New Delhi, Aug 30,2010: The Indian Biotechnology Industry would grow at a CAGR of 20% to achieve a market size of US$ 8 billion by 2015.This has been estimated by the recently released Confederation of Indian Industries (CII)- Yes bank knowledge report on the Life Sciences Industry.
The report titled 'India Life Sciences: Vision 2015' has attributed this to the various new development in the industry including the launch of numerous initiatives to lend support to the industry by the the union and state Governments. While highlighting the rapidly growing market in India, the report has also estimated that India will capture roughly 3-5%of the biopharmaceuticals market by 2015.
While being positive about the future investments in the sector, the report says that the innovative business models and products, and growing market requirement, private equity investors are expected to augment their interest in the sector. This will be on the back of better education and awareness of disease prevention through biopharmaceuticals, rising incomes and government participation. The market for vaccines has been shifting from traditional to combination vaccines. The sales of human vaccines have been forecasted to grow by a 10-13% CAGR over the next five years by the report.
Indian biotech companies have been steadily receiving large orders for combination vaccines from the Central Government under its numerous immunization initiatives. Demand for specific conjugates in the paediatric and adolescent segment is also stimulating growth of the market. Breakthrough products, such as Shanchol – the bivalent oral vaccine jointly developed by Shantha Biotech and International Vaccine Institute, will further boost demand.
The report says that the global biotechnology industry is undergoing transition, creating enabling factors that can aid the growth of the Indian biotech industry. It suggests that India can play a key role in reducing cost and time to market for new drug development through outsourcing of various components of the drug development process. There is an opportunity for R&D focused Indian biotech companies to enter into such alliances through collaborative development projects. In the Indian context these are two of the strongest disease segments with a huge domestic market. It also suggests that the Indian companies with limited financial resources can optimize business models by partnering with larger companies for product development and licensing at an early stage.
The report has mentioned that in the current global scenario, there is a growing need to effectively allocate scarce R&D resources as well as increase regulatory and safety standards. This has led to a growing presence of smaller bio-pharma companies to provide services in the outsourcing and discovery partnership business. Going forward, we expect this trend of outsourcing various facets of drug discovery& development to low cost destinations such as India to continue.
In addition, with the mushrooming of smaller companies with an R&D focus, there has been a shift towards small and medium companies taking the lead in the discovery of new chemical entities. Due to the complexity of the R&D process, pharma companies prefer to outsource various stages of the process leading to a possibly higher stages. Taking into consideration India's unique positioning with respect to this sector and the above mentioned growth factors, the report estimates the market for contract research & development to grow at a CAGR of 31% to reach a market size of $ 3 billion by 2015.
The estimation by the report also puts the medical devices and technology industry in India at US$ 4 billion in 2009 and industry sources estimate that the industry is growing by at least 15%year on year. Citing examples, the knowledge report says that the industry is seeing increased interest from multinational and domestic players. It mentions GE investment in an independent facility and Philips acquiring Indian companies in a bid to be cost competitive.
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