You may say I'm a dreamer
But I'm not the only one
I hope someday you'll join us
And the world will be as one
—John Lennon, Imagine

Second Look Tourists in Weihai, China, view a giant bronze sculpture

With the new rush India's biotechnology industry, now a piffling $2.5 million, is set to zoom to $4.5 billion by 2010.

The immortal song by John Lennon was the signature tune for Andhra Pradesh Chief Minister N. Chandrababu Naidu as he wooed US investors on the sidelines of the meetings of the World Economic Forum in New York last month. As Naidu made presentations about the potential of his state, the investors were bemused yet reassured. The minister was reaffirming that India is ready and waiting on the threshold of the next commercial frontier of science-biotechnology (BT).

The clutch of investors that Naidu wooed included medium and high-end biotech firms in the US, some of which were quick to commit investment. But some preferred to wait to see how the Indian Government tackles the prickly issue of protecting Intellectual Property Rights (IPR).

DINESH C. PATEL Indian-American pioneer in biotechnology, now seeking to set up a tissue bank in India Cofounded TheraTech Inc, known for innovative drug delivery products. After selling it for $350m, Patel co-founded Salus Therapeutics and Ashni Naturaceuticals. His vSpring Capital earmarks 30% of its $120m corpus fund for BT investment.

The interesting element, however, is that a fair sprinkling of biotech companies looking eastward has people of Indian origin either at the helm or in pivotal positions. Like it happened before in the field of information technology, will Indian Americans be yet another dominating presence in biotechnology?

Prima facie, it appears so. This could be the outcome of fortuitous circumstances, for BT marries the three sciences of biology, chemistry and information technology (IT)-where the Indian presence is abundant and established.

Though the term is not unfamiliar, biotechnology is still a nascent science involving any technique that uses living organisms or their products to make or modify a product, to improve plants or animals, or to develop micro-organisms for specific uses. Scientists recognise its potential to revolutionise the fields of agriculture, health and medicine and to influence industry. The promises: disease resistant and high yield crops that could solve the world's food problems; new cures and drug delivery systems for diseases and the use of technology to prevent genetically inherited disorders; and new enzymes that make industrial production more efficient and cost effective. It is that and more which is driving the $50 billion-global biotech industry towards an expected $150 billion figure by 2010.

VIPIN GARG His start-up Tranzyme is looking to set up a stem cell research collaboration in India A stint with Atlantic Richfield Corporation, an oil giant, taught him that BT cannot expect quick returns like IT. Tranzyme focuses on post-genomic drug discovery for neurosensory diseases.

India's share at $2.5 million is less than 1 per cent. However, that figure is expected to jump to $4.5 billion in the next decade. India enjoys certain advantages in the chase for this new pot of gold: it has a well educated, highly skilled, English speaking workforce that can give quality results at lower costs. India already enjoys a formidable reputation in it, a field that will take BT forward. And it is racing neck and neck with China and South Korea in this arena.

Unlike in software, however, the objective is not to create a new generation of sweat shops. "We want to be successful not because we are cheap, but because we are good," says Dr Inder Verma, professor of genetics at the Salk Institute in San Diego, California, and an active player in a host of biotech start-ups.

There is an immense amount of biochemical data being revealed everyday in research laboratories across the world, especially since the announcement of the unravelling of the human genome last year. And it is the obvious field to help collate that data creating a new interdisciplinary subject-bioinformatics.

For example, there are about 20,000 publications explaining the various elements of the Protein Kinase C (PKC) enzyme. No one individual or company can afford to collate it and separate each activity to provide a summary, explains Verma. "But India, with its vast resources of trained manpower and much cheaper costs, offers an ideal base. India has the scientists to read the data and separate it, and software professionals to collate it." The emphasis, he adds, is on economically cheap, not qualitatively cheap, products.

