BioTrends

Big pharma looks

out for biotech
partnering
Mr Steven Burrill, the
renowned biotechnology
market specialist has
predicted that the
industry, having
reshaped post the
meltdown, is all set
to surge ahead

ÀHFWµVKDUHGULVN¶E\VPDOOHUXSIURQWSD\PHQWVDQGODUJHU
ones on achievement of milestones. Collaborations with
emerging market players in China, India and Latin Amer-
ica will also increase.

Predictions for 2011

R
enowned biotech specialist and venture capi-
talist Mr Steven Burrill has revealed his 2011
predictions for the industry. He sees a dynamic
industry with an environment that favors risk
mitigated companies rather than early stage development
FRPSDQLHVWKDWKDYHDPXFKKLJKHUULVNSUR¿OH
‹ Biotech and capital markets: The biotech
LQGXVWU\EHQH¿WHGIURPWKHUHWXUQRILQYHVWRUFRQ¿GHQFH
in the second half of 2010. The biotech industry will con-
WLQXHWRRXWSHUIRUPWKHJHQHUDOPDUNHWVDVWKH¿QDQFLQJ
environment continues to improve in 2011.

³7KH FROODSVH RI WKH ¿QDQFLDO PDUNHWV DQG V\VWHPV KDV

been a major
Both big pharma and big biotech
force in reshap- will again compete for companies
ing the land-
scape, but it is
with advanced product pipelines,
far from the only as well as important land grabs of
factor,” says
Mr Steven Burrill, CEO of Burrill & Company. “The
technology
¿QDQFLDOFULVLVKDVKHOSHGDFFHOHUDWHWKHFKDQJHVDOUHDG\
underway, ranging from globalization, to healthcare ‹ Biotech IPOs: The biotech IPO window will remain
reform, to climate change.” open despite the fact that the 17 new biotech issues that
debuted on the US market in 2010 were plagued by lack-
According to him, there will be no major slow down in luster receptions (selling fewer shares well below the
big pharma’s appetite for biotech partnering. “Both big pricing range) and their average annual market perfor-
pharma and big biotech will again compete for compa- mance was down by 13 percent. By the end of 2011, at
nies with advanced product pipelines, as well as impor- least 25 biotech IPOs, possibly more, in the US will be
tant land grabs of technology. Partnership deals will re- completed.

A CyberMedia Publication | www.BioSpectrumIndia.com | January 2011 | BioSpectrum 19

BioTrends
‹ Capital: The industry has achieved a ‘steady state’
LQ WHUPV RI ¿QDQFLQJ UDLVLQJ DERXW  ELOOLRQ DQQX-
DOO\7KLVVLWXDWLRQZLOOFRQWLQXHLQ7KHLQGXVWU\¶V
FROOHFWLYHPDUNHWFDSZLOODOVRUHPDLQDWLWVSUHVHQW
ELOOLRQ OHYHO DV PDUNHW YDOXH JURZWK ZLOO EH RIIVHW E\
DFTXLVLWLRQV
LQIRUPDWLRQZLUHOHVVDQGPHGLFDOWHFKQRORJ\SURPLVHV
WRPDNHSHUVRQDOL]HGPHGLFLQHDQHYHUSUHVHQWUHDOLW\LQ
WKHZD\GRFWRUVDQGSDWLHQWVDSSURDFKKHDOWKFDUH
‹ Regulatory environment: 7KH LQGXVWU\ ZLOO FRQ-
WLQXHWRDGMXVWWRDUHJXODWRU\HQYLURQPHQWWKDWLQFOXGHV
FRPSDUDWLYHHIIHFWLYHQHVVUHVHDUFK&(53D\RUVZLOOEH
ORRNLQJDW&(5DVDZD\WRJDWKHUWKHQHFHVVDU\GDWDRQ
The industry’s collective market cap ZKHWKHUWRUHLPEXUVHIRUJHQRPLFDOO\JXLGHGPHGLFLQHV
will remain at its present $360 billion
:LWK 3UHVFULSWLRQ 'UXJ 8VHU )UHH $FW 3'8)$ H[-
level as market value growth will be SLULQJ LQ  WKHUH ZLOO EH D PDMRU EDWWOHJURXQG RYHU
offset by acquisitions GUXJVDIHW\DQGUHYLHZLVVXHVLQ86&RQJUHVVLQ

