India opens the door to partners

Kiran Mazumdar-Shaw told AusBiotech 2005 about opportunities for Australian biotech to work with India.

Whenever Kiran Mazumdar-Shaw returns to Australia, she confesses, she feels nostalgic. "I owe my biotech beginnings to Australia," she told the opening plenary session of the AusBiotech 2005 conference in Perth.

In the 1970s, Mazumdar-Shaw studied brewing at Ballarat, working for a while at Carlton and United Breweries before returning to India. But from being described as 'India's first female master brewer', Mazumdar-Shaw is now much more likely to be described as 'India's richest woman'. She is the chair and managing director of Biocon, India's largest biotechnology firm, which she founded in 1978 and whose initial public offering last year was 32 times oversubscribed.

From its early days in the fermentation business, Biocon has grown through generic biopharmaceuticals and is now a drug developer in its own right. But partnerships are key to its success, Mazumdar-Shaw believes, and there is an invitation and opportunity for Australia.

"Biotechnology is a business that needs linkages," she said, whether they were in manufacturing or investment. "Regional linkages are going to be a very important part of regional biotech strategy.

"It's also very important that at long last there is an interest to start collaborations with other countries in the region." We're all guilty, she said, of regarding the US as the most important target of our attention. "But the time has come to explore other countries."

Australia and New Zealand, she said, had investment and economic profiles that were very similar to the rest of the developed world. Raising risk capital is difficult here, but there is a rich pipeline of molecules in development. Meanwhile, India has more engineers than Australia, and growing capabilities in drug discovery.

"The changing demographics in India are opening up opportunities," said Mazumdar-Shaw. "In the past, it was high volume, low margins. Now there is more capacity to purchase more expensive drugs, but also several unmet needs [in healthcare]. Also, the intellectual property environment is improving in a very positive way."

Mazumdar-Shaw pointed to the global trends in biotechnology: big pharma is licensing molecules from biotech to fill its pipeline, while biotechs are unable to take molecules beyond proof-of-principle stage and are forced to license at the preclinical phase. Meanwhile, venture capitalists are increasingly risk-averse, so companies are forced to look at their exit strategies early. Opportunities for contract research organisations are growing, with "faster, cheaper, better" as a mantra.

"For small biotechs there is a high risk of failure," Mazumdar-Shaw said. "Partnerships are not just about cost. We have to learn to create value from cost."

Why India?

Risk capital is drying up in developed countries, Mazumdar-Shaw said, pointing to an Ernst and Young report which found that more than 75 per cent of biotechnology companies had less than US$4m -- not enough even for proof-of-concept development.

"But in countries like India and China, $5 million is a reasonable amount of money to do work," she said -- there are opportunities in those countries, she said, for biotechs to "extend the runway".

And it was also important, she said, to look at the new market opportunities in India and China, where drug development could also be cheaper and faster.

Biocon's strategy, she said, had been to enter the market with generic biopharmaceuticals, which enabled it to learn a lot about taking a product to market. "Now, having established a good revenue and profit stream, we can take more risks, thru partnering," Mazumdar-Shaw said. "Partnership opportunities are extremely attractive to companies like ours."

Most of Biocon's partners to date, she said, were with American firms. "But the time has come for companies like ours to see what exists in our region. We're keen to see what can be done with companies in this region."

Sharing responsibilities

Partnering, Mazumdar-Shaw said, enabled companies to share responsibilities. Biocon's US partners oversee regulatory pathways, preclinical and clinical development work in the US. Meanwhile, Biocon does the process development, manufactures materials, conducts the Indian trials, identifies license partners and looks for opportunities in the Indian market.

That strategy, she said, had led to more predictable US and European trials. "And you can sometimes introduce a product in India one or two years [before it earns US approval]. The post-market data can be useful."

Data generated in India, Mazumdar-Shaw said, was beginning to be benchmarked with international standards.

"These are not just hypotheses," she said. "All our partners have clearly understood there have been time-saving opportunities. But the people fit has to be very important -- the respect of science talent."