Global potential of BT boom areas in the next five years
PHARMACEUTICALS $ 100 billion	INDUSTRIAL ENZYMES $ 50 billion	AGRICULTURE $ 10 billion	OTHERS $ 40 billion
* Industry sources, approximate figures

ANU SAAD The CEO of Impath Company sees India as a potential investment destination Probably the only woman CEO of Indian origin in the US sector. Impath improves outcomes for cancer patients by providing patient specific diagnostic, prognostic and treatment information.

In the next decade, over 40% of pharmaceuticals will be developed through BT, accounting for more than $100bn in sales.

Verma should know. Like a rising number of academics, he has his feet firm in the entrepreneurial business of biotechnology as well-serving as director of Cell Genesys and Somatix Therapy Corporation. A member of the National Academy of Sciences, Verma was asked in 1995 by the National Institutes of Health (NIH) to chair a committee reviewing the scope and advancement of gene therapy. And as a member of the overseas board of the Department of Biotechnology, Verma has also been actively pursuing efforts to promote India as a biotech destination.

The post-genomic era has certainly leveraged the advantage in India's favour, opening up mind-boggling investment figures-the sales for 50 biotech drugs approved in the US are expected to be upwards of $10 billion. Its established prowess in it makes India an obvious destination for companies seeking data collation in BT. The successful outsourcing by US Fortune 500 companies like General Electric and Hewlett Packard has only reinforced the bullish sentiments on Indian it.

Apart from data collation, however, India also has the scientific manpower to analyse the data. For example, to identify DNA variations- that is to isolate crucial differences at the molecular level at which ailments or hereditary disorders can be ascertained and the right drug to be administered can be determined.

UK DISCOVERS INDIAN TALENT

BT Breeding Ground Before health consultant David Hawkins led a team from the Department of Trade and Industry (DTI) to India recently to explore opportunities in biotechnology he wasn't quite sure of the outcome. Back from India, he is an enthused man. "India has a huge pool of scientists that can be outsourced by the UK," he says. "We want to be there before the rest of Europe and the US start outsourcing Indian biotech experts." Beckett with Lalvani at Vitabiotics That's not all. "Bangalore will be the breeding ground of bioinformatics experts," predicts Hawkins. "There are several centres in India that have world class facilities with spare capabilities which can be used by UK-based firms," adds Hawkins. But while the Government is still talking, private companies are already charting their way in, such as Vitabiotics. It was the outward/inward business becoming easy in India that saw through the investment, says Dr K Lalvani, director, Vitabiotics Healthcare. In Bangalore, Vitabiotics Healthcare is putting in £5 million for a 1,000-sq ft factory by the name of Meyer Organics Healthcare and another £3 million on a research unit. In collaboration with a leading scientist, Arnold Beckett, it is setting up a R&D unit called Meyer-Beckett Research Ltd to focus on drug delivery. The unit will start operations in six months. As of now, the company has some Indian it experts and looks forward to some exchanges of biotech scientists as well. There are over 550 bioscience companies in the UK with over 40,000 employees, according to Biotech Association reports. London alone has about £300 million worth of biotech business, mainly research and product based. UK has more BT collaborations in the USA and in Europe, but the potential that India is posing cannot be ignored. "India still tends to do contract work for multinationals. So it's a watching brief for me," says inward agency London First Centre's Asia Pacific director, Michael Golay. Other than competition, India also has to address the question of ethics and morality in BT, especially if it wants to attract investment in areas such as stem cell research. Says Hawkins: "The UK is looking towards exporting experts on regulation matters to India. This might help set the ethical framework in place." -Ishara Bhasi in London

"We all have the same set of genes, but our responses to drugs are different because of variations in our DNAs," explains Anand Swaroop, professor, ophthalmology and visual sciences, human genetics, at the W.K. Kellogg Eye Center, Michigan. Most common diseases such as asthma, diabetes and heart ailments result from variations in multiple genes. To identify those genes requires the sifting through of an enormous amount of data, which is being done through the nascent field of bioinformatics.

