More M&A in biotechnology sector expected, Bangalore Bio 2007 hears

The conference session on Finance & Marketing - Innovation & Investment at the Bangalore (India) Bio 2007 brought out some of the advantages that the Asian companies have and the opportunities they provide to western companies. These factors will be critically considered for companies to consolidate and grow at a rapid pace. In the next two years, large and medium size biotechnology firms across the world would look to partner, merge and acquire some of their Asian counterparts.

Key factors that would drive acquisitions are cost advantage, quality standards, market reach, intellectual property rights and product potential, delegates were told.

Speaking on the occasion, Alok Gutpa, country head, life sciences and technology at Yes Bank said: "there have been some tremendous activities happening in the life science sector over the past few months. Lots of acquisitions, outsourcing deals, R&D, increasing cross border discussions on IPR licensing, etc - all reinforcing the message of India's and Asia's growing importance in the sector."

Opportunities for Asian firms "immense"

Delivering his address on the opportunities for Asian companies, Crispin Kirkman, managing director of the UK Emerging Technologies Network Agency, said, "the opportunities for the Asian companies in the biotechnology sector are immense. The key to the success of Asian pharmaceutical companies is their ability to retain their cost advantage while matching the quality standards of the west. India is an increasingly attractive destination for R&D activities in the pharmaceutical and biotechnology industry. Western companies are looking to partner with Asian companies, especially India companies, because of there low cost, flexibility, increasing number of Food and Drug Administration/European Medicines Agency (EMEA) approvals, high proficiency in health care and science, access to Asian market and excellent talent pool."

Elaborating on the need for a focus planning before entering a new market, Mark Ravera, principal of Strategic Pharma Consulting Group in the USA, said: "before entering a new market, a proper planning, clear focus, flexibility is key to success. Knowledge of target market needs to be incorporated in the drug development efforts - the earlier, the better! Focus on the therapeutic area is needed to build depth of expertise for sustained success while flexibility is needed due to imminent changes in market."

He added: "drug discovery may be feasible but, just like USA-based small biotechnology companies, Asian companies will have to look for partners to help bring any thriving innovation to market. This realization has already spurred acquisitions, alliances between the Asian and global pharmaceuticals in R&D, and outsourcing of services and clinical trials."

"Early stage funding remains one the biggest challenges which the industry is facing, in spite of various developments happening in [the] biotechnology sector. Investors are not willing to take [the] risk which is involved while investing in the incubation stage of the company. They are more in favor of mid-to-late stage investments," concluded Mr Gupta.