Abstract:

In India, the pharmaceutical industry is an

established industry, whereas the biotechnology
industry is in the nascent phase and has been
recognized as a new driver of growth.

There are more than 150 biotech companies in

India and established pharmaceutical companies
are also diversifying into biotechnology.

The report takes a look at the Pharma & Biotech

Industries in India; how they have evolved, the
relationship between the two industries, the
innovations that have taken place in these
industries, the emerging trends and the
opportunities for the future and how the
government is facilitating its growth.

The report examines the competencies that India has developed in the Pharma & Biotech
industries. It explores how these companies are endeavoring to provide better healthcare
products at better prices through their expertise in pharmacology and biotechnology, and also
provide high quality outsourcing services to international clients.

Issues:

» Understand how the Bitech & Pharma industries are evolving in India

» Understand the relationship between the Bitech & Pharma industries

» Understand the innovations in both the industries

» Learn about the competencies developed by certain companies in both the industries

» Learn abut the growth opportunities for both the industries

Contents:

  Page No.
Introduction 1
The Evolution of the Industry 2
Biocon India Ltd. 4
Shantha Biotechnics 6
Ranbaxy Laboratories Ltd. 8
Dr. Reddy's Laboratories 10
Looking Ahead 11
Exhibits 12

Keywords:

Innovation, Pharma industry, Biotech industry, Reverse Engineering, TRIPS, Genome Valley,
Biotechnology Enterprise Zones, Bioinformatics, Nicholas Piramal, Value Chain, Shanta
Biotech, Biocon India Ltd., Kiran Mazumdar Shaw, Ranbaxy Laboratories Ltd., Dr. Reddy's
Laboratories

The potential for Indian BioPharma segment is huge. With the implementation of WTO and
patents regime in 2005, Indian companies would not be able to do backward engineering of the
drugs, so they are focusing on in-house R&D. The growth prospects are bright as many contract
research organizations are coming up. Besides, a large number of foreign pharma companies
are setting up their R&D divisions here."

- Dr. S D Ravetkar, Senior director, Serum Institute of India.1

"The trend seems to be that more and more pharma companies are diversifying into the biotech
sector. It would be prudent to have a synergy between the pharma and biotech companies to
avoid cannibalization and killing of effective products."

- Dr Krishna M Ella, chairman and managing director of the Hyderabad-based Bharat

Biotech International Limited (BBIL).2

Introduction

Biotechnology is an emerging sector in India. It

accounted for just 2 percent of the global
biotechnology market in 2003. However, it is
estimated to grow exponentially over the next five
years, with an expected global market share of 10
percent.

India has been leveraging its strong information

technology (IT) base, human expertise and low
cost research and development (R&D), to
establish and strengthen its presence in the global
biotechnology market. Biotechnology is believed
to be the next major driver of growth in India,
after Information Technology in the 1990s. The
Government of India (GoI) has taken special
initiatives to promote India's biotech industry.

The GoI has more than doubled the biotech research Plan outlay, from Rs 6.22 billion in the
Ninth Plan (1997-2002) to Rs 14.5 billion in the 10th Plan (2002-2007). Apart from funding, the
GoI has eased the regulatory framework by approving genetically modified crops3 and
recombinant-DNA products (rDNA)4; as well as ethical stem cell research5.

In 2002, the GoI made changes to the Patents

Amendments Act (second amendments). These
changes were intended towards making Indian
patents comparable to WTO and TRIPS.
Inventions relating to the method of treatment of
plants are to be made patentable.

Patent protection has been made available for

micro organisms; earlier, all life forms were
excluded from patent protection. The term of a
patent is 7 years for food and drugs, and 14 years
for others. The government intends to make
changes in the terms of patents in order to bring
them in line with the TRIPS agreement, in which
the term is set at 20 years from the date of
application for a patent.

Other than the GoI, some state governments6 have

also taken initiatives for the development of
biotechnology in their states. Andhra Pradesh
(AP), Karnataka, Tamil Nadu and Maharashtra
were in the forefront.

In 2000, the AP government set up the Genome

Valley to host almost all the major players in the
field of biotechnology. It declared an area of
approximately 600 sq. kilometres as the Genome
Valley.

The AP government aimed at providing high

quality infrastructure at a reasonable cost with
integrated services to biotech manufacturing units
by setting up a series of Biotech Parks.

One of the parks that was set up was the ICICI Knowledge Park (IKP); this was done in
partnership with ICICI Bank.7 IKP has been leasing out bare and ready-to-use modular
laboratory units each of 3,200 sq.ft. area as well as plots of land for setting up customised R&D
centres.
 IKP has also been providing a range of
infrastructure and administrative support services
to create a congenial stress-free environment.
Tamil Nadu was planning to set up biotechnology
enterprise zones to use the bio-resources available
with the state.

The Maharashtra government also has been

promoting biotech parks and R&D centers. The
Karnataka government has formulated a
biotechnology policy for the promotion of the
biotechnology industry.

It set up the Institute of Bioinformatics and

Applied Biotechnology (IBAB) in partnership
with ICICI in the year 2001.

IBAB has been conducting courses and training programs in bioinformatics and biotechnology.
It has also been promoting the incubation of new startups in the biotech industry, and conducting
research and development in the field of bioinformatics and other related areas...

Excerpts

The Evolution of the Industry

The history of biotech industry in India dates back to 1896 when the Plague Research Laboratory was
established by Dr Waldemar Mordecai Haffkine in Mumbai. In 1925, it was renamed the Haffkine
Institute...

Biocon India Ltd.

Biocon India Ltd. (Biocon) was established in

November 1978 by Kiran Mazumdar Shaw, as a joint
venture with Biocon Biochemicals Ltd. of Ireland.

It started out as a manufacturer of industrial enzymes,

and evolved into an integrated biotechnology
enterprise focused on the development of
biopharmaceuticals, custom research, clinical
research and enzymes.

Biocon had two subsidiaries Syngene International

Pvt, Ltd. (Syngene) and Clinigene International Pvt,
Ltd. (Clinigene). Syngene provided chemistry and
molecular-based custom research services in early
stage drug discovery and development...

Shantha Biotechnics

Shantha Biotechnics (Shantha) was founded by Varaprasad Reddy (Reddy) in 1993. He was the main
promoter together with Yusuf bin Alawi Abdullah, the then Foreign Affairs Minister of Sultanate of
Oman...

Ranbaxy Laboratories Ltd.

In 1960, Bhai Mohan Singh, an auto financier,

acquired a small chemist shop from a debtor who was
unable to repay his loan...

Dr. Reddy's Laboratories

Dr. Reddy's Laboratories (DRL) was founded in 1984

by Dr. K. Anji Reddy (Dr. Reddy) to create and deliver
innovative pharmaceutical healthcare solutions...

Looking Ahead

The consumption of biotech products in India was estimated to be $1.5 billion by 2007 and was likely to
grow to $4.5 billion by 2010. Industry experts believe that the brain drain in these areas may slow down
as India is developing the infrastructure and policies to facilitate the growth of biotechnology...

Exhibits

Exhibit I: Syngene's Capabilities in Molecular Biology and Synthetic Chemistry

Exhibit II: Contract Services offered by Shantha Biotechnics
Exhibit III: DRL's Areas of Competencies in Discovery Research