biosimilar players
in the market.
According to Datamonitor, the
Indian biosimilars market will grow
to more than US$ 2 billion by 2014
as patent of key products, such as
epoetin alpha, filgrastim, interferon
beta 1a, interferon alpha, human
growth hormone (hGH), and insulin-
glargine are expected to expire by
then. While many of these drugs
represent the low-hanging fruit of the
biologics world and are unlikely to
provide the monetary gains of more
105
complex drugs, they do offer
manufacturers the opportunity to
position themselves within the
biosimilars sector in anticipation of
more lucrative targets.
India has a strong presence of
firms engaged in the biosimilar
space. For example, Reliance Life
Sciences launched three biosimilars
- ReliPoietin [Erythropoietin (EPO)],
ReliGrast [Granulocyte colony
stimulating factor (GCSF)], and
ReliFeron (Interferon Alpha 2b) in the
domestic market in 2008. Reliance
Life Sciences is currently working on
a range of biosimilars, which are at
different stages of development viz.
clinical trials, pre-clinical studies,
process development and molecular
biology. They are also concurrently
conducting clinical trials for two
biosimilars - EPO and GCSF - in
Europe. Further, Reliance Life
Sciences has built significant
manufacturing capacity for
BioPharmaceuticals and all these
facilities are compliant with USFDA
and EMEA standards. Currently, the
global biosimilars market is highly
fragmented with major players, such
as Biocon, Dr. Reddy’s Lab, Intas,
LG LifeSciences, Ranbaxy, Reliance
LifeSciences, Sandoz, Teva, and
Wockhardt, engaged in diverse
products. However, with the
complexity of the biosimilar business
and the technological and intellectual
challenges that companies may face,
competition is not expected to be
significant.
106
Nanotechnology
Nanotechnology is considered
widely as the most promising
technology of the 21st century. The
concept of nanotechnology evolved
in 1959, when US based Nobel
Laureate Richard P Feynman
suggested, in his book, titled “There
is Plenty of Room at the Bottom”,
that manufacturing in the
submicrometer scale would be
possible. Though he never used the
word ‘nanotechnology’, the
concepts he propounded were later
coined into a new word
‘nanotechnolgy’.
Recent years, in fact, have seen
a convergence of nanotechnology
and biotechnology. The convergence
of nanotechnology and
biotechnology opens the possibility
for a wide variety of biological
research topics and medical uses at
the molecular and cellular level. The
application of nanotechnology in
biotechnology provides information
with unprecedented precision and
sensitivity. It leads to the
development of new revolutionary
modalities of bi-molecular
manufacturing, early diagnostics,
medical treatment, and disease
prevention, beyond the cellular level
to that of DNA and individual proteins
- the building blocks of the life
process.
Infact, this convergence has
brought outcomes in research where
new kinds of drug delivery systems
can pervade the blood stream, target
contaminated cells, and even deliver
the desired medication in
programmable quantities at desired
intervals. Artificial replacements and
placebos at the nanoscale have been
other major developments. Rapid
advancements in biotechnology and
information technology have further
boosted medical diagnostics,
biomedical research, genomics,
genetic testing and new drug
discovery. Nanotechnology has led
to major developments in health and
medicine. The long-term goal of this
convergence is to contribute to the
overall human development and
improvise on fictional revolutionary
concepts to reality.
From an Indian context,
nanotechnology is at a very nascent
stage; but given the potential of the
sector, it is expected to grow at a
robust pace in the coming years. In
fact, nanotechnology has the
potential to revolutionize the Indian
agriculture scenario. It is also
predicted that nanotechnology will
transform the entire food industry,
changing the way food is produced,
processed, packaged, transported,
and consumed.
Several Indian firms and
research institutes are working on
nanotechnology products for drug
delivery, water filters, arsenic
removal, reducing water and air
pollution, antimicrobial coatings and
river cleaning projects. The
Government on its part is proactively
promoting various programs under
nanotechnology initiative. A ‘Vision
Group’ has been formed with
members from academia, industry
and research, to develop a national
nanotechnology policy. Government
of India has announced an
investment of Rs 1,000 crore through
a mission on nanotechnology from
2006 to 2011.The Government has
announced a US$ 250 million
program to build three national
institutes for nanoscience as well.
Stem Cell Research
Stem cell research is being touted
as the next wave of biotechnology
not only in India but also across the
world, which could potentially
revolutionize treatment of diseases
in the next couple of decades.
Stem cells are ‘master’ cells that
have been found to possess the
potential to repair tissues or grow
organs. Their sources vary. While
embryonic stem cells can replicate
any cell type without exception,
those from other sources such as
bone marrow or blood cord, the
adult stem cells, though restricted
in their differentiation capacity, are
multipotent.
According to a study by Frost &
Sullivan, the global market for stem
cell therapy is expected to be around
US$ 20 billion by 2010. There are
around 180 prominent companies
working on stem cell research in the
world, majority of which are based
in the US, followed by the EU, Israel,
107
 Box 8:
INDIA’S FIRST NANOTECH PARK
Nanobiosym Inc, a globally recognized nanotechnology firm is setting up India’s
first Nanotech park, The Nanobiosym Technology Park (NTP), in Ahmedabad under
public-private partnership involving the state Government. The 500 acre nanotech
park will include: a Nanobiosym incubator for research and development, a
manufacturing engine, a global health village, a global business center, an institute
for education and human resource development, and green living space.
The Nanobiosym Technology Park aims to be an innovation epicenter that
will bring together top talent from around the globe for cutting edge research,
learning and incubation, and commercialization of new nano-enabled technologies
and products.
The innovative public-private partnership between Nanobiosym and the
Government of Gujarat would maximize the benefits of the park for both the state
and the country. The park will bring the latest medical developments including the
GeneRADAR, to improve the state’s healthcare infrastructure and attract world-
class talent to stimulate world class development.
Nanobiosym is also forming a global consortium comprising of best of breed
partners from a variety of sectors like R&D, education, healthcare, infrastructure
development, finance and banking, knowledge partners, multinationals and small/
medium enterprises. The park is expected to act as a global powerhouse with a
focus on hi-tech innovation and entrepreneurship.

