Faster regulatory reforms, Higher industry involvement
BioSpectrum hosted the second BioSpectrum CEOs Summit series during August-September 2006 in three cities-Bangalore, Mumbai and New Delhi. The First CEOs Conclave was held in September 2005 in Hyderabad, which was organized as a full-day event. This time the event was held in three cities with three themes which covered the entire spectrum of issues facing the industry. The event was scheduled for two-and-half hours each followed by networking dinners.
The chief guest for the Bangalore series was Dr MK Bhan,
secretary, Department of Biotechnology. Key executives from the industry made
short presentations and participated in a brainstorming discussion on
"Making India a Global Hub for Clinical and Contract Research", which
was the theme of the conclave. The speakers at the CEOs Conclave included Dr
Kiran Mazumdar-Shaw, CMD, Biocon Ltd, Bhasker Iyer, MD, AstraZeneca, Dr Surinder
Kher, CEO, Jubilant Clinsys, Bharat Doshi, MD, Kendle India, Dr Vinod Mattoo,
Medical Director, Eli Lilly India, Dr Dhananjay Bakhle, director, medical
research and regulatory affairs, Aventis Pharma and
Dr Rashmi Barbhaiya, CEO and MD, Advinus Therapeutics. Dr Barbhaiya moderated the panel discussion.
Dr Cyrus S Poonawalla, chairman, Serum Institute of India, delivered the keynote address at the Mumbai BioSpectrum CEOs Summit and also participated as a panelist. The theme for the panel discussion was "BioPharma: Globalization". The other panelists included Dr Sanjeev Kumar, vice president and head, biotechnology, Zydus Research Center, Cadila Healthcare, Dr Dhananjay Patankar, head, biotechnology, Intas Pharmaceuticals, and Dr SD Ravetkar, senior director, Serum Institute of India. Nitin Deshmukh, head-private equity, Kotak Mahindra Bank and honorary director, ABLE, moderated the panel discussion. About 45 CEOs participated in the event.
The Delhi leg of the event saw the participation of over 50 CEOs. The theme was "Industry Growth: SME to Giants". Dr Rama Mukherjee, president, R&D, Dabur Research Foundation, Hari S Bhartia, co-chairman & MD, Jubilant Organosys, Dr Rajeev Soni, COO and president, PREMAS Biotech, Naveen Kulkarni, CEO, Polyclone BioServices, Bangalore and Dr Christopher D Earl, president and CEO, BIO Ventures for Global Health (BVGH), Washington, were the panelists. The discussion was moderated by Bhartia.
The suggestions made by the CEOs at these events are being reported so that the industry and the government can collectively participate and act in bringing about the desired affects to help grow the sector.
Detailed reports of the tri-city BioSpectrum CEO Summit 2006 follow in the ensuing pages.
Making India the Global CRO Hub
August 23, 2006, Bangalore
The BioSpectrum CEO Summit in Bangalore, held on August 23, 2006, discussed the strategies on how to make India the global hub for clinical research. The captains of the industry deliberated on the issues confronting the sector and came up with suggestions-both pragmatic and out-of-box-that can make a difference to the fortunes of the sector. Dr MK Bhan, secretary, DBT, called for greater industry-government participation in this direction with specific suggestions.
Bioservices is one of the most happening areas and one is witnessing a host of activities in this space. There have been a lot of M&As, alliances, and some of the leading global CROs have set shop in India. The numbers are on the rise. It's time now for the industry and government, all alike, to consciously grow and promote this sector. This sector would not only play an important role in the growth of the economy, but also encourage product innovation and development.
Creation of a white paper on what should be the ideal policy and the regulatory framework to create an enabling environment.
The industry to collectively ensure a very good image for clinical research in India.
Create a conducive environment for clinical research in terms of regulatory aspects and infrastructure. A single window clearance for the regulatory process is a priority.
Undercutting of the prices should be avoided. Industry should form a body to look into such issues, make an action plan, and also lobby with the government for redressal of issues, offering workable solutions
Initiate a body of regulators comprising India and other Asian and upcoming countries and have it as a centralized regulatory system.
Evolve a mechanism to invite experts who are familiar with evaluating new molecule development and put them on approval committees to speed up the process. Set up an external ethics review boards (ERBs).
Translational research is a huge opportunity for India and hospitals and clinics should be helped to generate patient database.
Human resource development is a huge challenge and DBT and other national funding agencies should play a vital role in giving grants to academic institutions to run programs and courses on developing clinical talent. Training programs for CRAs (clinical research assistants) and investigators. Nursing colleges should also focus on clinical trials.
Streamlining of taxes and service tax exemption to the Bioservices industry
There is a competency gap at the regulatory system and also a capability gap. The industry can take up training of the ethics committee.
