BIO OUTSOURCING ASIA

Biopharmaceutical Outsourcing Opportunities and Challenges

April 2008

VOLUME 1 ISSUE 2

Outsourcing

to Understanding the rationale, opportunities and challenges

Spotlight on Hyderabad A Top Destination for Life Sciences

Contract Research Organizations in

Making Strides in the Vaccine

Market

Emerging Market Opportunities

India Making Big Strides in the Vaccine market, By Dr. Anjali Shukla, Accure Labs Pvt. Ltd.

Spotlight on Hyderabad

Hyderabad: A Top Destination for Life Sciences, By CanBiotech

ICICI Knowledge Park: Nurturing an Environment for Innovation, By Deepanwita Chattopadhyay, CEO ICICI Knowledge Park

Partnering Opportunities and Models

Contract Research Organizations in India: Models and Partnerships, By CanBiotech

Partnering in Hyderabad, India-Opportunities in the Diagnostics and Biomedical Industries, By Dr. Konrad Faulstich, Head of Business Development ESE GmbH and Dr. Rathnagiri Polavarapu, CEO Genomix Molecular Diagnostics

Technology Transfer

Taiwan’s Technology Transfer Promotion Platform, By Dave Silver, President Biotech East Co. Ltd.

Advice from our Outsourcing Service

Providers

India Pharma: Informatics and Analytics Outsourcing, By Chandra Shekhar Prasad, marketRx

India Bioinformatics-Challenges to Overcome, By Poonam Bhana, ValueNotes Outsourcing Practice

Bio Outsourcing Asia TABLE OF CONTENTS

April 2008 Volume 1 Issue 2 © CanBiotech Inc.

Format and Editorial Calendar

Formats: Online, Digital, and Print Subscription: 25,000 Content: Feature Stories, Trends and Analysis, Case Studies, Technology Profiles, Company Profiles, News, Events Access: Free

UPCOMING ISSUE:

Contact the Editor at editor@canbiotech.com to learn more about writing for and featuring your expertise and/or company in our publication.

China Industry Overview, CRO’s in

China, Spotlight on Taiwan

The global vaccine market is currently attracting the interest of all pharma majors. The market is presently witnessing growth rates much faster than the traditional pharmaceutical market. Also, with many new blockbuster potential vaccines likely to hit the market in the future, the growth is only expected to increase. In fact, the biggest factor driving the vaccine market is its potential to prevent deaths due to diseases. Vaccines have eradicated many life-threatening diseases and many more vaccines are in the pipeline, which may serve as future life saviours (particularly anti-cancer vaccines which are expected to be launched around 2008). The vaccine market is growing at the rate of 16.52%. The global vaccine market is expected to reach U.S. $21.05 billion by 2010. Anti-cancer vaccines will grow rapidly through 2010. Currently, paediatric vaccines occupy a higher market share but in the future, this segment will lose its share to the adult, therapeutic, and influenza vaccine segments. Flu vaccines have a huge demand at present and all major vaccine manufacturers are investing in the segment. The vaccines market in India will earn revenues of around $ 10 billion in 2012, as per industry sources (in 2005). The human vaccines segment is the fastest growing segment in this sector and prominent players include Serum Institute of India, Panacea Biotech, Indian Immunologicals, Aventis Pharma, GlaxoSmithKline, Shantha Biotechnics, and others. Vaccine manufacturers like Serum Institute of India and Indian Immunologicals have a very strong global presence. Serum exports its vaccines to more than 140 different countries worldwide, whereas Indian Immunologicals is the largest supplier for food and mouth disease. In India, vaccines and recombinant therapeutics are the leading sectors driving the growth of the biotechnology industry.

A major share of the revenue is generated through exports accounting for almost 53%, over those from the domestic market, which are at a share of about 47%. With increasing consolidation of manufacturing and marketing capabilities by Indian companies, India has already achieved a leadership position in the global vaccines market and is all set to grab the market opportunity in the global recombinant therapeutics market. The vaccine sector is further showing a new rise, with the recent and forthcoming launch of new, innovative high value products. These will shift the market from being led by inclusion or otherwise onto high volume immunization schedules towards a new set of consumer orientated products targeting three main patient groups—namely children, the elderly, and travelers. Amidst Difficulties Are Opportunities – Various Challenges for the Indian Vaccine Market The vaccines market in India is witnessing a lot of activity. But to market vaccines is not everybody‘s cup of coffee. There are numerous challenges. 1) There is falling realization for mass vaccines like Hepatitis B in the domestic market by vaccine manufacturers. This leaves the organization with minimal funds to plough back into research for newer vaccines. 2) Funding becomes a big problem when it comes to new enterprises. However, today there are quite a few VC funds in the country, which are open to invest in this sector. Even after receiving the initial funding, companies find it difficult to generate and utilize funds for expansion. Indian companies have performed exceptionally well in the domestic and the lesser regulated markets. However, funding downstream opportunities is important to rise up the value chain.

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INDIA MAKING BIG STRIDES IN THE VACCINE MARKET

Dr. Anjali Shukla, Accure Labs Pvt. Ltd., New Delhi, India

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The vaccines business is attractive as the domestic biopharmaceutical segment contributes to 75% of the total biotechnology market, wherein, 47% alone is the contribution of vaccines. India enjoyed the advantages of early initial successes in vaccine R&D and indigenous production in the public sector, but the stark reality is that the country is unable to cope with the growing gap in the demand and supply of UIP (Universal Immunization Programme) vaccines. Therefore, India must evolve its own national strategies to meet its vaccination needs within its budgetary constraints. Four key actions are required for this: 1) There should be decisive intervention of the Indian government to meet the shortfall in the UIP vaccines. This may be done either by strengthening the public sector wherever possible, or by taking suitable measures to encourage the indigenous private sector on a case-by-case basis to make safe and effective vaccines available at affordable prices. The suitability of foreign vaccines to deal with Indian pathogenic strains also needs to be conclusively established wherever necessary. With a strong will and a small amount of planning, the current situation in India can be reversed, and India can even play a major role in meeting the global shortfall in the vaccines procured by UNICEF. 2) India needs to strengthen epidemiology and revive the collapsing disease surveillance system. This would help to decide between universal or selective immunization based on unequivocal scientific evidence, as well as to respond to the changing disease prevalence scenario on the ground, which may call for a move from universal to selective immunization or vice versa. 3) There is a need for high quality in-house R&D in order to ensure that our production technologies are coping with the times, and to negotiate strategic partnerships with outside scientists or institutions and companies.

4) The Indian government should actively encourage independent policy research, cost-benefit studies, and wider national consultations on various aspects of vaccination and public health so that it can take more informed decisions on such matters. Future Forecast The vaccines market will undergo a boom in the coming years with government agencies providing a number of funding opportunities. For instance, the Technology Development Board (TDB) is the first organization to encourage commercial enterprises to take up technology-driven projects. It offers soft loans to enterprises for commercializing innovative indigenous technologies and adapting imported technologies to Indian conditions. Production of recombinant Hepatitis C viral antigens by the Hyderabad-based Sudarshan Biotech and pentavalent vaccine (DPT + Hib + Hep B) by Shantha Biotech are two projects to exemplify. Though vaccines represent a crowded market, there is a way ahead in terms of a new generation of combination vaccines. Combination vaccines hold prodigious opportunity for Indian manufacturers as they possess inherent advantages in terms of low delivery cost and single-dose administration. Also vaccines for illnesses that are common in our part of the world like flu, dengue, rotavirus, cholera, and Japanese encephalitis make way for new opportunity. There is scope in improvements for commonly available vaccines like acellular pertussis instead of whole cell pertussis in DTP and injectible polio virus instead of OPV. To take advantage of these opportunities, vaccine makers are partnering for drug discovery and co-development of newer vaccines.

3) Vaccines need high maintenance. They require a complex infrastructure in place so that stockists and chemists in rural areas can store the products at the required temperature which generally ranges between 2-8°C. Vaccine R&D too requires high payoffs making it a complicated field to enter. Also, vaccines can only be launched after a huge human trial which is expensive. Hence, vaccine research can be taken as a ‗spend more earn less‘ project. 4) Though the regulatory approval process has improved considerably, speeding up the process is the need of the hour. This can be possible only if the single window clearance system is implemented. 5) Domestic Indian companies depend on government procurement to push volumes. This has its own timelines and guidelines. The resulting fallout of this is an immunization programme that is undertaken by global governments. To Make the Right Move Vaccines are a volume game with profits in numbers, i.e. where there are lesser margins there are volumes. Therefore, all the vaccine manufacturers aim to get their vaccine listed as part of the Immunization Plan to leverage the volume play. The next favourite choice of vaccine makers is the export market. Vaccine manufacturers like Serum Institute of India and Indian Immunologicals have a very strong global existence. Serum exports its vaccines to more than 140 different countries worldwide, whereas Indian Immunologicals is the largest supplier of vaccines for foot and mouth diseases. Exports are significant for vaccine manufacturers as they ensure a steady flow of revenues which can be re-invested in other efforts. Even the domestic vaccine market is attractive in terms of growth. It has more than double the pharmaceutical industry growth rate. Moreover, tremendous opportunities exist for the launch of newer vaccines like rotavirus, IPV, and DTP.

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About the Report ―Indian Contract Manufacturing - A Hot Opportunity‖ is the recent report by RNCOS that gives first hand information on the thriving contract manufacturing market in India and the opportunities it is opening up for global players. The Indian contract manufacturing market was worth U.S. $874 million in 2007. Although this market presently occupies a fraction of the total global opportunity, the future potential of the market seems immense. The Indian contract manufacturing market, with its low cost advantage, strong chemistry and reverse engineering capabilities, improving infrastructure, and strong incentives from the government, is expected to grow strongly in the next five years. By 2012, the Indian industry is expected to grab nearly 8% of the total global market. The report comprehensively evaluates the contract manufacturing market in India, analyzing its present market size, key segments, capabilities, and the future direction of growth. It also gives a statistical and analytical insight into the various factors vital for drug manufacturing, such as the competitive advantage/disadvantage of India vis-à-vis developed countries on various parameters such as cost, intellectual property, and infrastructure etc. Key Issues and Facts Analyzed

Evaluation of the total size and growth rate of the contract manufacturing market.

Analysis of key segments.

Evaluation of India‘s capability in pharmaceutical manufacturing.

Analysis of the total costs incurred while manufacturing a drug in India (such as cost of land, construction, labour, utilities, freight etc).

Analysis of the country‘s pharma-related human resources.

Study of the country‘s pharma-related infrastructure.

Analysis of the key opportunities created by the industry.

Analysis of key players, including their business overview, key facts, and financial information.

Key Findings

The Indian contract manufacturing market is expected to grow in excess of CAGR 37% between 2007 and 2012.

Most companies presently outsource APIs and intermediates from India. Moreover, India is also becoming a major hub for outsourcing formulations.

Many Indian manufacturers have upgraded their manufacturing plants, which has enabled India to have a number of plants certified by the FDA, EDQM, and various other regulatory agencies.

The cost of secondary manufacturing in India is around 13%-15% of the cost in the U.S., the U.K., and Germany, with companies making substantial savings on costs of plant set up, labour, and operations.

India has more than four times the total drug manufacturing staff than the U.S. and more than 12 times that in the U.K.

Growth of the contract manufacturing market is expected to provide a major boost to the pharma machinery market in India, which is expected to register revenues up to U.S. $822 million by 2010.

Strong appreciation of the Indian Rupee against the U.S. Dollar is having a detrimental effect on the profits of many Indian contract manufacturers.

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TO ORDER “INDIA CONTRACT MANUFACTURING” BY RNCOS PRICE: $1400 USD Online Download

Contact damani@canbiotech.com to place an order. Other Related Reports Opportunities in the Indian Healthcare Sector RNCOS‘ report ―Opportunities in Indian Healthcare Sector‖ provides extensive research and an objective analysis on the healthcare sector in India. This report has been written to help clients in analyzing the opportunities critical to the growth of healthcare market in India. Detailed data and analysis will help investors to comprehend the changing dynamics of the healthcare industry.