Thailand, Canada, and Australia. The
Stem Cell Research Forum India
(SCRFI) has predicted India to have
a market size of about US$ 540
million by 2010, with an annual
growth rate of 15%.
The potential of stem cell
technology to develop therapy for
many untreatable diseases through
cellular replacement or tissue
engineering is being widely
recognized. Therapies using stem
cells are giving hope to millions of
patients afflicted with chronic
diseases. Globally, stem cells are
used to treat over 130 diseases and
it is estimated that more than 500
clinical trials are being done to
develop therapies using stem cells.
Indian companies are becoming
an important part of this revolution,
helping to treat patients with
diseases ranging from eye problems
to heart disorders. The Government
of India has supported more than 55
programmes on various aspects of
stem cell research. These include
generation of human embryonic
stem cell lines, differentiation of
pancreatic progenitor cells to insulin
secreting cells, isolation of multi
potential adult progenitor cells from
bone marrow and their clonal
expansion, use of banana lectins for

108
 Box 9:
UMBILICAL CORD BLOOD BANKING
The emergence of umbilical cord blood banking has created more than a
dozen companies globally in a span of 2-3 years. Cord-blood cell transplants are
becoming common as a therapy for diseases of the blood as scientists are finding
that stem cells from umbilical cord blood may be able to grow into other kinds of
cells as well.
Storage of the stem cells derived from umbilical cord blood means one can
preserve and use genetically matched stem cells on hand, in case the child or
someone else in the family suffers from a treatable blood disorder or needs a
bone marrow transplant. There is a 25% genetic match between the siblings and
parents, which proves to be the most alluring prospect for expectant couples to
bank their child’s cord blood (thus ultimately their stem cells). The use of these
stem cells more or less ensures absence of graft versus host reaction, which is a
huge drawback in cases of organ transplantation.
Such advances are casting cord blood, previously regarded as medical waste
after childbirth, in a new light. Today doctors use cord blood cells to treat about 70
diseases, mostly anemias or cancers of the blood, such as leukemias and
lymphomas. Yet another area of future research concerns the delivery of stem
cells to the tissues in which they are needed. Current practice involves either the
injection of stem cells directly into the targeted tissue, or injection of the stem cells
into the bloodstream without any guarantee that they will actually find their way to
the appropriate tissues. Targeted delivery would ensure that the therapeutic stem
cells are introduced to the organs and tissues that need them, where they need
them.

stem cell preservation, conduct human clinical trials to

hematopoietic stem cells (HSC) for
haplo-identical HSC transplantation,
use of limbal stem cells for ocular
surface disorders, isolation and
characterization of mesenchymal
and liver stem cells, in-vitro
differentiation of human embryonic
stem cells to neural and non-neural
lineages, cardiac stem cells,
embryonic stem cells etc.
In March 2009, Bangalore-
based Stempeutics Research
received clearance from the Drug
Controller General of India to
develop drugs using stem cells. With
this, India became the first
developing country, after the US, to
allow human clinical trials to develop
drugs by using dormant cells in the
body that have natural regeneration
capabilities. Once injected into a
patient, the stem cells can be
controlled with a simple magnet to
direct them to the damaged area and
cure it.
Reliance Life Sciences, the
pioneer in stem cell-based research
in India on a commercial scale, has