Make regulatory approvals predictable.
CROs should be considered as an R&D organization
Industry can help the government design world class educational packages. The industry form a body of industry representatives, which could drive this program for the DBT.
Improve the statutory approvals to conduct animal studies is a huge issue.
Industry should have 4-5 volunteers, who meet at DBT to work on solutions for the betterment of the industry.
DR KK NARAYANAN, president, ABLE (Association of Biotechnology Led Enterprises) and Managing Director, Metahelix, set the discussion in motion by pointing out that clinical research and other contract research services, which constitute the main business areas of the Rs 720-crore bioservices market, would be key contributors to the growth of the economy and early introduction of newer life saving drugs. "ABLE envisions this sector to grow to about Rs 6,500 crore in revenues by 2010. The real challenge lies in sustaining this rate of growth and we need to move up the value chain," he emphasized.
"We need to ensure that the full time equivalent (FTE) of a person is able to match with that of the others in other geographies of the world. We need to move away from ground work to defining and planning experiments, helping people in data generation, managing and deriving interpretations and make the segment more domain knowledge intensive," he said. India's position on data exclusivity and other related issues has to be debated, he added.
DR RASHMI BARBHAIYA, CEO and managing director, Advinus Therapeutics, who moderated the panel discussion, pointed out that animal studies are an essential part in any drug development and to get the statutory approvals to conduct animal studies is a huge issue. It takes almost eight months to get the approvals. Further Type 2 animal studies are expensive. "The cost to habitat the animals is thrown on us and this puts Indian companies at a significant disadvantage as compared to the counterparts," he pointed out. He also called for improving the regulatory environment. For example, there is not a single body to approve INDA. And Indian companies have gone to the UK for human trials. "This is an important area which needs to be taken up on a priority basis."
Commenting on the availability of talent pool in India, he said there was great competition considering "the pace at which new companies are coming up and existing companies are expanding. My prediction is that India's competitive cost advantage is going to be eroded in the next five-seven years. We need to take India to a level where we remain competitive in the next few years."
Dr Barbhaiya expressed concern over the manner in which we are undercutting the prices. "India's biggest threat is Indians and this is definitely a real issue that needs to be addressed. The fundamental issue is we are not uniting. We need to unite and form a body which will look into such issues, make an action plan, and also knocking on the doors of the government for redressal of issues, offering workable solutions," he suggested.
Dr Rashmi also suggested an out-of-box solution that can make a big difference to the CRO sector. He suggested creation of a body of regulators comprising India, Malaysia and a few other upcoming countries and "have it as a centralized regulatory system."
BHASKER IYER, managing director, AstraZeneca, touched upon the heterogeneity aspect for targeted therapies. Stressing on the need to sensitize people on clinical research, he said that it was very important to create a conducive environment for clinical research in terms of regulatory aspects and infrastructure. "We need to have a single window clearance for the regulatory process," he stressed.
Bhaskar Iyer also suggested that the import licence for CROs be granted for a period of two-three years as this would reduce the hassle of going back for a fresh licence. "Currently, we get it for one year."
CROs should be allowed to increase the number of patients without having to go back for further approvals, he urged, adding that the government should facilitate export of tissue samples of genetic testing specific to protocol.
Underlining the importance of data management of clinical trials, he said many central laboratories have helped in participation in clinical trials in phases. "One sees an increased commitment in terms of designing protocols and assessing clinical trials' results. Teaching institutes are laying emphasis on clinical research and corporate houses have added to the value chain at different levels of engagement with the CROs," he observed.
However, the flip side of this scenario is the unpredictable timelines of approval, the not-so-supportive media and lack of ethically engaged PR agencies to create awareness among people, he lamented.
Stressing on the need for a special curriculum on clinical research, he said patient safety during clinical trials is of paramount importance and "adequate checks and balances in clinical research are with different stakeholders at different levels, which ensures the safety of patients."
DR DHANANJAY BAKHLE, director, medical research and regulatory affairs, Aventis Pharma, in his brief presentation, said, "The face of clinical trials has changed considerably in the last few years and we are beginning to see a phenomenon of industrialization of clinical research. Clinical trials are no longer confined to the academics in the institutes. It has become a very big industry today. Clinical Research Organizations (CROs), the profit entities for clinical research, are now dominating the market for clinical research.
Stating that clinical trials in India was a major topic for discussion at a number of global conferences in the US and Europe lately, Dr Bakhle said, "We first have to dwell upon the question that are we really serious about making India the clinical research hub for the rest of the world and how committed are the industry and the government in this effort."
