Healthcare biotechnology firms in India: Evolution, structure and growth

Author(s): Parveen Arora

Source: Current Science , 10 August 2005, Vol. 89, No. 3 (10 August 2005), pp. 458-463
Published by: Current Science Association

Stable URL: https://www.jstor.org/stable/24110794

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GENERAL ARTICLES

Healthcare biotechnology firms in India

Evolution, structure and growth*
Parveen Arora

The Indian biotechnology industry, like its global counterpart, is dominated by the healthcare se
The present article attempts to specifically highlight the important characteristics of Indian h
care biotechnology firms by examining their evolution, structure and growth.
The study revealed that the growth of biotechnology companies gained momentum after 199
with a phenomenal growth being observed post-WTO (1995 onwards). Biotechnology healthcare
are predominantly clustered in four states, namely Andhra Pradesh, Maharashtra, Karnata
Delhi. R&D as well as alliances is a common feature of the firms having activity profile m
concentrated in the domain of recombinant therapeutics, vaccines, diagnostics and antibod
recent years, the Indian biotechnology industry has come out with several generic products. Eno
opportunities exist for pharma and biotech firms to find innovative ways to harness the strengt
vaccine development, bioinformatics and traditional medicine to gain global presence and to
a novel drug molecule for the country.

Keywords: Biotechnology, evolution and growth, firms, healthcare.

Biotechnology has emerged globally as a high growth of descending order of number of biotechnology fi
sector with tremendous applications in the areas of human mainly comprised of Australia, China, India, Taiwan,
and animal healthcare, agriculture, environment and pro- Japan, New Zealand, Singapore, Malaysia, Phi
cessing industry. In the pharmaceutical sector, advances and Thailand5. It is interesting to note that deve
in modern biotechnology have initiated a radical change in countries like Cuba, Brazil and Argentina have also tak
the nature of search processes for the creation of new serious initiatives in the promotion of biotechnology
drugs (i.e. creation by rational design rather than by trial India is making consistent efforts to emerge as a key
and error methods). This has led to a radical change in the in biotechnology-related activities and investments en
production of new or rare molecules and drugs with lower with the huge knowledge pool, rich biodiversity and v
costs, novel means for quicker and more accurate diag- pharmaceutical industry. Unlike in USA, Europe and
nostic tests, and new and safer vaccines1"*. Globally, the in India the government largely dominates the bi
health sciences convergence with biotechnology and phar- logy research investments. The government has i
maceutical companies are the most advanced. Biotechno- more than Rs 1000 crores in various public researc
logy is leading the new health economy with around 30 of tutes since the creation of a separate Departmen
the top 200 selling medicines worldwide being developed technology (DBT) in 1986 in the country8. In recen
by biotechnology companies alone or in partnership with there has been active interest and involvement of indus
pharmaceutical companies. Out of 30, 40% are top-selling in this area. India is among the top 12 countries in
biologies blockbusters5. of number of biotechnology companies in the wo
Currently, the global biotechnology market revenues According to the latest official statistics9, biotech
are dominated by the US public traded companies with a and drugs and pharmaceuticals are the dominating
share of 77% followed by Europe and Canada with a share accounting for 36% of the total industrial investm
of 16 and 4% respectively, and the remaining 3% being R&D during 1998-99. According to CII estimate, bio
occupied by the Asia-Pacific. The Asia-Pacific, in terms logy in India employs approximately 20,000 peo
has a share of 2% in the global market. The Indian biotech
♦This article forms part the author's PhD research investigation and nology industry, like its global counterparts, is dom
the views expressed in the paper are those of the author only and not by the healthcare sector10. The healthcare sector ac
necessarily of the organization he works for. for 60%, industrial application 25% and agricultura
Parveen Arora is in the National Science and Technology Management technoloev 15%
Information System Division, Department of Science and Technology, „ T , , . . , . ■ ,
Technology Bhavan, New Delhi 110 016, India. Prominent among India s notable ac
e-mail: parora@nic.in biotechnology in the recent years is the
458 CURRENT SCIENCE, VOL. 89, NO. 3, 10 AUGUST 2005