109
already commercialised two
products. In 2008, the company
launched ReliNethra, a first-of-its-
kind treatment in India for corneal
blindness. Recently, the company
launched ReliHeal-G, which quickly
heals wounds. The company has
completed clinical trials for treatment
for heart attack using stem cells from
the bone marrow of the patient. It is
carrying out clinical trials for
application of stem cell-based
therapies for skin disorder, stable
vitiligo, non-healing diabetic ulcers,
Parkinson’s disease, and spinal cord
injury.
Apart from this, India’s largest
stem cell banking company, LifeCell,
and the US-based Harvest
Technologies, which manufactures
devices for stem cell harvesting, are
developing a unique treatment for
heart attack in association with
cardiologist Dr. Naresh Tehran in
New Delhi, and Dr. Ramachandra
Medical College, Chennai.
Parkinson’s patients in the country
would be able to avail stem cell
therapy services for treatment as the
Mumbai-based Jaslok Hospital and
Reliance Life Sciences are working
110
together to explore using the
patient’s own stem cells for curing
the disease.
A ‘Draft Guidelines for Stem Cell
Research’ on regulatory aspects of
stem cell research and its
applications, prepared by the Indian
Council of Medical Research (ICMR)
is on the anvil. The guidelines for the
stem cell research have been
finalized and have been submitted
to the Ministry of Health and Family
Welfare, Government of India. A
National Apex Committee for Stem
Cell Therapy (NAC-SCRT) is being
constituted jointly by the DBT and
ICMR as per these guidelines.
The new initiative by the US
administration in 2009 frees up
hundreds of stem cell lines around
the world for US funding which was
frozen in 2001. This effort is expected
to expand collaborations with Indian
researchers, who have over the past
decade, under fewer restrictions,
carried forward with their own
research. Given these instances, it
is quite but natural that stem cell
research in a country like India is
poised to bring about a sea change
in healthcare.
5. CHALLENGES & STRATEGIES
CHALLENGES
Skill Development
Industry sources have mentioned
that despite a mushrooming
educational institutions offering a
range of courses in biotechnology,
gap between the needs of the
industry and skills taught at these
institutions still remain, though the
gap is being narrowed down. It has
also been mentioned that most of
these institutions have limited ability
to provide the right pedagogy, or
the requisite infrastructure. The
challenge of bridging the gap
between the needs of the industry
and the curricula taught at various
institutions should be collectively
addressed by the Government,
industry and academia.
Government Health
Expenditure
Most Governments in developing
countries usually finance
programmes that support child
immunization against diseases like
measles and diphtheria, pertussis
25 Total health expenditure is the sum of public and private health expenditure. It covers
the provision of health services (preventive and curative), family planning and nutrition
activities, and emergency aid for health, but excludes provision of water and sanitation
(whopping cough) and tetanus
(DPT), as part of the basic public
health package. Though India too
has such immunization programme,
because of a relatively high
birthrate and population, the share
of Government health budget in
total healthcare expenditure is
relatively low (at 25%), according
to the World Development
Indicators – 2009. In comparison,
other developing countries like
Brazil (47.9%), Russia (63.2%),
China (40.7%) and South Africa
(37.7%) portrays a better
management of Government
healthcare system. It may also be
noted that as a percentage of the
GDP, the total health expenditure25
in India is around 3.6%, far below
than that of other emerging
economies.
Basic Education & Health
System
Amongst the most critical building
blocks for biotechnology
development and its success, a
good education and health system is
111
a must. India fares low in terms of
both these measures as reflected
by the UN Human Development
Index – an index measuring the
accomplishments made by a
country in life expectancy,
educational attainment, and
standard of living. India’s ranking is
132 out of a total of 153 countries,
and also one of the lowest as
compared to other competing
countries in this sector.
Funding
The inherent characteristics of the
biotechnology make the industry a
high investment one with a long
gestation period. Thus, funding
plays a key role in ensuring the
concept to develop into a product.
Global financial crisis has affected
the funding prospects of biotech
companies, as risk aversion
increased among the venture
capitalists, angel investors, as also
financing institutions. These have
been further exacerbated by the
slow activity in the IPO market due
to an anemic stock market.
According to the Biotechnology
Industry Organization (BIO),
prospects for biotech IPOs are
likely to remain dim in the year
2009, on the heels of a very weak
base (the year 2008), raising US$
116 million, as compared to raising
US$ 2.3 billion in 200726.

