Year to watch out for

Down to Earth - - COVER STORY - 6,300

biotech com­pa­nies in 2014. This was a 29 per cent in­crease over 2013. The year saw all sorts of in­vestors—re­tail, ven­ture cap­i­tal trusts, emerg­ing mar­ket ve­hi­cles—in­vest­ing in biotech­nol­ogy stocks. They re­ported more than the ex­pected re­turns, highly un­usual in times of mar­ket un­cer­tainty. This year, it seems, the in­dus­try is go­ing to be much more lu­cra­tive, both for in­vestors and buy­ers. Ac­cord­ing to jour­nal BioCen­tury, till Fe­bru­ary, the biotech in­dus­try has al­ready raised $1,819 mil­lion, tak­ing the to­tal in­vest­ment in biotech­nol­ogy up to $14.9 bil­lion (see ‘Year to watch out for’).

This growth has come al­most af­ter a decade. Biotech re­mained dor­mant and off the popular in­vest­ment radar af­ter a mar­ket crash in 2000. A few months be­fore the crash, it was the prime choice of in­vestors, rid­ing on prom­ises of progress in hu­man genome science and a boom in drug dis­cov­ery. In­ter­est­ingly, the present boom is led by small- and mid-sized bio-pharma com­pa­nies.

In In­dia, the world’s 12th big­gest biotech­nol­ogy econ­omy and hav­ing the sec­ond high­est num­ber of US Food and Drugs Ad­min­is­tra­tion (usfda) ap­proved plants, the in­dus­try is not only ex­cited at the re­vival in the US but also about its do­mes­tic prospects. In Fe­bru­ary, the 15th edi­tion of Ban­ga­lore In­dia Bio 2015, the coun­try’s an­nual biotech­nol­ogy show by in­dus­tries, noted the progress. “In­dia’s biotech­nol­ogy econ­omy will be more than $100 bil­lion by 2025, which will make it level with the in­for­ma­tion tech­nol­ogy in­dus­try,” says P M Mu­rali, pres­i­dent of As­so­ci­a­tion of Biotech­nol­ogy Led En­ter­prises (able), the coun­try’s only biotech­nol­ogy in­dus­try as­so­ci­a­tion.

The In­dian bioe­con­omy grew to $4.3 bil­lion at the end of the 2013 fi­nan­cial year, up from $530 mil­lion in 2003, ac­cord­ing to BioSpec­trum, a widely-read trade pub­li­ca­tion in In­dia (see ‘In­dian biotech’s steady growth’ on p33).

Though con­cen­trated in Hy­der­abad and Ben­galuru, there are units sprout­ing across the coun­try; cur­rently some 350 com­pa­nies are in op­er­a­tion. The bio-phar­ma­ceu­ti­cal sec­tor, which in­cludes vac­cines, med­i­cal de­vices and stem cells, is the main driver of In­dia’s biotech­nol­ogy growth, gen­er­at­ing close to 63 per cent of the in­dus­try’s to­tal rev­enue in 2013. “Com­pa­nies are do­ing well and the sec­tor’s fu­ture prospects look bright. Many new start-ups are com­ing up in the Ben­galuru clus­ter. This is re­ally a good time and there is more in­no­va­tion hap­pen­ing on the ground now,” says Mu­rali.

Ki­ran Mazum­dar-Shaw, the ceo of Bio­con, In­dia’s first biotech­nol­ogy com­pany, says, “If we com­pare the In­dian biotech in­dus­try with its global coun­ter­part, we find that we are go­ing there in terms of ca­pa­bil­ity but as far as in­vest­ment is con­cerned, China and Amer­ica are far ahead. In­dia has a huge mar­ket. Go­ing by this, the sec­tor will be­come only big­ger.” Bio­con was in news last Au­gust when it launched Alzumab, an anti-CD6 an­ti­body for the treat­ment of pso­ri­a­sis. The global mar­ket for pso­ri­a­sis drugs is ex­pected to reach $8 bil­lion by 2016. This has ex­cited the at­ten­tion of in­vestors who look for­ward to lu­cra­tive re­turns from biotech­nol­ogy.

“We had the stars aligned very well for us a decade ago, which we did not cap­i­talise on due to am­bigu­ous reg­u­la­tory poli­cies and knee-jerk re­ac­tions. Hope­fully, the lessons learnt from the past will now be used to ac­cel­er­ate growth in the health and agri­cul­ture sec­tor,” says Mu­rali.

The biotech econ­omy boom is def­i­nitely not a “gold-rush” kind of phe­nom­e­non where des­per­ate in­vestors chase a suc­cess story. Since the crash in 2000, many de­vel­op­ments have hap­pened in drug

"It is an in­cred­i­bly ex­cit­ing time for our in­dus­try. This is not hype and smoke and mir­rors"

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