For more reports visit CanBiotech’s Report Store at: http://www.canbiotech.com/reportsStore.asp

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Hyderabad: A Top Destination for Life

Sciences

By CanBiotech

© CanBiotech, 2007

India is emerging as a competitive destination for several segments of the R&D value chain, especially in late discovery, preclinical, and clinical development. India‘s human resources comprising of a large English-speaking skill base of three million graduates, 700,000 postgraduates, and 1,500 PhDs qualified in bio-sciences and engineering each year, present a huge advantage for India.1 Although currently contributing to just about 1% of the global biotechnology industry, the Indian biotechnology industry is projected to achieve a share of almost 10% over the next five years. 2 G Steven Burrill, CEO of Burrill & Company states, ―We expect India to claim 8% of the world‘s biotechnology companies by 2010…‖ 2 According to industry estimates, with the new product patent regime in place and a national biotech policy, the Indian biotech industry is set to touch U.S. $5 Billion in revenues by 2010. 2, 3 Kiran Mazumdar Shaw, chairperson of the Karnataka task force on biotechnology, states that all segments such as bio-pharma, bio-services, agri-bio, bio-informatics, and industrial biotech have seen good overall growth. Major multinationals have established subsidiaries in India. U.S. and European companies are further collaborating with Indian firms to develop new drugs and vaccines, to conduct clinical trials and toxicity studies, to perform molecular modeling and lead optimization, to provide computer services such as bioinformatics, and to develop industrial production processes for new drug ingredients. 3 Similarly venture capitalists from the U.S. and Singapore are helping to fund start-up biotechnology companies in India. Biotechnology is a market identified for rapid development in Andhra Pradesh. The state is naturally endowed with one of the richest biodiversities and enjoys a dominant position in pharmaceuticals, medical sciences, and healthcare. The state capital Hyderabad is home to several Centers of Excellence (CoEs) in biotech research and training. Building on an established foundation of world class infrastructure in R&D, manufacturing, healthcare, and education, the Government of Andhra Pradesh initiated India‘s first biotech cluster in Hyderabad—the Genome Valley. 4 Analysts indicate that when the government launched India‘s first biotech venture fund with a principal of $30 million—a joint venture between the Andhra Pradesh Investment Development

Corporation and Dynam Venture East of the U.S. to finance start-up biotech companies, Indian and foreign companies increasingly became attracted to Hyderabad, thereby creating the Genome Valley. 5 Spreading over 600 square kilometres, the genome valley in Hyderabad is developing into the first technologically advanced biotech hub for life science activities.5 Genome Valley is India's first state-of-the-art biotech hub that provides research, training, collaboration, and manufacturing activities for biotech companies. More than 100 biotech companies are operating out of the Genome Valley. The Genome Valley also encompasses established biotech parks – the Shapoorji Pallonji (SP) Biotech Park and ICICI Knowledge Park. 4

Shapoorji Pallonji Biotech Park: The Rs 100 crore (Rs 1 billion) park is spread over 400 acres. It provides state-of-the art infrastructure with support facilities such as instrumentation facilities, an incinerator, a secondary effluent treatment plant, distilled, deionised DM water, a cold storage and water housing facility, and an animal house.

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The park runs also a pilot plant for the validation of the commercial viability of technologies and products. 5 The Shapoorji Pallonji (SP) Biotech Park houses a mix of companies involved in high-end research in biotechnology and nanotechnology, manufacturers of biopharmaceuticals and molecular diagnostic kits, and contract research organizations (CROs). 4 The biotech park has further established alliances with research laboratories and technology parks in India and abroad including the Research Triangle Park, U.S., Super Computing Centre, U.S., Biotechnology International LLC, U.S., Technologiepark Heidelberg, Germany, Biotechnologiepark Luckenwalde, Germany, and Sun Micro Systems for Center of Excellence, Hyderabad. 4 ICICI Knowledge Park: The park is a world-class centre for leading-edge, business-driven research in the country. Promoted by the ICICI group, the park is a 200 acre campus with world-class infrastructure and support facilities. The current focus of the park is on the areas of biotechnology, pharmaceuticals technology, specialty chemicals, new materials, information technology, and telecommunications. 5 The Biotechnology Incubation Centre also located in the Genome Valley operates research and development laboratories, a multi-utility plant, a specialized pilot plant, and an analytical and quality control center. The Agri-Business Incubator provides business support to existing and new agri-business with the objective of reducing the risk in commercialization of agri-technologies. 5 As of May 2007, the innovation centre had commercialized six technologies related to areas like bio-fuel from sweet sorghum, transgenic cotton, ferment or for bio-pesticides, agri-clinics (commercial agriculture extension), organic agriculture, bio pesticides in novel formulations, ground nut ICGV91114 variety, and chick pea JG11. 6

Chief Minister Y. S. Rajasekhara Reddy stated at BioAsia 2007 that the State Government was developing the third phase of Genome Valley in Hyderabad over an area of 300 acres. A biotech incubation centre would be set up in SP Biotech Park, which would be supported by the Indian Institute of Chemical Technology. An international animal research facility is being developed in collaboration with the Indian Council for Medical Research (ICMR) and National Institute of Nutrition, in an area of 100 acres, with the hope that drug companies could conduct their pre-clinical research in the Genome Valley. 7 The Genome Valley is home to leading biotechnology institutions and private pharma companies. These institutions include: The Indian Institute of Chemical Technology, Centre for Cellular and Molecular Biology, National Institute for Nutrition, and Centre for DNA Fingerprinting and Diagnostics. 5 Top private biotech companies include: Avra Laboratories, Bharat Biotech International, Bijam Biosciences, Biological E. Ltd, Bioserve Biotechnologies, Dr Reddy‘s Laboratories, Genotex International, GVK Bio, Indian Immunologicals Ltd, Indigene Pharmaceuticals, Jupiter Biosciences, Krebs Biochemicals, Microbiomed Products, Nuziveedu Seeds, Prabhat Agri Biotech, Satyam Computer Services, Shantha Biotechnics, Tata Consultancy Services, and Vimta Labs. 5 Commitment by the government to the Genome Valley is further evident by the current projects in the pipeline: An international life science institute is being set up in Hyderabad. It is anticipated that this institute will find its model from the John Hopkins University. The National Animal Resource Facility for Biomedical Research being established in collaboration with the National Institutes of Health of the U.S.

An Umbilical Cord Stem Cell Bank, a bio-medical research centre and a state-of-the art maternity/ neo-natal hospital are being set up by Pacific Health Care Holdings, Singapore. 5 The Government of Andhra Pradesh has clearly identified the biotech sector as one of the "Engines of Growth" in its Vision 2020 document. The Government will leverage the existing strengths of the state for the rapid commercialization of biotechnology. It is anticipated that the third phase will be operational by 2009. At this year‘s BioAsia event, the Andhra Pradesh Chief Minister, Dr Y.S. Rajasekhara Reddy, in his presidential address, assured full support to the growth of the biotech industry in the State, while his Industries Minister, Ms J. Geeta Reddy stated that Hyderabad‘s Genome Valley had emerged as the top destination for life sciences and biotech companies. 8 References: 1) Bajpai N. and Sachs J.D. 2005. India in the Era of Economic Reforms-From Outsourcing to Innovation. The Global Economy. Handle with Care, Altana AG. 2) Pai, J.L. 2006. India‘s Surging Biotech Sector. InvestorIdeas.com. 3) Wilkie, D. 2004. India Wants to be Your Biotech Source. The Scientist. 4) BioSpectrum. 2006. Biotech Hub of India. 5) Lype, G. Hyderabad: India‘s Genome Valley. rediff.com. November 2004. 6) Mahalakshmi. Agri-Business in Genome Valley. Financial Express. May 2007. 7) Genome Valley Phase III Soon. The Hindu. February 2007. 8) Satish, H. Biotechnology can be more transformative than infotech. The Hindu Business Line. February 2008.

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GVK Bio Pvt. Ltd. Ravikrishna Chebolu, General Manager Business Development GVK Biosciences Private Limited #210, 6-3-1192 Kundanbagh, Begumpet Hyderabad 500 016 INDIA Tel: +91 40 66929999 Fax: +91 40 66929900 Email: ravikrishna.c@gvkbio.com Indian Immunologicals Ltd. Mr. K V Balasubramaniam, Managing Director Road # 44, Jubilee Hills Hyderabad 500 033 INDIA Tel: +91 40 23544585 Fax: +91 40 23544007 Email: info@indimmune.com Indigene Pharmaceuticals Ltd. Rolf-Dieter Rebhuhn, Senior Vice President Business Development Indigene House Road No. 14, Banjara Hills Hyderabad 500 034 INDIA Tel: +91 40 2348 7000 Fax: +91 40 2354 8478 Jupiter Biosciences Ltd. V.K.Saipriya Tel: +91-40-27731798 Fax: +91-40-27731801 Email: vksaipriya@jupiterbioscience.com Krebs Biochemicals Ltd. #401/402, 4th Floor, Cyber Heights, Plot No 13, Road No 2, Banjara Hills, Hyderabad 500 033 INDIA Tel: +91-040-23540415 Fax: +91-040-23540320 Email: krebsho@krebsbiochem.com Shantha Biotechnics Pvt. Ltd. 3rd Floor, Serene Chambers, Road No.7, Banjara Hills, Hyderabad 500 034 INDIA Tel: +91-40-23543010 Fax: +91-40-23548476 E-mail: info@shanthabiotech.co.in

Company Profiles Avra Laboratories Pvt. Ltd. Chandra Ramarao, Director Research and Operations Avra House, 54 Sai Enclave Habshiguda Hyderabad 500 007 INDIA Tel: +91 40 27178571, 27150422 Fax: +91 40 27179149, 27175605 Email: info@avralab.com Bharat Biotech International Ltd. Dr. Krishna M. Ella, Managing Director Genome Valley Shameerpet Hyderabad 500 078 INDIA Tel: +91 40 2348 0567 Fax: +91 40 2348 0560 Email: info@bharatbiotech.com Biological E. Ltd. Biological E. Limited 18/1&3, Azamabad Hyderabad 500 020 INDIA Tel: + 91-40-27603742 / 30213999 Fax: + 91-40-27630307 / 27615309 Email: intl@biologicale.co.in Bioserve Biotechnologies Ltd. Ramakrishna V. Modali, President # 3-1-135/1A CNR Complex, Genome valley Mallapur Main Road, R.R.Dist, Hyderabad 500 076 INDIA Tel: +91-40-27178176 Fax: +91-40-27178178 Email: India@bioserve.com Dr. Reddy's Laboratories Ltd. Dr. Rajinder Kumar, President Research, Development, and Commercialization Dr. Reddy's Laboratories Ltd. Greenlands, Ameerpet Hyderabad 500 016 INDIA Tel: +91-40-23731946 Fax: +91-40-23731955 Email: businessdevelopment@drreddys.com

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Introduction With increasing global competition, partnering and outsourcing, facilitating agencies like science parks play a crucial role in promoting the country‘s knowledge industries. These parks act as regional development agencies. Science parks and incubators are seen as cost effective tools for the government to attract investments and growth in emerging innovation sectors. However a park alone cannot provide the impetus. It has to be embedded in an innovation eco-system with R&D institutions/ research universities, companies, infrastructure and support services as well as a pro-active government. ICICI Knowledge Park (IKP) is the first wet lab Research Park in India. Structured as a not-for-profit company, the mission is to set up a world-class centre for business driven research. This is achieved by developing an innovation hub around a research park so that the region becomes globally competitive. The Park is spread over a 200 acre campus in the Genome Valley life science cluster near Hyderabad. While the current focus of IKP is in Life Sciences, innovation in any knowledge-based sector that requires wet labs is encouraged. Early Years Today IKP is recognized as one of the premier R&D parks in the country with a successful model for various governments/science parks to emulate. When the Project took off in 1999 the concept of developing an innovation hub around a shared facility for wet-lab business-driven research was novel for India. ICICI Bank, the largest private bank in India, was however quick to sense the changing global business environment with knowledge becoming a key driver for growth and the emerging opportunities for India, especially in the area of Life Sciences, and resulting long-term opportunities for the Bank. The Project was made possible by ICICI Bank providing management support and initial funding of around Rs 39.5 crores and the State Government of Andhra Pradesh giving 200 acres of land free of cost for

establishing the Park. IKP also received around Rs 3 crores as grant money from the Union Government for establishing a Virtual Information Centre, a Life Science Incubator, and the Garden of Life (a medicinal plant garden) at the Park. IKP started operations in June 2000 as a shared infrastructure and facilities provider by addressing the needs of Indian pharma and biotech SMEs who wanted to diversify into R&D based work by providing them ready-to-use laboratories. Two years later the Park started focusing on companies with first or second round VC funding, including those of non-resident Indians who wanted to set up establishments in India. These entrepreneurs required modular labs, lower overhead costs, minimal administration hassles, networking support, and connections with various government agencies. By 2004 the Park started getting response from medium to large Indian as well as foreign pharma and biotech companies. Moving up the Innovation Chain After achieving a critical number of tenants and a sustainable revenue stream, in 2005 IKP decided to move up the innovation chain and set up a Life Science Incubator (LSI) specifically to promote innovative technology entrepreneurs. The LSI not only provides fully furnished dedicated lab space and shared equipment but more importantly, a mentoring program for start-up companies and scientist entrepreneurs. The idea is to incubate companies/ technology entrepreneurs and make them ―VC ready‖ in a three-year period. The LSI model is a little different from that of a university-led incubator where technologies come primarily from the university and are pursued with the help of faculty/students. So far LSI has received proposals mainly from entrepreneurs who have a track record of working with the industry and have decided to pursue ideas/technologies on their own. They need low cost lab space as well as support and advice in business, networking, and funding.

