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HYDERABAD, June 21

THE global biotech industry has bucked the slowdown blues registering a robust business even as India in the Asia-Pacific region has emerged as a significant force in the global biotech industry, according to Ernst & Young report for the year 2002.

The report `Beyond Borders — the Global Biotechnology Report' which was released by the Andhra Pradesh Chief Minister, Mr N. Chandrababu Naidu, on Friday, highlights growth imperatives.

This will primarily result from the increasing R&D collaborations of Indian companies with foreign and domestic firms, Government support, tax incentives, rising public interest, growing investment by strong, traditional companies and viability of significant investment.

The Director of E&Y, India, Mr Utkarsh Palnitkar, after the launch of the report here, said India is poised to emerge as a major hub for the biotechnology activity in the Asia Pacific. Indian entrepreneurs can harness low cost of innovation and create platform technologies and offer contract research services to the global biotech industry.

"The Government initiatives to create biotech infrastructure in every State will provide further impetus to the industry,'' he said.

The Indian expertise in the manufacture of generic pharmaceuticals has also provided a platform for the biotech industry. Worth about $3 billion in 1997, the pharma industry is expected to rise to $ 9 billion by 2005. Significantly, the areas of pharma, biotechnology and research are blurring.

Further, India's success in information technology, combined with its strengths and technology provide excellent opportunities in the field of bioinformatics.

"Traditional IT companies are translating their strong capabilities in data mining and warehousing to business models based on biological data," the report noted while citing examples of IBM's India Research Lab and Satyam's five-year agreement with the Centre for Cellular and Molecular Biology.

The global biotech industry comprises 4,284 companies, of which 622 are public and 3,662 private, spread over 25 nations. The 622 public companies generated revenues of $35 billion, spent $16 billion in R&D and employed more than 1,88,000 people in 2001. And, there were more than 480 pharma-biotech collaborations and almost 550 biotech-biotech partnerships worldwide.

Issues relating to financing both domestic and cross-border venture capital features prominently in the strong growth of the global biotech industry in 2001.

Despite a lacklustre performance of the IPO market, the global biotech industry raised more than $10 billion in venture capital, private and public equity funds, representing its second-best financing year ever, after 2000.

Last year, in the US, the biotech companies raised nearly $8 billion in equity financing, while biotech firms in Europe secured more than $2 billion and Canadian firms approximately $900 million.

The biotech market is developing in India with VC funds such as ICICI Venture Capital and IL&FS venture capital's joint venture with the US-based Invesco Private Capital, State-owned VC funds like in AP or the Department of Biotechnology and corporate venture funding such as Dr Reddy's.

The report observed that the sector is an emerging force in the Asia-Pacific region experiencing notable expansion in Australia, China, India and Singapore, which are now home to more than about 500 companies.

The E&Y report said the risk-taking culture encourages new ideas and protection of IPR and academia support for transfer of technology was necessary to develop the industry.

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