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Indian pharma majors bet big on biotechnology space

Category  :  Industry
Date  :  Jun-24-2010 13:09

Traditional Indian drug manufacturing firms are venturing into the biotechnology segment and are considering asset acquisitions to enhance their business. The idea now seems more profitable considering the present situation mainly due to fall in valuations, specifically for smaller biotech companies and start ups. This view is supported by the recent developments by the pharma majors like Cipla and Piramal.Cipla has recently agreed to acquire 40 per cent stake in Indian biotech company, MabPharm. In addition to this it has also bought a 25 per cent stake in a Hong Kong based biotech firm BioMab. Following the path of Cipla, Piramal is in the process of acquiring Canada based Biosyntech, which is working on developing one product in regenerative medicine segment.Y K Hameid, CMD at Cipla Ltd says that, across the globe 30 per cent of the drugs which are being approved now are biotech products. Even if Cipla targets small portion of the $100 billion biotech market with the less number of products, it will account for a significant business for the company.Within the biotechnology segment, smaller deals like co-development and in-licencing tie-ups are gaining prominence. Supporting these are the examples of Cipla''s investment in Mangalore based Stempeutics Research for stem cell based therapies and Biocon''s tie up with US based firm Mylan.But the biotech companies have lot to obstacles as complex biologic processes involve lengthy gestation periods. In addition to this there are numerous regulatory hurdles in entering huge markets such as the US. Further, the $3 billion Indian biotech market is growing at a pace of 17 per cent CAGR. Companies are planning to establish their self in markets of China, Africa and Latin America before tackling regulatory approvals in Europe and the US.

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