"At present the ministry of health is playing the role of facilitator for clinical trials, but it also needs to be the regulator. Overall there is a positive scenario but we do not have a comprehensive policy for clinical trials. The biotech policy lacks a comprehensive national clinical research policy," he rued.
Drawing attention to the widespread growing criticism, especially in the western media that the multinational companies (MNCs) were trying to exploit the Indian population for clinical trials, he lamented that India did not have the harmonized standards for conducting clinical trials. "There could be ethical issues also when we talk about clinical trials conducted only for regulatory purposes," he pointed. "It is very crucial for us to ensure collectively a very good image for clinical research in India," he noted.
KIRAN MAZUMDAR-SHAW, CMD, Biocon Ltd, opined "We have very unique kind of patient access and we do not have to go for refractory patients as is done in most parts of the world. We have very interesting opportunities in a large number of disease segments and personalized medicine is also another unique opportunity as there are many patients and the stratification of these patients is possible here." However, there are two key issues that are not conducive to this segment-the regulatory aspects of this industry and the skill base, she said.
Pointing out that the ethical committees at the various institutes are taking a lot of time to give clearances, she said it would be ideal to have an external ethics review boards (ERBs) back these committees for speedy approvals.
Noting that translational research is a huge opportunity for India, Shaw said there was a need for hospitals and clinics to start generating patient database. "They should not rely on patients to keep their medical histories," she said.
"Human resource development is a huge challenge for us. We will not be able to meet the needs of the industry if we do not develop this resource fast," Shaw said and urged the DBT and other national funding agencies to play a vital role in giving grants to academic institutions to run programs and courses on developing clinical talent.
"The government must play an important role in training more CRAs (clinical research assistants) and investigators," she stressed. "Medical colleges should focus on translational research and start emulating the Harvard or Johns Hopkins Institute for research. We also need our nursing colleges to focus on clinical trials as the paramedical community has an important role to play in clinical trials," she said.
BHARAT DOSHI, managing director, Kendle India, said there are many advantages as well as disadvantages in clinical research in India. However, the biggest plus point is the low cost advantage which is unique to India and that can be negated because of other concerns in the future
Since India's competition is no longer with developed western countries, but with developing clinical trial regions like CEE and other parts of Asia-Pacific region (including Australia), streamlining of taxes will be help the Indian CROs. "As per the Economist Intelligence Unit's benchmarking survey in 2005, which included seven Asian countries, despite all the regulatory advances we have made in the last two-three years, India's overall ranking was fifth. It was ranked first on cost advantage, but ranks sixth in the overall taxation regime, seventh on industry skills pool and regulatory processes, seventh on the business environment parameter. On the taxes front too the ranking is very low-seventh in corporate tax rates, fifth in sales tax and VAT regime, and fourth in terms of specific industrial incentives," Doshi said.
Pointing out why the high rate of service tax will affect the clinical research industry, he compared the cost of clinical development in India with others. The cost of development was about 60 percent of that in the US while that in CEE and other Asian countries (excluding China and India) is estimated as 70 percent of that in the US. "So we are faced with the threat of losing to our competitors in Europe and other Asian countries," he said and made a strong case for exemption of service tax for clinical research in India.
DR VINOD MATTOO, medical director, Eli Lilly India, pointed to potential fatal flaws. There are two or three issues that need to be fixed. There is a competency gap at the regulatory system and also a capability gap. "There is a need to enhance competency and capability. Bioethics is a process issue. And the industry can take up training of the ethics committee."
DR SURINDER KHER, CEO, Jubilant Clinsys, felt that technical competence at the DCGI level is extremely important. It is also very important to understand protocols, he stressed and lamented the unpredictability on time duration to get approvals, which spans from anything between two months and six months.
DA PRASANNA, vice chairman and CEO, Manipal Acunova, said CROs should be given prominence and considered as R&D organizations. He also advocated creation of a stem cell therapeutics committee.
"We need continuity,"
-Dr MK Bhan, secretary, DBT
Dr MK Bhan heard the views of the panelists from the CRO sector and responded to them. Dr Bhan shared with the industry some of the initiatives that DBT has undertaken in the last four months.
W e need to create a process of change that will drive whatever else we want to do. Here the industry's help is needed. We can create a group of 4-5 people who can review the progress on issues and manage them.
With reference to human resource and training, we have got 30 applications from hospitals for establishing clinical research centers. About 29 of them were horrible. So I worked with some of them to create a prototype for providing clinical training. Eight of them have been designated and we are going to put Rs 20 crore before December for the training institutes. The challenge here is to develop the content of the programs and I need industry's help, a body of three people, who can drive this program and help in design the packages. We have an agreement with the NIH and Johns Hopkins to use their material. There is money but I do not have resources to drive. Further, the industry should be forthcoming to help the institutes as they do not have the expertise in approaching with proposals.
