Bangalore: General Electric Co. (GE) wants Indian companies entering the emerging biopharmaceutical business in India to use its plug-and-play solutions instead of building factories from scratch and is promising the benefits of time, cost and flexibility in product mix to firms that do so.
GE wouldn’t mention the cost involved and although an executive at one biotech firm said the move would benefit start-ups entering the business, another said that these solutions were best used for making test batches or samples. GE, however, is convinced that its products will redefine the biopharma business in India.
The business is about creating drugs from biological products as opposed to chemicals and is considered the next big step for the Indian biotech industry. GE says that its experience and technologies behind biopharma manufacturing, which will make the process lean, efficient and fast, will help Indian companies “leapfrog” and catch-up with their Western counterparts.
GE Healthcare (GEHC) Life Sciences, part of the $17 billion (Rs71,740 crore) by revenues GE Healthcare, has tested its ready-to-use biopharma production facilities globally and will launch some of these in India later this year.
In preparation for this, GE recently launched Fast Trak Biopharma Services in India, which will provide education, process development and validation to biopharma companies. The company says these services are meant to train people in using the technology, not just the equipment. “We want to change the image from ‘I sell gizmos’ to one that can help the biopharma industry become more efficient and get to the market in a smarter way,” says Eric Grund, director, Fast Trak.
Biopharmaceuticals are complex large molecules made by genetic manipulation of living organisms and require complex and costly manufacturing facilities that take months to build. India is tipped to be a front-runner in contract manufacturing of biopharma, which includes products such as vaccines, monoclonal antibodies (largely used in cancer treatment), insulin, and growth and other recombinant hormones.
Experts, however, say that given the way the industry is moving, smaller facilities, which can quickly change from manufacturing one product to another, would be the need of the day. That may explain why GE had decided to launch its plug-and-play products which it claims can significantly cut down the time it takes to shift from one product to another—from seven days to a few hours.
“I think it’s good for early stage entrepreneurs that this is being offered as GE has the necessary experience,” says Villoo Morawala-Patell, founder and chairman of Avestha Gengraine Technologies Pvt. Ltd, a biotech company that is building plants in Bangalore and Hyderabad to manufacture biopharmaceuticals in the autoimmune and cardiovascular therapeutic areas. Experience is not in short supply for GE, whose products, Grund claims, are used in 90% of the biopharma production facilities worldwide.
For GEHC, it’s a calculated move. The 5th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, published by life sciences market research firm BioPlan Associates Inc., estimates that biopharma manufacturing capacity will expand by 46% worldwide over the next five years for mammalian production systems (where mammalian cells are used as factories).
However, it also says the capacity utilization of biopharma manufacturing facilities has declined in the last four years, with US companies operating at 80.5% capacity, clearly justifying the need for smaller, multi-use biopharma manufacturing systems.
“GE’s move also shows that the company is looking at alternative models for business growth and is putting together expertise from its diverse companies that it acquired over the last few years to create new opportunistic business models,” says Morawala-Patell.
Grund agrees that GE Healthcare’s acquisition of New Jersey-based Wave Biotech Llc. in April 2007 was a strategic step in this process. Wave makes unique plastic-based bioreactors that are designed to replace traditional and more expensive stainless steel tanks and piping.
As a result, GEHC promises agility with its sterile, closed systems to Indian companies, which are on a high growth curve.
The Indian biotech industry is growing at around 30%, with more than 70% of its revenue coming from the biopharma segment, according to the annual survey by Biospectrum, a trade journal, and the industry body Association of Biotech Led Enterprises.
Replacing stainless steel hulks with disposable bags, minimizing the risk of cross-contamination (when the steel tanks are used for multiple products), cutting capital costs and reducing the hassle of validation and cleaning steps are only some of the benefits of GE’s products. While other companies provide some disposable technologies, “we are the only one providing out-of-the box, plug-and-play solutions”, says Grund. Added to that is the process development services, which Fast Trak is offering.
“It’s a wonderful technology, no doubt,” says Krishna M. Ella, chairman and managing director of Hyderabad-based Bharat Biotech International Ltd. But the issue, he argues, is the cost, as any disposable technology adds to it. “Using these technologies for manufacturing sample or test batches is alright, but they might not hold up as regular production facilities,” Ella adds.
The reason is the cost at which biopharma products will likely sell in the country. “Disposable technologies are fine if one could sell a vaccine at Rs220 a dose, but if it’s to be sold at Rs20 or Rs30 per dose, then these production systems are not economically viable,” says Ella.
Whether these production systems will be financially viable or not remains to be seen, but for now they offer resilience to the industry which meanwhile has an alternative of not commissioning dedicated facilities for contract manufacturing.