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INDIAN BIOTECHNOLOGY INDUSTRY OUTLOOK 2012

Market Scenario | AnalyZ Research Team

Main Facts
The Biotechnology industry in India to reach $11.6 billion by 2017-Global Industry Analysis The opportunities for investors in Biotech industry are manifold. In 2010-11 the Indian Biotech industry registered 21.5% growth, touching $4 billion mark clocking Rs 18,399.34 Cr-Source:Bio Specturm The BioPharma segment continues to dominate biotech industry with 61.77% share in the overall revenue. Disservices occupies 18.82% share, followed by Biafra with 14% share. In Asia Pacific market, India occupies 28.66% market share. India is in 12th rank in the world in biotechnology and 3rd largest in Asia-Pacific after Japan and Korea. (Source: CII) The Sector employees approximately 20,000 scientists and over 352 companies drive it towards further growth. Karnataka is the Biotech Capital of India

BioAgri 14%

BioIndustrial BioInformatics 4% 1%

Market Share 2010-11

Biotech Industry: Market Size 2010-11

BioPharma
BioServices BioAgri BioServices 20% BioPharma 61% BioIndustrial BioInformatics

Source: Bio Sprectrum, June 2011

According to the ninth annual survey conducted by the Association of Biotechnology-Led Enterprises (ABLE) and a monthly journal, Bio Spectrum, the Indian biotech industry surges to $4 billion with the registered growth of 21.5% with revenues of Rs 18,399.34 Cr.

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Biotech Industry Revenues: Segment Wise

Segment BioPharma BioServices BioAgri BioIndustrial BioInformatics Total 2010-2011

10,655 3,345.97 2,480 625.94 242.23

17,249.34

2009-2010 % Change 8,829 18% 2,639 7% 1,936 5% 564 1% 231 0% 14,199 31%

Source: Bio Spectrum, June 2011

Companies: Segment Wise-Revenue in Cr FY 2010-11

Segment BioPharma BioServices BioAgri BioIndustrial BioInformatics Company

Biocon Quintiles India Nuziveedu Seeds Novozymes Ocimum Biosolutions

Revenue in Cr 1483 476.25 610 242 65

Source: Bio Spectrum, June 2011

Biotech Industry: Exports vs. Domestic Sales 2010-11

The very nature of biotech industry is export-driven. The export business went up, total exports in the FY 2010-11 is 8852.34 Cr
6,000 5,000 5,535 5109.6

4,000
2,986.29 3,000 2,000 1,000 0 259.68 74 652.94 252.43 150.23 106.2 2405 Exports Domestic

Source: Bio Spectrum, June 2011

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Market Forecast
According to the India in Business, Ministry of External Affairs, Govt of India the forecast for 2015 is that the Indian biotech industry would have an annual revenues in excess of US$13 billion According to Global Industry Analysis-The Biotechnology industry in India to reach $11.6 billion by 2017

Key Drivers India Advantage

Low Cost Operation in India o o o R&D costs in India is significantly lower, outsourcing to India can save up to 200 million Cost of clinical trials is 60% lower compared to global markets Clinical trials take significantly lesser time in India

Large HR Pool- Skilled Professionals o 5000 PhDs and 1000 Post doctoral in biosciences related fields

Increasing Government Support

o 100% foreign equity investment is possible in manufacturing of all drugs except recombinant DNA products and cell targeted therapies. o Single window processing mechanism for all biotech projects involving FDI (Foreign Direct Investment) of US$22 million or more under the Foreign Investment Implement Authority (FIIA) with its Fast Track Committee (FTC) existing in Department of Biotechnology. o Depreciation allowance on plant & machinery rose from 25 to 40%. o Customs duty exemption on goods imported in certain cases for R&D. o Customs & excise duty exemption to recognized Scientific & Industrial Research Organizations (SIRO) o 150% weighted tax deduction on R&D expenditure o 3 years excise duty waiver on patented products. o 100% rebate on own R&D expenditure. o 125% rebate if research is contracted in public funded R&D institutions. o Joint R&D projects are provided with special fiscal benefits Favorable IP Climate o Indian Copyright Act, 1957
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o The Patent Act, 1970 o Indian Patents and Design Act, 1972 o The Trademarks Act, 1999 o Biotechnology Patent Facilitating Cell (BPFC) o Foundation of Biotechnology Awareness and Education (FBAE) o National Research Development Corporation (NRDC)

