A decade is a long enough time for most industries to come of age; not in biotechnology, though.
By nature, the science and stringent regulations-driven biotech industry is a high-risk, long-gestation venture. So when business leaders at the 10th annual biotech showcase event in Bangalore last week said the industry had reached critical mass and was poised to double its revenue to $10 billion by 2015, it didn’t smack of rhetoric. Still, what the veterans didn’t hammer out sufficiently, at least in public, was the critical change in tack needed not only to propel growth, but also to save the industry from becoming an acquisition playground.
The range of small and large acquisitions and the unnecessary delays in the commercialization of locally developed technologies and products in the recent past point to the alluring, but disturbing, proposition where desperate entrepreneurs aim at developing technologies that may just end up feeding the pipeline of bigger companies.
In the decade ahead, the industry should rapidly move on from contractual services and outcome-based businesses to risk-sharing and co-development of products, particularly with large life sciences companies. After all, the looming “patent cliff”—when patents expire and firms lose the monopoly over a product—will cause big pharma to lose $100 billion in sales by 2012. By engaging in co-development, small biotech companies can garner invaluable experience, something which arises from the big firms’ institutional knowledge of failures, and can’t be gotten off the shelf or through popular off-shoring arrangements.
Additionally, some products, especially in new-age diagnostics and medical devices, need to be successfully commercialized soon, lest they should fall prey to the predatory advances of competition. The large population and engineering base in India offers the perfect environment for local development of a range of medical technologies— from microprocessor-based implants to robotics for operation theatres.
Sure, the entrepreneurs need to change their mindset as well—from mere manufacturers to sophisticated solutions providers, from tinkering entrepreneurs to true innovators. But it’s the regulators who need to catch up most with the pace of the industry.
The traditional chemistry-dominated generics pharmaceutical business has turned Indian regulators into laggards. Biology is dynamic, it demands a certain vitality from the people associated with it. That’s why the Rs6,000 crore medical device industry—80% of it comprising imports and growing annually at 23%—is clamouring for a regulatory regime that the country hasn’t managed to provide.
Biotechnology wants to be paid and praised for the promises of innovation. It is time it’s also respected for its precariousness—caught as it is between a steep “valley of death” and the unlevel playing field.
What kind of regulations does Indian biotech need? Tell us at email@example.com