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ICICI Knowledge Park: Nurturing an Environment for Innovation By Deepanwita Chattopadhyay CEO ICICI Knowledge Park City Off: Level IV, ICICI Bank Tower, Street No 1, 1-11-256 Begumpet, Hyderabad 500 016 Site Off: Turkapally, Shamirpet, Ranga Reddy District, Hyderabad 500 078 Tel: +9140 2348 0003/0022 Fax: +9140 2348 0007

It was a real proud moment for the Life Science Incubator when its first incubatee Laurus Laboratories received a valuation of USD 100 million from Aptuit Inc. within 2 years time. Aptuit-Laurus is now an anchor company at IKP. Current Status Currently IKP has 84,000 square feet of wet lab space in a 140,000 square feet Innovation Corridor. IKP has also allotted around 45 acres of land on long lease to six anchor companies to build their own facilities. The facilities created by the Park are now fully occupied by a wide spectrum of companies from technology start-ups to SMEs to very large companies. There have so far been 31 R&D companies at ICICI Knowledge Park. Out of these companies, 11 have graduated and currently there are 20 companies (13 Indian, 5 American, 1 German and 1 Japanese company) in the Park working in various areas of pharmaceuticals, biotechnology, and chemistry. Approximately, 70% of these companies are into technology/ product development while the rest are engaged in contract research. Today around 1,400 people work from the campus. So far 20 patents have been filed by the Park residents; but the number is expected to grow exponentially in the near future. Apart from the investment from ICICI Bank and the government, IKP has invested around Rs 10 crores from internal accruals to augment the facilities. The companies have in turn invested over Rs 300 crores in the Park. Going Forward ICICI Knowledge Park periodically reviews its strategy so as to be able to respond to the needs of the emerging knowledge sectors. IKP along with NASSCOM has recently launched a seed stage Innovation Fund, the NASSCOM-IKP Innovation Fund to address the capital gap between funds from friends and family and traditional VC finances. The Fund will be operational in mid 2008. The Park is now working on a strategy to promote and incubate companies in the areas of clean technologies, especially those that border the life sciences, materials, and energy sectors.

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Managing the Outsourcing Relationship Once the strategic decision to outsource preclinical and/or clinical research is made, it is critical to develop the process and the parameters by which the right partner will be selected. Key differences to note between service providers: 1) The scope of activities provided by the partner. Clarify these services and how they match your needs as the Sponsor. 2) The global representation of the service provider. Competitive pressures require partners to be evaluated on this parameter as Sponsors access new, emerging markets. 3) Specialization by medical indication and experience in key therapeutic areas. 4) Size of the partner-specifically the scale of services offered. Sponsors can select service providers on a case-by-case basis from a list of pre-screened service providers. These service providers then compete for each project through a bidding process. However, strategic outsourcing and the preferred provider model, enables the client to develop a closer link with the service provider, with a view of the long-term prospects of the partnership. Preferred provider status enables the service provider to make a better investment in the partnership-including skill development and technology investments based on the promise of a future working relationship with the client. Furthermore, with increased risk sharing by the client and service provider, both companies become more vested in the success or failure of the drug discovery process. Consequently, the service provider has a strong incentive to dedicate the best expertise to the client's project. Given the stakes and objectives, Sponsors should take time to finding the right outsourcing partners. A client‘s needs must be matched to the expertise provided by the outsourcing service provider, particularly within the desired therapeutic arena(s).

According to Frost & Sullivan, the contract research industry would have attained revenues in the range of U.S. $14.4 billion by 2007, as compared to the $7.8 billion reported in 2002. 1 With a commitment to facing new regulatory challenges including reducing the risk of failure during drug development, improving clinical trials, expanding their service offerings as Contract Research Organizations (CROs) face competition at home and abroad, and meeting the global needs of their clients, CROs will enjoy a bright future. With tighter intellectual property protection, a growing number of Indian and CROs are expected to take a larger piece of the U.S. CRO market share. Clinical Research Business Models 1) Complete Outsourcing: There are several international CROs operating out of India alongside a few local CROs with a solid reputation built from experience. Companies that do not have large medical departments in their affiliates use CROs to exploit India‘s clinical trial infrastructure. 2 2) Using Local Medical Departments: Companies with medium to large affiliates can use their local departments for monitoring clinical studies. 3) Dedicated Clinical Operations: This model involves the set up of an R&D company with equity investment by the parent company for which tax benefits can be provided. 4) Support Services: Support services required as part of clinical development including software development, data mining and management, statistical programming and analysis, and medical writing, can be outsourced to local companies.

Contract Research Organizations in India: Models and Partnerships

Dr. Minna Allarakhia, Editor, CanBiotech

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Breadth of expertise and skill-set, financial stability, previous success in outsourcing partnerships, commitment to the client‘s project and needs should all be assessed by the biopharmaceutical company. In turn, service providers should ensure that commitment to outsourcing R&D exists in the top management levels at the client site. Equally important is an assessment of the outsourced project‘s priority to the client and an assurance that a match in expectations and deliverables exists. Only with a match between a client and service provider in terms of needs, expectations, and deliverables can a successful drug discovery partnership be ensured. Selection Process 1) Determine the end-goal of the project. Prepare detailed project/study designs, with time and cost information. Study items that can be included: Drug development requirements; Bioanalyses required; Test species, or Animal model; Drug substance to be tested; Drug testing processes; Toxicokinetics; Histopathology required; Regulatory requirements. 2) Perform competitive intelligence on the preclinical/clinical partners to whom the project should be outsourced. Evaluate the partners based on your needs; note the differences between service providers. Rank the service providers based on your needs with a focus on the ones that best suit your scope of requirements, reach, medical focus, and degree of service required. 3) Solicit a request for quote (RFQ) from the top service providers. 4) Evaluate the proposals based on project parameters: services required and offered by the partner; cost; time; experience; medical specialization; capacity management by the partner; regulatory experience; GLP compliance; quality control management by the partner; financial stability of the partner. 5) Schedule and conduct site visits to ensure that the partners are best matched with the needs of the projects. 6) Select the partner and award the contract for the project to be outsourced. Development of the Partnership 1) The contract should define the following: the team responsible for completion of the project both from the Sponsor company and partner company; the contact person from both parties; timeline-deliverables; data management; documentation requirements; process for completion of the project and to handle problems; performance criteria and measurables; payment schedule. 2) Confidentiality Agreements should be signed off for the outsourcing project. It is critical to also establish communication processes.

Information flow should be complete and free to manage expectations and ensure successful completion of the project. 3) Review and approve study protocols prepared by the partner. 4) Establish the monitoring protocol. Possible areas for monitoring of preclinical and clinical services include: GLP compliance; medicinal chemistry; clinical chemistry; study design; clinical observations; bioanalyses; toxicokinetics; statistical analysis; reports; data. 5) Review the performance of the partner based on established performance criteria. The selection of the right partner, the development of an open and close partnership, and the monitoring and review of the partner will ensure that the project is completed successfully from a scientific, regulatory, time, and cost perspective. [Table 1]

Table 1: Finding Preclinical and Clinical Service Providers

KEY ISSUES

Scope of activities provided

Global representation of service provider

Specialization by medical indication

Size of service provider

Financial stability

Experience including regulatory experience

SELECTION PROCESS

Prepare a detailed project/study design

Perform competitive intelligence

Solicit requests for quotes

Evaluate the proposal on predetermined criteria

Schedule and conduct site visits

Select service provider

DEVELOPMENT OF THE PARTNERSHIP

Develop contract; Sign confidentiality agreements

Review and approve study protocols

Establish monitoring protocols

Establish performance criteria

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Contract Research Organizations in India Biocon India Group The Biocon India Group is an integrated biotechnology company, which historically has been involved in manufacturing industrial enzymes by fermentation. Strong in research, the company has leveraged these R&D capabilities to conduct customized contract research for large drug companies and biotech companies. The company applies its proprietary fermentation technologies to make effective and innovative biomolecules in diabetology, oncology, cardiology, and other therapeutic segments. Biocon‘s existing products include medicines to treat diabetes, high blood pressure, high cholesterol, cancer, as well as digestive aids; Biocon is India‘s largest producer of human insulin. It is now aiming to produce the world‘s first oral insulin, as well as drugs to treat ailments ranging from rheumatoid arthritis to lung cancer, and brain tumours. 3 From early stage drug discovery to clinical development and commercialization, Biocon leverages its collective expertise and resources to provide an innovative range of products and services. This integrated business model allows Biocon to offer their strategic global partners customized, high value solutions at any stage in the lifecycle of a drug—right from discovery to the market. The company has entered into agreements with such companies Pfizer, AstraZeneca, and Bristol-Myers Squibb. 4 Syngene Syngene, a Biocon subsidiary, offers outsourced, high value research and development from target identification and validation to small molecule, and library synthesis. The subsidiary provides pharmaceutical and biotechnology companies with customized solutions in the areas of synthetic chemistry and molecular biology. For example, the Biocon subsidiary and the Bristol-Myers Squibb Co. stated last year that they are significantly scaling up their nine-year-old research tie-up. 5

Syngene will set up a dedicated research facility at Biocon Park for its client to move into high-end R&D services for the latter‘s global discovery and early drug development plans. Syngene or Biocon anticipates adding 400 scientists over the next three years to its existing 600 research team to advance BMS‘s plans, according to Syngene‘s COO, Dr. Goutam Das. 5 Clinigene Clinigene, another Biocon subsidiary, specializes in Phase I-IV clinical trials and studies using well-characterized clinical databases in diabetes, oncology, lipidemia, and cardiovascular diseases. Established in 2000 as a Biocon subsidiary, the company launched India‘s first CAP (College of American Pathologists) accredited Central Reference Laboratory with clinical specializations in biochemistry, haematology, histopathology, and microbiology. At the beginning of 2004, Clinigene announced the opening of a human pharmacology unit (HPU) to conduct phase 1 clinical trials and related studies for pharma R&D companies. Five domestic and six international pharma majors enlisted Clinigene at the time to conduct clinical research for their pipeline drugs, according to Dr. Arvind Atignal, chief operating officer of Clinigene. 6 The 26-bed, 3,000 sq.ft HPU set up with a total investment of Rs 6 crore is located at the superspecialty Sagar Apollo Hospital. The unit will conduct trials in compliance with global ethical and regulatory standards and will focus on bio-availability and bio-equivalence (BA/BE) studies of drugs on healthy human volunteers. 6 GVK Biosciences Pvt Ltd GVK BIO is one of India‘s premier CROs, providing an integrated platform of research services across the pharma R&D value chain. In 2007, Sequoia Capital India invested Rs 100 crore or $25 million in GVK Biosciences Pvt Ltd.