Exhibit 24:
UN HUMAN DEVELOPMENT INDEX RANK BY SELECT COUNTRIES

SOURCE: UN Human Development Report 2008, Exim Bank Research

26 Beyond Borders – Global Biotechnology Report 2009

112
Ethical Issues in Genetic
Research
Biotechnology has been confronting
the world with some ethical issues,
which have raised numerous
challenges with no definite
solutions. Genetic research and its
applications like genetic
engineering, manipulation, testing,
therapy, eugenics, selective
abortion, GMOs, stem cell
research, and cloning, opened
significant ethical and consumer
issues, including the potential risks
that may be adversely impacting
the environment. The issue of
genetically modified food appears
to be of a particular concern. A
challenge for the Indian
biotechnology industry will be to
work and liaise widely with the
community and earn its confidence
and investors. Awareness may be
generated among the consumers
through provision of detailed
information, ranging from the basics
of gene technology to details of the
regulatory processes.
Concentration of IPRs
Intellectual property rights (IPRs)
are intended to promote research
and development by allowing
researchers to generate revenue to
meet the development costs.
However, there are concerns that
the current level of biotechnology
IPRs are concentrated mainly at the
hands of private sector. It is
reported that, globally, few
companies are responsible for the
vast majority of agri-biotech
research. These companies have
focused on crops and traits (such
as herbicide resistance) that are
having commercial significance,
and thus, may not be willing to
transfer to others. Globally, Mergers
& Acquisitions (M&A) trends
among biotechnology companies
have also been on similar lines,
encouraging the concentration of
IPRs, which may affect the ability
of developing countries, like India,
to negotiate for access to
proprietary technologies at a
reasonable price. This challenge
stems largely from patents that
confer broad rights over GMOs and
plant varieties.
Biosecurity
Biosecurity is another challenge
with growing debate and
discussions among the academic
and policy spheres, with
bioterrorism, biosafety, and
emergence and re-emergence of
infectious diseases as concerns to
the society as a whole. Another
challenge faced by biotech industry
is the proliferation of bioweapons
which can create havoc to human
civilization. The threats associated
with misuse of biotechnology affect
the growth prospects of this
industry, which otherwise present
potential benefits for global
priorities, such as health, food and
environment.
113
Bio-hacking
Biohackers are a group of
enthusiasts who are involved in
working with cells and genes
without any sound knowledge and
lack of proper infrastructure. With
the fall in the cost of equipments
that are capable of manipulating
DNA, the threat of growing number
of biohackers is significant. The
work raises fears that people could
create a deadly microbe on
purpose, just as computer hackers
have unleashed crippling viruses or
hacking into various websites. Such
a scenario may lead to “bio-spam,
bio-spyware, bio-adware” and other
bio-nuisances. An unrestricted
biohackery scenario could put the
health of the biohackers, the
community around them, and the
environment, under unprecedented
risk.
Patenting of Micro-organisms
Another associated challenge to the
biotech industry is patenting of
micro-organisms and associated
biosafety requirements, as strict
biosafety norms have to be
followed while handling micro-
organisms. The regulations for
accessing strains from a depository
have to be carefully worked out to
ensure that these do not land into
wrong and/ or technically
incompetent hands. India too needs
to bring in a patent law for
protecting micro-organisms and
rules for accessing strains from a
114
depository. In this context, the
Department of Biotechnology,
Government of India, has proposed
to build an internationally
recognized depository in the
country. It is hoped that following
the establishment of the depository,
a law in this regard would be
forthcoming. In this respect, laws
of other countries could also be
referred.
STRATEGIES
Public-Private Partnerships
Public-Private Partnership may be
encouraged and supported in areas
that are vital to the national
development, from a scientific,
economic or social perspective, and
focused on technology and product
development. Establishing a strong
industry academia linkage through
collaboration would also bring
multifold benefits to the biotech
industry. India has a wide network
of universities, departments and
specialized institutes that have
been promoted by various
authorities (Department of
Biotechnology, Department of
Science & Technology, Council of
Scientific and Industrial Research,
Indian Council for Medical
Research, Indian Council of
Agricultural Research, etc.)
providing numerous specialised
science degrees at the Masters’
level. These institutions also provide
an effective network of research
laboratories. Efforts should be
made to bring in a seamless
transfer of knowledge and people
among these universities, institutes,
and corporate for a better
coordination among themselves,
and to share their research-based
information on a continuous basis.
The company could have
preferential access to the
intellectual property generated in
such jointly funded projects.
Another alternative could be
encouraging public-funded
successful R&D institutions to
establish not for profit companies
to facilitate collaborative work with
industry. In these facilities,
researchers could pursue innovative
projects for defined periods on user
charge basis, providing access to
centralized equipments and
scientific consultation. There should
be an industry-academia
arrangement wherein the industry
could have an active participation
when it comes to planning
curriculum and methods of
evaluation. Private firms may also
share the responsibility to promote
academic excellence by creating
Chairs in Universities and further
strengthen the industry – academia
relationship.
Need for enhancing Venture
Capital funding in India
One of the biggest challenges for
the Indian biotech industry is
attracting investment through
venture capital mode. With the
corporate sector being risk averse
to investing in biotechnology
projects, especially in their
gestation and early phases, the
need of VC funding becomes
critical for the growth of the biotech
industry in India. Venture capital
turns typically source majority of
their funding from large investment
institutions such as pension funds
and financial institutions, who like
to invest long term only with
assurance of high returns. Thus,
venture capitalists make careful
investment decisions, which leads
to high risk aversion rates. Instead,
India may consider promoting
venture capital investment on the
lines of Russian model. Russia has
been boosting venture capital
sector from scratch, by seeding
funds with Government support,
