Year to watch out for
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"