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Aparna Krishnan

Biogenerics means therapeutic products based on genetically engineered or recombinant technologies that are already being sold in developed markets such as the US and Europe.

MUMBAI, Dec.17

BIOGENERICS is likely to be the next lucrative destination for the domestic pharma industry. With $25 billion biological products going off patent in the US by 2004, the stakes are high.

Apart from the big pharma companies such as Wockhardt, Ranbaxy, Zydus Cadila and Sun Pharmaceuticals, pure biotech companies such as Shantha Biotech, Bharat Biotech, Panacea Biotech and Serum Institute of India are pinning their hopes on the vast export potential.

Biogenerics is a term used to describe therapeutic products based on genetically engineered or recombinant technologies that are already being sold in developed markets such as the US and Europe. The two main segments of biogenerics are recombinant protein technology and monoclonal antibodies. The global sales of recombinant therapeutics are expected to be in the region of $4,610 billion by 2005.

An analyst tracking the sector said, "Patents of products such as diabetes, hepatitis B&C, growth hormone and sclerosis will expire by 2005 and a biotechnology product from this segment are being contemplated".

According to Dr V.V.L.N. Sastry, Country Head, Firstcall India Equity Advisors, "Indian companies are attracted not only by the size of the biological products that are going off-patent but also the fact that there is no price war as in the formulations market. Companies could price the biological products at five per cent less than the multinationals and still grab a substantial part of the market".

Dr Sastry said that the cost of process for research and development is also relatively low. "Indian companies have an advantage as the process R&D can be made cost-effective in India. Many companies have manufacturing facilities that satisfy the economies of scale and adhere to the World Health Organisation (WHO) norms," he added.

One can expect a spate of tie-ups or partnerships and acquisitions for marketing in the US by Indian pharma companies, said the analyst. "Most Indian biotech companies do not have the marketing muscle to sell biologicals in the developed markets. Hence, marketing partnerships can be expected in the next two to three years," she said.

But there are hurdles mainly in the US market. Mr Hari L. Mundra, Executive Director, Wockhardt Ltd said, "The entry barrier into biogenerics market especially in the US is quite high. In an order of difficulty, chemical and fermentation products are easier to register as opposed to biologicals as these products are treated as new chemical entities". Also, the journey from the conceptual stage to marketing of a biological product that is process patent non-infringing takes a considerable amount of time in the developed markets, he added.

Wockhardt has two products in the biotechnology segment, erythropoeitin and Hepatitis B vaccine. According to Mr Mundra, the first Indian entry for biogenerics in the US could take up to 2005.

Dr Krishna Ella, Chairman and Managing Director of Bharat Biotech agrees. "Biological products are considered as new chemical entities and hence, approvals are far more stricter."

Leaving aside the obstacles, biogenerics seems to be yet another market opportunity for Indian companies looking for avenues to counter the multinational influx expected once 2005 sets in.

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