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 GENERAL ARTICLES

recombinant hepatitis B vaccine, human insulin, erythro search Foundation, Ghaziabad; Biocon India Ltd, Bangalo
poietin, granulocyte colony-stimulating factor, interferon, and Strand Genomics, Bangalore were also held to get an
streptokinase, a world patent for solid state fermentation in-depth insight of these firms and an overall view of
called pla factor, bioinformatics software like Avadis and healthcare biotechnology industry30"35.
Biosuite. The first indigenously developed recombinant
hepatitis B vaccine by the Shantha Biotechnics, Hyderabad
Results
drastically brought down the cost (imported price) from
US$ 16 per dose to around 50 cents in India11,12.
Distribution of biotechnology firms
In the Indian context, empirical works have examined
the R&D, knowledge base, market sales, commercialization
An overall analysis of the directory database shows" the
and alliance of biopharmaceutical firms13-17. Also using
sectoral distribution of biotechnology firms in the country
industry-specific databases, the structure of biotechnology (Table 1).
firms in general has been analysed in terms of parameters
The healthcare sector dominates the Indian biotechnology
such as size, activity profile, product portfolio, R&D patterns,
industry with 44% of firms followed by agriculture, 40%;
alliances, etc.18'19, but all these empirical studies have industrial biotech and equipment, 11% each and the remain
been limited to only a few firms.
ing 11% by bioinformatics, environment, etc. (Table 1).
Realizing the importance of the healthcare sector, an
attempt has been made to portray a more comprehensive
Characteristics of healthcare biotechnology firms
dimension of the healthcare biotechnology firms. The article
endeavours to uncover the current developments in healthcare
Healthcare biotechnology is an emerging industry with
biotechnology industry, i.e. post 2000 and correlate these
majority of the firms being established recently (Figure
with earlier activities. The overall trends and examination
1). About 72% of the firms were established after 1980s,
in various sub-periods highlighting the structural charac
teristics and growth of the firms in this emerging area of
great public interest are also presented. Table 1. Sector-wise distribution of biotechnology firms, 2003f

Sector No. of firms Percentage

Methodology Healthcare 142 44

Agriculture 130 40
Industrial biotech 37 11
The data for the analysis have been primarily derived 36
Equipment 11
from the latest available Directory of Biotechnology Indus Bioinformatics 20 6
tries and Institutions in India 2003, brought out by Biotech Environment 15 5
Consortium India Ltd (BCIL), Department of Biotech Contract services 2 0.6
Total 321 100
nology, New Delhi. The Directory contains alphabetically
arranged list of biotechnology firms in India along with 'Firms may be operating in multiple sectors. Healthcare sector includes
their brief profile. The profile contains details about the firms active in the area of human and animal healthcare.

firm's operational sector, state, establishment year, products

developed, alliances, etc.
The Directory information base11 was suitably trans Beyond 2000
formed according to the need of the study. In this regard,
the healthcare firm records with details of parameters such 1995-2000
V
n_
as establishment year, state, activity domain, manpower,
$ 1991-94
§j 1991-94
alliances, etc. were extracted and a separate core database >>

of healthcare biotechnology firms was created using in-house 1I 1981-1990

1981-1990
software programs. An in-depth analysis of healthcare E
biotechnology firms was carried out using the core data % 1971-1980
Jj 1971-1980
_Q
n
base with the help of appropriately developed software
programs. The outcome of the analysis was further validated
|~ 1961-1970
1961-1970
HI
LLJ

and supplemented with updated information from other 1951-1960

relevant secondary sources like CII reports20,21, Ernst and
Young report5, newspaper reports22-25, Chronicle Pharm Prior to 1950
T"
~T~
abiz weekly reports26, annual reports8,27, websites24,28,29, etc. to
have a more informed picture of the healthcare biotech 0
0 10
10 20
20 30
nology in India. Interaction meets on one-to-one basis Firms
Firms (numb
(num
with R&D chiefs of select biotechnology firms like Shantha 'Establishment
'Establishmentyear
year
Biotechnics; Panacea Biotech, New Delhi; Dabur Re Figure 1. Healthcare fir