The DBT will give Rs 60 crore each year for clinical research programs. We will run a regulatory school. We will get the first batch by March 2007. DBT will start translational research in January 2007, for which the government has already released Rs 150 crore. The DBT would offer two types of courses, a fellowship in research, and a masters in translational research. The UNESCO center that we have created in Delhi will run the programs in partnership with Harvard. There are a number of human resource initiatives. We plan to do massive funding for training centers, clinical trial centers and advanced data management centers. Further, we are ready to fund any training programs initiated jointly by industry and academia.
But it will still leave us short of people, who can do world class regulation. It is a big issue. We should get into DCGI's office as a partner organization, with continuous informed management support, it make world class regulations possible. I will make this offer to the minister of health. The translational research will also be able to help the regulatory authorities.
The DBT has funded 50 clinical trials this year and will bear the expenses of clinical trials for innovation from any Indian company. We are moving into a big way in looking at product evaluation as a responsibility of the department. The a national biotech authority will be cleared shortly.
Registering clinical research centers as a R&D is an attractive thought. It also will make these centers eligible for government support in some form or the other. DBT will fund clinical trials for any innovation from a local Indian company. We have funded 24 companies and we have hired private CROs to monitor them and DBT is paying Rs 50 lakh per CRO. We are moving in a big way into product evaluation as a responsibility. Average spending on a trial has been $1 million. I have put a policy statement on partnerships with large companies to give us a space to work with them.
BioPharma & Globalization
September 5, 2006, Mumbai
The BioPharma sector has crossed $1 billion figure (Rs 4,700 crore) in 2005-06 with the exports alone accounting for 53 percent of that figure. This shows that Indian biopharma companies are going global. Yet, Indian companies do not figure among the list of global biotech companies. The moment Indian companies enter into the league of Top 20 Global BioPharma companies, the sector will be highly regarded by the global community.
The BioSpectrum CEO Summit in Mumbai, held on September 5, 2006, focused on how the Indian BioPharma companies can become global majors. Dr Cyrus S Poonawalla, Chairman, Serum Institute of India Ltd, as the chief guest, said that a lot of vision has to be put to make this dream a reality.
Nitin Deshmukh, Head-Private Equity, Kotak Mahindra Bank Ltd moderated the panel discussion to figure out the areas, which would support the companies to become global. The experts on panel included Dr Poonawalla, Dr Sanjeev Kumar, vice president and head, biotechnology, Zydus Research Center, Cadila Healthcare Ltd, and Dr Dhananjay Patankar, head, biotechnology, Intas Pharmaceuticals Ltd, and Dr S D Ravetkar, senior director, Serum Institute of India Ltd.
Indian biopharma can get global recognition, if a lot of vision is put as a whole.
The Indian biopharma can become competitive if organizations focus on quality products and innovativeness and look at strong partnerships and collaborations.
The government can be very supportive by not being interfering and quickly clearing the norms. The whole industry should get together and lobbying in New Delhi be strengthened considerably.
One should have the passion and dedication along with commitment to really go global.
Developing infrastructure, besides strong R&D and product is the most important consideration. The government should support infrastructure building.
Go global with a strong pipeline of novel biologicals by scouting alliances both internationally and with the Indian academia.
Develop expertise and knowledge base about the regulatory requirements, particularly those of the western markets. Encourage and support reverse brain drain to catalyze the growth of the biotech industry.
There is a need to upgrade the skill sets and converge the technical expertises. There should a tripartite agreement between CSIR labs, academia and the industry to do basic and fundamental research in some of the identified areas.
Contract manufacturing will propel a faster growth. Strengthen the capabilities, skill sets and infrastructure in contract manufacturing.
Companies like Serum Institute of India Ltd and Biocon Ltd are globally well known. For example, Serum Institute of India is the largest exporter of vaccines and immuno-biologicals of the country with products being exported to 140 countries across the globe, thus gaining worldwide recognition as a reliable source of quality vaccines which form part of the global vaccination programmes. Similarly, Biocon is one of the largest suppliers of statins and an integrated biotech company. In addition to these, there are many other companies already exporting biologicals to various countries. Clearly, Indian biopharma companies have global ambitions, but India's status at the global level needs to be enhanced.
There are many dimensions to becoming a global power. One of them is the extent to which R&D can be commercialized on a global basis. India can become a primary offshore manufacturing site for the products sold in the US and other global markets. Indian companies need to focus on R&D. It is here one needs to figure out how the capital market can support the industry. The Indian biopharma can become competitive if ethical and quality issues can be addressed. To make this happen organizations need to focus on quality products and innovativeness and look at strong partnerships.
