The Hindu Business Line : Asian `biotech hotbeds' must develop USP: E&Y report

IT may still puzzle analysts why biotechnology is trusted when used in medicine, but viewed with suspicion when used in agriculture. But be it medicine or agriculture, Japan, China and India are the emerging "biotech hotbeds," says an Ernst and Young (E&Y) report, released recently at Bio 2005 in Philadelphia.

Nevertheless, "each country has to have its USP (unique selling proposition), otherwise me-too products will be developed. And the USP has to be matched with the bio-diversity of each country," says E&Y's Mr Utkarsh Palnitkar, who presented the report at Bio 2005.

India's strengths are in processing, fermentation, informatics and its vaccine manufacturing capacity. By 2010, the country will be the largest manufacturer of vaccines in the world, Mr Palniktar told Business Line. Also, in terms of the neglected diseases seen in Africa, South-America and India — it makes sense to research diseases in India, he said.

China's strengths are in bio-processing, and Korea has made strides in stem-cell research.

In Korea, the legislation has moved in tandem with therapeutic cloning and, as a result, companies such as LG and Samsung have become large filers of patents, said Mr Palnitkar.

Singapore has the regulatory environment and infrastructure in place, but it has to look outwards for people to man these, he said.

The support of the governments in India, Singapore, China and Korea, in terms of infrastructure and policy, has given an impetus to the biotech segment in these regions, said Mr Palnitkar, Health Sciences leader with E&Y in India.

There will be a surge in global partnering, where intellectual property will be shared between companies in the West and those in Asia. With China improving its regulatory system and India passing its Patents Law early this year, two of the world's largest markets will allow for patenting of drugs, the report said. The challenge, however, remains in terms of enforcement.

Agricultural biotech, controversial in much of Western Europe, is being embraced by the developing world, the report notes.

The year 2004 is the first year that the absolute growth in cultivation of transgenic crops in developing countries outpaced the growth in developed countries, it added.

China and India are expected to play an increasingly visible role in agricultural biotech too, as it is viewed as the sustainable answer to poverty and food security issues, said Mr Palnitkar.

Biotech revenues in the Asia Pacific region grew 36 per cent ($ 2 billion), compared to the global industry revenues, which grew at 17 per cent ($54.6 billion). However, Mr Palnitkar said, biotechnology is a recent phenomenon in Asia and hence the robust growth.

The global biotechnology industry raised $21.2 billion in 2004, a 15-per cent increase over the capital raised in 2003. However, venture capitalists are still reticent to fund biotech ventures at the early stage, he said.

Though the US is a biotech leader with 78 per cent of biotech revenues being generated there, competition is close at its heels.

Europe is better positioned to move forward, after a painful 2003.

And the Asia-Pacific region is not far behind, the report says.

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