More contenders now join the race for biotech investments

More contenders now join the race for biotech investments
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First Published: Fri, Mar 16 2007. 12 19 AM IST
Updated: Fri, Mar 16 2007. 12 19 AM IST
If Bangalore is the software capital of India and Hyderabad the emerging destination for semiconductor investments in the country, which region can stake its claim over the $1.5 billion (Rs6,600 crore) biotechnology sector?
The verdict is not out yet, but the southern states of Andhra Pradesh and Karnataka, which have lagged behind peers Maharashtra and Gujarat, seem to be catching up, if the recent investment proposals made by biotech companies are anything to go by.The western states still have the most number of biotech companies and account for the maximum revenue from any Indian region.
But that could change if the current trend continues, say industry insiders. They predict that about Rs3,000-4,000 crore could be invested in biotech and life sciences-related funds in Andhra Pradesh in the coming years. The latest to head to Hyderabad include Eli Lilly, DuPont, Merck, Novartis and Biocon.
Andhra Pradesh has an advantage of having a strong pharmaceutical manufacturing industry, says Utkarsh Palnitkar, the head of the health sciences practice at audit firm Ernst and Young India. The setting up of two biotech-focused industrial parks in Hyderabad—the ICICI Knowledge Park that aims at roping in R and D (research and development) investments and the Shapoorji Pallonji Biotech Park that seeks a manufacturing focus—helped the city.
The Shapoorji Pallonji park has attracted investments close to Rs600 crore so far, Suresh Dhawan, its chief executive says. In comparison, just Rs200 crore has come into all of Gujarat since 2000 by way of biotech investments, confirms the state’s biotech mission.
The International Biotech Park at Pune has attracted investments of about Rs300 crore, says its chief executive officer Prasanta K. Biswal; Serum Insitute of India is making investments of another Rs250 crore in the city. Pune is the leading biotech cluster in Maharashtra, followed by Mumbai and Aurangabad.
The momentum of biotech investments in Hyderabad will increase as the Andhra Pradesh government sets up a special economic zone, planned on the outskirts of the state capital. Other developments that improved prospects of Hyderabad as a biotech cluster were setting up of an exclusive biotech venture fund and an intellectual property cell. “Having funds closer to the biotech clusters helps them grow,” Palnitkar says.
Bangalore—a rival to Hyderabad’s scramble for new investments and home to Biocon, Sami Labs, AstraZeneca, Gangagen Biotechnologies, Strand Genomics and several other biotech businesses—is ceding ground thanks to its choked roads and erratic power supply.
An upcoming pharmaceutical hub at Visakhapatnam has attracted Bangalore-based Biocon that said earlier this month it will invest Rs1,000 crore in a research and insulin-making facility there, the first time it is moving outside Bangalore. Another key advantage in favour of Hyderabad will be the setting up of an animal-testing lab.
“With plans to encourage animal-testing facilities in Hyderabad, biotech companies will continue to evolve in and around Hyderabad. By 2010, Hyderabad will continue to sustain its position to be the most powerful biotech cluster, followed by Bangalore and Pune as key centres for biotech growth for India,” says N. Venkat, president (marketing and sales), Shantha Biotechnics.
Other states -are also joining the race for biotech investments, seeing Hyderabad’s progress. Kerala, Tamil Nadu and even Uttarakhand are all developing biotech clusters.
A new industrial park focused on bio-informatics—an emerging stream that uses computers and electronic sequencing techniques in biological research—in Chennai, being set up by Singaporean developer Ascendas, will be a definite draw, predicts E&Y’s Palnitkar.
Gujarat has signed preliminary deals worth Rs1,554 crore with biotech businesses planning to set up shop in Vadodara, Gandhinagar and Kutch in the next few years, according to Anand Bhadalkar, an official with the Gujarat State Biotech Mission. These investments will be made by firms such as Akruti-Nirman-TCG Group, Zydus Group and Intas Biopharmaceuticals.
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First Published: Fri, Mar 16 2007. 12 19 AM IST
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