CURRENT SCIENCE, VOL. 89, NO. 3, 10 AUGUST 2005 459

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GENERAL ARTICLES

38% of the total firms were established during

ees.1991—
Nearly 31% of the firms like Biocon India Ltd, Panacea
2000, while 11% got established after 2000. Biotech Ltd, Shanta Biotech, Nicholas Piramal India Ltd,
Key firms established prior to 1980s like Wockhardt
Eli Lilly, etc. have a strength of more than 300 employees.
Ltd, Hindustan Antibiotics Ltd, Lupin Ltd, GlandIn terms of technical personnel, 75% of the firms like
Pharma,
Venkatesawara Hatcheries, etc. were primarilyStrand
activeGenomics,
in Eli Lilly, Bharat Biotech, Bibcol, etc.
pharmaceutical business and later got diversified into
have less than 100 employees. Firms having more than 300
technical
healthcare biotechnology. The last decade (beyond 1991)personnel are Wyeth Lederle Ltd, Hindustan
Antibiotics
has seen the emergence of dedicated biotechnology firms Ltd, Panacea Biotech Ltd, Biocon India Ltd, etc.
(DBFs) like Shantha Biotechnics, Bharat Biotech, Alliances
Xyctonare a prominent feature among biotechnology
Diagnostics, Strand Genomics, Syngene International,
firms irrespective of the year of establishment (Table 4).
The alliances
etc. as well as the active participation of pharma majors like involved mainly contract research, contract
Ranbaxy, Cadila, Reddy Research Foundation,manufacturing,
Dabur, marketing, technology transfer as well as
etc. Interestingly, subsidiaries of MNCs like GlaxoSmithKline
joint R&D agreements. Indian biotechnology firms exhibited
and Eli Lilly also emerged on the scene during the alliances
period. with national institutions like JNU, Delhi;
Nearly 77% of the total firms were locatedBARC, Mumbai; NCL, Pune; Bayer (India), IGIB, Delhi;
in four
states, namely Andhra Pradesh (AP), Maharashtra, IISc, Bangalore etc. and with international institutions
Karnataka
likelargest
and Delhi (Table 2). Maharashtra and AP have the Austin Chemical Company, USA; Animal Research
Institute, Australia, Institute of Animal Health, UK, Vetter
concentration of healthcare biotechnology firms, accounting
Pharma, Germany, etc.
for 27% each. It is interesting to observe that Maharashtra,
being a traditional pharma hub, could integrate biotech
nology in its activity domain to come at par with AP, be
ing well recognized as an upcoming biopharma hub. In
Table 3. Distribution of healthcare biotechnology firms by activity
contrast, Gujarat being traditionally known for its large domain, 2003
concentration of pharma majors like Torrent, Cadila and
Total no. of Proportion
Proportion of firms
of firms
Alembic, has been quite slow in adopting biotechnology.
Activity
Activity domain
domain firms doing R&D (%)
Majority of the healthcare biotechnology firms are operat
Recombinant as
drugs, DNA, 32 81
ing in multiple segments like marketing, manufacturing
well as R&D of biotechnology proteins,
products/processes. A hormones,
few
micro-arrays
firms are also active in providing consultancy and services, 30 60
Diagnostics
like Avestha Gengrine Technologies, Biocon India VaccinesLimited, 21 71
Bharat Biotech International, Bhat Biotech India, BCIL, Antibodies 12 92
10 80
etc. In addition, biotechnology firms are working in the Therapeutics
10 80
multifarious activity domain (Table 3). Nearly 60% of theEnzymes
Antibiotics 8 100
firms are engaged in the specialized activity domain like 6 67
Equipment
recombinant drugs, DNA, proteins, hormones, micro-arrays, Tissue culture 4 100
diagnostics and vaccines, having R&D as a prominent feature.
Bioinformatics 4 75

In terms of manpower profile, around 51% of the firms Clinical research trials 3 100

Consultancy 3 33
like RPG Life Sciences Ltd, Xcyton Diagnostics Ltd,
Others 32 69
Yashraj Biotechnology Ltd, etc. have less than 100 employ
Others include firms active in herbal, ayurveda, nutraceuticals, aqua
culture, media reagents, etc.
Table 2. State-wise distribution of healthcare
biotechnology firms, 2003

State No. of firms

State No. of firms Table 4. Distribution of firms by type of alliances by establishment
years, 2003
Andhra Pradesh 38 (27%)
38 (27%)
No. of alliances
Maharashtra 38 (27%)
Kamataka
Karnataka 17(12%) Establishment year No. of firms Indian Foreign Total
Delhi 16(11%)
12(8%)
12(8%) Prior to 1950 7 3 4 7
Gujarat
Tamil Nadu 10(10%) 1951-1960 7 4 5 9

Uttar Pradesh 4(3%) 1961-1970 6 2 4 6

2(1%) 1971-1980 10 3 5 8
Haryana
2(1%) 1981-1990 25 7 8 15
West Bengal
Jharkhand
Jharkhand 1 (1%) 1991-2000 40 13 17 30

Kerala 1 (1%) Beyond 2000 11 5 6 11

Orissa 11(1%)
(1%) Total 106 37 49 86

Total 142(100%)
Some of the firms revealed having multiple alliances.

