19 Mar 2014, Narayanan Suresh , BioSpectrum
It was a good year for deal makers in the lifesciences industry in Asia-Pacific with the overall business exceeding $10 billion in 2013, quick estimates show. This was an increase of over 25 percent over the deals in 2012. Full data available for the first six months of 2013 indicate deals totaling $6.6 billion in 101 deals, an increase of 29.5 percent over the previous year during the same period.
This is a good sign of a vibrant industry. However, when we compare these numbers to the deals in some of the developed markets, we get a clear sense of where APAC as a region stands today. Mergers and acquisitions (M&As) in the lifesciences industry in the US alone in 2013 was $6.6 billion and just the biotech sector alone contributed $4.5 billion, making it one of the best year for that sector. There were 778 deals in the US biotech industry.
M&A deal size in APAC in a full year pales even more when compared to the latest blockbuster, $25 billion purchase of New York-based Forest Laboratories by Swiss generics drug maker, Actavis. Just one deal is nearly three times the M&A's in a full year in the entire APAC region. It clearly indicates that the lifesciences industry in APAC has a long way to go before reaching close to global standards.
The largest deal in Asia in 2013 was the $1.75 billion buy of India-based Agilent Specialties division of Strides Arcolab by the US-based Mylan.
In the case of biotech crops too, the situation is similar in Asia. Asia accounts for only seven of the 28 countries that grow biotech crops globally. The combined cropped area of these seven Asian countries-India, China, Pakistan, Philippines, Australia, Myanmar and Bangladesh is 29.8 million hectares (mha) which is just a shade more than Argentina (24.4 mha), the world's third largest grower of biotech crops. Brazil is the No 2 in growing biotech crops over 40 mha area.
The latest annual report on global biotech crops released by industry agency ISAAA has some interesting facts. Globally, in 2013 biotech crops were grown in a record 175 mha compared to 170 mha in 2012. Biotech crops were first introduced in the world in 1996 and since then cropping area has increased consistently every year.
In Asia, India and China are two major biotech crop nations. India is the leader in cultivating biotech cotton crop in 11 mha. China is behind India with 4.2 mha, growing five crops-cotton, papaya, poplar, tomato and sweet potato. The situation may change dramatically in a few years. In China, there is a strong government support for biotech crops, spurred by vocal groups of scientists. In India, regulatory hurdles and stringent opposition by civil society groups have put a question over this sector for a few years now. China hopes to approve a genetically-modified variety of maize to feed its 500 million pigs and 13 billion poultry numbers, the largest in the world.
Meanwhile, hectic efforts are on in India to salvage the AstraZeneca Research center which has been planned to shut down in April as part of the company's restructuring efforts. Local campaign may see the center emerge as an incubation center for lifesciences startups