through the Russian Venture
Company (RVC). Israel has also
adopted similar approach of state-
backed venture capital model to
boost the investments in knowledge
based industry.
Strategy to Move to a Higher
Value Chain
Indian biotechnology industry, over
the years, has developed a number
of biotech products, but has been
found to perform tremendously well
in the vaccine segment. The
players in this industry as well as
the research institutions should
increasingly focus upon moving up
115
the value chain by enhancing
strengths in new products and
applications, and by offering R&D
solutions in drug discovery and
validation based on genomics,
proteomics, pathway analysis
(determining how toxic or
radioactive substances reach
humans), and clinical trials on
humans. Drug discovery and
innovations in drug delivery,
especially in areas like diabetes,
cancer, and inflammatory ailments
could take the industry into greater
heights. Indian biotech industry
should also look forward to moving
up the value chain in terms of
geographies so that India is present
in more premium markets.
Enhancing Biotech
Applications
Modern research finds application
of biotechnology in various
industries, and thereby add value
to the products and processes of
such industries, including
agriculture, forestry, marine,
environmental management, pest
management, and management of
human and animal healthcare. To
capitalize on the potential benefits
and to ensure international
competitiveness, it is important to
promote speedy and widespread
diffusion of biotechnology to the
broader industrial community, while
maintaining responsible and
sustainable use. Industry initiatives
and entrepreneurship commitments
116
are particularly essential in this
regard. The Government may
promote research-industry linkages
and facilitate market information
including technological and
commercial trends and
opportunities. Integration of
biotechnology with various
manufacturing sectors could also
be encouraged through better
synergy and coordination of
activities among various
departments / institutions, with the
Department of Biotechnology,
Government of India, serving as
focal point.
Lucrative Domestic Market
The domestic biotech market is
expected to post robust growth with
rising income levels, improving
living standards, growing medical
infrastructure, increasing health
insurance penetration, enabling
regulatory framework and
institutional infrastructure, and the
growing number of organized
pharma-retail chains. For example,
in a country like India (which is
often referred to as the diabetic
capital of the world), it is certain to
find a market for products like
insulin. With more and more people
leading a sedentary lifestyle, there
may be opportunities for the Indian
biotech industry to innovate
products that cater to the demand
for controlling such chronic
diseases.
Biotech Skill Development
Biotechnology industry is highly
R&D intensive. In order to remain
globally competitive, the industry
requires a pool of highly skilled
manpower. India has already made
its mark in scientific research in the
world, with a large pool of scientific
manpower. The education system
in India, with its wide network of
universities providing quality
science education, has helped
immensely in this regard. However,
with the changing composition of
economic growth there is an
emerging trend of students not
preferring science stream for career
opportunities. This may lead to
shortage of qualified manpower in
highly research oriented activities
such as biotechnology. Thus, it is
important to devise policies that
would attract more students to the
science stream. Many countries
give both financial and fiscal
incentives in the form of grants and
preferential loans, to encourage
students to opt for science streams.
Reversing Brain Drain
Shortage of manpower due to
Brain-Drain is another challenge
faced by the Indian biotech industry.
The expected shortage of scientists /
skilled professionals in OECD
countries may enhance the Brain-
Drain from India in the coming
years, unless suitable policy
measures are taken to reverse the
trend. There is an urgent need to
expand the current research
programmes with attractive
compensation package in order to
attract world-class talent. In this
context, it may mentioned that
Government has initiated a
programme ‘Ramalingaswamy
Fellowship’, aimed at bringing back
scientists of Indian origin working
abroad in various fields of
biotechnology, and who are
desirous of pursuing R&D in Indian
institutions. It may be mentioned
that China Academy of Sciences
(CAS) has established
programmes, such as Specially
Hired Foreign Research Fellows,
and Young Foreign Scientist
Project, through which the country
would arrract over 600 Chinese
scientists working abroad, annually;
each returning scientist would
receive funding of around
US$300,000 per annum. Corporate
entities too may get involved by
providing adequate exposure to the
budding talents through training and
placements. This would also
provide the Indian biotechnology
industry a tremendous competitive
manpower advantage over its
competitors.
Symbiotic Relationship
between Pharma and Biotech
Sectors
Use of organisms for the
improvement of medical processes
(red-biotechnology) constitutes one
of the major business segment of
117
the biotechnology industry. This
provides significant opportunities for
pharmaceutical firms also. In
general, biotech firms would
concentrate their business models
in covering a part of the product
development value chain. Biotech
firms are often not much engaged
in entire product development value
chain due to shortage of funds
and necessary know-how.
Pharmaceutical firms could
complement the biotech firms
through their knowledge
and financial power. Also,
pharmaceutical firms, which require
continuous innovation, could benefit
cooperating with biotech firms who
provide new product concepts and
innovative technologies.
Such a trend is increasingly
relevant for collaboration between
cash-rich pharma firms and cash-
dried biotech firms to sustain
themselves with a win-win strategy.
This is amply corroborated by the
data compiled by Deloitte, which
indicates that the number of deals
between pharma and biotech firms
increased from 20 in 2000 to 64 in
2008. Infact, the median value of
deals between pharma and biotech
firms rose from US$ 80 million in
2000 to US$ 400 million in 2008. This
substantial growth also reflects
greater maturity and perceived worth
of target biotech companies and their
pipelines.
Strengthening North-South
Collaborations
Many Indian firms use services
contracts with foreign firms to fund
their operations, develop
commercialization capabilities and
access valuable international
technology and expertise. Services
provided include R&D, clinical trials
and manufacturing. Bharat Biotech
International, for example, is one of
the first developing country firms to
manufacture a foreign proprietary