460 CURRENT SCIENCE, VOL. 89, NO. 3, 10 AUGUST 2005

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 GENERAL ARTICLES

Growth of healthcare biotechnology industry nies are selling kits in areas such as pregnanc
estimation of T3, T4 and TSH, HIV infection, HBV in
Today, the Indian biotech sector has attained a critical fection, HCV infection, rheumatoid diseas
mass in manufacturing as well as research services and ders, cancer (cervix, colon, prostate, lungs,
has slowly built a market for biotech products and services kidney and Hver function tests.
estimated at US$ 700 million. This is expected to reach Monoclonal and polyclonal antibodies for d
US$ 1 billion by 2005 and further to US$ 5 billion by munodiagnosis, tissue typing, clinical assays a
2010, along with the creation of more than 1 million jobs . constitute a huge portion of the market. Key ind
A major chunk of the biotech business has been exports ac- in this space include Lupin Labs> Cadila
counting for 56%, while the domestic consumption accounts Ranbaxy> etc The animal health biotech mark
for 44%. Our consumption of biotechnology products is other expanding field. It is expected38 to t
estimated to increase from Rs 87 billion in 1999 to Rs 94 mmion fey ^ 2(m MNCs and large comp
billion in 2005 while the projected demand for 2010 is animal ^ d]visions based on India indu
around Rs 233 billion. Around 40% of the consumption ?{.^ GlaxoSmithKline; Wyeth,
comprises human and animal healthcare products ' ' . „ , ... ,.
r ' Ranbaxy and Alembic.
, . . Some companies have developed biotech products or
wp armaceutica s entered into tie-ups with glob
The Indian biopharmaceuticals alone have the potential to Products in th
reach US$ 2 billion market size28 by 2010. In 2003-04, world's larSest
biopharmaceuticals occupied the largest market share of cine due t0 the
76% of the total biotechnology business in the country, n'cs' Bharat B
amounting to Rs 2480 crores2836. Biopharmaceutical pro- Serum Institute- In
ducts fall under four broad categories, namely vaccines, recombinant hu
therapeutics, diagnostics and others, like statins. The vaccine and Wockhardt
business is the largest contributor, accounting for 47% of Bke streptoki
the market share, therapeutics 17%, diagnostics 10%; the ^ a" set t0 8a'n
rest 26% is accounted by others, primarily statins business. biopharma busin
Biopharmaceuticals account for 75% of the total exports the coming ye
dominated by vaccines and statins293637.
The domestic vaccine market is currently of the order Bioinformatics
of US$ 100 million and is growing at the rate of 20% per
year38. The key players in the vaccine segment are: Shan- The Indian bioinf
tha Biotechnics, Bharat Biotech, Biological Evans, Cadila, garner a good share
GlaxoSmithKline, Haffkine Bio Pharmaceuticals, Panacea grow to US$ 6
Biotech, Serum Institute, Wockhardt, Indian Immunologi- for Indian enterp
cals, Venkateswara Hatcheries, etc. These companies are beyond the ge
selling DPT, DT, tetanus, rubella, hepaptitis B vaccine, rabies formatics indu
(tissue culture-based), typhoid vaccines, new generation centres. As a result,
vaccines, etc. In the pipeline are the vaccines for protection ern part of Indi
against hepatitis E, malaria, HIV, tuberculosis, leishmani- vis-à-vis few c
asis, etc. There are also opportunities for developing re- players in th
combinant viral vector vaccines and DNA vaccines. Kshema Tech
The therapeutic products are largely consumed in the TCS, GVK Bioscie
domestic market and the major players in this segment in this area are
are: Shantha Biotechnics, Eli Lilly, Bharat Biotech Interna- Life Scienc
tional, Cadila Healthcare, Cadila Pharmaceuticals, Intas products in this a
Pharmaceuticals, Nicholas Piramal, Novo Nordisk, Wock- Avadis, which
hardt, Biocon, Dabur Research Foundation, etc. These a co-distribution
companies are working on diseases like diabetes, tuberculosis, Japanese comp
HIV, malaria, cancer, cholera, heart diseases, etc.

The market for diagnostics is around US$ 100 million investments an

and nearly 50% of the demand is met by imports . In the
diagnostics segment, there is a handful of companies, Spurred by the s
namely Xcyton Diagnostics, Accurex Biomedical, Reametrix, series of investm
Beacon Diagnostics, Bhat Biotech, Bio-systems Diagnos- initiated by the
tics, Monozyme India, Span Diagnostics, etc. These compa- US$ 113.5 million

