The Indian biotechnology sector is one of the fastest growing knowledge-based sectors in India and is expected to play a key role in shaping India's rapidly developing economy. With numerous comparative advantages in terms of research and development (R&D) facilities, knowledge, skills, and cost effectiveness, the biotechnology industry in India has immense potential to emerge as a global key player.
The sunrise sector is expected to touch the US$10 billion mark by 2015 on the back of emerging opportunities across various verticals, namely biopharma, agri-biotechnology, industrial biotechnology among others. The Indian biotech industry clocked revenues worth US$ 4 billion in 2010-11, witnessing a 33 per cent growth over the previous year. Of these revenues, around 40 per cent is contributed by Karnataka.
“The whole world is looking towards emerging economies for providing solutions to global health and other problems. As India has the necessary talent pool, cost advantage along with entrepreneurial drive, we should take the benefit of this emerging opportunity,” Kiran Mazumdar-Shaw, CMD of Biocon said.
The biotechnology industry in India is likely to see a significant increase in the merger and acquisition (M&A) activity, according to research firm Grant Thornton. Combined, the two quarters (Q4 2010 and Q1 2011) have seen 29 M&A transactions in the pharmaceuticals, healthcare and biotechnology sector. India’s high-skill and low-cost advantage is said to have helped in gaining export contracts and clinical research bioservices.
In the overall revenue of US$ 3 billion (2010), exports accounted for 53 per cent of the share, stated the Whitepaper- The Asian Promise- released by Grant Thornton. Biopharmaceuticals and bioservices have been thekey segments that contributed to the growth of theIndian biotech sector. Vaccines accounted for amajority of the biopharmaceutical market.
The report further stated that while China and India led in terms of the number of biotech M&A deals in the Asian region in 2010, India saw one of its largest deals in the agri-biotechnology space in Rallis’ acquisition of Metahelix for a consideration of US$ 46 million.
Investments, along with outsourcing activities and exports, are key drivers for growth in the biotech sector.
According to data released by the Department of Industrial Policy and Promotion (DIPP), the drugs and pharmaceuticals sector has attracted foreign direct investment (FDI) worth US$ 1.85 billion between April 2000 and February 2011.
Some of the major investments in the sector are as follows:
Tie-ups and Takeovers
Sun Pharmaceutical Industries Ltd and MSD (India) have entered into a partnership to market diabetes drugs Sitagliptin and Sitaglipitin plus Metformin in the Indian market.Under the pact, which comes nearly two weeks after the two firms had agreed to form a joint venture; Sun will have the rights to sell the two drugs in the Indian market under different brand names.
The Department of Biotechnology, Government of India and the Indian Council of Agricultural Research (ICAR) have entered into a MoU with Biotechnology and Biological Science Research Council (BBSRC), UK Department for International Development (DFID). The initiative is expected to forge productive global partnerships between scientists in the UK, India and other developing countries to leverage high quality biological and biotechnological research for sustainable crop production in South Asia and Sub-Saharan Africa.