Developing world can help weather the slowdown

Developing world can help weather the slowdown
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First Published: Wed, Sep 09 2009. 11 36 PM IST

Strategic move: The Bangalore corporate headquarters of Biocon Ltd. The company acquired the assets of Nobex Corp. in 2006. Hemant Mishra/ Mint.
Strategic move: The Bangalore corporate headquarters of Biocon Ltd. The company acquired the assets of Nobex Corp. in 2006. Hemant Mishra/ Mint.
Updated: Wed, Sep 09 2009. 11 36 PM IST
Biotechnology firms in developed nations can better weather the economic downturn and stay competitive if they collaborate with the developing world since capacity in this industry is no longer limited to a handful of high-income Western countries, says a new study in Thursday’s issue of the journal Nature Biotechnology.
Strategic move: The Bangalore corporate headquarters of Biocon Ltd. The company acquired the assets of Nobex Corp. in 2006. Hemant Mishra/ Mint.
Studying 181 (out of 259) biotech firms in Canada, which ranks second only to the US by number of health biotech firms, researchers from the McLaughlin-Rotman Centre for Global Health (MRC), University of Toronto, found one in four Canadian biotech firms have some form of partnership in the developing countries.
China and India score well, with 47% of the Canadian firms having manufacturing collaboration with China and 43% having contract research activities in India. The authors say the Canadian firms’ partnership with India and China is approaching or surpassing their partnership with developed nations other than the US such as Germany, the UK and Japan.
“It is significant that even in the current sustained worldwide economic downturn, the economies of China and India are still growing,” said Halla Thorsteinsdóttir, principal investigator of the study. “Establishing ties with companies there may help companies in Canada and other developed world countries to weather the recession.”
The average revenue of Canadian firms that collaborate with developing countries is $16.3 million (Rs79 crore), against $4.4 million for firms that have no with the developing world.
To be sure, these numbers could also indicate a tendency among larger firms to forge partnerships with firms in developing countries, but an expert here said such partnerships are becoming imperative.
According to Shrikumar Suryanarayan, director general of the Indian industry body Association of Biotechnology Led Enterprises, the nature of collaboration is changing as some Indian biotech firms are looking to acquire intellectual property in the North (developed countries) and bring back the molecule or technology to develop it locally. “Due to the downturn, a lot of distressed assets are available in the developed countries which some intelligent companies in India are eyeing. They can’t pay $100-150 million now but modest $10-15 million acquisitions are on the cards,” added Suryanarayan. In 2006, Biocon Ltd acquired the assets of its US-based research collaborator Nobex Corp., and that led to the development of the firm’s most promising products, oral insulin, he said.
This role reversal is beginning to happen. Researchers cite Mumbai-based Piramal Healthcare Ltd‘s investment of $5.4 million in a Canadian biotech Biosyntech in exchange for distribution and research collaboration. That investment allowed Biosyntech to remain afloat and raise more funds from North American investors. “Their products are progressing well through clinical trials,” said Swati Piramal, director, strategic alliances and communications, Piramal Healthcare. And even though Piramal Healthcare’s diabetes and cancer molecules, currently progressing in human trials in five countries, need more research funds, the firm, says Piramal, would “always look for such (Biosyntech) technology opportunities”.
The survey data shows that almost all of the collaborations have led to some shared output. The most common is a joint product in the pipeline, although in several instances the partners have a joint product in the market.
The Indo-Canadian partnership has picked up pace recently. India’s department of biotechnology, or DBT, and International Science Technology Partnerships, or ISTP Canada, awarded projects worth $6.7 million in June. And India’s department of science and technology and ISTP Canada invested $17 million in June 2008 in biotech and health projects.
Global collaborations are high on DBT’s agenda. Some 100 projects have been completed and 125 are in the pipeline according to a senior official who handles international collaboration at DBT. These projects invariably involve firms, which can apply for funds if they have a research institution as a partner. “There are many kinds of collaborations but increasingly we are looking at translational research, one that leads to products,” said the DBT official, who didn’t want to be identified.
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First Published: Wed, Sep 09 2009. 11 36 PM IST