Based on this investment, GVK BIO hopes to expand its capacity in drug discovery services, build a state-of-the-art campus at Hyderabad on a 25 acre site and provide new service offerings in the preclinical and clinical arena. 7 In 2006, GVK Biosciences Pvt Ltd and Wyeth Pharmaceuticals announced a partnership agreement. The agreement with Wyeth, involving multi-million dollar investments, required GVK Bio to establish a dedicated discovery chemistry research site to engage 150 synthetic chemists working exclusively for Wyeth. 8 Manipal Acunova Manipal AcuNova Ltd announced late last year its European foray with the acquisition of a German CRO, ECRON GmbH. The new entity, ECRON AcuNova, marks one of the first overseas acquisitions by an Indian CRO; it is anticipated that this will drive the company‘s growth in Europe and the U.S. 9 ECRON AcuNova provides end-to-end services for phase I - IV clinical research including clinical trial management, clinical data management, PK/PD services, and central lab services.10 Matrix Laboratories Matrix is gradually emerging as one of the frontline plays in the pharma outsourcing space. A robust pipeline targeting the developed markets of Europe and the U.S., strong relationships with both generics and innovator companies, and a reasonable valuation are the key drivers of this company‘s growth. Matrix Laboratories has seen its outsourcing business grow fivefold, to $10 million in one year according to industry experts. 11 The company is engaged in the manufacture of Active Pharmaceutical Ingredients (APIs) and Intermediates, but also offers contract research services. Contract R&D services include chemical development of new molecular entities (NMEs) from lead optimization through preclinical development and into manufacturing of API for clinical development phases.

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Contract manufacturing services are reserved for projects that are further along the pipeline including commercial manufacturing. Matrix Laboratories and three other drug companies have been tapped by the Clinton Foundation to supply low-cost anti-AIDS drugs to AIDS-stricken regions like Africa. Matrix will supply the active ingredients in the anti-AIDS drugs not only to Raxbaxy and Cipla, but also to any other drug companies that will partner with the Clinton Foundation. 12 A new Hyderabad-based manufacturing unit was established for contract manufacturing to global pharma companies primarily in regulated markets including the U.S. and Europe. The company initiated a capacity expansion programme and expected to increase its production capacity to 1200 KL from 900 KL in 2004, around four times the capacity the company had in 2001 with three plants. 13 In 2005, Matrix Laboratories entered into a Share Purchase Agreement (SPA) with the promoters of Mchem Group China, for the acquisition of a controlling stake of about 60% in the Mchem group. The share purchase agreement is in line with the strategic intent and the memorandum of understanding that the company had signed earlier with Mchem to gain access to the comparative advantage that China provides in the sourcing of pharmaceutical chemicals and intermediates, and to establish a cost effective supply chain. 14 In 2006, Mylan Laboratories Inc. and Matrix Laboratories Ltd. announced that Mylan would acquire up to 71.5% of Matrix shares outstanding for Rs. 306 per Matrix share. 14 Matrix would provide Mylan with a significant presence in important emerging pharmaceutical markets, including India, China, and Africa, as well as a European channel and distribution network through Matrix‘s Docpharma subsidiary. By combining Matrix‘s active pharmaceutical ingredient (API) and drug development business with Mylan‘s expertise in finished dosage forms (FDFs), this transaction would allow Mylan to capture incremental pieces of the value chain through backward vertical integration. Additionally, Matrix would expand Mylan‘s capabilities in a number of key areas including products with higher barriers to entry and long-term growth opportunities, and allow the company to pursue a broader portfolio of new products at lower costs. As part of the Mylan organization, Matrix should benefit from a strong U.S. presence, expanded production capabilities and manufacturing capacity, and industry-leading expertise in product development and process optimization. 14 Quintiles India Founded in 1997, Quintiles India currently has offices in Ahmedabad, Mumbai and Bangalore with experience in working on over 90 clinical studies involving more than 600 sites and 13,000 patients including studies in oncology, psychiatry, neurology, anti-infectives, gastroenterology, ophthalmology, endocrinology, and cardiology.

Since Quintiles India opened shop in 1997, 15 of the top 20 global pharma companies have worked with the company in India according to Ferzaan Engineer, chief executive officer of Quintiles India. 15 Quintiles India offers high quality clinical data management services for Phase I, II, III, and IV studies in various therapeutic areas. It has been utilizing India‘s IT expertise to assemble a data management team in Bangalore that is trained and skilled in offering data management services in Clintrial, Oracle Clinical, and various EDC platforms. The unit provides customized solutions to pharmaceutical, biotech, and medical devices companies, including CRF design, database design, query management, double data entry, coding, and quality control as per global standards and at highly competitive prices. Quintiles India also offers services in the areas of project management, clinical trial monitoring, regulatory affairs, drug safety, protocol development, site management, quality assurance, clinical trial supplies, data management, training, and centralized ECG. 16 Quintiles announced in 2006 its intention to open a central lab in India to help feed its expanding network of clinical trial operations in the country. The new lab will be one of only a few global central laboratories operating in India; Quintiles is hoping to use this competitive advantage to lure more of its clients to conduct trials in the budding region. 17 Reliance Clinical Research Services Reliance Clinical Research Services (RCRS) is a clinical research organization set up by the Reliance Group to provide clinical research services to pharmaceutical, biotechnology, and medical device companies. 18 RCRS performs preclinical and clinical (Phase I to Phase IV) studies. The company is now conducting several studies for clients based in the U.S., the U.K., and Middle East. RCRS is working for indications in oncology, burn wounds, cardiovascular, endocrinology, nephrology, gastroenterology, infectious diseases, and vaccines. 19 Siro Clinpharma SIRO Clinpharm, one of India‘s first contract research organizations has been performing clinical trial services for the past several years. Each year, business has grown 60 to 80% with almost 90% coming from international sponsors, says general manager Chetan Tamhankar. With the change in intellectual-property laws, SIRO Clinpharm expects business to ―skyrocket,‖ he adds. 20 In 2003, the Mumbai-based SIRO Clinpharm Pvt Ltd and Princeton-based Covance Inc. announced their collaboration to offer drug development services in India to support the domestic and international biopharmaceutical industry. The collaboration between the two will further strengthen the global reach of Covance and the operational capabilities of SIRO.

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―We are pleased to collaborate with Covance in offering drug development services in India to the global pharmaceutical industry,‖ said Dr Gautam V Daftary, director, SIRO Clinpharm. 21 Then in 2004, Pfizer announced that as part of an overall strategy to build partnerships with CROs, Pfizer Global Research and Development (PGRD), through its affiliate in India has entered into a partnership with SIRO Clinpharm. The agreement covers the provision of clinical data management and biometrics services. The partnership allows Pfizer to leverage a rich talent pool while capturing the unique cost-productivity advantage India offers. 22 In 2006, Ventiv Health, Inc.‘s Ventiv Clinical Services division and SIRO Clinpharm Pvt. Ltd., announced the formation of Ventiv-SIRO (India), an exclusive joint venture offering drug companies clinical data management services. The Ventiv-SIRO (India) joint venture brings together Ventiv's broad statistical analysis and data management services and premier client portfolio with SIRO‘s strength conducting large-scale Phase II-IV clinical trial data management projects. Ventiv-SIRO (India) will provide pharmaceutical and biotech companies access to a broad pool of outsourced offshore talent that will design databases, conduct data and statistical analysis, and analyze medical images and scans. 23 Synchron Research Pvt. Ltd Synchron was started by a group of pharmaceutical professionals in 1998. Today Synchron is a leading Contract Research Organization in India providing a broad range of clinical research services from phase I to phase IV. On March 31st 2008, Synchron Research Services Pvt Ltd, announced the acquisition of the stand-alone bio-analytical and bio-marker facility of PAREXEL in France. The lab will be known in France as SYNEXEL Research International SAS. ―Our global operations are aimed at providing our clients a variety of options and a complete package of services and to become their drug discovery and development partners‖ says Dr. Shivprakash Founder and Managing Director, Synchron. Synchron also hopes to look for more opportunities in Europe. Apart from Europe, Synchron has already started operations in other Asian countries. Its Bangkok facility offers BA/BE and clinical research capabilities—being the first CRO in Thailand. 24 Triesta Sciences Triesta undertakes research in the identification, validation and development of cancer biomarkers and their integration with clinical drug development and molecular diagnostics. 25 The company has programs in the areas of oncology, infectious diseases, gastrointestinal disorders, and renal disease. Triesta has established integrated clinical research and molecular analysis capabilities in India to undertake the end-to-end clinical validation of novel RNA, DNA, or protein-based targets and markers. The company entered into a strategic alliance with Molecular Connections in the area of biomarker discovery and validation in 2003. 26

As a part of the alliance, Molecular Connections will provide its advanced information extraction, informatics, and pathway analysis expertise for Triesta Sciences‘ biomarker discovery program. 27 Vimta Labs Vimta Labs is India‘s leading contract research and testing organization. According to Dr Vasireddi, CMD of the labs, the principal focus is now on water, food, agriculture, pharmaceuticals, and the health sector. The company is assisting pharma firms in developing generic drugs by undertaking clinical research and bio-equivalence studies. The other areas of clinical research include pre-clinical toxicology studies. 28 Conclusion In context of the size and growth of the current Indian market vis-à-vis the Asian and global markets, it is clear that India promises great potential to become one of the most significant players on the global stage by 2010. The ingredients to success for this industry will include: a strong academic research environment, a highly educated labour force, a supportive physical infrastructure, experienced venture capital and management, and supportive intellectual property as well as regulatory laws. The developments taking place in India at the national, state, and local levels appear to be the foundation for what should be a phenomenal biopharmaceutical industry in India. With the patent regime strengthening, domestic and international companies, most of which have established their base in India, are eagerly conducting research and development activities in the country. India is all set to transform into a global leader by 2010 should it continue to unravel opportunities in the right segments and develop long term capabilities to harness these opportunities.

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References 1) CanBiotech. (2005). CanBiotech Annual Outsourcing Report. 2) Shankar, V. It takes two to tango. Express Pharma. May 2007. 3) India's biotech queen goes for global crown. AFP. March 2007. 4) www.biocon.com 5) Biocon arm to set up research facility for Bristol Myers, to be Britols Myers' first research centre in the country. Business Line. March 2007. 6) Biocon arm Clinigene opens clinical trial centre. The Hindu Business Line. January 2004. 7) Sequoia Capital Invests $25 Million In GVK Biosciences. VC Circle. November 2007. 8) GVK Biosciences to provide research services for Wyeth Pharma. The Hindu Business Line. January 2006. 9) Manipal AcuNova buys German Co. The Hindu Business Line. November 2007. 10) www.acunovalife.com 11) India: Big Pharma's New Promised Land? Business Week. January 2004. 12) India set to tap $48-bn pharma outsourcing mkt. rediff.com. October 2003. 13) Matrix Labs plans Rs 75 crore facility. Business Standard. October 2004. 14) www.matrixlabsindia.com 15) Quintiles to expand India operations. The Hindu Business Line. April 2005. 16) Services Galore at Quintiles. BioSpectrum. August 2004.

17) Barnes, K. Quintiles steps up Indian presence. DrugResearch.com. October 2006. 18) www.relclin.com, 2008 19) Reliance Clinical services for global markets. The Hindu. May 2004. 20) www.siroindia.com 21) SIRO Clinpharm, Covance to work jointly in India. BioSpectrum. August 2003. 22) Pfizer to use Clinical Data Management Services from Siro Clinpharm in India. Pfizer India. May 2004. 23) www.inventivhealth.com 24) Synchron Acquires Parexel's Bio-Analytical and Bio-Marker Facility in France. Business Wire India. March 2008. 25) www.triesta.com 26) Triesta Sciences. BioSpectrum. January 11 2006. 27) Molecular Connections ties up with Triesta to develop biomarkers. Express Pharma Pulse. April 2003. 28) Vimta Lab sets its eyes on global market. PharmaBiz.com. July 2003.

