Biotech/bioinformatics India overview

I just finished scanning a year's worth of BioSpectrum issues. Here's a quick overview (with a severe bias towards bioinformatics). For facts and figures, the magazine's BioData is a good resource.

India isn't among the big players yet in terms of biotech, though it does seem to be positioning itself for a leading role in bioinformatics thanks to its strong IT sector. Nevertheless, there is much excitement about biotech taking off, founded not just on euphoria, but on the availability of natural resources (diverse gene pool and ecosystems) and scientific talent, a pharma sector that is moving from manufacturing generic drugs to drug discovery and providing services (e.g. contract research), a large domestic market for bioagri and traditional medicinal knowledge that provides a unique starting point for drug discovery. Of course there is also the cost advantage of conducting biotech in India rather than the United States.

So far vaccines seems to be the single largest biotech business, including exports (mainly WHO-driven) and development of new vaccines. Bioinformatics is a small business by comparison (one tenth the revenues of vaccines in 2002/2003), but the quickest growing one. However, given that the global market is smaller to begin with and that India is entering the market with proven IT competencies, chances are good for status as a global player. Analysts expect India to capture 5% of the global market by 2005. Another sector that relies on India's established reputation as a global player for ITES (IT enabled services) is the market for contract research opportunities (CRO).

In its early stages, bioinformatics was largely a software services business based on supplying custom-made code for foreign pharma and biotech firms. Increasingly, however, Indian bioinformatics firms are launching proprietary products. A growing niche could be internet applications: 'In contrast to the accelerated growth that the internet has experienced, companies in the biotech sector have just begun to utilize the variety of internet applications available. Although maintaining a web presence and accessibility to research exists for these companies, the industry has relatively overlooked the possibilities of B2B commerce, ASP applications or the ubiquitous wireless domain,' says Aditya M Reddy, CEO of Hyderabad-based DeUS Infotech Private Ltd.

So far the main customer base (80% of data-driven drug discovery) is in the US, and to a small extent in Europe, Australia, Singapore and Japan. The domestic pharma and biotech industries are considered by many to be too young to represent a significant market yet.

Despite this, and Ernst & Young survey showed only 3 Indian cross-border alliances in biotech for 2002.

Industry insiders warn that the service business in biotech is limited and that, for India the real money is in discovering new drugs for ourselves and not in supplying information and data to foreign companies, who would then use this information to discover new molecules.

Various clusters are aggressively marketing their locations, e.g. Hyderabad (Genome Valley) and Bangalore (the biotech city).

The main bioinformatics players are Strand Genomics, CDC Linex, Bigtec, Institute of Bioinformatics, Jubilant Biosys, Ocimum Biosolutions, Mascon Life Sciences, Bilcare, Scinova, SysArris, Molecular Connections, and SERC.

The major software outsourcing companies, such as Infosys, Wipro Health Sciences (or Wipro Healthcare), TCS, Kshema Technologies, and Satyam Computer Services are also exploring opportunities. However, their strength seems to lie in providing management software for biotech and pharma companies (bio-IT), rather than specialized bioinformatics.

International players (in bioinformatics and bio-IT) are IBM/IBM India, Intel, Sun Microsystems, Oracle, and Cognizant Technologies.

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