Genomics companies in India are not being able to take off in a big way owing to poor logistics, a sorry venture capital scenario and short-supply of professionals, according to the country's leading industry players.
In the post-genomic era, while business opportunities abound in the area of converting huge amounts of new knowledge into new products, Indian companies are ruing the absence of government support in terms of liberal norms to ship products back and forth as well as a dismal shortage of trained hands.
(L to R) Swapan Bhattacharya, Anuradha Acharya, Samir Bramhachari, Alexander Kel and William Haseltine 
"Then there are issues of trained manpower and product logistics. For instance, for us to begin a drug discovery project in India, it would typically take about a month to get the start-up products. There are a lot of hurdles in getting them from overseas or even from within the country. In fact, it takes the same time to get a product from the US as from Bangalore! China does it in three days," he said.
Anuradha Acharya, CEO of Hyderabad-based Ocimum Biosolutions agreed saying the bottlenecks in shipping were indeed one of the biggest problems. "Besides, we need better incubators to attract new companies and funding agencies," she said.
Talking about the venture capital scene in India, Bhattacharya said it was almost non-existent. "There are three or four groups including ICICI ventures and the Andhra Pradesh Industrial Development Fund operating in this area. However, all venture funds put together would not be more than 400 million dollars. It is very sad that we don't have a thriving venture capital scene," he said.
The primary reason behind this, he felt, was India's traditionally weak commitment to developing intellectual property. "India didn't have a patent regime till now. So venture capitalists were weary of putting money in this business. Now we do have a patent regime in place and some amount of money is flowing in from pharmaceutical and biotechnology companies," he observed.
Bhattacharya said these companies had already suffered in the stock market or taking the risk of getting into drug discovery. "So the solution they have come up with is separating the two businesses. Indian business houses are driven by short term returns, a lot of what is happening in the drug field — almost 125 billion dollars worth of branded drugs are going to become generic in the next seven years or so," he pointed out.
Experts think this is the 'pot of gold' many Indian pharmaceutical groups are chasing. Bhattacharya said rather than intellectual property development through internal funds, Indian companies would benefit from an umbilical chord-type risk sharing model where global pharma or rich biotech companies do part of the research and take a part of the royalty.
William Haseltine, chairman of US-based virtual pharma company Haseltine Global Health, advocated for the Piramal-Eli Lily type model where Eli Lily develops interesting compounds and Piramal develops expertise in proprietary drug development. Piramal takes the risk to develop the drug through phase two and gets deep education from Lily in return. Lily takes the product back at a profit. Piramal then gets the rights to sell the drug. "This model runs extremely well. Now Pfizer and a couple more companies are trying to do this too. This could be an interesting model for Indian companies since there's an enormous hole in the Indian drug development scene," he said.
Predicting doomsday for the genomics information and services businesses, Haseltine, founder of a number of biotechnology companies, said such ventures required continual investment to maintain status quo which erodes all their profits. "In fact, you can never keep up with the academic community. In the service model, the margins are small and you don't make very big business. The information companies will be short-lived since someone will come up with better software all the time. Their business is taken care of by someone else's business," he reasoned.
"We are experiencing massive failure in converting new knowledge in genomics into new products. This is an area that needs rethink and restructuring. There are great opportunities for India to look at," he added. Chinese companies were developing drugs through phase two at one hundredth the cost of US companies. "Are there any lessons for India to learn from this?" he asked.
Samir Bramhachari, director general of the Council of Scientific and Industrial Research (CSIR) did not hazard a guess on which model would work best for Indian companies. "It is very difficult to say what the ideal Indian model would be like. I would be happy to have 100 models, one of which survives," he said.