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India – A place of business opportunities With an economic growth rate of the GDP of more than 8.5% in 2007 and an average growth rate of 7% in the past decade, India has become a preferred target for foreign investment.1 In fact, foreign investments are so high that the Indian Rupee as well as prices for property appreciated more than expected and in the meanwhile raised inflationary concerns. However, India has a well working banking system, a solid democracy, low wages and established a solid high tech fundamentals and education with low language barriers. Current industrial production growth rates are about 10% annually.2 The huge Indian population of more than 1 billion people combined with suboptimal infrastructure in rural areas, socio-economic behaviour, and environmental pollution is one factor that drives the market opportunities in the diagnostics and biomedical industries. This applies particularly for on-site testing and rapid point of care tests for infectious diseases, such as Malaria, HIV, TB and HBV as well as cancer detection. Therefore, immunochemistry techniques are expected to be of the highest growth rate of IVD testing in India and molecular diagnostics tests are seen to greatly appreciate in number in the near future.3 A report by Kalorama Information4 has put the Indian market for IVD tests at $400 million in 2005, accounting for 1% of the global IVD market, with an annual growth rate of 20% during the next five years. This means that the market should reach $990 million, or about 3% of the global IVD market, by 2010. Consequently, companies who target cancer and diseases characteristic for India, such as particular types of Malaria predominating in India, are ideally suited to establish a customer base there, particularly when ‗packaging‘ the tests into a portable and rapid format so that both hospitals as well as physicians in rural areas can leverage the benefits

of diagnostics. This approach of decentralization of diagnostics testing requires technologies which can be performed in a rapid, sensitive, quantitative and portable format. Genomix and ESE have joined forces to address these problems and provide test platforms for rapid decentralized testing, which are easy to use and are affordable. Both immunochemistry as well as nucleic acid testing (NAT) platforms are planned to be deployed for this market. The Genome Valley of Hyderabad The Indian Government is executing a plan to help establish start-up companies in biotech and other fields by providing grants, subsidized properties, and low interest (1%) business loans. Moreover, the Government provides incentives for non-resident Indians to return and expand industries, which may eventually result in increased attraction of academic intellectuals and entrepreneurs from the U.S. and Europe. It has been recognized that in-vitro-diagnostics (IVD), biotech and environmental pollution monitoring are important to the future of the country. Hyderabad and Bangalore are known as cities with exploding high-tech activities. Multinational corporations (MNCs) such as Microsoft, Intel, Dell, and Yahoo have all established their presence followed by large pharmaceutical companies. This has established an environment where diagnostics, biotech, and instrument manufacturers as well as other life sciences oriented companies can settle due to vendor or collaboration relationships and due to the availability of skilled workers in these fields. Examples include Invitrogen, Sigma-Aldrich, and many others. Establishing Business and Partnering in Hyderabad Genomix and ESE partnered in India, as they are both complementary and can address the demand for products in the markets described above. ESE is developing and producing portable/handheld testing devices; Genomix the tests for Malaria, HIV, HBV, and others.

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Partnering in Hyderabad, India -Opportunities in the Diagnostics and Biomedical Industries By Dr. Konrad Faulstich Ph.D., MBA, Head of Business Development at ESE GmbH, Germany; Dr. Rathnagiri Polavarapu, Ph.D., CEO at Genomix Molecular Diagnostics, Pvt. Ltd., Hyderabad, India

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Genomix brings the knowledge of the sales channels in India to the table and has well-established contacts to government, hospitals, industry, and academics. ESE has also the opportunity to partially produce parts and assemble devices in India, which will be directly introduced into the Indian market. This generates cash flow within India and lowers the cost of production and logistics. Grants from the government cannot be passed on to foreign entities and industrial partners. A legal entity has to be set up in India between partners to be eligible for grant money. However, Indian commercial partners can subcontract development and production to foreign companies. It must be ensured of course that the money will be used for the benefit of India, will generate cash-flow within India, and is used only for the tender that was granted. A closer partnering structure is the Joint-Venture (JV). A JV must be set-up as a 51:49 share or higher ratio between the Indian and the foreign partner to receive money directly from the Indian Government. A 76/24 or vice versa ratio avoids veto rights to one of the partners. Genomix and ESE found it helpful to get legal advice from the Chambers of Commerce that various countries maintain in India, such as the Indo-Canada Chamber of Commerce ICCC5 or the Indo-German Chamber of Commerce IGCC6. The chambers represent the interests of partners from both countries and aid in legal questions, consult for partnering options, conduct marketing studies upon request, and help in setting up offices and operations if desired including hiring needs. JVs per se are expensive to set up and need almost a year‘s time to be established. An appropriate way for ESE and Genomix was therefore to approach a close relationship stepwise. This was done first by a establishing a loose partnership, then by a distribution agreement for certain products, markets, and applications to be co-developed. The relationship can then be extended accordingly.

There are other mechanisms to protect proprietorship, such as working with a complementary partner in a mutually beneficial relationship, control of complementary assets such as sales channels, complementary products and production knowledge, open licensing strategies, trade secrets, and time to market. Summary India presents itself today as a huge opportunity for medical diagnostics, biotech, and life sciences companies. Both economic/socio-economic as well as environmental factors drive the demand for products in this area. The Indian Government has created a stage for interested companies and entrepreneurs to establish businesses in India while the hurdles are comparably low. Hyderabad has become a hub for life sciences, diagnostics, and biotech companies. Establishing business in India can be done without partnering by subsidiaries, liaison and branch offices or in an equity or non-equity alliance. Partnering can be done in a looser format (customer, collaboration, strategic alliance) or closer format (distribution, manufacturing, Joint Venture, Merger/Acquisition). There are incentives provided by the Government such as subsidized properties, grants, low interest loans, and support in evaluation and surveys. An example of partnering is shown by ESE and Genomix, which have joint forces currently in an extendable collaboration and distribution relationship to address the demand in India for portable, rapid, and affordable tests for hospitals and physician‘s offices, covering infectious diseases and environmental monitoring.

References 1) www.cia.gov/library/publications/the-world-factbook/geos/in.html#Econ 2) www.theodora.com/wfbcurrent/india/india_economy.html 3) Christina Elston, High growth projections for IVD market in India, IVDTechnology, Sept, 2006. 4) Kalorama Information (New York City), Worldwide Market for In Vitro Diagnostics, www.kalorama.com. 5) www.iccc.org, www.iccc-i.org 6) www.indo-german.com

It is important to note that especially in India, the Government is very supportive and helpful to entrepreneurs. This refers to market surveys, evaluating products, grants and loans to spur the economy. Another way to establish a customer base is to seek assistance from entities which provide development aid in India. Their development aid mandate and views on development objectives without commercial interest may partially overlap with the business objectives of companies entering India, especially in the medical, diagnostics and environmental areas. These entities can help with filed studies, and help train physicians, as well as record statistics in various population studies. Foreign companies can set up businesses in India without partnering of course. This ranges from branch offices, where the foreign parent company is liable both in India and its home country, a liaison office, which cannot perform commercial transactions in India, or formation of a subsidiary, which requires hiring, operations, and market access to be successful. In our view it is most important to leverage the knowledge of doing business, of cultural differences, of sales channels and appropriate networks of an Indian partner to run a successful and sustainable business in India. Last but not least trust, between the partners and mutual respect are indispensable in any well working relationship. Some hurdles for companies to settle in India are regional political unrest and the uncontrollable hype in the real-estate market. Although the educational system outputs a high number of very knowledgeable technicians and life sciences/biotech graduates, the hands-on experience is usually not extensive. Once trained to the state of the art, methods of retaining skilled employees have been unconventional and can be cumbersome at times for employers. Nevertheless, relatively low wages compared to the U.S. and Europe may compensate for some of those hurdles. On IP related issues and reverse engineering it is not easy to say that India‘s laws protect IP to international standards.

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Dr. Polavarapu was director of the DNA Core Facility and Associate Professor in the departments of Biochemistry and Medicine and served in both research and administrative capacities at Emory University. He established a high throughput macromolecular core facility as one of the first core labs in the country for automated DNA sequencing, high density Microarray Gene Chip technology, laser-captured microscopy (LCM), RT PCR and other state-of-the-art technologies. He was also involved in the design and execution of projects and collaborated with several investigators regarding their functional genomics studies (1997-2002). He is serving as advisor to several other biotech companies and is an adjunct professor of the Genetics department of Osmania University, India. He has received numerous awards and honours and has co-authored more than 40 research articles in peer-reviewed journals. Contact: Genomix Molecular Diagnostics, Pvt. Ltd., 5-36/207, Prashanthnagar, Kukatpally, Hyderabad 500 072. Andra Pradesh, India. Tel: +91-40-64581236, giripolava@yahoo.com, info@genomixbiotech.com, www.genomixbiotech.com

Dr. Rathna Giri Polavarapu, President and CEO of Genomix Molecular Diagnostics and Genomix Biotech, has 25 years of experience in biomedical research and has held several senior executive positions in academia and the biotech industry. He received his doctoral degree from Madras University in 1983 followed by a prestigious post doctoral fellowship at the National Institutes of Health, and started his career as a scientist in a broad spectrum of fields in biomedical research until 1993. He gained extensive experience in the fields of molecular and cellular biology and use of state-of-the-art technologies that resulted in cloning several important gene families and discovering their functional role in disease processes. He moved to Penn State University, School of Medicine as a faculty (1993-1997) and initiated research programs in cancer, neurodegenerative diseases, and molecular aspects of drug metabolism and received several national grants and program projects. He also established molecular core labs to serve the scientific community regarding their genomics needs.

Konrad Faulstich, PhD, MBA is Head of Business Development at ESE GmbH and has more than 10 years international management experience in the biotech area. The focus of his responsibilities is the fast growing fluorescence business of ESE, which serves many different industries worldwide. Prior to joining ESE he held managerial positions at Becton Dickinson and Applied Biosystems with multi-site management responsibilities. He earned his PhD in Organic and Biological Chemistry from University of Frankfurt, Germany and an MBA with concentrations in Strategy/Economics and in Finance from Cardean University/Ellis College at NYIT. Among others, Dr. Faulstich has been a member of the Board of Industrial Advisors to the University of Berkeley Sensor and Actuator Center (BSAC), has been lecturer at Universities of Applied Sciences at Sigmaringen and Darmstadt, Germany and has co-authored numerous patents and publications.

ESE GmbH was founded in 1997 and has specialized in portable decentralized test platforms, high precision miniaturized detection systems, illumination and embedded systems in the UV, fluorescence, and process control business. ESE is certified according to ISO 9001 and EN 13485 and develops and manufactures devices according to standard regulatory requirements. ESE provides customized and master tailored solutions for medical devices, diagnostics, biotech, brand security, water and environmental analysis, food applications, packaging industry, agricultural tests, and space research. Contact: ESE GmbH, Ludwigshafener Str. 29, D-78333 Stockach, Germany, Tel: (+49) 7771 9166-24, Mobile: (+49) 172 932 8441, Fax: (+49) 7771 9166-18, konrad.faulstich@ese-gmbh.de, www.ese-gmbh.de

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Outsourcing and Technology Transfer: Peas in the Same Pod Probably the most famous cheerleader of the modern outsourcing movement, New York Times award-winning journalist Thomas Friedman, detailed in his 2005 best-seller ―The World is Flat‖ the process of identifying and utilizing cost advantages, talent, new markets, new manufacturing resources and so on, from around the world. Whilst he implied that the West had the advantage when it came to creativity and invention, the underlying foundations that drives the process, these very globalization processes have levelled the playing field and ensured that invention and creativity can now be found pretty much all over the world. Technology transfer can be considered the bridge between such invention and eventual commercialization, and is much a part of today‘s flat world as is outsourcing. Licensing Connects Biotech to Pharma One of the best ways to form a new biotech company is to in-license a technology that has already been developed and form a company around it, adding management, marketing, and talent. Of course, this is also how Big Pharma operates as well, with the scale of the economics staggering. For example, Pfizer has reportedly earmarked U.S. $17 billion to acquire new drugs or biotechnology treatments during the next two years, a company spokesman said in 2006, from tech transfer or M&A. An example of the process, and illustrating the global reach of the modern tech transfer deal, can be seen in the development of the new human papillomavirus (HPV) vaccine. Invented by Dr. Ian Frazer and his team at the University of Queensland, Australia; licensed on to CSL, a large biotech firm headquartered in Melbourne, Australia; then licensed on to U.S.-based Merck and U.K.-headquartered GlaxoSmithKline (GSK). Merck is currently marketing the drug worldwide (80+ countries) after FDA approval in 2006, with GSK set to follow soon.

