Fledgling start up ecosystem in Indian Biotechnology - an opportunity we do not want to miss!
Date: Tuesday , January 26, 2016
The biotechnology industry is a prominent knowledge-based industry in India. It also has the potential to play a pivotal role in the rapid economic development of the country. It is interesting to note that India ranks among the top 12 biotechnology destinations in the world, and second in Asia after China. We have an opportunity to leverage this to be a player in the global healthcare.
The sheer size of Indian population offers a huge market for biotech products and services. The country has multiple advantages - skilled resources, knowledge, focus on research and development (R&D) facilities and cost effectiveness. However, concerns about intellectual property rights and regulatory friendliness are a reality. But with a maturing industry, these challenges are expected to find solutions through better policies and industry participation. We are in a decade where Indian biotechnology companies, mostly perceived as generic manufacturers of blockbuster drugs without patent protection, are breaking the mould to innovate and develop products and technologies that are contributing to the advancement of global healthcare.
The Indian biotech sector will touch the $100 billion mark as per the estimates made by the Association of Biotechnology Led Enterprises (ABLE). India is a known destination for pharmaceuticals, API formulations, vaccine manufacturing and outsourcing of clinical trial and research contracts. We have seen good growth in other areas of biotechnology such as diagnostics and therapeutics, bio-fertilisers, hybrid seeds and bioinformatics. Increasing expense on exploratory research and drug development has been a focus for some of the top biotechnology leaders in the country, which according to me is a necessity for the growth of the industry.
Startups in Biotechnology
The biotech sector has experienced significant growth since increased government spending from 1985. Budgetary allocations to the sector have also increased. In addition to financial assistance, the Indian government is also offering full support to the biotech sector by providing non-financial incentives at both the central and state level. For instance, the DBT set up the Biotechnology Industry Research Assistance Council three years ago. Its Biotech Ignition Grant scheme now provides entrepreneurs Rs.50 lakh and mentorship over 18 months to prove technology ideas before seeking angel investment. Multiple public-private partnered incubation centres have been set up in different parts of the country - prominently in Hyderabad and Bangalore and are creating a dynamic atmosphere for the entrepreneurial minds in the domain. Bangalore itself accounts for 52 percent of all biotech companies in the country. Many believe this is due to the conducive environment available within the city, venture capitalist funding and incubator complexes which provide a scientific ecosystem to encourage nascent companies to thrive.
It has also come up at a time when incubators, accelerators and angel investors are helping entrepreneurs to realize their life sciences startup dream. In 2014, life sciences and medical companies bagged 12 percent of venture investment, as compared to negligible amounts just three years ago. 2015 has been even better. Some of the diagnostic chains have gone public in 2015, suggesting the rapid growth that this industry is experiencing.
The results are to be seen. Latest reports suggest that out of around 800 biotechnology companies in India, around 500 are startups. And we hear about new ventures focusing on the latest technologies enabling personalized medicine, which is the focus for the global healthcare. Multiple startups providing EHS, remote health care/telemedicine, microfluidic lab-on-chip platforms, stem cell therapy products, natural enzymes for medical use, 3D printing and data storage solutions for healthcare, are proofs of an emerging ecosystem in the country. To note is that, all these startups are able to attract the brightest talents from across the world, including the biotechnology hubs in the U.S.
Funding was difficult to come by for the healthcare entrepreneurs; but recently, the interest has picked up with noted VC firms and HNIs willing to invest and nurture these enterprises. In only the diagnostics sector, over $35million has been invested in India for the year 2015. This highlights the interest of the investment community in this sector. We have also seen a trend where Indian biotech companies have shopped internationally, in line with their global aspirations.
In summary, India has an opportunity to be a key global biotechnology player. It is up to us, the government and the intellectuals, to leverage and sustain this momentum for building billion dollar companies from India!