Is Indian Life Sciences Really in Limelight?
India–the land encompassing prodigious flora and fauna is flourishing with untapped opportunity in the field of life sciences. The rapidly increasing demands in health care, food, medicines, all such urgent attention-screaming issues could be reclaimed through development in the biotech sector of this country.
Currently, stats show that there are about 8.1% companies in pharmaceutical sector, 19.3% in R&D services and 2.3% in therapeutics and diagnostics services in India. Here are few signs debating on- is India really doing justly in the field of life sciences?
Figure 1. Indian biotech industry growth trend. (Source: ABLE-Biospectrum Industry Survey, June 2013, Make in India, TechSci Research, Global Industry Analysts Report (GIA))
Aid from Homeland
Better late than never! Government of India proves to be a tower of strength in nurturing this sector. In Union budget of 2015-2016, US$1.09 billion ( ₹7288 crore approx.) has been allotted for the field of biotech research. It is being estimated that if US$4.01 -5.02 billion is being invested annually for the next five years, biotech sector can grow at an average rate of about 30% contributing to about US$100 billion by 2025. ‘The Department of Biotechnology, Ministry of Science & Technology’, is actively recognizing the needs in this sector and is acting as a pillar of support for vehement scientists and start-ups by providing various grants and funds thereby motivating them in spiraling up and investing in innovative ideas (we will be discussing them in our upcoming featured article!). Operational biotech parks facilitating R&D, production and industrial sector development are being setup by the Indian Government in Lucknow (Uttar Pradesh), Kochi (Kerala), Bangalore (Karnataka) and Guwahati (Assam).
However, the 2016-2017 Union Budget has left many in-house investors perturbed. It has been announced that the weighted tax deduction for R&D expenses would be cut down from 200% to 150% for upcoming financial years till 2019-2020 after which it would be further limited to 100%. This proposal has hindered various upcoming in-house investments slowing down India’s trial to becoming a global key player in biotech sector.
Mergers & Acquisitions-The Indicator of Good Day
India’s robust generic potential for biotechnology has captivated a huge amount of multi-national companies in collaborating with native industries (or vice-versa) to achieve a double helix growth. Some of the pre-eminent tie-ups in harnessing India’s potential are listed below.
In January, 2016, Animal Health unit of Zydus Group, a part of Zydus Wellness Ltd, announced the strategic acquisition of select brands and the manufacturing operations of USA based Zoetis, the largest animal health company in world. The amount of acquisition was undisclosed.
In October, 2015, A Swedish contract drug manufacturing firm Recipharm acquired 74% of the shares from Karnal, India-based, Nitin Lifesciences, sterile injectables CMO. The estimated value of this purchase was ₹6,712 million on a cash and debit basis.
Dr. Reddy’s Laboratories Ltd, subsidiary Aurigene has entered into a locked-up agreement with Curis a US firm upto January 18, 2017 in developing and commercializing antagonists for immuno-oncology. 17.1 million shares of Curis’s common stock has been issued to Aurigene on this collaboration.
Apart from various collaborations with foreign companies various Indian companies have also collaborated in drug development as one could understand the demands and needs of one’s own country even better.
In February, 2016, India’s largest drug maker company, Sun Pharmaceutical Industries Ltd. has completed the sale of two central nervous system (CNS) divisions to Bangalore based Strides Shasun Limited for ₹165 crore.
The Indian Council of Medical Research (ICMR) has decided to collaborate with Sun Pharma in drug development and developing treatment strategies that affect India.
Recently, Six Swiss Exchange has narrowed down about 200-250 companies in chemical and life sciences sector for providing access to various investors across Europe.
Though there were rapid M&As in the initial half of 2015, India’s M&A activity is facing a downfall of about 20.1% compared to the first quarter of 2015. It is hoped that such downturn is interim. There is no other more suitable time for a wake-up call to gear up and propel India’s life sciences sector onto a trajectory of rapid development.
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