Analysts are predicting that the worldwide market for the HPV vaccine to be a whooping U.S. $4-7 billion per year. Valuable technologies can be found in locations all over the world, sometimes in the most unlikely of places. However, tracking down technologies in other languages than your own can be tricky. This is why the prestigious publication Nature Magazine launched a dedicated China-focused publication in early 2007, to uncover and feature research from Chinese scientists that because of being originally published in Mandarin was not getting international exposure. Concurrently, research institutes or companies that are not internationally networked or savvy can be sitting unaware of useful and valuable technologies, not knowing how to publicize or promote them. Similarly, companies looking for acquisition targets will overlook these opportunities simply because they are off the radar. The Taiwan Technology Transfer Promotion Platform That's where BiotechEast comes in. We are a life science-focused consultancy company based in Taipei, Taiwan. Working with Taiwanese universities, research institutes, and companies, we have developed a technology transfer promotion platform, with the aim of identifying, packaging, and promoting Taiwan-developed patented technologies to potential buyers or collaborators overseas. The format grew out of a realization that while valuable technologies were coming out of Taiwan, Taiwanese companies had unrealistic expectations about the preparation, cost, and time involved in successfully commercializing or out-licensing these technologies, particularly to companies outside of Taiwan. BiotechEast had previously gotten involved fairly deeply in cases with several local companies that had come to a premature end due to such reasons, much to our disappointment and financial disadvantage. While we knew some great technologies were coming out of Taiwan, we did not want to tie ourselves

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Taiwan’s Technology Transfer Promotion Platform

By Dave Silver, President, Biotech East Co., Ltd.

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BiotechEast introduces technology promotion platform at Taipei forum 28 February, 2008 Life Sciences marketing and info-research company BiotechEast has developed a new package of services for companies in Taiwan‘s life sciences sector, to help publicize their technological achievements overseas and to increase opportunities for international business partnerships. Called the ‗Taiwan Life Sciences Technology Promotion Platform‘, the package was announced at a forum in Taipei on Wednesday held to highlight promotional and alliance-building strategies by companies in Taiwan‘s burgeoning biotechnology sector. "Although Taiwan‘s life science companies are making progress with exciting innovations, it‘s the visibility and promotional aspects we believe are lacking," said BiotechEast president, Dave Silver. For example, recently patented technologies often end up ―gathering dust‖ at technology transfer offices at research institutes and universities, he mentioned, where salaried staffers have no incentive to promote them. According to BiotechEast, the platform includes a range of services such as the editing and rewriting of a participating company‘s technology documents, posting of these documents on some of the world‘s most visited technology trading websites and email newsletters, and a technology brief sent to pharmaceutical consultants and technologies assessment specialists worldwide. With Big Pharma willing to spend billions of U.S. dollars on acquiring new discoveries that could lead to the next blockbuster drug, Taiwan companies in this sector are wise to try to capture some of this interest, suggested Silver. He also noted that the new service was a very cost-effective alternative to trying to ‗go it alone‘ on promotion. ―To construct effective targeted promotions on your own is a very expensive proposition. We‘ve been able to pool resources and negotiate with promotional providers on a volume basis to bring down the cost for participants from Taiwan,‖ he said. ―We make sure we take every opportunity to reach the kinds of people who are looking for new life science technologies,‖ he added. Participating companies are already seeing results.

too closely to the success or failure of a company‘s deal. How it works is this: Technologies are promoted through a range of marketing vehicles (including CanBiotech.com), our own websites and email channels, as well as to a network of technology buyers and tech transfer consultants around the world, including acquisition directors at many Big Pharma firms. This package of services is offered at an affordable price point to our clients, encouraging participation from a range of both large and small companies as an entry-level window into the technology transfer process. At this stage, the package offers a ‗first tier‘ level of services. BiotechEast helps with the promotion and exposure of these technologies only; companies which receive enquiries from interested overseas parties through participation in the platform liaise and negotiate with such inquiries by themselves without our involvement. For where the program is in terms of its development, this is where we want to be. However, BiotechEast is in the process of developing a ‗second tier‘ range of services such as technology valuation, legal services, and so on, to offer participating companies. The service has been running for a little over a year now, with impressive results to date. Out of the first batch of clients signing on for the one-year service, all have renewed their contract for another year, some with the same technologies showcased, some with updated technologies. Our clients have let us know they have received a lot of interest in their technologies since joining the program, some having to even take on extra staff to handle all the enquires and interest! With Taiwan‘s experience and expertise in traditional herbal medicine, it is not surprising that a high proportion of companies participating in our program are from the herbal medicine industry.

The typical model for a herbal medicine drug discovery company is to develop or refine botanical material with properties already well known and documented from thousands of years of use as a Chinese medicine, then spend years of lead development and preclinical testing in preparation for a submission to the FDA for IND approval. At the same time, it will be utilizing the same ingredient in a health food product, sold over-the-counter to earn revenue to support the drug‘s development activities. With more and more companies in Taiwan successfully taking this route, it would not be surprising to see some exciting new drugs emerge from Taiwan in the years ahead. About BiotechEast Co., Ltd. BiotechEast is a consulting company providing research and business facilitation services for companies wishing to connect with the emerging life science industries within the Greater China region. BiotechEast specializes in independent industry analysis, technology transfer facilitation, and in identifying outsourcing opportunities in the medical devices and bioproduct manufacturing sectors. Dave Silver - President, BiotechEast Dave has worked in media, marketing, and consulting for more than 14 years based in Taiwan, and is currently leading the consulting team at BiotechEast, which he co-founded in 2001. He is a recognized authority on Taiwan‘s life sciences sector, having written more than 350 news and feature articles on the subject for www.biotecheast.com and a number of other publications. Dave also covers the industry as an independent analyst for BiotechEast‘s private clients both in Taiwan and abroad.

BiotechEast Co., Ltd. www.biotecheast.com dsilver@biotecheast.com Ph: 886 2 27028100 Fax: 886 2 27069996 15F, No. 57 Tunhua S. Rd., Sec. 2, Taipei 10618, Taiwan

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Indian Pharma: Introduction The profile of the Indian pharmaceutical industry appears promising. Valued at over U.S. $6 billion and growing at over 13% annually1, the Indian pharmaceutical market is one of the fastest growing pharmaceutical markets in the world. Though with over 20,000 registered drug manufacturers, where the top three companies have a market share of around 15%, this market seems highly fragmented; however, a consolidation is perceptible due to infusion of the patent regime. Current estimates put the population at 1.13 billion (estimate for March 31, 2008)2 with increasing spending power, and a huge patient base to support the flourishing market. ―Driven by a huge patient base, increasing incomes, improving healthcare infrastructure and strong penetration of health insurance, the pharmaceutical market is expected to grow more than double its size in the next five years‖ RNCOS, a market research company, reports.3 Following the western model, the urban population is expected to increase the penetration of life-style related drugs. Currently drugs for acute diseases dominate this market. India‘s share in the global pharmaceutical market is modest at 1-2%.4 Globally the India market ranks fourth in terms of volume and 13th by value.1 India, among the top three5 in generic drugs and active pharmaceutical ingredients (APIs), has a strong foothold in global pharma market. Outsourcing has gained momentum here in clinical research as well as in contract research and manufacturing services (CRAMS). Big pharma companies are partnering with Indian pharma in collaborative research (Ranbaxy and GSK), contract research (Torrent Divi‘s), contract manufacturing (Matrix Dishman, Shasun, Cadila), and distribution in India (Nicholas, Cadila, Wockhardt).1 Drivers of Outsourcing The soaring cost of research,

surmounting pressure from competition, and time-to-market problems have compelled global pharma majors to look for low-cost destinations. A distinct cost advantage, better regulatory compliance, proved intellectual capability, and global relationships can help India make more competitive, and hence a stronger signature in the outsourcing space. Contract Research and Manufacturing India has placed itself as a global hub of CRAM services. The growth of CRAMS has given Indian pharma companies, especially mid-cap, a reason to rejoice. According to an estimate of IBEF, ―over the last 5 years, the CRAMS industry has been contributing close to 8% of the total Indian pharmaceutical business‖. The CRAMS industry is expected to grow at a CAGR of nearly 32% from 2006 to 2013, fuelled by developed countries.1 Pfizer, Astra Zenca, Eli Lily, GSK, Merck, Roche, and Allergan among others are increasingly coming on terms to outsource their business to the Indian CRAMS sector. Financial Express reports that the Indian pharmaceutical industry is gearing up to exploit the over $35 billion global contract research and manufacturing (CRAM) business in a big way.6 Some pharma majors like Pfizer (malaria, osteoporosis, breast cancer and schizophrenia), Eli Lilly (Human Insulin, Insulin Lispro, lung cancer), Roche (lung cancer), SIRO Clinpharm (in oncology, endocrinology, traumatology, sports medicine, pulmonary diseases, pediatric diseases), Clinigene International (diabetes), and Wellquest (40 drug product tests)7 are also foraying into clinical trials. Going the IT Outsourcing way Clinical trials generate huge amount of data. As such, ‗Data management and analysis‘ has become one of the core business concerns. A greater number of R&D centers across the world are seeking a common base for transfer of data, information, and knowledge to enable an informatics-based decision support system.8 India‘s IT experience and skills, as well as cost advantage, are

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Indian Pharma: Informatics and Analytics Outsourcing

By Chandra Shekhar Prasad, marketRx, Gurgaon, Haryana, India-122002 Author is currently working with marketRx, a pharma analytics and consulting company, as a Business Analyst. Contact No: 91-989-139-9403; email ID: csp021@gmail.com

Disclaimer: The opinion given here is personal, and it does not have any relation with marketRx

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giving India an edge over other players. The Bio and Information Technology Coalition of Biotechnology and Information technology has also brought a new horizon for Bio-IT. It can be thought of a branch of Bioinformatics, which is helping the industry speed up drug research. According to the projection of RNCOS, the worldwide annual market growth rate is close to 15.8% or U.S. $3 billion by 2010 and the total European Bioinformatics market is set to expand from nearly $310 million in 2004 to $720 million by 2011.8 ValueNotes / KnowGenix research projects that Indian bioinformatics services outsourcing revenues will touch U.S. $62 million by 2010. Indian Bio-IT Outsourcing Spectrum With over 325 companies, the Indian biotechnology sector generates revenues of about U.S. $2 billion and is estimated to reach U.S. $5 billion by 2010. The sector has been growing at between 35% and 40% per annum for the last three years.9 The booming biotech industry has created a kind of curiosity and respect for itself in the world market. This has helped the industry fetch more business from the bigger players of developed countries. Contract research organizations and IT/ITES companies have come forward to provide integrated Bio-IT solutions. Solutions vary from database management to IT services to R&D support. This includes database (biological and chemical) management, data analysis, biomedical R&D support services, IT enabled services and customized tool development among others. Some CROs, who have data management arms are: Quintiles, SIRO Clinpharm, ICON Clinical Research, SFBC International, and Synchron among others. The Centers The biotech industry is clustered mainly in the West and South of India. Bengaluru (earlier known as Bangalore), Hyderabad, Chennai, Pune, Mumbai are