CURRENT SCIENCE, VOL. 89, NO. 3, 10 AUGUST 2005 461

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GENERAL ARTICLES

statins facility and to increase the number of scientists in being observed in the post-WTO period, i.e. 19
its contract research organization, Syngene. Ranbaxy, India's This period has seen the emergence of DBF o
largest pharma company is planning to enter the biotech large pharmaceutical firms adopting BT, s
segment with investments of around US$ 50-60 million. the established pharma majors like Dabu
Lupin is expanding into biotechnology via acquisitions, Reddy, Cadila, etc. as well as biotechnolog
while Intas Pharma is also making a foray in this seg- Biocon and Shantha Biotechnics. The first
ment. MNC Roche Scientific India plans to invest US$ established spin-off company from the Indi
7.5 million in India for conducting clinical research opera- Science (IISc), Strand Genomics, also eme
tions. India is already a centre for conducting regional tri- riod35. Majority of the healthcare biotechnolo
als for Roche interferon cancer drug 'Pegasys'. In addition, established in post-1990s are private lim
successful attempts have been made by various biotech- Interestingly, MNC subsidiaries like Eli Lill
nology companies such as Wockhardt, Nicholas Piramal, Kline, Pfizer, etc. also gained entry during
and Strand Genomics to mobilize foreign investments for The reasons for the active participation b
their expansion and R&D activities39,40. this period could possibly be the signing
As a result of the 2005 global patent agreement, Indian treaty by India, coupled with the comparat
companies are driven to innovative research and are establish- the country offers like cost, skilled manpowe
ing their own niche areas: Reliance Life Sciences is plan- healthcare domain.
ning to launch genetically engineered skin; Avesthagen The growth of healthcare biotechnology fir
has won a US patent for multiple use genetic modification taken place in clusters. The results show
technology; GlaxoSmithKline Biologicals has plans to centration of companies in four states, nam
launch a number of vaccines like new-generation DTP, Pradesh, Maharashtra, Karnataka and Delh
rotavirus and cervical cancer for its global portfolio. governments are giving a special thrust for
Similarly, Xcyton, a small biotech diagnostic kit-maker of biotechnology cluster development by ev
has made its presence felt in the global and domestic di- favourable policies, including tax and exc
agnostics market5,22. Several biotech medicines are due to as well as the much needed venture capita
come off patent in the next few years, and pharma majors This has resulted in an upsurge of new biotec
are looking at India for contracting research and manu- especially in states like AP and Karnataka. '
facturing of biologic generics. India is becoming a talented chal Pradesh is a recent witness of this phenom
and cost-competitive destination for biotechnology re- Perhaps this could be one of the reasons th
search, product development, toxicity studies and clinical pite being recognized as a traditional phar
trials and has positioned itself to take advantage of moves with Maharashtra is yet to catch up with other s
by governments in the US and Europe to create a régula- ing biotechnology.
tory framework for approving generic versions5,24. The firms that are active in the healthcare
comprised of medium sized and newly dedicated biote
Conclusion nology firms. The activity profile of these firms though
quite diverse, is mainly concentrated in the doma
The Indian biotechnology industry like its global counterparts combinant therapeutics, vacc
is dominated by the healthcare sector. The present article bodies. Biotechnology is a knowle
attempts to highlight the important characteristics of Indian industry; the results portend th
healthcare biotechnology firms by examining their evolu- spective of their size, are en
tion, structure and growth. R&D activities. Thus there is a realization by the firms to
The results have shown that the evolution/growth of carry out innovative research for achieving grow
healthcare biotechnology firms has its roots in the phar- ing out new products in the post-WTO era42,43
maceuticals industry, which reflects the phenomenon taking Globally, the growth of biotechnology has b
place globally. Key pharmaceutical firms established in terized by large alliances or networks of learning4
pre-80s in the country like Wockhardt Ltd, Hindustan BT firms have exhibited alliances both with
Antibiotics Ltd, Lupin Ltd, Gland Pharma Ltd, etc. have international organizations. A study on Indian bi
ventured or adopted at a later stage the biotechnology in ticals also supports this assertion17. Foreig
manufacturing, marketing and also research. Majority of dominated among the firms, thereby reflecting t
the biotechnology companies were established after 1980s to catch up with the new or cutting-edge techn
and this period incidentally coincides with the initiatives with the global research network for higher gr
started by the government during the Sixth Five Year The R&D efforts of Indian biotechnology
Plan (1980-85) to set up a dedicated Department of Bio- stantially lower than those of global count
technology and to nurture and promote biotechnology. the prime reasons for this is the lack of r
The growth of healthcare biotechnology companies structure compared to that of other developi
gained momentum in post-1990s, with phenomenal growth like Brazil, Taiwan, China and Israel. In India,

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 GENERAL ARTICLES

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16. Ghosh, P. K., The role of alliance in modern biotech industries in and suggestions during my personal interactions for the above
developing countries. Curr. Sei., 2004, 87, 874-884. work. Computational and analytical support rendered by Sh Rubul Baruah
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knowledge base and market sales of Indian biopharmaceutical
firms. Res. Policy, 2002, 31, 381-398. Received 14 February 2005; revised accepted 13 June 2005

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