Is the Indian biotech sector becoming a major source of attraction for life science firms world over? Proponents of this industry feel so, more than any time in the past. Improving IP/regulatory environment and growing recognition of its competencies seem to lend credence to this theory.

India’s fledgling bio industry could spin out some impressive figures in the last couple of years. Currently valued at $2 billion, it aims at $25 billion turnover in next 10 years. Considering the fast pace of growth — more than 35% annually — this target is not impossible, believes Association of Biotech Led Enterprises (ABLE), its umbrella body. India’s science and technology minister, Mr. Kapil Sibal is even more bullish: “I am more confident and optimistic with $40 billion revenues by 2015.” He reasoned this goal was not unrealistic because more and more companies are interested to either have a stake or make a fresh investment in India’s bio business.

Through Partnering Gateway

Though the life science industry here still has a long way to go honing its skills, as well as in terms of human resources and education, it looks as if there is a newfound enthusiasm among the global bio firms to forge some meaningful alliances with their counterparts in India. Recently, Merieux Alliance bought out a 60% stake in Shantha Biotechnics, a south Indian company. Similarly, Louis Pasteur Institute announced its plans to shift operations to India. Zeal for partnering amongst the life science upstarts across the globe has opened a gateway of opportunity for Indian bio enterprises. In addition to France, several life science concerns from the U.S., UK, Netherlands, Germany, Austria, Denmark and Australia are already exploring the Indian biotech terrain for suitable partners, according to industry sources.

While small-timers look out for possible partners to work and grow alongside, bigger, established players want competent and trustworthy alliances as the trend for outsourcing gains a wider acceptance. Outsourcing drug discovery services, including chemistry, biology, screening, and lead optimization is expected to reach nearly $7.2 billion by 2009 for both start-up and industry-leading pharma and biotech companies, suggests a new study from a division of MarketResearch. India, along with China, holds great promise to meet the R&D productivity challenges.

Traditionally, the biopharma industry has been a bit reluctant in hopping on the offshoring bandwagon. However, the attitude is changing as the regulatory, IP compliance and core skill sets in the country continue to improve, experts point out.

From Chem to Bio

“The initial success came from chemistry outsourcing. So a natural extension is to seek biology services. Since these capabilities are just emerging in India, it is a natural consequence that biology outsourcing services opportunities are coming to India,” commented CSN Murthy, chief executive officer of Aurigene Discovery Technologies. Offering a host of services ranging from molecular biology to toxicity studies, this Bangalore-based discovery services company already has pacts with Forest Laboratories (discovering drug candidates for obesity and metabolic disorders); Merck Serono (autoimmune diseases); Debiopharm (two immuno-oncology targets) and Danish Rheoscience and Novo Nordisk (assay development structure based drug design.)

Jubilant Organosys is another instance. The firm, along with its subsidiary Jubilant Biosys, has a five-year drug discovery collaboration agreement with Eli Lilly. Jubilant is also engaged in about half a dozen programs, which are purely end-to-end discovery tie-ups — target validation to the entire chain. “We deliver up to whatever is mutually agreeable. If it is early-stage collaboration, it will be a lead; if it is a later early-stage deal, it could be a candidate; and it can also be a proof of concept,” explained Mr. Mosur, chief executive officer of Jubilant Biosys.

Likewise, there are also some well-established custom research players such as Syngene, a subsidiary of Biocon, India’s leading biotech firm, Nicholas Piramal of Mumbai, and Hyderabad-based Suven Life, which provides R&D services to a global clientele. Many newcomers in the field are also in the process of scaling up with new products and services. With proven strengths in research and manufacturing of life science products, India can well be among the top 10 global hubs of biotechnology by 2015, predicts Dr. Cyrus Poonawalla, chairman, Serum Institute of India (SII):”The world is going to see India as a low-cost center with tremendous manpower and this is our biggest strength.” Pune-based SII desires to supply nearly the entire global requirements of pediatric vaccines and combo vaccines by then.

Long-term goals are fine. But India needs to set certain short-term strategies with priorities, such as establishing credibility with global players and developing competencies.

S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at [email protected].