Indian Biopharmaceutical Industry: 2008 in Review

India's biopharmaceutical sector continued to expand rapidly in 2008. Revenue in the sector exceeded $2.5 billion, with an estimated annual growth rate of 25%.¹

Eric S. Langer

As in previous years, the biopharmaceutical sector continues to be an export leader for the Indian economy. In 2008, about 56% of Indian biopharmaceutical products and services were sold abroad or otherwise qualified as exports.

Moreover, India's basic research and development (R&D), clinical research, and production capacities also have continued to expand to support the sector's growth. The country's regulatory capabilities also have been showing some signs of improvement. However, this growth has not been without glitches. The highlights below show the past year's developments in India.²

SUBSTANDARD INDIAN VACCINE PRODUCERS SHUT DOWN UNDER WHO PRESSURE

In recent years, following site inspections, the World Health Organization (WHO) had complained of poor manufacturing practices used by several Indian vaccine producers. Indian government inaction reportedly caused WHO to threaten a suspension of purchases for its global vaccination campaigns. In January 2008, the Indian government effectively shut down four of these vaccine makers, Central Research Institute in Kasauli, Pasteur Institute in Conoor, BCG Lab in Chennai, and the Haffkine Institute in Maharashtra. In April, it was announced that the first three of these plants would be converted into drug-testing facilities to help India curb its counterfeiting rackets. Indian products currently account for about one out of every 20 drugs tested.

NEW REGULATORY AUTHORITY FOR BIOPHARMACEUTICALS

In July, a bill was drafted to establish India's National Biotechnology Regulatory Authority (NBRA), which will oversee and regulate biopharmaceutical products including recombinant proteins and vaccines, gene therapies, and blood and plasma-derived products. Indian officials also revealed plans to elevate the Department of Biotechnology to full ministry status.

IP CLIMATE COMPLAINTS CONTINUE

In February, the US-based Biotechnology Industry Organization (BIO) publicly demanded that the Office of the US Trade Representative (USTR) keep India (and other countries) on the USTR's "Priority Watch List," and the USTR eventually did so. BIO wants India's patent law to be aligned with Western intellectual property (IP) protections, with clarification of the patent eligibility of polypeptides and nucleic acids, and a greater allowance for "evergreening" molecules with clinically insignificant modifications. In May, it was reported that regulatory officials in India were thinking about requiring biopharmaceutical developers to obtain product patents even for biosimilars because of the complexity of the large-molecule evaluation process.

CLINICAL RESEARCH: ARE OPPORTUNITIES BEING MISSED?

The Indian population is highly diverse, genetically, yet is more likely than the Caucasian populations to carry genes predisposing for obesity and type 2 diabetes. These findings highlight India's potential as a clinical proving ground for drug candidates. The clinical research market in the country for all drugs (both large- and small-molecule), was about $300 million in 2008.

To expand this market, government officials announced last summer that plans were being drawn up to allow foreign drug companies to test drugs in India in Phase 1 trials. Unlike now, foreign firms have been restricted to Phase 2 and Phase 3 trials.

However, India has been unable to exploit this market opportunity fully, because of bureaucratic complexity and lengthy delays for trial approvals.

R&D EXPANSIONS

Biopharmaceutical multinationals are offshoring increasingly large slices of R&D. In addition to developing R&D capabilities to support its own innovators, India aims to compete with China, Singapore, Korea, and other fast-growth nations to capture as much of that market share as it can. In 2008, plans for major new R&D facilities were announced by companies including Avesthagen in Bangalore, Panacea Biotec in Mumbai, and Biocon in Punjab. Furthermore, biotech parks with R&D facilities, such as Bangalore Helix and the Genome Valley expansion, continued to proliferate. A state-of-the-art vaccine R&D center, to be run as a joint nonprofit venture by Emory University and an Italian biotech NGO, is also under construction.

PRODUCTION CAPACITY INCREASE

In the past year, Dr. Reddy's began work on a new 5,000-L biologics manufacturing facility in Andhra Pradesh; Mumbai-based USV began building a 3,000-vial-per-hour injectables facility at Daman; Avesthagen began building a biosimilars plant in Bangalore; and the government continued work on a major vaccine park in Chennai. Intas became India's first and only local biopharmaceutical company to receive EU GMP certification at its Ahmedabad facility, and aims to bring a range of oncology biogenerics to the European market soon.

PRODUCT AND COMPANIES NEWS

Bangalore-based Biocon has grown so swiftly that it is now ranked among the top 20 global biopharmaceutical firms and is the only Asian company with this distinction. The company saw its revenues from both biologicals and contract research services grow strongly during the year, even as profit margins were pinched by the effects of rupee volatility on export contracts and by falls in licensing revenue. Biocon announced a number of new product-related developments in 2008, including an apparently safer American-made prefilled syringe for its EPO and GCSF products, and early-stage clinical trials for its hoped-for oral insulin blockbuster, as well as a monoclonal antibody against rheumatoid arthritis and psoriasis.

The company underlined its intention to market its own products in Western markets by acquiring, in February, a 70% stake in Germany-based AxiCorp for €30 million. However, rumors put out by the company in April, suggesting an imminent acquisition of an unnamed American marketer, failed to materialize.

Panacea Biotec reported falling revenues around the middle of the year but in August received a $34-million contract from UNICEF for its EasyFive pentavalent vaccine against diphtheria, tetanus, pertussis, hepatitis B, and hemophilus influenzae B.

Intas Pharma and its venture partner, Europe-based Kwizda, completed a Phase 1 clinical trial of Neukine, a biogeneric GCSF. The companies hope to file for EU approval by early 2010. Intas also formed a venture with Canadian firm Apotex to co-develop and market the product in North America.

The ranks of Indian biopharmaceutical companies meanwhile continued to expand. Venkateswara Hatcheries, known as producers of veterinary products, announced plans to form a human biopharmaceuticals unit, Uttara Biosciences, to focus initially on the development of oncology therapies.

CONCLUSION

India's biopharmaceutical industry is managing to do quite well by leveraging the strength of contract research plus local and regional sales of insulin and other off-patent, big-market biologics. It is slowly but surely positioning itself to do much better.

The current economic downturn in North America and Europe has the potential to hasten the transfer of basic R&D, clinical research, and manufacturing activities to India and other low-cost, high-technology countries.

Meanwhile, India-made biogenerics are competing in the Indian domestic market and are increasingly being sold in other lightly regulated markets such as the Middle East, Africa, and Asia. Now open to biogenerics, Europe is the next big target, and legislation to enable biogenerics approvals in the US is possible in the next administration, where an emphasis on healthcare cost cutting is expected. Further into the future lies growth driven by innovative drugs, vaccine initiatives, bioinformatics expertise, and clinical trials prominence.

Eric Langer is president and managing partner at BioPlan Associates, Inc., Rockville, MD. He is also the editor of Advances in Biopharmaceutical Technology in India, 301.921.5979, elanger@bioplanassociates.com

REFERENCES

1. BioPlan Associates. Advances in Biopharmaceutical Technology in India. Inc. Rockville MD; 2008.

2. India Biopharmaceutical Newsletter. BioPlan Associates. 2008 Dec.