the main centers of excellence. In the North of India, Delhi is gaining momentum in housing biopharma companies. Bengaluru, after establishing itself as an IT and BPO hub, has placed itself as a hub of bioinformatics companies. A number of small companies are also mushrooming to cater to the needs of major pharma companies. Hyderabad is following the same model; as a major IT center, it houses a number of companies working in the Bio-IT domain. Bio-IT Players All leading global and local players, who have footholds in IT/ITES, are finding a way into the Bio-IT zone. Companies like IBM, Accenture, and Cognizant have all initiated their bio-IT activities in India. These activities range from pure bioinformatics solutions (i.e. proteomics and genomics) to data management to IT services to analytics. Most of the Bio-IT activities are concentrated on clinical data management. Some companies are providing IT solutions to pharma companies. These services include installation, training, and support of IT solution. Domestic IT companies like TCS, Infosys, and HCL Technologies are also in this foray. TCS provides ―strategies and technology to help pharmaceutical companies accelerate drug discovery, enhance understanding of the clinical development process, and make better decisions‖.10 Another IT giant, Infosys is providing services in gene discovery by leveraging grid computing facility, data management, and software installation, and training.11 HCL has been delivering significant value for its life science customers through the integrated package of process management, software services, and infrastructure management.12 Wipro Healthcare and Life Science division provides clinical data management, clinical data analysis, pharmacovigilance, and life sciences supply chain services.13 Satyam provides IT and BPO services for seven of the world‘s top 10 life sciences organizations. It offers services in research, clinical development, pharmacovigilance, operations and supply chain, sales and marketing, regulatory compliance, and

corporate IT.14 Pure bioinformatics companies like Strand Life Sciences, Molecular Connections, VLife Sciences Technologies, and Multinational Pure bioinformatics companies like Cytogenomics and LabVantage are in this race. Strand Life Sciences aims ―to provide solutions in data mining, predictive modeling, computational chemistry, software engineering, as well as to develop technologies and offer various products for research biology, chemistry, and drug discovery. Strand also offers custom Solutions based on its technologies‖.15 ‗Molecular Connections claims to work across various areas including protein interactions and pathways, protein target databases, chemical compound and reaction information, ADME Tox, clinical, drugs etc.16 VLife Sciences works in protein modeling and simulation, pharmacophore modeling and provides software solutions to pharmaceutical, and biotechnology industries, research institutes, and academia.17 Domestic companies with a focus on CRAMS like GVK Biosciences and Jubilant Biosys are also offering informatics solution. GVK Biosciences, the largest Indian CRO, offers services in informatics, medicinal chemistry, diagnostics, and clinical trials, with details of research facilities, products and services.18 Jubilant Biosys is focused on providing informatics and structure-directed drug discovery solutions to pharma companies.19 Multinational IT companies like IBM India, Accenture, Cognizant, and Mphasis are similarly flexing their muscles. IBM Life Science solutions aims to provide the IT infrastructure that researchers in biotechnology, pharmaceutical research, genomics, proteomics, and healthcare need to turn data into scientific discovery and new treatments for disease.20 IBM is also offering high-performance computing, data integration and management tools, installation, and training. Accenture is working exclusively for Wyeth in clinical trial data management. Cognizant is providing its services to Pfizer in data capture and management.

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GSK, a global pharma giant, has established a clinical data management center in Bangalore, which supports ongoing studies worldwide. Ocimum Biosolutions is a global life sciences R&D enabling company with three focus areas including BioIT, BioMolecules, and BioResearch. Ocimum delivers end to end genomic products and services to its customers.21 Pharma Analytics and Market Research Analytics is ―the science of analysis‖. Common applications of analytics include the study of business data using statistical analysis in order to discover and understand historical patterns with an eye to predicting and improving business performance in the future.22 Pharmaceutical analytics broadly includes analysis of clinical and sales and marketing data. It provides technology-intensive strategic solutions to the customer. It can help companies track product performance, understand market dynamics, formulate promotional strategies, and identify new opportunities and threats. In the pharma industry, sources of data include biological, chemical, clinical trial, as well as sales and marketing data. The data is supported by data management, data analytics, and data mining. Marketing and sales analytics effectively covers sales force effectiveness. Sales force operation and management includes sales force strategy, sales rep targeting, forecasting, territory alignment, sales operation management, optimizing sample allocation, product promotion analysis, and segmentation for tactical planning. There are very few dedicated players in the market, who serve the pharma and biotech companies. marketRx (now a Cognizant company) is a major player of this field. ZS Associates, another major player, serves an array of industries. There are some companies, like Accenture, who use third-party vendor products (for example Oracle‘s Siebel analytics) to serve the client. Siebel Pharma Analytics provides pharmaceutical companies with

Indian Players

Expertise

Tata Consultancy Services

End-to-end solutions, services and products to life sciences and healthcare institutions

Infosys Computing facility, data management

Satyam Software tools

Wipro Data management and statistics work

prebuilt, role-based business intelligence applications, which combine comprehensive physician profiles, promotional activities, campaigns, and medical education events with prescription and market share data to provide actionable insight into sales and marketing activities.23 Another information-intensive area is market research. It is the process of systematically gathering, recording, and analyzing data and information about customers, competitors, and the market.24 Pharma market research encompasses market event analysis, KOL identification, segmentation, promotion analytics, DTC ROI analysis, physician profiling, integrated brand planning, sales and brand tracking among other things. This segment, in general, is dominated by Knowledge Process Outsourcing (KPO) centers, like Evalueserve and Genpact. These KPOs cater to an array of industries. Currently, there are no big KPOs specifically dedicated to pharma market research. Future Course The current U.S. slowdown is set to have some impact on the revenue and growth rates of the Indian IT and biopharma industries. Given the current slowdown, the estimated growth of the outsourcing industry appears to be highly impacted. The degree and level of impact will depend upon the state of the U.S. economy and time period of slowdown. It will also depend on how the Indian pharma industry responds to this recession. One thing that is clear is that this recession is going to hamper the growth of the outsourcing industry. However, given the challenges facing pharmaceutical companies, the outsourcing sector should be able to weather this storm.

References 1) Pharmaceuticals, February 4, 2008, http://www.ibef.org/industry/pharmaceuticals.aspx 2) Population commission of India http://populationcommission.nic.in/ 3) Shushmul Maheshwari, Indian Pharma Sector Analysis March 15, 2008. http://www.rncos.com/Report/IM585.htm 4) Kripalani, Manjeet. Pharma Karma; Tougher patent protection laws are spurring rapid growth in new drug research across India. Business Week 39:29 (18 April 2005): 20. 5) Pharma sector to triple india-south africa bilateral trade to us$ 12 bn. By 2010: ficci www.ficci.com/press/337/INDIA.doc. 6) R Ravichandran. Pharma cos bet big on CRAM, more to join the bandwagon March 23, 2007. http://www.financialexpress.com/old/fe_full_story.php?content_id=158747) 7) George Iype, clinical trials:why India is irresistible December 22, 2004. http://newslinks.rediff.com/money/2004/dec/22spec.htm 8) RNCOS, Bioinformatics Market Update (2006). http://www.rncos.com/Report/IM045.htm 9) Biotechnology November 26, 2007 http://ibef.org/industry/biotechnology.aspx 10) Healthcare & Lifesciences:TCS http://www.tcs.com/industries/healthcare/Pages/default.aspx 11) Life Sciences, Infosys http://www.infosys.com/industries/life-sciences/default.asp 12) Overview: Life sciences & Healthcare http://www.hcltech.com/life-science/ 13) Healthcare and life-sciences, Wipro http://www.wipro.com/webpages/itservices/industries/healthscience/index.htm 14) Enabling Life Sciences Business, Satyam http://www.satyam.com/industries/life_sciences/index.asp 15) Strand Life Sciences http://www.strandls.com/ 16) Offerings: Molecular Connections http://www.molecularconnections.com/ 17) Services: VLife sciences http://www.vlifesciences.com/vlife_tech/ 18) Services: GVK Bio http://www.gvkbio.com/ 19) Jubilant Biosys http://www.jubilantbiosys.com/ 20) Life sciences, IBM http://www-935.ibm.com/services/in/index.wss/industry/igs/x1022138 21) BioIT: Ocium Biosolutions http://www.ocimumbio.com/web/default.asp 22) Analytics http://en.wikipedia.org/wiki/Analytics 23) Siebel pharma mobile analytics http://www.oracle.com/applications/crm/siebel/resources/pharma-mobile-analytics-white-paper.pdf 24) Market Research http://en.wikipedia.org/wiki/Market_research

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Indian Bioinformatics – Challenges to Overcome The rapid rise of the genomics industry and its increasing application in life sciences R&D has created a huge commercial market for bioinformatics, due to the large amount of data being generated. To facilitate the storage, management, retrieval, and analysis of this data, and the application of IT to the life sciences sector - bioinformatics, assumes increasingly higher significance. We believe that almost all new drug discovery programs will be based on genomics in the future and the pressure to reduce cost and time of new drug development will lead to increased outsourcing of bioinformatics services. Compared to developed nations, outsourcing to India offers about 30-40% costs savings in overall drug discovery research, and close to 60% cost savings when outsourcing core bioinformatics services. Cost savings are primarily driven by lower cost of manpower, infrastructure, and operations. The Indian bioinformatics outsourcing industry recorded revenues of U.S. $32 million, which constitutes 90% of total domestic revenues in 2007. ―Local demand for bioinformatics services is low due to low investment in new drug discovery. Even though research investments of life sciences companies are increasing, they are still small compared to global standards,‖ states Dr. Ashutosh Mundkur, VBU Life Sciences, Service Offerings, Satyam Computer Services Ltd. Outsourcing revenues are estimated to grow at a CAGR of 25% and touch U.S. $62 million by 2010. These estimates are made based on the current plans of Indian vendors, as well as considering the impact of scarcity in human resources. Improved availability of skilled workers could help take growth rates higher. Similarly, positive actions by the Indian government to enhance IP rights and increase funding to the sector could also help raise growth. ―The Department of Biotechnology has earmarked U.S. $500,000-750,000, for bioinformatics, from its total biotechnology investment of U.S. $4.5 million per annum. These funds will go towards generating bioinformatics resources and developing bioinformatics infrastructure,‖ according to Mr Sanjay Bhardwaj, Head Marketing RoW, Ocimum Biosolutions. Figure 1: Projected Bioinformatics Off-shoring Market in India (2007e-2010)

Source: ValueNotes Research The Indian bioinformatics vendor space has seen the mushrooming of pure play bioinformatics players, entry of multinationals, and increased focus of IT companies on the life sciences vertical. Also, pharma and biotech CRAMS players have started offering informatics services.

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Indian Bioinformatics – Challenges to Overcome

By Poonam Bhana, ValueNotes Outsourcing Practice Poonam is with the ValueNotes Outsourcing Practice, which specializes in research on outsourcing (BPO/IT). The ValueNotes Outsourcing Practice provides custom research on outsourcing/offshoring, as well as regular publications and information products. Email: bporesearch@valuenotes.biz, Url: www.sourcingnotes.com

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Lucrative opportunities exist for Indian vendors in bioinformatics services, customization of existing products, and database licensing/ creation/ manipulation. However, they face certain challenges.

1) Lack of qualified and experienced professionals Bioinformatics is a highly specialized field and any lack of biological understanding can result in sophisticated computational methods being applied naively; hence finding the right team is vital. However, companies are faced with high attrition and rising wage levels. This in turn could reduce the cost competitiveness of Indian vendors over their counterparts in China, Brazil, Ireland, etc. 2) Problem of market / data heterogeneity Life sciences clients may use different data formats and such proprietary and incompatible data formats limit the value of bioinformatics. Hence, vendors need to develop such data integration tools that facilitate analysis of data sets from different sources. 3) Need for standardization of service platforms; modular

systems There exist several bioinformatics vendors with varying standards and platforms. A major challenge for new and existing vendors is standardization of service platforms. Also, vendors need to offer more modular systems that can plug into other systems or well-documented application program interfaces already being used by their clients. ―Flexibility of a bioinformatics tool is essential for it to be a success. The tool should be flexible and allow for use in various applications,‖ states Mr. Ajoy Singh, Senior Coordinator Sales, Technoconcept (India) Pvt. Ltd. 4) Need to focus on niche areas Industry experts believe that vendors must focus on certain niche areas. Players who provide a wide range of varied services or a non-specialized service portfolio will find it challenging to reach the sustained margins enjoyed by pure play vendors. For example, LabVantage‗s niche area is LIMS while that of Ocimum Biosolutions is microarrays. 5) Need for investment to improve existing tools A key limitation to drug discovery remains the incomplete biological understanding of disease and the ability to recognize targets linked with validity to disease. With newer research studies and data generation accelerating at a rapid pace, the need for improved data handling tools has risen. Hence, vendors need to continuously invest in innovation to improve existing tools and techniques.