DR SANJEEV KUMAR sharing his thoughts on the recipes for success said, "The three companies namely Amgen, Genentech, and Genzyme became massively global in the last 25-30 years with their novel biologicals. We are recognized as a potential threat to the global biogenerics companies. So in India, we have the kitchen. We are already cooking the dishes. Now we have to start selecting the right dishes. There are some misses and gaps, which need attention. We hardly have any novel biologicals in the pipeline. We should be thinking in this line. It's the responsibility of the industry first to consider this and the government can facilitate this later. We have to adopt technology-driven approach, look for niche opportunities, and scout for global partnerships with small biotech companies for developing novel biologicals-recombinant proteins, monoclonal antibodies and vaccines. We should also scout for alliances with the Indian academia for novel biologicals. Few companies have done this. And here the things will move faster."
DR SD RAVETKAR suggested convergence of technologies and human skills as a way out to make global products and global companies. "It is always people behind a product that matter a lot. There is a need to upgrade the skill sets, merge the technical expertises and acquire passion for doing things better. It is also essential to create and enhance the confidence levels of the scientific community. Besides validation aspects, training of the people is another area that needs attention. Although it is an uphill task we have to do the microanalysis of each and every thing," said Dr Ravetkar.
Further, rather than imitating others and launching the same kind of biologicals, we need to identify the niche areas and put dedicated efforts to launch new biologicals. "There should a tripartite agreement between CSIR labs, academia and the industry to do basic and fundamental research in some of the identified areas. Globalization is simple provided one pays attention to the smallest things and tries to do a gap analysis of the technology and works on bridging that. It's only simple things that make big difference for the company to go global."
DR DHANANJAY PATANKAR, sharing his views on the need for building knowledge and expertise in the development, manufacturing and marketing of therapeutic products said, "We should not narrow down the scope of globalization by restricting ourselves to the regulated and developed markets like North America and Western Europe. We should also look at markets in Latin America, East Asia and various other geographies and cover a large part of the world."
He likens the manufacturing facilities and plants of the biopharma sector to the hardware component of the IT industry. "The Indian companies have well under stood the cGMP systems, FDA and EMEA requirements in design and setting up of the facilities, because of the long association and experience in the Pharma industry. And software of the IT industry is the data that we generate in support of the products in the biopharma sector. Here not many expertises are currently available. We have a long way to go. It gets less attention than it deserves. Using our regulatory system as a base we have to move ahead, as the regulatory requirements in the US and the Europe are beyond these guidelines. We are not as comprehensive as we would have to be to take the products to the European market."
"We must understand the rules of the game in developing expertise and knowledge base about the regulatory requirements, particularly those of the western markets. Our scientists must understand these regulations so that they can develop their products and develop strategies accordingly. They will be in position to quote from the guidelines and defend and justify their stand on the data they generated. The management and companies have to inculcate such an attitude amongst the scientific community. This kind of approach should be initiated by the industry, as it is not within the scope of academia or university systems," said Dr Patankar.
It took nearly three decades for Indian pharmaceutical industry and two decades for IT industry to get the global acknowledgement.
Nitin Deshmukh pondered if we were talking about scale, too early, for the Indian biotechnology industry considering its size to get global acknowledgement?
Dr Dhananjay Patankar opined that as a nation we are now talking a lot on globalization than a decade ago. A lot of potential is there in India, although in terms of total size, we may not be there as quickly. "And it's time to start talking about it".
In response to the question if scale was important or innovation to make a global impact, Dr Cyrus S Poonawalla said, "Both are equally important as one follows the other. There are a lot of companies worldwide which are successful more because of pilot scale and to some extent they have been able to commercialize innovation. For example, the success for Serum Institute comes not because of the pilot, but on how it is scaled up to meet the global requirements."
Dinesh Dua, President- International, Wockhardt Ltd, added, "One thing that will propel the growth faster than the pharmaceutical industry is contract manufacturing. The leading biological companies including the biggies are coming to India sensing the capabilities, skill sets and infrastructure India has in contract manufacturing."
So what is hampering the Indian companies in doing innovation? According to Dr Sanjeev Kumar it is mainly the regulatory support system. A single window clearance for faster approvals from the government can help the industry to do better things. "Besides, we have to first have the know-how to make biosimilars or vaccines and also know what can sell. Once you have the skill sets in place, which I believe many Indian companies do have, it is only a matter of time that we will see more R&D coming up in novel biologicals."
Dr Cyrus S Poonawalla too acknowledged that the government's support was lacking tremendously. He said, "The government is not very forthcoming in its responses. It's only the lip sympathy that we are getting. People like Dr Bhan, Dr Ganguly, and Dr Mashelkar are very talented individuals, extremely eloquent but as a team they are unable to deliver effective enough to get through one single window clearance, which is a prime need of the hour. As one body, we should try to press this immediately. We have been discussing this for almost three years now, yet nothing really has happened."
