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Small players have carved a niche for themselves in the bioinformatics space that is still dominated by big established companies.
On the other hand, mid-sized companies are burdened with overheads and are struggling to survive in this sector growing at a faster clip.
Currently, bioinformatics is growing as an independent discipline and small players with niche talent are developing products and solutions to suit the contract research and development (R&D) services of companies that outsource to India.
These players are active in molecular biology, DNA sequencing, molecular biology software packages, molecular modelling, clinical trials, contract manufacturing, drug development and discovery.
The current size of the domestic bioinformatics market is estimated to be roughly Rs 250 crore and growing annually at 5-10 per cent.
According to Mr Utkarsh Palnitkar, Managing Director, Pluripotent Capital, small bioinformatics players are getting steady outsourcing orders for they are nimble and fast to develop products which integrate well with big company's requirement. A few start-ups are also busy ramping up to be mid-level players.
Funding
“Whereas mid-sized companies which are three to four years in the business are increasingly finding it hard to acquire quality talent due to affordability, a few are finding it hard to get second or third round of funding,” he said.
The Association of Biotech Led Enterprises (ABLE) in its survey said that a majority of the companies are located in Bangalore, Hyderabad, Pune and Mumbai. Companies such as Strand Life Sciences, Ocimum Biosolutions, V Life Sciences, SysArris, Cell works, CytoGenomics and Molecular Connections have managed to get funding.
The sector is also getting a push with large IT companies such as Cognizant, HCL, Wipro, and TCS joining the fray.
Dr Binay Panda, Head of Ganit Labs (a genome sequencing and translational genomics lab based in Bangalore), said: “In this sector, outsourcing is dominated by large companies (with 100 employees and more) if you take their cumulative share of the total revenue but there are plenty of small, out of garage and medium-sized companies that are smart and getting good deals.”
According to Ms Dipta Chaudhury, Senior Consultant - South Asia and Middle East, Pharma and Biotech Practice, Frost & Sullivan, the bioinformatics space is still dominated by existing players.
This is primarily because the investment has mostly been incremental, with companies preferring to buy from existing suppliers.
“Also, new companies prefer to buy from bigger companies than new entrants. At the same time, there are companies which purchase bioinformatics platforms from cheaper and more accessible vendors, who are SMEs,” she said.
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