‹ Science and technology:7KHHYROYLQJOHJDOEDWWOH

‹ Partnering:7KHUHZLOOEHQRPDMRUVORZGRZQLQELJ RYHUWKHSDWHQWDELOLW\RIJHQHVZLOOKHDWXSDQGXQFHUWDLQ-
SKDUPD¶VDSSHWLWHIRUELRWHFKSDUWQHULQJ%RWKELJSKDU- W\ZLOOFRQWLQXHWRVZLUODURXQGVWHPFHOOVEXWUHJHQHUD-
PD DQG ELJ ELRWHFK ZLOO DJDLQ FRPSHWH IRU FRPSDQLHV WLYHPHGLFLQHZLOOEHKRW
ZLWKDGYDQFHGSURGXFWSLSHOLQHV7KHGHDOVWUXFWXUHVZLOO
HPEUDFH µVKDUHG ULVN¶ 7KH GD\V ZKHQ ELRWHFK HQMR\HG
PDMRUXSIURQWSD\PHQWVIRUSKDUPDFRPSDQLHVWRDFFHVV
WKHLU WHFKQRORJLHV DUH RYHU &ROODERUDWLRQV ZLWK HPHUJ-
LQJPDUNHWSOD\HUVLQ&KLQD,QGLDDQG/DWLQ$PHULFDZLOO
“
Biotech and pharma
companies are expected to
take a keen interest in drafting
DOVRLQFUHDVH new regulations governing the

‹ Mergers and acquisitions:7KHSUHGLFWHGVXUJHLQ

ELJ 3KDUPD DFTXLVLWLRQV RI ELRWHFK FRPSDQLHV GLG QRW
development of biosimilars
— Mr Steven Burrill ”
CEO of Burrill & Company
KDSSHQLQ,QWKHEHJLQQLQJRI6DQR¿ZLOOVHDO
WKHGHDODQGDFTXLUH*HQ]\PHDQGWKLVZLOOXVKHULQVHY-
HUDORWKHUDFTXLVLWLRQVRIEOXHFKLSELRWHFKFRPSDQLHV ‹ Cleantech will boom:7KHFOHDQWHFKERRPLQQRQ
IRRG FURSV ZLOO FRQWLQXH DV PDMRU LQYHVWPHQWV LQ VRODU
‹ Pharma restructuring:3KDUPD SRZHU ZLQG SRZHU DQG QH[W JHQ-
FRPSDQLHVZLOOFRQWLQXHWRPDNHMRE HUDWLRQ ELRIXHOV JHWV DWWHQWLRQ 7KH
FXWVDQGUHVWUXFWXUHWKHLUEXVLQHVVHV PDUNHWZLOOQRWRQO\HPEUDFHJUHHQ
DKHDGRIORVVLQSDWHQWVSURWHFWLRQRQ EXW WHFKQRORJLHV WKDW LP-
PDMRUEORFNEXVWHUV SURYH HQHUJ\ HI¿FLHQF\ DQG
HQYLURQPHQWDO µIULHQGOLQHVV¶²OHVV
‹ Government involvement on healthcare: The SROOXWLQJDQGOHVVFRQVXPLQJ
IHGHUDO JRYHUQPHQW WKURXJK 0HGLFDUH DQG 0HGLFDLG
ZLOO FRQWLQXH WR SOD\ D JUHDWHU UROH LQ WKH GHOLYHU\ DQG ‹ Global markets:(PHUJLQJPDUNHWVZLOOFRQWLQXHDV
UHLPEXUVHPHQW RI KHDOWKFDUH 7KLV WUHQG ZLOO FUHDWH DQ GRPLQDQW IDFWRUV ,QFUHDVLQJ DIÀXHQFH D JURZLQJ PLG-
DUUD\RIQHZUHJXODWRU\DQGFRPSHQVDWRU\UXOHVLVVXHV GOHFODVVDQGJRYHUQPHQWSROLFLHVZLOOPDNHKHDOWKFDUH
DQGFKDOOHQJHVIRUKHDOWKFDUHSURYLGHUV ELJ EXVLQHVV LQ WKHVH FRXQWULHV (PHUJLQJ ELRWHFK PDU-
NHWVSDUWLFXODUO\LQ%UD]LO&KLOH&KLQD,QGLD0DOD\VLD
‹ Biosimilars:+HDOWKFDUHUHIRUPFDUULHVSURYLVLRQLQ- DQG5XVVLDZLOOJURZIDVWHUWKDQWKH86DQG(XURSH
VWUXFWLQJWKH)'$WRFUHDWHDSDWKZD\IRUELRVLPLODUVDQG
ERWKELRWHFKDQGSKDUPDFRPSDQLHVDUHH[SHFWHGWRWDNH ³$V , GLVFXVV LQ P\ XSFRPLQJ ERRN ² Biotech 2011:
DNHHQLQWHUHVWLQWKHGLVFXVVLRQVRQGUDIWLQJQHZUHJXOD- Life Sciences: Looking Back to See Ahead²H[SHFWWRVHH
WLRQVJRYHUQLQJWKHGHYHORSPHQWRIELRVLPLODUV WKHELRWHFKLQGXVWU\DVDZKROHSHUIRUPEHWWHULQ
DV WKH ¿QDQFLQJ HQYLURQPHQW FRQWLQXHV WR LPSURYH
‹ Converging technologies impact healthcare:$ ,QYHVWRUV ZLOO UHZDUG ULVN PLWLJDWHG FRPSDQLHV DQG
JUHDWHU HPSKDVLV RQ SUHYHQWLRQ DQG ZHOOQHVV LV H[SHFW- WKRVH WKDW DUH DEOH WR H[HFXWH RQ WKHLU EXVLQHVV SODQV
HG$JUHDWHUXQGHUVWDQGLQJRIKXPDQJHQRPLFVDQGWKH 2YHUDOOWKH\HDUZLOOEHDJRRGRQHIRUWKHELRWHFK-
DGYHQWRIPROHFXODUGLDJQRVWLFVDQGWKHFRQYHUJHQFHRI QRORJ\LQGXVWU\FRQFOXGHV0U%XUULOO BS