Do Indian companies lack the confidence to make the products of global nature? "The process should be under the control of a person and not vice -versa. In biopharmaceuticals, a person should predict the behavior of the product and also know the yield he is going to get. That is still missing. Unless there is a 360-degree analysis of the complete procedures, this won't be possible. Instead of looking at the tangible advantages and short-term gains, we ought to have a long-term vision, which will pay results," argued Dr Ravetkar.
Would the reverse brain drain-that has catalyzed the growth of the IT industry and to a certain extent the pharma industry-catalyze the growth of the biotech industry? Dr SD Ravetkar, said "It would help, but to a certain extent only, as the IT and biotech models are different. IT is more a services-oriented model, while biotech is altogether a different ball game with a long gestation period while launching the products."
Dr Dhananjay Patankar observed, "The fresh graduates that we get at the masters level and at the PhD level are quite capable, intelligent and talented. But they lack hands-on-knowledge. Reverse brain drain will really help get a bunch of skilled people and acquire the skills and experience. It is a good catalyst in raising the level of the biotech industry."
Dr Bansi Lal, president, R&D, Calyx Chemicals & Pharmaceuticals Pvt Ltd, pointed out that the numbers in doing good science is a debatable subject. "The question is how to promote this leap of opportunity at the college and university levels?" he said. Dr Poonawalla too sees it as an important issue. "It's not easy to resolve either. Earlier, it was difficult to attract good talent to India. But now because of the burst in the biopharma activity, it is easier to attract the talents based outside of India," Dr Poonawalla explained.
Dr Ramani Iyer, senior vice president strategy and planning, Nicholas Piramal India Ltd added that there was no incentive for the brightest students to go for biology. The creamy layer of students with 95 plus is opting for computer science, physics or chemistry. There is a need to encourage and motivate the students at the grass root level to look at biology as an area of opportunity.
Dr Ramani Iyer raised another important issue. "We have government, industry, entrepreneurs, ideas etc but where is the capital market supportive for innovation?" Dr Dhananjay Patankar suggested, "As in the pharma industry, first plough the revenue then invest in research activities. It's going to be slow process. We have to first establish a steady revenue stream and then plough it back into R&D. If one wants to accelerate and have the skill set to grow higher then one does require capital funding."
Globally scale is achieved through either Mergers or Acquisitions (M&As). "Will that model work for Indian companies and can this be considered by the Indian biopharma companies to go global?" asked Nitin Deshmukh. Partnership is definitely not only a viable but also a necessary model to work with. We don't have skill sets and capital to invest in all the points of the chain like discovery, manufacturing, clinical trials and infrastructure. "Definitely alliances with companies providing either technology or other kinds of aspects in which we are not strong in will be a right model to look at," observed Dr Patankar.
Dr Cyrus S Poonawalla added, "The opportunity to do global acquisition is going to be difficult. However, we have to look at acquiring the skill sets and technology to go global and develop our fundamental research and come up with our own IP. We are 10–15 years behind the global players and if we have to catch up with the rest of the world and move faster, scouting for alliances is an easy way."
"Passion, dedication, and commitment are the key attributes to go global,"
-Dr Cyrus S Poonawalla, Chairman, Serum Institute of India Ltd
Today, we have many companies from India that are globally competitive. That has happened at a time when there was very little support given to the industry by the government except lip sympathy and things were unfavorable towards industry. Today, things are much better and we all have to collectively move to the next phase. The general attitude and perception about the biopharma or biotech has improved. People are now looking forward to India. And sooner or later it will become a reality.
One should require passion and dedication along with commitment to really go global and also see to it that the objective is achieved. It's not just the commercial things that will make the biotech industry go global. Leaders such as Narayana Murthy have shown that it's passion that made them to grow the IT industry global, which we never dreamt of 5-10 years ago. We have a very good jumping board in India as we currently have the maximum number of USFDA approved manufacturing facilities outside the US.
The biotech industry has a much bigger task than the pharma industry to accomplish. The registration and formalities for doing clinical trials are much more complicated than pharma products. A lot of financing is required. The CROs need to work a lot on not just doing the bioequivalence studies but also introduce generic products and bulk drugs in the US.
If we look back at Serum Institute, we went into an area where there were few takers, right up to now, for our products. Our vision was to create a business which would have a proportion of growth that was not estimated by the WHO and so called experts who were doing all the strategy and all the statistics. That was an important decision and it had not just come like that. It has come with a vision and with strong resources background.