Swaroop, who has a PhD in biochemistry from the Indian Institute of Science (IIS), Bangalore, joined Yale University in 1982 to do post-doctoral research. He then moved on to Utah to work in human genetics and later joined the University of Michigan in 1990, where he is now director at the Center for Retinal and Macular Degeneration. Swaroop points out that with more and more Indians getting involved in bio-medical research and doing extremely well, many of them have joined the big players in the pharmaceutical industry. But the significant trend is of those desis who have started their own companies.

Meeta Patnaik, assistant vice president of California-based Speciality Laboratories joined pharma major Ranbaxy when the genomic revolution pitchforked diagnostics into the limelight as an integral tool for therapeutic care. Joining Speciality in 1990, she has primarily been overseeing all internal research and development and managing strategic alliances both in the US and internationally. "We develop and commercialise over 100 new or enhanced tests every year," she says.

Till December 2000, Speciality had a tie-up in India with Ranbaxy for country-wide laboratories. "I have been involved in the BT field in India, which included establishing laboratories for specialised testing using molecular biology, immunology and biochemical techniques and the latest developments in bioinformatics," says Patnaik.

The stakes in Ranbaxy were divested when Speciality Laboratories went public and decided to concentrate on its core activities in the US. Now once again the company is looking to revive its relationship with India "more as strategic alliances". As in it, much of the work can be outsourced. "There is enormous work going on in institutes in Delhi with which we can and will collaborate. The alliance will be of mutual benefit," says Patnaik.

Similarly emphatic is Anu Deshbandhu Saad, CEO of Impath Company, a top notch firm specialising in diagnostic work. Probably the only woman CEO of Indian origin in the biotech sector, she believes the time is ripe for her company to move East and is sizing up Japan and India as potential investment destinations.

In the business of improving outcomes for cancer patients, Impath with a database of over 8,70,000 patient profiles, uses sophisticated technologies to provide patient-specific diagnostic, prognostic and treatment information. This information goes to over 8,300 physicians who specialise in the treatment of cancer patients, and to over 2,000 hospitals and 570 oncology practices. Impath's predictive oncology serves pharmaceutical, biotechnology and genomics companies developing new therapeutics targeted at specific, biological characteristics of cancer.

Saad is upbeat about India as she feels it offers great potential for doing clinical trials and generating biopsy specimens. "The potential is because of the medical resources, the it infrastructure and the thrust being given to biotechnology in the country," says Saad who joined Impath in 1990 and moved up to be CEO and named board chairman in January 2001.

Vipin Garg, who came to the US in the 1980s, is a scientist-turned-entrepreneur with a biotech start-up called Tranzyme-a Birmingham, Alabama-based firm focused on post-genomic drug discovery for neuro-sensory diseases. When in Philadelphia, Garg got picked up by Atlantic Richfield Corporation (an oil giant) which was venturing into biotech: it hired 50 PhDs and gave them $10 million and told them to do what they wanted with the money.

Garg maintains there was a severe lesson in this experience, both for him and for India. "Basically, the company wanted quick returns, failing which they lost interest. Similarly, I detect a great impatience in India too. That can be dangerous." There is a big difference between it and BT, he explains. In biotechnology, the investment costs are high ($50-100 million) and the incubation period pretty long, so the profit cycle is that much longer. "You can't make a baby in less than nine months," he quips.

Garg's Tranzyme is now looking to India to set up a stem cell research collaboration. Garg believes that India, with its large market together with its inherent strengths in information technology and scientific manpower, has a great potential as a manufacturing base. "Biotech drugs that have been around for decades and on which the patents are about to expire, can be manufactured in India at a tremendous cost advantage. In the long run, it will establish a core capability and a track record for the Indian biotech industry," he says. This would create the confidence in US companies to bring in more recent compounds to manufacture for export, he feels. Companies like Shanta Biotech have already begun with the manufacture of Interferon and the Hepatitis vaccine.