20 BioSpectrum | January 2011 | www.BioSpectrumIndia.com | A CyberMedia Publication

 BioTrends

Global healthcare spending to cross $71 trillion by 2020

S
pending on healthcare and primary care services, have
among the Organization saved government 25 percent of
for Economic Co-opera- the cost of providing care, accord-
tion and Development ing to project partners interviewed
(OECD) countries and Brazil, for the PwC report. Already,
Russia, India and China (BRIC) competition for private capital
nations will grow by 51 percent be- has prompted governments in
tween 2010 and 2020; amounting Europe, Asia, Africa and South
to a cumulative total of more than East Asia, to establish PPP agen-
$71 trillion, according to estimates cies that are charged with devel-
from PriceWaterHouseCooper’s oping PPP policy recommenda-
(PwC) Health Research Institute. tions, streamlining procurement
Health spending in these areas is and contracting for services.
said to be rising faster than gross
domestic product (GDP), magni- Highlights:
fying gaps in budget deficits and ł By 2020, spending on health
spurring governments, to look to infrastructure among the OECD
the private sector for ways to get a countries and BRIC nations will
better value for taxpayers’ money. increase to $397 billion annu-
ally, up from $263 billion today.
One trend that is emerging glob- However, the larger market for
ally is the use of public-private health PPPs will be in non-in-
partnerships (PPPs) to finance frastructure spending, estimat-
and manage health infrastruc- ed to be more than $7.5 trillion
ture and delivery, and, according annually, up from $5 trillion in
to PwC, growth in this area could 2010.
create a multi-trillion global mar-
ket opportunity for private com- ł Between 2010 and 2020, the
panies and investors, implement a OECD and BRIC nations will
more efficient use of taxpayer dol- spend cumulatively $3.6 trillion
lars, and offer better quality health on health infrastructure and
systems. $68.1 trillion on non-infrastruc-
ture health spending.
In a new report titled, Build and Beyond: The revolution
of healthcare PPPs, PwC says that public health authori- ł Health spending in the US accounts for approximately
ties around the world are increasingly contracting with half of all health spending among OECD nations, but
private entities to manage healthcare services for defined the biggest growth will be outside of the US. According
populations or markets. These PPPs, which have largely to PwC projections, the countries that are expected to
been used for infrastructure finance, are evolving as way have the highest health spending growth between 2010
to slow the rising cost of healthcare and address larger and 2020 are China, where health spending is expected
problems in the health system. PPPs enable public health to increase by 166 percent, and India, which will see a
authorities to maintain oversight of standards while in- 140 percent increase.
jecting private sector efficiency, fiscal discipline, new in-
novation and investment in efficiencies, driven by incen- ł Among OECD countries, health spending as a per-
tives to generate long-term cost savings and improve the cent of GDP will increase to 14.4 percent by 2020, up
quality of public health, according to PwC. from 9.9 percent in 2010. Among BRIC nations, health
spending as a percent of GDP is expected to increase
PwC, which is said to have worked on over 100 health to 6.2 percent in 2020, up from 5.4 percent in 2010 as
PPPs in 15 countries, sees the market growing substan- their economies grow and they build out their health
tially over the next five years, and says that the model has systems. In actual spending, this amounts to a 117 per-
proven to save healthcare costs. For example, partner- cent increase in spending over the decade, with China
ships like Spain’s Alzira project, which includes hospital leading the way in spending increases.

