India's Biocon Secures Spot in List of Top Global Biotech Majors

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Researched by Industrial Info Resources (Sugar Land, Texas)--A recent report released by Med Ad News ranked Biocon Limited (Bangalore, Karnataka), India's pioneer in the biotechnology sector, among the world's top 25 biotechnology companies. The report, which listed drug-based firms by revenue and by income, ranked Biocon at 20. Biocon has the distinction of being the only Asian country to be featured in the list, which includes 19 U.S. companies and five others from Europe and Australia. Biocon is the first enzyme company in the world to receive ISO certification. The top 25 companies account for 62% of the industry's sales and more than 90% of the aggregate income. The global biotechnology industry, with 5,000 companies worldwide, is estimated to be a $100 billion industry by 2010.

India's biotechnology sector registered a 20% growth in the last 2007-08 fiscal year with revenue of $2.86 billion compared with $2.1 billion in 2006-07. The sector is set to achieve a target of $5 billion by 2010 and is expected to grow into a $13 billion to $16 billion industry by 2015. The industry had shown a steady 30% growth during the last five consecutive years. It is composed of more than 250 biotech firms in the bioagri, bioindustrial, bioinformatics, biopharma and bioservices segments.

The bioservices segment registered the fastest growth rate of 43% followed by bioinformatics at 31% and biopharma at 16%. Exports of $1.44 billion accounted for 56% of the industry's revenue with biopharma and bioservices accounting for 70% and 26% of the exports, respectively. The biopharma segment accounts for two-thirds of the industry's revenue. Vaccine production is the key driver of the biopharma segment. Shantha Biotechnics (Hyderabad, Andhra Pradesh) meets 40% of the world's demand for Hepatitis B vaccine. India is also the largest producer of DPT and measles vaccines, which are exported to more than 130 countries.

The fledgling biotech industry attracted investments of $690 million in the last fiscal year. International players like Eli Lilly (NYSE:LLY) (Indianapolis, Indiana) and Sigma-Aldrich Corporation (NASDAQ:SIAL) (St. Louis, Missouri) are looking to make forays in the Indian bio-manufacturing industry. Serum Institute (Pune, Maharashtra), Biocon, Panacea Biotech (New Delhi) and Nuziveedu Seeds (Hyderabad, Andhra Pradesh) are the leading domestic players. In the bioagri segment, Nuziveedu Seeds and Rasi Seeds (Salem, Tamil Nadu) are the domestic majors. Biotechnology is playing an instrumental role in revolutionizing the agriculture sector through cultivation of genetically modified crops. The bioagri segment has attracted international players like Bayer AG (OTC:BAYRY) (North Rhine-Westphalia, Germany), Syngenta (NYSE:SYT) (Basel, Switzerland) and Monsanto (NYSE:MON) (St. Louis, Missouri).

Late last year, India unveiled a biotechnology policy to promote research, innovation and product development in agriculture, animal productivity, biomanufacturing, environment and human health. The industry, which has been facing an acute shortage of specialists, is now capitalizing on the current wave of downsizing in the biotech and pharmaceutical sectors in the U.S. and Europe. Scientists from India are returning to explore opportunities in India's burgeoning biotech sector. Bangalore has emerged as one of the key drivers of India's biotechnology industry, accounting for 60% of the country's exports during the last fiscal year. Twelve of the 24 new firms set up in this sector in the last fiscal year are in Bangalore. The city has 200 biotech firms, which attracted investments of $250 million in 2007-08.

India's pharmaceutical industry is the second-fastest growing industry in the country with a growth rate of 27.32%, revenue of $13 billion and exports of more than $6 billion in 2006-07. India plays a significant role in the global pharmaceutical industry as a key manufacturer of active pharmaceutical ingredients and drug intermediates. The country accounts for more than 22% of the global generics market and is the fourth largest in the global pharmaceutical arena in terms of volume. It is expected to develop the industry into a $35 billion business over the next decade. India has the largest number of pharmaceutical facilities approved by the Food and Drug Administration outside the U.S.

Ranbaxy Limited (Gurgaon, Haryana) is the country's largest company in the pharmaceutical sector with a turnover of more than $1 billion in 2006-07. On June 11, Daiichi Sankyo (TYO:4568) (Chuo, Tokyo) announced that it had acquired a majority stake of more than 50% in Ranbaxy Limited for $3.75 billion. Dr. Reddy's Laboratories (Hyderabad, Andhra Pradesh), Cipla (Mumbai), Sun Pharma (Mumbai), Lupin Labs (Mumbai), Aurobindo Pharma (Hyderabad, Andhra Pradesh), GlaxoSmithKline Pharma (Thane, Maharashtra), Cadila Healthcare (Ahmedabad, Gujarat), Aventis Pharma (Mumbai) and Ipca Laboratories (Mumbai) are other domestic majors in this industry.

The industry is currently fragmented with more than 3,000 small and medium manufacturers. Domestic companies are involved in the manufacture of new formulations and subsequent international market launches. They are also emerging as outsourced manufacturing facilities for international clients, which have also begun to outsource clinical trials to Indian firms. SIRO Clinpharm (Mumbai), in collaboration with Covance Incorporated (NYSE:CVD) (Princeton, New Jersey), is conducting clinical trials for clients in Europe, Japan and the U.S. The pharmaceutical industry entered the "product patent regime" in 2005, which revolutionized the sector and attracted foreign investments in manufacturing and R&D efforts. International majors like GlaxoSmithKline (NYSE:GSK) (London), Johnson & Johnson (NYSE:JNJ) (New Brunswick, New Jersey), Novartis (NYSE:NVS) (Basel, Switzerland) and Pfizer (NYSE:PFE) (New York City, New York) already have an established presence in the country. The industry presents investment opportunities of $10 billion over the next five years.

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