Biotech products entered the pharmaceutical market about 15 years ago and their share is constantly increasing. Consequently, the first biotech pharmaceuticals will be running off patent within the next few years. There are, among others, blockbuster products such as: Human insulin, Human growth hormone, Interferon alfa, Interferon gamma, Tissue plasminogen activator, Erythropoietin, Interleukin 2 and Granulocyte colony stimulating factor (GCSF).

Together these products account for more than $20 billion in annual revenue. In the next decade, more than 40 per cent of all new pharmaceuticals will be developed through biotech, accounting for more than $100 billion in annual sales.

Among the first CEOs of Indian origin at the helm of a public limited biotechnology company is Kumar Chandrashekaran. The Delhi born, IIT Powaii alumni came to the US in the 1960s to do graduate work at Berkley in Chemical Engineering, and taught briefly at Stanford. Then he began working with Alza-a pharma company recently acquired by Johnson and Johnson-before moving to a sister concern called Syntax. Now at the helm of InSite Vision, Kumar is pursuing research in biotechnology applications for curing eye ailments.

His company, he says, is in a position to cash in on the country's potential. "On a real time basis, I am interacting with a Mumbai-based pharmaceutical firm. I am trying to see whether I can use the drugs here that they are synthesising in India," he says. The idea is to import the less expensive, slightly superior drug. "To me India is well equipped with scientific manpower and offers low cost innovations," he says.

Tamil Nadu-born Benjamin Issacs, now president of Massachusetts-based Formatech Inc, too thinks the Indian experience will be a two-way street. "The cost structure is advantageous, then you have the exchange rate disparity and finally the much lower cost of living. In addition, it is competitive in manufacturing pharmaceutical products," he enthuses, adding that India can be used as a base to not only sell drugs to other developing countries but also to import drugs into the US.

Formatech Inc, which provides contract services in various fields to both biotech and pharmaceutical companies, however, has reservations about India's failure to update its patent laws. While his company is scouting the Indian market for an alliance and hopes to clinch it in the next 18 months, he is watchful of the Government approach to patent regulation. "Companies engaged in drug manufacture on a contract basis worldwide are very sensitive about protection of IPR. They will be watching how the Government executes existing laws to protect these rights."

Says Garg of Tranzyme: "For US and European companies the challenge in India is primarily IPR protection. The Government will have to make a deliberate effort to police and implement the laws. Delay to do so will be disastrous." Utah-based Dinesh C. Patel argues in the same vein. Co-founder, chairman and CEO of TheraTech Inc, a pioneer in the development and manufacture of innovative drug delivery products, Patel says: "The biggest problem so far is patent protection. Unless it is air tight, nobody will put in serious money. On the research side, the prospects are good."

After the sale in 1999 of Thera-Tech for $350 million to California-based Watson Pharmaceuticals, Patel went on to co-found Salus Therapeutics, a biotechnology company that develops anti-sense pharmaceuticals. The same year he helped found Ashni Naturaceuticals Inc, which focuses on developing patent-protected, clinically-tested natural products. He then set up vSpring Capital with a fund corpus of $120 million, of which 30 per cent is earmarked for BT investments.

Patel is now looking to partner a venture to set up a tissue bank in India. "For genes testing you need a lot of tissue samples. The plan is to set up a wholly-owned subsidiary of Silico Insights in India. In this regard, a memorandum of understanding was signed recently with the Andhra Pradesh Government. We are also talking to the Piramal Group and seeing how we can collaborate."

It is more than apparent that Patel and his ilk having arrived in the US with a little more in their pockets than the statutory $35 permitted in those times, have worked their way into vantage positions in the biotechnology sector in the US. Coincidentally, the entire biotech sector in the US is looking to expand its horizons-in which India is emerging as an investment destination. The issue is whether India will be able to help itself to a portion of the global biotechnology pie or remain a "dreamer", a la John Lennon.