The Hindu Business Line : New biz model for biotech soon

(From left) The Chairman and MD, Biocon Ltd, Ms KIran Mazumdar-Shaw, the Union Minister for Science and Technology, Mr Kapil Sibal, and the Minister for Industries and Infrastructure, Karnataka Government, Mr P.G.R. Sindhia, at the inauguration of Syngene's new research facility at Bommasandra in Bangalore on Thursday. — G.R.N. Somashekar

Bangalore , Oct. 21

THE Centre is scripting a "win-win" business model for the fledgling biotechnology industry so that the fund-starved sector can enter into equity-based partnerships with Government agencies.

This will help biotech companies to avoid dependence on grants and financial support from the Government, while getting free access to technology.

The Union Minister for Science & Technology, Mr Kapil Sibal, assured industry representatives here that his Ministry was drafting such a plan in public-private partnership (PPP). With all its risks, a PPP, he said, was a viable way for enterprises to thrive. The Government through its agency would pick equity in the joint venture that the company would float. In turn, the enterprise would get technology transferred free of charge from a public lab. Profits from successful venture would be ploughed back into further research projects.

Mr Sibal was briefing the media after an interaction with the members of the biotech industry. He said the industry mainly raised issues related to duty anomalies, funding, intellectual property and regulations.

All these would be addressed in the National Biotechnology Policy that the Department of Biotechnology was working on. The policy framework would be announced in January 2005. The policy would also draw suitable inputs from the report that the Swaminathan task force report on agri biotech has submitted and the Mashelkar report that is coming out shortly on DNA drugs.

The DBT Secretary, Mr M.K.Bhan, had announced the plan for such a policy during the Bangalore Bio conference held in July.

The new WTO-compliant Patents Act would also be in place by January 2005 and would take care of the IP issues of the knowledge-based industry. "The Government will not violate its international commitments," he said.

At the same time, a Bioinformatics Policy, the first in the world, was also in the making and would be announced around May 2005. The first draft was ready and consultations were on among the IT, communications and S&T Ministries.

All these measures would attract huge amounts of FDI into the nearly $ 1-billion domestic biotech sector and make it a $ 10-billion global industry.

Mr Sibal said his Ministry found it difficult to approve proposals like a biotech seed capital fund. He recalled that a well-meaning move for a drug development fund got whittled down from Rs 500 crore to just the interest on a corpus of Rs 25 crore. "The PPP model will be such that we do not have to go the Finance Ministry every day."

However, a good PPP calls for synergy among the activities of the four elements - academia, labs, government agencies and the entrepreneur.

The Ministry planned to tackle the long procedural and regulatory delays in approvals for biotech products through a single-window mechanism. It was also looking at a need to have "at least 20 more Indian Institutes of Science" to address the emerging HR needs of the industry.

The diagnostics sector raised the problem of import duty anomaly, where the indigenous kit manufacturer paid 16 per cent import duty for raw materials, while whole kit imports had no duty. Mr Sibal said this would be taken up with the Finance Ministry. He hoped to get the biotech sector the same incentives that the IT industries enjoy.

The interaction was organised by ABLE - the Association of Biotechnology-Led Enterprises. ABLE represents some 90 companies across the country.