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August, 2011

India is ranked among the top 12 biotech destinations worldwide and third largest in the Asia-Pacific region. The biotechnology sector grew by 21.5 per cent in 2010-11, to cross the US$ 4 billion mark, as revealed by an annual survey conducted by BioSpectrum and Association of Biotech Enabled Enterprises (ABLE).

India's biotechnology industry is expected to reach US$ 10 billion, in terms of revenue from the current US$ 4 billion, by 2015.

The Indian contract research and manufacturing services (CRAMS) sector is expected to almost double to US$ 7.6 billion in 2012, up from US$ 3.8 billion in 2010. The sector is estimated to capture a considerable portion of the global outsourcing sector by 2012, as per a report by ICRA Ltd. Further, the segment is estimated to grow at a global high, 41.4 per cent compound annual growth rate (CAGR) during the fiscal years 2010-12.

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.

The biotechnology industry can be classified into five different segments, agri-biotech, bio-industrial, bio-informatics, bio-pharma and bio-services with each concentrating on a particular niche area.

The Indian market for bio similar products, such as insulin, hormones, vaccines and plasma proteins, is about US$ 541.7 million (Rs 2,500 crore). The clinical research organisation (CROs) players grew five-fold in three years, from around 20 in 2005. The number may reach 150-200 by 2012.

Currently, the State of Karnataka contributes around 40 per cent of the Indian biotechnology sector. The State has remained a major investment destination in the biotech industry and the Government of Karnataka has set up a US$ 10 million Bio Venture Fund for incubating start-ups in high-technology areas.

Major Investments

The drugs and pharmaceuticals sector attracted foreign direct investment (FDI) worth US$ 2,942 million between April to May 2011-12, according to data released by the Department of Industrial Policy and Promotion (DIPP).

Investments, along with outsourcing activities and exports, are key drivers for growth in the biotech sector. Some of the major investments in the sector are as follows:

  • Apollo Hospitals Enterprise Ltd and University College London (UCL) have signed a memorandum of understanding (MoU) for collaboration in training and clinical research. Both partners would promote and carry out educational and research initiatives in health sciences
  • A six-member pre-trade mission from Maryland, US, visited the Ticel Biotechnology Park and the biotechnology infrastructure facility, to explore areas of collaboration in biotechnology and pharmaceuticals. The advance planning team met with industry representatives and officials to explore partnerships and investment opportunities
  • US-India Business Council (USIBC) will participate in the 12th edition of Bengaluru India Bio, an annual biotech show, next year, according to Karnataka's Vision Group of Biotechnology. USIBC will assist to explore business opportunities both in the US and in India
  • Lupin has entered into a licensing agreement with the Sydney-based NeuClone Pty Ltd for cell-line technology. NeuClone will provide the exclusive proprietary cell-line technology to be developed into bio-similar drugs targeting cancer
  • Biotechnology firm Life Technologies Corporation has invested around US$ 3 million to open a distribution hub in Bengaluru, which they expect would increase their business in India by 40 per cent in 2011
  • Biotech firm Biocon’s unit 'Clinigene International' has inked a pact with US-based Spaulding Clinical Research to jointly offer clinical research solutions to both pharmaceutical as well as biotechnology firms
  • Biotech firms Serum Institute, Panacea Biotec and Bharat Biotech have independently agreed to supply pentavalent , which combines five different vaccines in one, and rotavirus vaccines for infants at discounted rates to global health NGO GAVI Alliance
  • Biocon plans to invest in the range of US$ 64 million to US$ 107 million over the next three years, to set up plants for supplying generic biotechnology drugs to Europe and the United States. “India has the necessary talent pool, cost advantage along with entrepreneurial drive, we should take the benefit of this emerging opportunity,” according to Kiran Mazumdar-Shaw, CMD, Biocon
  • Drug firm Jubilant Life Sciences has signed a long-term supply agreement for an undisclosed product with a global firm, claiming that it has an earning potential of over US$ 97.51 million (over Rs 450 crore) in the next three years. The total contract is valued at over US$ 80 million to be supplied in three years
  • Pharma companies have witnessed rural market sales doubling on the back of aggressive marketing initiatives. India's rural drug market grew by 18.8 per cent in the 12 months period ended April 2011 as compared with 10.9 per cent in the previous year.