Mayor Players in Biotechnology Industry

Biocon According to Bio Spectrum-ABLE top 20 survey 2011 Biocon ranks the 1st position with Rs.1483 Cr. The company started by Dr.Kiran Mazumdar-Shaw in the year 1978, with focus on Biopharmaceuticals. Serum Institute of India Ranks 2nd position with Rs.1041 Cr, the company started in the year 1966, by Dr.C. S. Ponnawala, the business activity of serum institute is manufacturing and marketing of lifesaving immunologicals, the H1N1 vaccine boosts the company to the topline. Panacea Biotech Ranks 3rd position with Rs.928.41 Cr, started in the year 1978, headed by Dr.Rajesh Jain, the business activity of Panacea is Pharmaceuticals, Biopharamaceuticals and Vaccines Nuziveedu Seeds Ranked 4th position with Rs.610 Cr, started in the year 1990, headed by Dr.M.Prabhakar Rao, the business activity of Nuziveedu Seeds is production and marketing of agri biotechnology products. Reliance Life Sciences Ranked 5th position with Rs.490 Cr, started in the year 2002, headed by Mr.K.V Subramaniam, the business activity of Reliance Life Sciences is research initiative in medical, plant and industrial biotechnology.

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Quintiles India Ranked 6th position with Rs.476.25 Cr, started in the year 1979, headed by Dr.Farnaaz N, the business activity of Quintiles India is offering clinical, commercial and capital solutions. Quintiles established a leading position in conducting clinical studies. Novo Nordisk India Ranked 7th position with Rs.462 Cr, started in the year 1990, headed by Mr.Melvin Oscar DSouza, the business activity of Nordisk India is Diabetes care, growth hormone and homeostasis maintenance products . Novo continues to lead the insulin market. It is the largest company in the world in diabetes care accounts for 55% of insulin market in India. Rasi Seeds Ranked 8th position with Rs.371.88 Cr, started in the year 1973, headed by Dr.M Ramasami, the business activity of Rasi Seeds is production and marketing of agri-biotechnology products.

Karnataka-Indias Biotech Hub

The Biotech capital of India 60% of biotech companies are having base in Bangalore 50% of the total revenues in national biotechnology sector Growth in industrial output of Karnatakas biotech companies CAGR 11% per annum Extensive Intellectual Capital o 12 Biotechnology finishing schools under millennium biotech policy II o 103 R&D Centers Extensive Industrial Infrastructure o Sector focused SEZs-Mysore, Mangalore, Hubli-Dharwar, Belgaum, Shimoga, Gulbarga, Kolar & Mandya o 86 acre Bitochnology park-Bangalore Helix with 52 acre Alexandria Knowledge Park in Bangalore Pro Industry policy-State Millennium Biotech Policy II 2010, State Industrial Policy 2009-14 o K-Bio Venture capital fund of US$ 10.4 million with 26% stake holding by GoK o Under Biotech policy, financial support of 20% of the project cost for PPP-based projects for creation biotech parks.

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Biotech Clusters in India

Investment Opportunities The following thrust areas offer tremendous scope for potential investment in the Biotechnology sector

Agriculture and Plant Biotechnology Medicinal and Aromatic plants Animal Biotechnology Aquaculture and Marine Biotechnology Seri biotechnology Stem Cell Biology Human Genetics and Genome Analysis Environmental Biotechnology Microbial and Industrial Biotechnology Healthcare Bio-Fuels Bio Pesticides Bio-Informatics Software Support
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