Box 10:
RAMALINGASWAMI FELLOWSHIP - AN INITIATIVE FOR REVERSING
BRAIN DRAIN
Ramalingaswami Fellowship supports distinguished non-resident scientists
of Indian origin who wish to return to India and pursue research of high calibre in
Life/ Agricultural Sciences, Biotechnology, Bio-engineering, Translational Health
Science, etc. The initial duration of the fellowship is 5 years which is extendable
for another 5 years in exceptional cases. The awardee (s) get a consolidated
fellowship amount of Rs 50,000 per month for the first three years and Rs 60,000
per month for the next two years along with an annual contingency grant of Rs. 5
lakhs. Ramalingaswami fellows have the freedom to work in any of the scientific
institutions/universities in the country and also continue to be eligible for regular
research grants through extramural/other schemes of various S&T agencies of
the Government of India.

118
 Exhibit 25:
TRENDS IN PHARMA-BIOTECH M&A DEALS
SOURCE: Deloitte, Exim Bank Research
vaccine product, which is
contracted by the U.S. company,
Wyeth, to produce its Haemophilis
B (Hib) vaccine. Multinational
corporations are increasingly
conducting clinical trials in India and
rely on Indian contract research
organizations to manage these
trials. It will be vital for the Indian
biotech firms to expand their
capabilities in clinical trial
management, and pay close
attention, not only to good clinical
practice (GCP) guidelines, but also
to bioethical principles, to provide
a high level of care and protect the
rights of patients. This will not only
make the Indian contract research
firms to achieve global standards,
but will also help to bring in more
foreign exchange earnings, through
enhanced exports of services.
Encouragement to Innovative
Funding Models
Encouraging innovative funding
models in the biotech industry is
essential given the financial
constraints of this industry, For
example, pharma / biotech firms
may set up Special Purpose
Vehicles (SPVs) which shall be
contracted by the parent firms for
product development work in areas
such as specialty generics, topicals,
steroids, hormones, and
biopharmaceuticals, which may
have high initial product
development costs, and which are
non-infringing process, based on
regulatory compliances. Such
funding models may not stretch the
balance sheets of the parent
companies, nor equity dilution. An
119
 Box 11:
EXIM BANK’S SUPPORT TO RESEARCH & DEVELOPMENT
Exim Bank has been closely associated with the promotion of R&D in the
pharmaceutical / biotech sectors in India. The Bank has been providing integrated
financing for R&D activities of the pharmaceutical and bio-pharmaceutical
companies. The financing is in the form of either term loan / equity participation or
hybrid product, and would facilitate R&D expenditure and approvals in regulated
markets. This facility is primarily extended to pharmaceutical and bio-
pharmaceutical companies. The eligible R&D activities under this financing
programme include:
 Development and commercialisation of new product / process / application;
 Significant improvements in existing product / process / application/ design;
 Development of technology or design to satisfy domestic or international
environment, technical requirements/ standards, specifications;
 Setting up, expansion of pilot plants;
 Research studies necessary for obtaining regulatory approvals, product
registrations, cost of filing and maintaining international patents; R&D centers.
The eligible R&D expenditures under this financing programme include:
 Acquisition of technology at the ‘proof of concept’ or design stage which will
be used to develop new product/ process;
 Land and building, civil works for housing eligible R&D activities;
 Dies, tools, laboratory and other R&D equipment, mould, computer hardware,
software, miscellaneous fixed assets;
 Salaries of R&D personnel, support staff during the R&D project phase
including training costs;
 Cost of regulatory approvals, filing and maintenance of patent registration;
 Expenditure on external consultants for outsourcing a component of R&D
project;
 Product documentation and allied costs during the R&D project phase;
 Costs of materials, surveys, technology demonstration studies, field trials.

agreed percentage of revenues of the products would flow back to

from the SPV funded projects could
be returned back to the parent
company, or funding bank, towards
the investment. In the case of
institutional financing, once the
funding bank recovers its
investment or IRR, the ownership
the company without any
complications what so ever.
Emerging Biosimilar
Market in US
Biotechnology industry in India has
a well-developed foundation with

