India with its huge population and faster growing economy offers a huge market for the biotechnology sector. The high income growth and the fast growing health care sector fueling the growth of the biotechnology sector, which is currently at a market size of USD 3.6 billion.
Milestones of Biotech sector
In the year 1978, Biocon, was set up and this was the first company which started operations in this filed. In the year 1981, the government had set up the Centre for Cellular and Molecular Biology in Hyderabad. The Centre for Cellular & Molecular Biology (CCMB) is a premier research organization in frontier areas of modern biology.The objectives of the Centre are to conduct high quality basic research and training in frontier areas of modern biology, and promote centralized national facilities for new and modern techniques in the inter-disciplinary areas of biology. Again in the year 1984, Institute for Microbial technology was set up in Chandigarh. In the year 1989, Bangalore Genel commenced its operations. Syngene, India’s fi rst contract research organisation started its R&D activities. In the year 1998, Monsanto Research established and R&D center for plant genomics. In the year 2000, India’s first bioinformatics company, Standard Genomics was formed.
According Exim Bank report on Biotechnology in India-growth and opportunity, in terms of market dynamics, the Indian biotech sector had a healthy growth in 2008-09 with its revenues reaching Rs. 12137 crore. Within this, Bio Pharma contributed Rs. 7883 crore, followed by Bio Services (Rs.2062 crore), Bio Agriculture (Rs. 1494 crore),Bio Industrial segment (Rs. 478 crore), and Bio Informatics (Rs. 220 crore). Recent trends in turnover of the industry indicate that the Indian biotechnology industry recorded a CAGR of 31.5% during the period 2001-02 to 2008-09, increasing from Rs.2345 crore to Rs. 12137 crore during the period. The domestic biotechnology market clocked revenues of Rs 4,985 crore in 2008- 09, registering a 10% growth as compared to the previous year, and accounting for around 41% of revenues generated in the industry. As regards segment-wise data, for the year 2008- 09, Bio Pharmaceutical sector accounted for the largest chunk of the biotech industry, garnering a share of 65% in total revenues, with vaccines being the largest contributor within the Bio Pharmaceutical segment. Bio Services (17%) and Bio Agri (12.3%) are other major sub segments of Indian biotech industry. Segments like Bio Industrial and Bio Informatics garnered a share of 3.9% and 1.8%, respectively of the total revenue in 2008-09. Interestingly, the share of the various segments of the biotechnology industry remained almost the same with minor changes in 2008-09, as compared to 2007-08. As per the Bio spectrum-ABLE industry survey (2010-2011), the Indian biotechnology industry posted revenues of US$ 2.9 billion, in spite of the global recession during 2009 and measured recovery during 2010. The sector has shown consistent development in double digits since the last decade with average revenue growth fi gures rising to more than 20 per cent. It has been estimated that the industry is poised to target a total turnover of US$ 8.6 billion by the end of 2015 which would only be possible if there will be a growth rate of about 30 per cent year on year basis. In the year 2011, the Biotech industry recorded revenues worth USD 3.6 billion registering a growth of 20 percent compared with the year 2010. The industry is expected to grow signifi cantly to USD 11.6 billion by 2017. The bio pharmaceutical sector accounted for the largest chunk of the biotech industry and the bio services and bio agri segments accounted 18.8 percent and 14.4 percent. The Indian bio services sector recorded a growth of 96.8 percent in the year 2011 and the bio agri and bio pharma sector had grown by 28.1 percent and 25.8 percent.
Key segments of Indian Biotech industry
The biotechnology industry can be classified into fi ve different segments - agri-biotech, bioindustrial, bio-informatics, bio-pharma and bioservices with each concentrating on a particular niche area. Within the Bio-technology sector, the bio-pharma segment remains to preserve the first position, closely followed by the bio-industrial segment which has registered the fastest growing rate within the sector, surging from less than 5 per cent market share fi ve years ago to over 14 per cent. The states of Karnataka, Andhra Pradesh and Tamil Nadu added to 44.22 per cent share of the Bio-technology industry, which was marginally higher than Gujarat and Maharashtra share of 43.60 per cent. The bio-pharmaceutical products are therapeutic or preventive medicines that are derived from materials naturally present in living organisms, using recombinant DNA technology. The Bio services mainly include clinical research and CRO along with custom manufacturing. Bio-agriculture is segmented into hybrid seeds, transgenic crops, bio pesticides and bio fertilizers. Bio industrial predominantly comprises enzyme manufacturing and marketing companies. Bio informatics deals with the creation and maintenance of extensive electronic database on various biological systems which is the smallest part of the current domestic biotechnology industry. The Exim bank report estimated that the therapeutic sub segment contributed around 37% of the total revenues generated from Bio Pharma in 2008- 09. During 2008-09, the Indian therapeutics market recorded a 19% growth to record revenues worth Rs. 2956 crore. Human insulin was the largest contributor to the therapeutics market, a refl ection of India’s large diabetic population. With diabetes now ranked as the fi fth leading disease causing death across developed country markets, and forecast to grow, the market for once-a-day drug delivery and non invasive drug delivery systems continues to offer signifi cant potential for expansion. India is predicted to lead the way with 73.5 million people expected to have diabetes by 2025. The diagnostics business accounted for close to 17% of the total Bio Pharma business in 2008- 09, recording a CAGR of around 14% during the period 2005-2009.
The department of Biotechnology set up 35 facilities during 2002-07 to produce and supply biological products, reagents, culture collections and laboratory animals to scientists, industries and students at nominal costs. More over the department had formulated a National Biotechnology Development Strategy to strengthen the industry’s human resources and infrastructure while promoting growth and trade. The government has decided to spend 30 percent of DBTs budget in public private partnerships to promote R&D at various stages. The Central government has taken an initiative to secure the domestic market of the fake drugs and for this purpose, a number of companies have been forced to adopt an SMS-based tracking facility to ensure genuineness of their medicines. Following this development initiative by the government, US-based Pharma Secure, a leading global player in providing SMS-based authentication services to pharmaceutical manufacturers, has reported greater acceptance of its track-and trace facility in India. In addition, the Directorate General of Foreign Trade (DGFT), Government of India has also made it compulsory for all drug exports to bear serial numbers with track-andtrace capability. Similarly, the Drug Consultative Committee (DCC) of the ministry of health has also permitted an exceptional identifi er for all local drugs so that they can be substantiated by customers through SMS,which is one of the path-breaking initiatives taken in the best interest of millions of customers in the country. In a move to standardise procedures, the Indian Parliament passed the Clinical Establishments Bill 2010, which would make registration of clinical trials as well as clinical research organisations mandatory in the country. The bill also includes standard operating procedures for various trial related tasks