Generally, the Biotechnology sector is considered to be the same as Pharma. Here, in this article, we will talk about how Biotech or Biotechnology is different from the Pharma industry and what are the industry overview of biotechnology in the country, and which players are associated with this sector.
What is Biotech or Biotechnology?
- Biotechnology is a technology that utilizes biological systems, living organisms, or parts of this to develop or create different products. Ex. Vaccines, etc.
- While Pharma is chemical-based medicines ex. Paracetamol, where there is no involvement of living organisms.
Biotechnology Industry Breakup:
- The Biotechnology Industry can be categorized into 5 parts namely Biopharma, Bioindustry, Bio-Services, Bio-IT, and Bio-Agri.
- Biopharma is medicines that are made for living organisms in addition to some chemicals. The sub-segments of Biopharma include Biosimilars, Vaccines, Insulins, Regenerative Medicines, and Medical Devices.
- Bioindustry: This segment of Biotech includes Biofuels, Industrial Enzymes, and Bio-polymers. Here, there is no involvement of living organisms.
- Bio-Services: It includes Contract Manufacturing and Clinical Research of Biotech products. Ex. CRAMS space.
- Bio-IT: Bio-IT includes segments like Bio-Informatics, Big Data, and Precise Medicine.
- Bio-Agri: It includes Hybrid Seeds, Bio-fertilizers, and Bio-pesticides.
Industry Overview of Biotechnology Sector:
- The biotechnology sector in India is witnessing a strong growth trajectory and has proved to be highly inventive.
- India is among the top 12 biotechnology destinations in the world and the third-largest in Asia-Pacific.
- The Indian biotech industry holds 3% of the global market share.
- The Indian biotechnology industry is likely to register a CAGR of 16.4% to reach US$ 150 billion in 2025.
- By 2025, the contribution of the Indian biotechnology industry in the global biotechnology market is expected to increase to ~19% from 3% in 2017.
- The biotechnology industry consists of 4,000 biotech start-ups and is expected to grow to 10,000 by 2024. In 2020, India had >2500+ biotech companies.
- As of 2020, biopharmaceuticals contributed 62% to the Indian bio-economy, followed by bio-agriculture,(16%), bio-services (15%), and bio-industrial (7%)
- Under Union Budget 2021-22, govt allocated INR 1660 crores towards biotechnology, aiming to have 10,000 biotech start-ups by 2024 and a US$ 150 billion bio-economy by 2025.
Opportunities in Various Segments:
- The Indian biologics market is expected to register a CAGR of 22% from 2019 to 2025 to reach US$ 12 billion (~Rs. 90,000 Cr.) by 2025.
- The growth of biologics provides an opportunity for biosimilars in the market
- Key Players in the Global market are Amgen Inc, Abbvie Inc & Bristol Myers Squibb Company.
- Key Players in India are Biocon, Cadila Healthcare, Serum Institute, Panacea Biotech.
2) Bio Industrials:
- Biofuels and bioenergy are considered alternative resources and are gaining popularity in India.
- The rise in energy demand is leading to an increase in dependence on fossil
- As a result, companies can develop a strategy to reduce import dependence through biofuels and bioenergy.
- Key Global Players: Abengoa Bioenergy, Archer Daniels Midland Company
- Key Indian Players: Praj Industries.
- India’s Union budget 2021-22 states the government’s plan to enhance farm productivity and focus on food security
- This will likely increase the importance of bio-agriculture, which will enhance efficient food production.
- Key Global Players: Bayer AG, Marrone Bio Innovations
- Key Indian Players: Bayers Crop science, Rallis India & UPL
- India has potential for clinical trials due to a large and low-cost market
- Clinical trials in India are regulated by the Central Drug Standard Control Organization, which has reduced approval time to about 30-60 days, allowing market growth
- Key Global Players: Parexel, Syneos Health, Lonza Inc
- Key Indian Players: Syngene, Astrazeneca Pharma, Suven Pharma
- Biotechnology has immense growth potential in the Bio-IT segment, given the rising need for technology to transform data generated by R&D institutes, clinics, hospitals, etc., into a defined format.
- India’s IT industry is witnessing substantial growth and has the requisite IT infrastructure to cater to the needs of the global Bio-IT industry.
- Key Global Players: Agilent Technologies, Illumina
- Key Indian Players: TCS & Reliance
What Should Investors Do?
The biotechnology sector is a fast-growing segment in India and both from the CRAMS and Biotech space. With the availability of skilled labor and improvement in the manufacturing facility, this segment becomes an interesting space to keep an eye on.
Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent are commendation to buy or sell stocks or MF.