120
strong pharmaceutical and
biosupplier sectors. The global
market for generics BioPharma-
ceuticals are expected to grow
significantly in the next few years,
as several ‘blockbuster’ drugs are
likely to lose patent protection. A
record number of drug patents
expire over the next few years,
which should lead to stiff
competition from generics, and
significant fall in prices. Evaluate
Pharma, an industry consultancy,
estimates that about half of the
US$ 383 billion-worth of patented
drugs to be sold in the world in
2009 may lose patent protection
within five years. In 2010 alone the
industry is expected to be put at
risk with nearly 15% drop in its
revenue from patented drugs. In
such a situation Indian companies
appear well positioned to leverage
upon their cost-effective
manufacturing capabilities to
compete on a global scale and
garner some of this market.
In the context of patent expiry on
BioPharmaceuticals, it may be noted
that USA would emerge as one of
the largest bio-similar markets after
approval of Waxman Biosimilar Bill,
providing opportunities for Indian
firms. Biosimilars is a term used to
assign a sense of similarity between
the originator biologic and a copycat
version. According to industry
sources, there are at least 75
proteins and peptide therapeutics
identified in the US as potential
profitable targets for new products.
Most of these were approved as New
Drug Applications (NDAs) to facilitate
BioPharma companies to develop
biosimilar products. It is expected
that stringent regulatory approval
would be put in place to permit
marketing of biosimilar products at
an affordable costs.
Catalysing Coherence in
Clusters
Cluster development is a key
strategy to promote innovation,
accelerate technology transfer and
facilitate product development.
Biotechnology, being inter-
disciplinary in nature promoting
scientific and engineering research,
requires enabling infrastructure for
promoting and nurturing innovation
for building successful enterprises.
The clustering concept maximises
synergy and efficiency of firms
located in the cluster. Across the
world, especially in countries like
USA, Canada, UK and Ireland,
biotech clusters have been found
to be improving the performance of
the firms. Although this approach
has already been emerging in the
country, it is important to ensure
that such strategies deliver desired
results through a coherent effort of
all the stakeholders. Existing
biotech clusters could also be
examined with respect to any voids
that could be plugged to achieve
the desired results. Efforts could
also be made to set up clusters
121
 Table 15:
KEY BIOTECH PRODUCTS LOSING PATENT PROTECTION IN THE US
Brand Name Manufacturer Patent Expiry
Beneflix Wyeth 2009
Kogenate FS Bayer 2011
Novoseven Novo Nordisk 2011
ReFacto Wyeth 2014
Interleukin-2 Novartis 2012
Aranesp Amgen 2014
Procrit Ortho Biotech 2006
Neumega Wyeth 2011
Neulasta Amgen 2015
Genotropin Amgen 2006
Genotropin Pfizer 2008
Infergen InterMune 2009
Betaseron/Betaferon Novartis 2007
Amevive Astellas 2013
Enbrel Amgen/Wyeth 2012
Humira Abbott 2010
Remicade J&J 2018

SOURCE: Avendus Research, Industry Sources

around the existing institutions of International cooperation and

excellence, and to integrate them
deeply into the economic,
entrepreneurial and social fabric of
the region.
Leveraging International
Partnerships
Biotechnology is globally
recognized as a rapidly emerging,
complex, and far reaching
technology, and therefore a strong
international partnership, both at the
levels of research institutions and
at corporate front, is essential.
partnerships can be leveraged to
achieve global best practices in the
country’s science and technological
efforts, for joint intellectual property
generation, harmonization of
regulatory processes, smooth cross
border movement of biological
materials, and access to global
markets for the country’s products
and processes. Such an approach
would not only bring in better
technical know-how, but would also
help in enhancing India’s research
and development resulting in