One of the most important things to go global is the infrastructure, besides strong R&D and product. The government's support to infrastructure building is abysmal. Infrastructure makes all the difference to the foreign buyers.
Single window clearance has not yet happened. This has been delaying all the projects, overhead costs and creating frustration, especially in the smaller ones who don't have a very strong representation in New Delhi. I think the whole industry should get together to see that our lobby in New Delhi is strengthened considerably, without which our clearances will continue to be delayed.
Building mini giants
September 27, 2006, New Delhi
The Delhi leg of the 3-city BioSpectrum CEOs Conclave and the last in the series after the summits in Bangalore and Mumbai was held on September 27, 2006. Over 50 CEOs, research and academic institute heads gathered to discuss the strategies on how to accelerate the growth of the Small and Medium sector Enterprises (SMEs), the theme of the conclave being "Industry Growth: From SMEs to Global Giants." Hari S Bhartia, co-chairman & MD, Jubilant Organosys, moderated the panel discussion in Delhi. Dr RA Mashelkar, DG, CSIR, was the chief guest for the evening and he emphasized on the importance innovation.
Currently the global R&D outsourcing amounts to $40 billion while the out- sourcing in India is around $120 million and most of it is in the clinical trials and formulations space, while less than 1 percent has gone into target discovery. Thus with the present global target discovery CAGR at about 35 percent, India has a possibility of even more than 100 percent growth in this arena.
Make the investor environment friendly to the biotech community.
Make the biotech investors more aware about the biotech businesses and models.
The VCs in the US are ready to invest in the late stage companies but there is a real gap in funding the early stage companies. The companies are looking at a new model for seeking innovation and how to close that gap between the funding and early stage innovation. Indian companies can explore and provide a new business model.
Streamline operational environment, licensing norms, duties, and approval timelines.
Build adequate facilities at the airports for storing biologicals and biosamples and other infrastructure.
Increase R&D pipeline in industrial research and development. It is essential that the entire government machinery, regulatory and financial machinery and the private entrepreneurs set a goal of developing about 500 molecules.
A strong intellectual portfolio is more important to a start-up than an established company. They should focus on choosing the right valuation method and talking to the right investor.
There are thousands of preclinical candidates lying all over the world as orphans because some of them are not blockbusters and are just lying on the shelves of the big pharma companies. That is where we can put our innovation skills to use, in license them, take them to proof of concept and then out license them.
Create bioclusters, where the academia, service providers, industry, and venture capitalists come together and continuously interact on new ideas and develop them.
RAJEEV SONI, COO and president, Premas Biotech, talking on the experience and the challenges involved in setting up a biotech enterprise, said, "When we launched Premas Biotech six months back, we knocked about 60-70 doors for funding both in India and abroad before the actual funding came from an investor company in the UK. While I feel honored that the funding came from abroad, I am very sad that a lot of funding agencies in India did not fund our venture due to various reasons. The investor environment is still not very friendly to the biotech community."
"The challenges that we faced while setting up the business venture were many. We found that there were hardly any knowledgeable funding partners. When we sounded our idea to the funding agency or the Venture Capitalist (VC), they did not have any understanding of what we wanted to do. There is a very complex operational environment, which is a major hindrance to start a new biotech company. There are multiple licensing agencies and the processes need to be streamlined," he added.
Dr Soni further pointed out that, "We all talk about the cost advantage of India. But this cost advantage in manpower is offset by the duties we pay on equipment and consumables. Hence, we cannot be competitive in the global environment and provide services unless there is an incentive by the government for getting equipment at reasonable prices. And if one wants to go for duty exemption or set up an export-oriented unit, the approval timelines are very long."
The Premas Chief also touched upon the quality of manpower. "We have theoretically well qualified people but they lack hands on practical training." Another key concern raised by him included inadequate facilities at the airport for storing biologicals and biosamples at –70 or –20 degrees centigrade for longer durations. He added that, "The government, regulatory bodies must believe and demonstrate that new and innovative R&D is a way to bring about scientific and social change not only for creating jobs but also for betterment of livelihood"
DR RAMA MUKHERJEE, president, R&D, Dabur Research Foundation stressed that the R&D pipeline in industrial research and development should be high. "If you look at the big foreign companies, their R&D pipeline is at least four or five times more than their products in the market. And this speaks about their R&D investment and focus. In India, the government R&D, the CSIR institutions or the DBT institutions can bring the products to a certain level, but the actual product development has to occur in the industry labs. If the industrial R&D is not strong then it is very difficult to take the products through."
