Random rumblings from India

Doorways into a India of Past – Pune India
originally uploaded by lecercle

After noticing a flurry of biotech activity in India lately, I decided to dedicate today’s post to profiling what has been happening there in the past two months. India has certainly been on the lips and minds of many, especially in the context of outsourcing R&D. While discussing outsourcing to India is certainly en vogue, with frequent references to it being one of the great emerging markets for burgeoning biotechs, these proclamations are often accompanied by some forward-looking safe harbour statement like, “India is fast becoming…, is likely to become…, etc.” Just looking at what has happened this month would suggest that “what will come” may already be here.

Nov 13 – Domestic report released stating the Indian pharma market is poised to accelerate at 13.6% between 2006-10. It is expected to become a $9.48-billion industry by 2010. The Indian pharma market has consistently seen growth of 9.5% CAGR in the last 5 years and is currently pegged at $5.7 billion, according to a study paper by the Assocham and Cygnus. (Financial Express, India)

Nov 13 – Indian software major Tata Consultancy Services Ltd. signed a multiyear outsourcing contract with U.S. company Eli Lily & Co. (LLY) to provide software for clinical trial data management and statistical analysis, among others. Though TCS declined to confirm the contract size, the report quoted industry sources as valuing the deal at about $30 million-$35 million. (LA Times)

Nov 9 – France’s Merieux Alliance acquired a majority stake in India’s Shantha Biotechnics, giving it a new development centre for vaccines, therapeutic proteins and monoclonal antibodies. Shantha earned $20 million in revenue last year, making it India’s fourteenth largest biotech company. Merieux sees the deal as a direct way to develop a beachhead in the Indian drug market. (Red Herring)

Nov 2 – Paras Pharmaceuticals Ltd., a Gujarat, India-based developer of over the counter health care and personal care products, raised $12 million from Sequoia Capital India. The company announced last month that it had secured $42 million from Actis.

Nov 1 – India’s Department of Biotechnology (DBT) is putting $1 million toward the establishment of clinical research training centres in order to ensure high quality of research. According to a recent report, contract research in India is growing at a rate of about 25% per year. (Red Herring)

Nov 1 – VWR International, that massive life sciences product distributor, established a wholly owned subsidiary in Bangalore, India, to better serve the needs of the rapidly expanding pharmaceutical and biotech industry in the subcontinent. (Yahoo Business)

Oct 31 – Amgen says it will open facilities in Mumbai and Hong Kong to support its clinical trials and drug development work. Amgen says it’s in talks with a variety of companies in India and China to form new collaborations for drug development. (Pharmabiz)

Oct 26 – Industry analyst firm Research and Markets reports that India’s pharma market now ranks fourth in the world. India is suddenly a safer place to research and manufacture pharmaceuticals, thanks to legal reform, raised manufacturing standards and reduced bureaucracy and Western pharma companies are now flooding back to do business in the country.

Oct 17 – Merck KGaA and Glenmark Pharmaceuticals S.A (Switzerland), a wholly owned subsidiary of Glenmark Pharmaceuticals India (GPL), entered into an agreement for Glenmark’s DPPIV inhibitor GRC 8200, a treatment for type 2 diabetes in Phase II of clinical development. (PharmaLive)

Oct 16 – India’s Wanbury will buy the generic drug business of Spain’s industrial Farmaceutica Cantabria for 42 million euro. (Zee News)

Oct 12 – Peregrine received regulatory approval in India for a new clinical trial of its lead tumor necrosis therapy. “We are moving this program forward in India because of the high level of experience of the participating neurosurgeons with convection-enhanced delivery (CED), the state-of-the-art facilities of the medical centers involved and the fact that the contract research organization overseeing the trial is highly experienced in successfully running similar glioblastoma trials with many of the investigators who will be involved with our study.” (Steven W. King, president and CEO of Peregrine.) (Yahoo Business)

While this brief snapshot suggests a growing trend of deals and opportunities in India, I’ll close with my own forward looking statement. Despite large numbers of venture capital and private equity funds investing in certain high-growth sectors of the Indian industry like media, entertainment and retailing, the Indian biotech sector remains relatively small, as compared to the country’s pharmaceutical sector. Private equity firms invested ~$109 million across 10 firms in the life sciences segment, 80% of which were pharma deals, during the six months ended June 2006, compared to the $3.5 billion investments made by private equity firms across all sectors during the same period (Venture Intelligence).

Insert ‘tip-of-the-iceberg’-esque analogy here.

You can read more about the event MaRS held in June on India’s rise here.

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