India’s biotech sector got a fresh bout of vigor following reports that its revenues are growing faster than anticipated. The industry grew 33% in the last fiscal year, and the momentum is likely to continue. Revenues will cross $10 billion by the year 2015, stated senior officials with the government. 

News announcing these magic numbers provided a much-needed booster dose, paving the way for renewed optimism in a bio sector that fell short of achieving the revenue goal set for the previous year.

The sunrise industry was forecast to touch $5 billion in fiscal 2010, a growth rate of 23% year-on-year. The figures, however, were not able to cross $4 billion mark in the last fiscal year. The slowdown was attributed to the global economic slump and resultant stalling in leading global markets. The recession impacted overseas trade, leading to a dip of as much as 18% in the overall revenues in the financial year 2008-09.

Exports To Swell

Exports comprise a major component in India’s biotech business. “The Indian biotech industry is set to grow exponentially, reaching $10 billion in revenues by 2015 from $4 billion achieved in fiscal 2011, with exports contributing substantially,” said Karnataka IT and BT principal secretary M.N. Vidyashankar while attending Bangalore India Bio 2011 — India’s largest gathering of biotech industry — in Bangalore in May. 

Bangalore is the hub of India’s biotech industry. This capital city of southern state of Karnataka is home for more than half of the country’s 350-odd bio firms. During 2010-11, the biotech sector in Karnataka contributed $1.6 billion, which accounts for 40% of the country’s total bio-revenue, Mr. Vidyasankar said.

At $4 billion, the sector currently claims only a minuscule share in the global biotech market, which is predicted to grow to $433 billion by 2015. Nonetheless, it figures in as third largest market in the Asia-Pacific region as well among the top 12 biotech destinations in the world.

The anticipated growth will largely be driven by biopharmaceuticals, which account for over 60% of the total industry revenues. The biotherapeutics segment is expected to gain enormously from upcoming opportunities in biosimilars. Several Indian players have placed their bets on the equivalents of the $50 billion worth of branded biologics tipped to lose patent protection by 2015.

Indian companies with the capability to make low-cost generic versions of expensive biotech drugs expect to rake in big moolah from the huge market thrown open by biosimilars. The global market for biosimilars is seen peaking to the level of $3.7 billion in next four to five years from the present $243 million, according to a report by Datamonitor Group Plc, a market analysis firm.

Autonomous Regulator

Equipped with cost-efficient technologies and skilled manpower, Indian firms would be able to utilize this opportunity to the full. Biopharmaceuticals and bio-agriculture lead the growth rally. Among the generic biopharmaceutics, vaccines top the chart. Currently, vaccines — both human and veterinary — account for 50-60% of the total biopharmaceutics market with an estimated sales of $481.5 million, as per a recent report by Frost & Sullivan. Relative cost advantage in developing biosimilars over competitors elsewhere is a key factor favoring Indian players. Other major segments that make up the sector are bio-services, bio-industrials and bioinformatics.

Even as the various stakeholders debate market potential, CMOs and innovator companies still find the regulatory mechanism in India casting a shadow over growth prospects. Inordinate delays in granting approvals and red-tape in permitting clinical research impede the rapid growth, nullifying the benefits, experts said. 

“Though we have a strong R&D base in India, it is negated by cumbersome processes and hijacked by nonscientific issues,” said Kiran Mazumdar Shaw, CMD of Biocon, India’s top biotherapeutics firm.

The government, on the other hand, assures that such issues pertaining to regulation will be removed on a priority basis. The authorities have already finalized a draft bill for an independent regulatory body for biotech drugs, responding to a long-standing demand by the industry.

The proposed body would be an autonomous one and would help initiate a large number of schemes for the sector, announced M K Bhan, secretary, department of Biotechnology under the Ministry of Science & Technology, in a video-address at Bangalore Bio 2011.

The industry hopes that the National Biotechnology Regulatory Authority Bill will come up in the next session of Parliament for discussions.  

S. Harachand is a pharmaceutical journalist based in Mumbai. He can be reached at harachand@gmail.com.