Bullish Indian Biotechs Forecast Steep Earnings Growth
The CEO of Indian biotechnology firm Biocon, Kiran Mazumdar Shaw, claims that the industry could reach a value of US$5bn by 2010. Worldwide interest in Indian biotech is currently growing, in the wake of new data protection laws and the relaxation of clinical trial rules.
India's Export-Import Bank recently published a study indicating that the biotech industry's revenues rose by an annual 39% during the 2003/04 financial year, with biopharmaceuticals accounting for the lion's share of the sector's income. Shaw notes that the recent acquisition of Lotus Laboratories by Iceland-based drugmaker Actavis is testimony to the faith placed by foreign firms in the industry, where rapid growth in IT support systems, stem-cell research and clinical studies in general has been observed in recent years.
Indeed, it appears that the recent modernisation of the regulatory regime governing
the sector is set to expand investment further. Following the amendment of India's
so-called Schedule Y in early 2005, full clinical trials through Phases I to
III are now legal in India. Provisions allowing the export of human tissue samples
are also testimony to the improved environment for foreign biotechs, which
at least according to the industry's boosters are also set to benefit
from low local operating costs.