News: 'India scores in biotech' - E&Y

(BD 11/04/2006) Mumbai - India is well poised to become a hub for processing and managing clinical data in the biotechnology arena and stem cell research will help it to create a niche for itself, an Ernst & Young report on biotechnology said on Tuesday.

Utkarsh Palnitkar, industry leader (Health Sciences), Ernst & Young India, said, “India’s generics firms are positioning themselves to play a big role in the evolving biogenerics market. With our advantage in information technology and access to well-trained and relatively less expensive human capital, India is also well poised to become a hub for processing and managing clinical data. Further, stem cell research will also help us create a niche.”

The report — Beyond Borders: The Global Biotechnology Report 2006 — indicates the revenues of publicly-traded biotechnology companies surpassed $60 billion for the first time in the sector’s 30-year history. According to the report the biotechnology sector’s growth in the Asia-Pacific region outpaces its performance in other parts of the world with a scorching 46 per cent increase in revenues.

In 2005, Asia-Pacific became the first region to reach aggregate profitability in biotech. Asian governments see biotech as a natural fit and the next big thing because it is a technology based industry with tremendous growth potential in the decades ahead. Mr Palnitkar said, “Deals were a key driver in the Asia-Pacific region, where companies formed partnerships to position themselves in an environment characterised by brisk growth, increasing competition and sweeping regulatory changes.”

China and India continued to attract attention and deals, motivated by the desire to increase access to these large and growing drug markets, and by the need to lower the costs of drug development. The report noted: “With India becoming a signatory to the Patents Law, the rule of the game has changed for Indian companies and they are repositioning themselves for increased competition and new niches. With the patent regime coming into force, domestic and international companies are eagerly conducting research and development activities in India.”

It says that finding suitable valuation benchmarks in the Indian biotech sector is often a challenge, and a changing regulatory and policy structure adds to the complexity of valuing companies. “Seed capital to fund start-ups will be critical for the growth of India’s biotech sector,” Mr Palnitkar stressed.