122
quicker and faster outcomes.
Efforts have already been taken at
the Government level to leverage
the institutional strengths across the
countries. Such efforts should be
enhanced with collaboration
measures on continuous basis.
Biotechnology Usage in
Biofuels
Biotechnology could also be one of
the most effective and innovative
tools to make sustainable use of
biofuel, reducing the adverse
environmental impacts of GHG
emissions, and limiting the diversion
of land from food crops to fuel
crops. Biotechnology would also be
critical to increase land productivity
both in fuel crops and food crops,
through plant science, modern plant
breeding techniques and with state-
of-the-art application of crop
protection.
For fuel crops biotechnology
could help to:
 Increase biomass yield per
hectare while reducing the
needs for production inputs;
 Improve crop quality (higher
biofuel yields);
 Reduce land-use competition
through higher productivity and
reduced losses from biotic
attacks (insect, viruses, etc),
and biotic (environmental such
27 International Food Information Council
as drought, wind, salinity)
stresses;
 Contribute to the cultivation of
energy crops in areas with
marginal conditions;
 Develop efficient
microorganisms and enzymes
to convert the (hemi) cellulose
to sugars, which can then be
fermented into biofuel.
Since the introduction of
biotechnology in agriculture and food
production in the early-1990s,
biotechnology has been utilized to
develop new tools for improving
productivity. In 2005, twenty-one
countries planted biotech crops
covering a total of 222 million acres.
These crops include soybeans, corn,
cotton, canola, papaya, and squash
that are improved versions of the
traditional varieties. In addition, rapid-
rise yeast, and an enzyme used to
make cheese, are both commonly
produced through biotechnology.27
There are three main categories
of biotechnology-enhanced crops in
use or development.
 Enhanced input traits, such as
herbicide tolerance, insect and
virus protection, and tolerance
to environmental stressors,
such as drought;
 Value-added output traits, such
as corn with higher amounts of
123
 lysine for animal feed, or
vegetable oils with increased
levels of omega-3 fatty acids;
 Crops that produce
pharmaceuticals or improve
the processing of bio-based
fuels.
SUM UP
India is already being reckoned as
a frontrunner in the biotechnology
industry. With a huge base of
talented, skilled and cost
competitive manpower, and a well-
developed scientific infrastructure,
India is poised to become a leading
global player in biotechnology. The
vast population of India helps not
only in creating significant domestic
demand, but also provides biotech
124
research companies with a vast
gene pool. The institutional
infrastructure in the country offers
a strong foundation for these
strengths to get transformed into
business opportunities. Indian firms
could focus on acquiring overseas
biotechnology units in countries like
the US, which have seen plunging
valuations due to the global
meltdown. Though India has a long
way to go in terms of innovations
in processes, instruments, and
funding, the future looks bright for
the industry with India poised to
become one of the global leaders
in this industry. India, with all its
inherent strengths, can definitely
use biotechnology as a vehicle to
improve the lives of billions across
the world.
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126
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AHMEDABAD DAKAR
Sakar II, Floor 1, 1st Floor, 7,
Next to Ellisbridge Shopping Centre, rue Fe,lix Faure,
Ellisbridge P. O., Ahmedabad 380 006. B. P. 50666,
Phone : (079) 26576852/43; Fax : (079) 26578271 Dakar, Senegal
E-mail : eximahro@eximbankindia.in Phone : (00 221 33) 8232849
BANGALORE Fax : (00 221 33) 8232853
Ramanashree Arcade, Floor 4, E-mail : eximdakar@eximbankindia.in
18 M. G. Road, Bangalore 560 001.
Phone : (080) 25585755/25589101-04; Fax : (080) 25589107 DUBAI
E-mail : eximbro@eximbankindia.in Level 5, Tenancy 1B,
CHANDIGARH Gate Precinct Building No. 3,
PHD House, Floor 1, Sector 31-A, Dubai International Financial Centre,
Dakshin Marg, Chandigarh 160 031 PO Box No. 506541,
Phone: (91 172) 2641910 /12/39/49 Dubai, UAE.
Fax: (91 172) 2641915 Phone : (00 97 14) 3637462
Email: eximcro@eximbankindia.in Fax : (00 97 14) 3637461
E-mai : eximdubai@eximbankindia.in
CHENNAI
UTI House, Floor 1,
DURBAN
29, Rajaji Salai, Chennai 600 001.
Suite 117, Aldrovande Palace,
Phone : (044) 25224714/49; Fax : (044) 25224082
6, Jubilee Grove
E-mail : eximchro@eximbankindia.in
Umhlanga Rocks,
GUWAHATI 4320 Durban,
Sanmati Plaza, Floor 4, Near Sentinel Building,
South Africa.
G. S. Road, Guwahati 781 005.
Phone : (00 27 31) 5846118/19
Phone : (0361) 2462951/2450618; Fax : (0361) 2462925
Fax : (00 27 31) 5846117
E-mail : eximgro@eximbankindia.in
E-mail : eximdurban@eximbankindia.in
HYDERABAD
Golden Edifice, Floor 2,
LONDON
6-3-639/640, Raj Bhavan Road,
88/90, Temple Chambers,
Khairatabad Circle, Hyderabad 500 004.
3-7, Temple Avenue,
Phone : (040) 23307816-21; Fax : (040) 23317843
London EC4Y OHP,
E-mail : eximhro@eximbankindia.in
United Kingdom.
KOLKATA Phone : (00 44) 20 73538830
Vanijya Bhawan, Floor 4, (International Trade Facilitation Centre), Fax : (00 44) 20 73538831
1/1 Wood Street, Kolkata - 700 016. E-mail : eximlondon@eximbankindia.in
Phone : (033) 22833419/22833420; Fax : (033) 22891727
E-mail : eximkro@eximbankindia.in SINGAPORE
MUMBAI 20, Collyer Quay, # 10-02,
Maker Chambers IV, Floor 8, Tung Centre,
222, Nariman Point, Mumbai 400 021. Singapore 049319.
Phone : (022) 22823320/92/94; Fax : (022) 22022132 Phone : (00 65) 65326464
E-mail : eximwrro@eximbankindia.in Fax : (00 65) 65352131
NEW DELHI E-mail : eximsingapore@eximbankindia.in
Ground Floor, Statesman House,
148, Barakhamba Road, New Delhi 110 001. WASHINGTON D.C.
Phone : (011) 23326625/6254; Fax : (011) 23322758/23321719 1750 Pennsylvania Avenue NW,
E-mail : eximndro@eximbankindia.in Suite 1202, Washington D.C. 20006,
PUNE United States of America.
44, Shankarseth Road, Pune 411 037. Phone : (00 1) 202 2233238
Phone : (020) 26403000; Fax : (020) 26458846 Fax : (00 1) 202 7858487
E-mail : eximpro@eximbankindia.in E-mail : eximwashington@eximbankindia.in

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