It is clear from the revenue statistics that the trend of growth in this industry has continued and the industry has crossed 18,000 crore or $4 billion in dollar terms, posting a 21 percent growth over previous year’s revenues of over 14,000 crore (approx $3 billion).
However, despite the expectations, the industry has not touched $5 billion yet – perhaps the after effects of the severe recession in 2008 are still being felt globally.
The Southern-Western Leadership
The southern region of India is slightly ahead of the western region in terms of total share of revenues, however, the south comfortably leads in the number of firms (172 vs 137). Bangalore and Hyderabad are leading the way and the recent announcement of building a cluster and incubator in Bangalore will help maintain the leadership of this region. The north cluster follows at the third spot but hopefully new clusters, especially in the NCR, will help close the gap in the future. What is revealing is, that despite possessing huge bio-resources and many leading institutions, the eastern part of India is lagging in terms of proper biotech enterprises. The states of Bihar, West Bengal, Orissa, Assam and the North East need a focused strategy to seed biotech enterprises.
There are now 362 firms in India that are focussed on some aspects of biotechnology. This is an important indicator. The vibrancy of a knowledge intensive and highly regulated industry such as biotech depends on the number of new start-up firms that are establishing and injecting fresh business ideas, solutions, and products built on innovation. What do we need to have in policy terms to say that India can treble the number of innovative biotech firms in the next five years to cross the one thousand mark? How do we make the biotech landscape investor friendly and ease the burden of establishing and operating start-ups? Indeed for the sector to grow even further several concomitant factors have to be addressed:
Streamlining Regulation: Regulation that enables innovation is the key. ABLE facilitated, as “Knowledge Partner” a regulatory session at Bangalore INDIA BIO last month. What became clear from discussions there as well as from all other forums is, that Industry will like to have a scientific evidence-based, clear and non-ambiguous, streamlined and transparent regulatory mechanism where procedural delays are minimized and technical considerations are dealt with by expert committees that are not created on an ad-hoc basis.
For India to achieve a leadership position in biotechnology, this is foremost in all sectors of biotechnology, i.e., biopharma (including diagnostics & devices), agri-biotech and industrial biotech including food & nutrition. Indeed, it goes without saying that investor confidence is directly linked to a clear and streamlined regulatory landscape.
The Future Ahead
Indian biotechnology industry is showing signs of consistent and mature growth in the 20 percent range. It has done well despite the global recession. Indian biotech firms are globalizing and strategically partnering with other firms – the Pfizer-Biocon and Glenmark-Sanofi deals are indicators of the kinds of new partnerships to emerge.
It is clear that vaccines, diagnostics and devices along with biosimilars will be key growth areas in biopharma. The agri-biotech sector is poised to grow – especially, the seed business in the area of new hybrids. Regulatory clarity in both biopharma/healthcare & agribiotech will be crucial for the future. There is a perceptible dynamism in systems biology (or BioIT) firms that are building predictive models, both disease and organ models, and enabling drug discovery research.
The growth potential of BioIT firms in India built on India’s strengths in IT and biology remains high. The CRO industry has become highly competitive and many CROs now have to show unique differentiation other than cost arbitrage. Many CROs have chosen to follow a risk-sharing model for growth to transition themselves into drug discovery firms. While this transition might take years it is a positive trend for the industry.
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