"There are thousands of molecules in the preclinical and clinical phase in the rest of the world, while in India we have fewer than 10 molecules in the clinical phase. It is essential that the entire government machinery, regulatory and financial machinery and the private entrepreneurs set a goal of developing about 500 molecules. If we do not scale up and optimize, then regardless of the centers of excellence we create, we will not be able to achieve a global standing."
NAVEEN KULKARNI, CEO, Polyclone BioServices, outlining the essentials for a biotech entrepreneur, elaborated that the road to success is not just research, but the ability to turn ideas into businesses; create a flexible, yet efficient approach to building alliance portfolios; strategic planning, identifying and accessing potential partners. "To enable the company to drive sustained growth in the future a strong intellectual portfolio is more important to a start-up than an established company. They should focus on choosing the right valuation method and talking to the right investor," he said.
DR CHRISTOPHER D EARL, President & CEO, BIO Venture for Global Health (BVGH), opined that currently there is an enormous focus on global health accompanied by a lot of global attention and global money and in the US, in the past couple of years, a lot of money has gone in the generation of technology discovery platforms. Talking about the patterns of VC investment, he said, "The VCs are ready to invest in the late stage companies but there is a real gap in funding the early stage companies. The companies are looking at a new model for seeking innovation and how to close that gap between the funding and early stage innovation. And maybe Indian companies can explore and provide a new business model." Complementing the Indian entrepreneurs he added, "I found the energy and the spirit of entrepreneurship in Indians striking. They have a lot of risk taking ability and try a lot of new things that have not been tried before."
HARI S BHARTIA, co-chairman & MD, Jubilant Organosys, spoke about how competitive market forces have triggered innovation, which is the lifeline of any biotech business. Proposing an alternate business model, he said, "There are thousands of preclinical candidates lying all over the world as orphans because some of them are not blockbusters and are just lying on the shelves of the big pharma companies. That is where we can put our innovation skills to use, in license them, take them to proof of concept and then out license them."
"Currently out of the $1 billion that is being spent on the development of a drug, the largest part is being spent from phase II to phase IV development. Right now the ability for Indian companies to take risks in this area is limited. It will probably take us 10 years to be able to develop drugs from a scratch. But, as of now, developing a drug to a certain stage and then partnering or out licensing it is a viable model. In this way, we can start off the mini giants out of India."
Emphasizing the importance of clusters in developing new bio products, he mentioned, "About two thirds of the innovations or patents that are filed world over are from a handful of clusters, where the academia, service providers, industry, venture capitalists come together and continuously interact on new ideas and on how to develop them. It is very important to create such platforms in India as well, where we all can meet and exchange ideas."
Voicing his concerns about the crunch in human resources, Bhartia said, "We are going to have a great shortage of resources in research-the number of PhDs is a serious concern and passion for research is going down. Our education system is not geared towards creativity. We need to create an interest in innovation from an early stage in school. Today, research is a very attractive career option as the pay structures in the industry have already changed and the researchers are one of the highly paid people in the industry now." Talking about the role of academic institutes, he said, "In the academia, there needs to be a strong awareness of going out and presenting their ideas. Just like we have academic councils in research institutions, similarly we must have research councils, which can review and benchmark the institutes for research excellence."
Dr RA Mashelkar, DG, CSIR, who was the chief guest for the evening, emphasized on the importance innovation. Concurring with the views of the other panelists on innovation, he said, "Innovation is the key. In fact it is the key in building competitive nations, competitive enterprises, and creating wealth. Innovation is the key to practically everything." n
'The strategy for the future is focus on innovation and creation of IP,"
-Dr RA Mashelkar, DG, CSIR
The government is moving forward and has set up schemes like the Technology Development Board (TDB), Drug Development Promotion fund, NIMTLI scheme, and SBIRI, for the entrepreneurs. Currently 28 percent of TDB investments are in the biotech arena, which is not a small sum. So investments are coming through. These schemes encourage innovation, risk taking ability and failure is also welcome. Earlier, we had always operated in a region where markets were certain because we could see them, technologies were certain as we had to do only reverse engineering. From there, we have moved to an area where the essential focus is on where the markets are uncertain, and technologies are uncertain. So funds like these did not exist in the past and now by design such funds are being created for entrepreneurs.
The strategy for the future is focus on innovation and creation of Intellectual Property (IP). The country needs entrepreneurship, the right mind, mindset, ability to create and protect IP and venture capitalist support. And the VC support will not be available unless there is IP.
The spirit of entrepreneurship needs to be inculcated. In foreign countries entrepreneurship is something that is being developed and cultivated as a part of a course or a curriculum. Now in India, I am seeing a new change in the IITs, IISc, universities and that is why we are creating a legislation on the lines of the Bayh-Dole Act, where the rights of the innovation rests with the institution."
Hurdles for Biotech Start ups/SMEs