A CyberMedia Publication | www.BioSpectrumIndia.com | January 2011 | BioSpectrum 21

BioTrends
Drug discovery market to
touch $2.24 bn by 2016
W ith growing reliance on Indian pharma
and biotech companies for drug discovery,
the future drug discovery market in India is ex-
pected to grow strongly. According to a report by
Research and Markets, the drug discovery market in
India was $650 mn in 2009, representing a compound
annual growth rate (CAGR) of 60 percent from 2004;
and the market is expected to reach $2.24 bn by 2016.
The major factors driving this growth include: huge
cost advantages for the Western pharma companies of
up to 60-70 percent, favorable local regulatory condi-
tions to promote drug discovery, improved intellectual
property (IP) protection after the introduction of the
Trade-Related Aspects of Intellectual Property Rights
(TRIPS), skilled workforce and Western-equivalent re-
search infrastructure.
Government support in In-
dia for the development of the
drug discovery and develop-
ment market has been large-
ly focused on the purchasing
power parity (PPP) model.
Unlike China, the government
in India has encouraged private
entrepreneurship by helping the private biotech and
pharma companies in their projects through collabora-
tive research, loans or grant-in-aid.
The Department of Science and
Technology, Government of India,
leads the government initiatives
for encouraging R&D in the coun-
try, which has largely benefited
the healthcare and pharmaceutical
industry. The conceptualization, implementation and
monitoring of the majority of the government initia-
tives has been handled by the Council of Scientific &
Industrial Research (CSIR), India.
The department established several bodies such as the
Drug Development Promotion Board and the Technol-
ogy Development Board, in order to provide funding for
research projects across different sectors. These bodies
have entered into collaborations with a number of drug
discovery and development projects with Indian phar-
maceutical companies. The agencies are also collabo-
rating with various national level research institutes
and universities across the country.
22 BioSpectrum | January 2011 | www.BioSpectrumIndia.com
Medical equipment market
to register $2 bn by 2015
I ndia Semiconductor Association (ISA), the apex trade
body representing the Indian semiconductor and
electronics industry, has released a sector report on the
opportunities in the Indian medical electronics field.
According to the report, medical electronics market is
valued at $853 mn and the Indian healthcare market is
valued at $66.46 bn. The growth of Indian medical elec-
tronics market is driven by key factors such as: chang-
ing demographics and age profile that is prone to spend
more on healthcare; rise of lifestyle diseases and the
need for their diagnosis; the need to fill the gap in health-
care infrastructure through public-private partnership,
among others.
Medical equipment market is estimated to grow at a
CAGR of 17 percent in the next five years to register $2.07
bn. The domestic market for medical equipment current-
ly stands at $820 mn.
Indian biosimilars market
set to clock $2 bn by 2015
R obust economic growth figures and increasing income
levels may soon elevate India’s position in the global
biosimilars market amongst the emerging economies by
2015. Commenting on the biosimilars market growth, Mr
Hareesh Parandhaman, head of business development —
Biotechnology, Lupin Pharmaceuti-
cals, said, “Indian biosimilars market
is set to grow at 20 percent by 2015 at
par with the global growth rate. The
global market for biosimilars is worth
$120 billion and emerging markets
contribute 18 percent of it. Indian biosimilars market is
estimated to register $2 billion by 2015.”
It is noteworthy that the Indian pharmaceutical exports
have been consistently growing. So far, the market share
of India in biosimilars space has been negligible, opines
the industry experts at the CPhI India Conference Series
2010 held in Mumbai. Experts unanimously observed
that soon after the establishment of the US pathway for
biosimilars (somewhere between 2013 and 2015), Indian
players can see huge business in the space. Some of the
Indian biosimilars players in India include, Biocon, Dr
Reddy’s Labs, Intas Biopharmaceuticals, Reliance Life
Sciences, Lupin Pharma, Cipla and Wockhardt. BS
| A CyberMedia Publication