Moving up the Value Chain Bioinformatics as a science is still evolving and the underlying mathematical and algorithmic methods are still being developed. In this rapidly changing scenario, a vendor that aims to provide a set portfolio of services may not flourish or witness sustained profitability in the long term. Vendors that contribute to the evolution of the subject itself, generate their own intellectual property, and provide customized services that are compatible with existing systems, will survive in the longer term. The bioinformatics outsourcing opportunity to Indian bioinformatics vendors will rise from U.S. $32 million in 2007 to U.S. $62 million by 2010. These opportunities range from LIMS, enterprise solutions, improved database utility, data management tools, to exportable software that can be shared. However, to capture this opportunity, vendors need to establish credibility through success of past projects, and by demonstrating a strong technical capability, establishing strong overseas relationships, and training end users for use of bioinformatics tools. To meet the evolving needs of the life sciences industry and to efficiently use the enormous data generated, bioinformatics vendors must - •Provide tools to generate easily understandable and accurate information that takes into account the different types and natures of data. •Provide flexibility in tools to accommodate constant and ongoing adaptation of life science knowledge. •Position themselves as facilitators, rather than a substitute for human decision. Bioinformatics tools should focus on adding value to the existing human element. •Life sciences companies are striving to improve research efficiency and reduce time to market. In such a scenario, services for support and maintenance of systems are also essential. The figure below summarizes the critical success factors for a bioinformatics vendor.

Figure 2: Critical Success Factors for a Bioinformatics Outsourcing Vendor; Source: ValueNotes Research

Critical Success Factors Compressing product development cycles and maximizing time between introduction and obsolescence.

Cater to market demand and stay abreast of technological advances.

Improve data quality in terms of reproducibility and accuracy.

Successful recruitment and retention of qualified and experienced employees.

Different systems from various vendors must be equally accessible. Standardization of tools/service platforms is essential.

Develop more robust and standardized data annotations and improve existing algorithms for effective filtering, visualization and analysis of the data.

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Technology Title: A botanical drug for the treatment of diabetic foot ulcers Summary Description: A new Traditional Chinese Medicine (TCM) herbal medication for treating diabetic-induced chronic wounds, named WH-1, has been approved by the U.S. FDA to enter second-stage human testing. WH-1 is composed of two Chinese herbs, including one that is relatively rare and growing in Taiwan. WH-1 has been assessed to be very competitive on the world market as a chronic wound-healing agent as it is cost effective to manufacture and has a superior stability profile. Development Status: Phase II (US FDA and Taiwan DOH) Type of Business/Licensing Sought: Licensing or Partnering Licensing Contact: Liming Shen, Ph.D. limingshen@microbio.com.tw

Technology Title: A fermented soy extract for inhibiting cancer growth Summary Description: A fermented soymilk extract, MS-20, is in Phase II (U.S. FDA and Taiwan DOH) and Phase III (Taiwan DOH) clinical trials for the treatment of cachexia in liver cancer patients and for reducing neutropenic fever in cancer patients undergoing chemotherapy, respectively. MS-20 has passed strict safety tests and in eight reports of prior human experience as well as many other ongoing clinical studies; it has shown no signs of toxicity or other side effects. Development Status: Phase II (U.S. FDA and Taiwan DOH); Phase III (Taiwan DOH) Type of Business/Licensing Sought: Licensing or Partnering Licensing Contact: Liming Shen, Ph.D. limingshen@microbio.com.tw

Technology Title: Composition of agent for the prevention and treatment of Alzheimer‘s disease Summary Description: Composition of agent for the prevention and treatment of Alzheimer‘s disease, and the method of said agent. The composition comprises of monacolins, anti-inflammation agents, and anti-oxidant compounds extracted from red mold rice (RMR), and produced in various forms; pastils, capsules, powder, beverage, etc. Development Status: Pre-Registration Type of Business/Licensing Sought: Licensing or Partnering Licensing Contact: Dr. Tzu-Ming Pan tmpan@ntu.edu.tw

Technology Title: BNG-1 Treatment for ischemia stroke Summary Description: A novel mixture of traditional Chinese medicines with anti-platelet aggregation and anti-thrombotic activity for both prevention and treatment of cerebral stroke. Phase II clinical trials (under the regulations for new drugs from Taiwan's Department of Health (DOH), Bureau of Pharmaceutical Affairs), confirmed the safety and feasibility of BNG-1 consumed together with aspirin in patients with acute ischemic stroke; no adverse effects in humans shown. Development Status: Phase III (Taiwan DOH) Type of Business/Licensing Sought: All can be considered; licensing, co-development, etc. Licensing Contact: Karin Huang info@braingenesis.com.tw

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DIA 44th Annual Meeting Boston, MA June 22, 2008-June 26, 2008 Pharma‘s Event of the Year! The Impact of FDAAA on Drug Safety Critical Path Update for ‗08 40 preconference tutorials Over 1000 speakers, including representatives from FDA, EMEA, and global regulatory agencies More than 8,000 industry professionals Exhibit Hall with 850 booths Networking Reception at the Boston Museum of Science Email: dia@diahome.org

Impact China IV: Pharmaceutical R&D Global Summit Beijing, China May 04, 2008-May 06, 2008 As China continues its unprecedented growth, the question is no longer are you working in China but how are you working in China. The Chinese market continues to mature and now is the time to fully develop a decisive stratagem for accessing the market and realizing the benefits China offers. Impact China has grown along with the market with its comprehensive coverage of vital issues and progressive business strategies. Event Contact: Cheryl Kahan-Radhuber Email: CKahan-Radhuber@srinstitute.com

Biopharma Opportunities China Forum 2008 Shanghai, China June 19, 2008-June 20, 2008 Key Issues: • China‘s BioPharma: Regulation, Market and Development Trends • Strategy Planning in China: Perspectives from Global Leading BioPharmas • Opportunities for Biopharma R&D in China • Pharmaceutical Outsourcing Strategies in China • Genetic Engineering Updates and Showcases Event Contact: Shirley Wang Email: shirley@igvision.com

Drug Discovery & Development of Innovative Therapeutics Japan Tokyo, Japan May 07, 2008-May 09, 2008 IBC's Drug Discovery & Development of Innovative Therapeutics (DDT) conference is coming to Tokyo, Japan, May 7-9, 2008! Based on the annual DDT Boston World Congress (www.drugdisc.com) of the same name, our 2008 Tokyo event will discuss cutting-edge scientific and business/partnering strategies to help build your drug pipeline from discovery to clinical proof-of-concept. Event Contact: Ellen Cabral Email: ecabral@ibcusa.com

Singapore-Hangzhou Science and Technology Park Service Outsourcing Forum, Hangzhou May 12, 2008 In line with this strategic thrust, the Hangzhou government and Ascendas of Singapore, have embarked on the development of the Hangzhou-Singapore Science and Technology Park (SHSTP). This session offers an overview of this new exciting development and you are invited to explore this business opportunity that defines the future BPO industry in China. Event Contact: Mr Michael Yu Email: marketing.hz@ascendas.com

The IXth World Conference on Clinical Pharmacology and Therapeutics (CPT2008) Québec City Convention, Québec City, Canada July 27, 2008-August 01, 2008 CPT 2008 will bring together recognized international experts, in all areas of clinical pharmacology, clinical pharmacy, basic pharmacology, toxicology, and pharmacoepidemiology to support better health outcomes and rational use of drugs. These exciting program will appeal to attendees whose interests range from the molecular to community health. Event Contact: Marie Lanouette Email: cpt2008@nrc-cnrc.gc.ca

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BIOBUSINESS NEW Gujarat Biotech Park is likely to be launched in April-The basic infrastructure development of Gujarat Akruti-TCG Biotech Ltd, a joint venture between the Government of Gujarat with Mumbai based Akruti City Ltd and The Chatterjee Group (TCG) Ltd, has already been completed by state government funds, in an area of 90 acres, with most of the plots already sold out to major biotech companies in India and abroad. The total investment for the completion of the project is expected to be $500 million. Source: Pharmabiz News, Mar 10, 2008. Marck Biosciences set to enter Malaysia, Singapore & Indonesia markets-Marck Biosciences, an Ahmedabad based pharmaceutical company, is planning to enter in the far east countries like Malaysia, Singapore, and Indonesia by the end of June 2008, with its 12 new products in the ophthalmic and injection therapeutic segments. The company has filed 12 new dossiers in Malaysia, Singapore, and Indonesia and is intending to file 100 more dossiers in the existing therapeutic segment in South East Asia, Latin America, and Africa; the company is also filing products in regulated markets like Australia, Europe, and U.S. by the end of 2008. Source: Pharmabiz news, Mar 13, 2008. The Andhra Pradesh State government delays Phase III development of SP Biotech Park. Shapoorji Pallonji (SP) Biotech Park (Phase II completed in 2006) is waiting for an additional 100 acres for the third phase. The state government is delaying the allocation of land. A senior official of APIIC says, ―We have already cleared land for the third phase and we expect to complete it in another three to four months‖. Source: Pharmabiz News, Mar 04, 2008. Dr. Reddy’s signs a research pact with 7TM for metabolic disorders. Dr. Reddy's Laboratories and a Denmark based 7TM Pharma have joined hands by signing a drug discovery research pact on selected drug targets in the area of metabolic disorders. As per the agreement, Dr. Reddy‘s and 7TM Pharma will identify clinical candidates for pre- selected targets and jointly develop these candidates from the pre-clinical stage up to phase IIa. Source: Biospectrum News, Mar 11, 2008. Wockhardt may enter EU with biogeneric products by 2009. Wockhardt is targeting a $10 billion generic and analogue insulin market by 2014 with four products already off-patent in key markets such as the U.S., E.U., and Japan. The company has filed for a new drug application for Insulin in the U.S. while the E.U. filing is expected shortly. Wockhardt might launch biogeneric products in E.U. as early as 2009. Source: Hindubusinessline News, Mar 30, 2008.

BIOSCIENCE NEWS A new vaccine research center to be launched in New Delhi-ICGEB Emory Vaccine Center dedicated to vaccine research focused on HIV/AIDS, tuberculosis, hepatitis C, dengue virus, malaria, and other infectious diseases, is a joint center between U.S.-based Emory Vaccine Center and the Italian firm International Center for Genetic Engineering and Biotechnology (ICGEB). Emory University will provide the funding to support scientific staff, while ICGEB will provide space and infrastructure. Source: Pharmabiz News, Mar 06, 2008 Hyderabad’s liver centre to focus on stem cell research. The Centre for Liver Research and Diagnostics, now the Centre for Stem Cell Sciences (CSCS), will focus on stem cell R&D, production, and cell therapies. It will also be involved in advanced education and expanding scientific knowledge in the field. Source: India eNews, Mar 12, 2008.

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CLINICAL AND REGULATORY NEWS Vaccine production halted in 3 Government institutes, hampers immunization program in India. The shut down of all three government facilities-Central Research Institute in Kasauli, Pasteur Institute in Conoor and BCG Lab in Chennai that produce the bulk of six crucial vaccines including DPT, BCG, and measles for infants by Health Ministry, has resulted in a shortage of essential vaccines in India. Source: NDTV News, Mar 21, 2008. Indian Council of Medical Research (ICMR) has launched two studies to identify the prevalence of polio virus antibodies in children of Uttar Pradesh districts. The ICMR is conducting one study in children in Moradabad, which is one of the most affected areas, and another study to determine the prevalence of polio virus antibodies in non-polio cases in children up to 5 years. Source: Pharmabiz News, Mar 11, 2008. The government is planning to upgrade the Department of Biotechnology (DBT) to a full fledged ministry. At present DBT is under the Union Ministry of Science and technology. DBT has an annual budget of $2,251 million as compared to the $112 million budget for the Indian Council of Medical Research (ICMR). It is anticipated that biotechnology can help to sustain a 9% growth rate in the economy. Source: ABLE News, Mar 18, 2008.

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