Industry grows 18% to Rs
Flat growth in terms of
The Indian biotech industry in 2008-09 registered 18 percent growth,
with record revenues of Rs 12,137 crore. However, in terms of dollar
business, the industry was where it had been in the last fiscal, i.e.,
at $2.5 billion, with the price of a dollar hovering around Rs 47
during the year. The exchange rate of the dollar, which was around Rs
40 per dollar in 2007-08, grew by 18-19 percent during the
year and this is reflected in the performance of the industry. In rupee
terms, the industry registered 18 percent growth.
The very nature of the biotech industry, that it is export-driven, is
clearly reflected in these numbers. The rise in dollar value helped
companies to up their topline. In rupee terms, the exports
business went up by almost 25 percent to Rs 7,152 crore, accounting for
60 percent of the total business in 2008-09, yet the total industry
exports registered only 6 percent growth in dollar terms over 2007-08
to $1.5 billion.
The domestic business at Rs 4,985 crore ($1 billion), registered 10
percent growth in rupee terms. But in dollar terms, it meant a negative
growth of about 7 percent compared to $1.14 billion in 2007-08. The
Indian biotech sector is consolidating and looking at various business
models to sustain the momentum of growth that it had been recording
before 2007 and this is going to be spurned by the industry’s
moves to adapt to the next level of change. A clear trend in this
direction is the globalization strategy. The activities related to
localization of global companies and globalization of Indian companies
continued in 2008-09 too. We saw several partnerships being inked.
Almost all the major players have entered into several partnerships
during the year.
The biopharma segment continued to account for the largest share of the
biotech industry revenues. In 2008-09, the biopharma sector had a 65
percent share of the total pie with revenues of $1.67 billion (Rs 7,883
crore). In fact, in dollar terms, it’s a negative growth of
2.75 percent compared to the revenues of $1.72 billion (Rs 6,899 crore)
in 2007-08. In 2007-08, the segment had accounted for 67 percent share
of the total industry revenues, registering 16 percent
growth. The share of exports in the total biopharma pie was
close to 58 percent. Exports from biopharma alone accounted for over 68
percent of the total industry, while the bioservices sector had 28
percent share in exports (Rs 1,964 crore). The bioservices sector
registered 31 percent growth. The bioagri sector grew by 24 percent to
Rs 1,494 crore, the bioindustrial sector by 16 percent to Rs 478 crore,
and the bioinformatics sector by 15 percent to amass Rs 220 crore in
Clearly the industry had to handle the challenge of market-to-market
conditions. The recessionary effect in terms of venture
capital and private equity funding did not have a dramatic effect on
the companies, as the VC firms were anyways not taking the risk of
investing in biotech ventures in the country. The global trend that
dominated the industry dynamics in 2008 was bigger biotech companies
getting acquired, while the small and medium companies signing
partnership deals. Though Indian companies were impacted with credit
squeeze, the good news is that public funding is on the rise. Now India
through the Public Funded R&D bill is encouraging researchers
and the academic institutions to innovate and plans to
incentivize the efforts. The generics business is now here to stay and
with Obama coming in the biosimilars will have a stronger
proposition than generics because they are difficult and
complex to emulate . The entire pharma generic space is
expected to see price erosion up to 90 percent. This erosion in
biosimilars is expected to be 50-60 percent.
Looking at the future, India will go the innovation way. The government
funding in terms of providing finance, getting into PPPs, their
commitment in developing this sector is encouraging and it is prepared
to be a financier and steer regulations.
Globalization in biotech is largely India-centric. In the future, India
will be a part of the global market and will be a part of the pie
across the value chain. There will be a lot of marketing alliances
where companies abroad can come and Indian companies will play the role
of contract sales organizations (CSOs). Lastly on the
globalization front, it will not just be about business opportunities
but capability development that will expose India to actively
learn the expertise of the partner. South Korea is
a best example of this. The alliances prepares companies to
go to the next level.
SURVEY & RANKING
|Indian biotech industry
in 2008-09 registered 18 percent growth, with record revenues of
BioPharma sector grows to Rs 7,883 crore.
Bioservices sector registered 31 percent growth.
Bioagri sector grew by 24 percent to Rs 1,494 crore.
Bioindustrial sector grew by 16 percent to Rs 478 crore.
Bioinformatics sector grew by 15 percent to Rs 220 crore.
- BioSpectrum conducted this
survey in association with the Association of Biotechnology Led
Enterprises (ABLE). BioSpectrum and ABLE have jointly been doing this
exercise since 2003. A detailed questionnaire (survey form) is sent to
over 150 companies to capture the needed information for the analysis.
This was done during May-June 2009. Companies shared information with
us to the extent it was possible by them about their companies and the
- The revenues considered for
the analysis are biotech products sales and service figures. In several
cases, where revenue figures were not available estimates were arrived
talking to industry experts.
- This year in the list of Top
20 Biotech companies, diagnostics and clinical trials companies have
not been taken into account. But the drug discovery services companies
have been listed.
- Biotech suppliers’
revenues are not considered as part of the biotech definition.
- BioPharma included products
made by fermentation/animal cell culture (not animal extracts) and
plant cell culture (not plant extracts).
- The BioAgri segment analysis
has included only the GM seeds and molecular markers and related
products. So the hybrid seeds business is not a part of the
agribusiness sales values.
- For all the ranking
purposes, we have taken the biotech business only into consideration.
Wherever TURNOVER is mentioned it means, sales turnover from biotech.
Therefore, turnover wherever mentioned is not necessarily the total
sales turnover of the company