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Biologics manufacturing on the rise
Despite slowdown, the biologics manufacturing business in India is growing.

There were only a handful of companies manufacturing biologicals in India sometime back. But now there are over a dozen Indian biopharmaceutical and pharmaceutical companies that are producing biologics. These include APIs and intermediates and vaccines. Indian companies are strengthening their bases and capabilities.
Shantha Biotechnics Ltd, the first Indian company to develop, manufacture and market recombinant human healthcare products in India, laid foundation for a new state-of-the-art vaccine manufacturing complex at Muppi Reddy Pally village in Medak district in Andhra Pradesh. Shantha will manufacture its next generation vaccines in this complex. The first vaccines to be manufactured in the premises will be from the entric vaccine portfolio like cholera and rotavirus vaccines. Dr J Geetha Reddy, minister for major industries, sugar, commerce and export promotion, Andhra Pradesh initiated the ground breaking ceremony of Shantha's new facilities in Muppireddy Pally village in February.
This facility will have the capacity to manufacture more than 100 million doses of vaccines per year. The company has plans to initially invest Rs 50 crore with future investments going up to Rs 100 crore. The new facility is part of Shantha Biotechnics strategic expansion plans focused on servicing existing and growing market demands for its range of vaccines.
Dr Varaprasad Reddy, managing director, Shantha Biotechnics, said, “The new vaccine complex will address the capacity constraints of our existing facilities to manufacture range of entric vaccines and the new generation pneumococal vaccine which are under development. Shantha obtained WHO-Geneva Pre-qualification for its pentavalent vaccine in 2009 and has started supplying the vaccine to UNICEF. Shantha has the distinction of receiving the EMEA certification for one of its products in the current year”.
Shantha is also focusing its R&D efforts in the development of novel vaccines like HPV and novel therapeutic antibodies. Shantha Biotech is part of the global healthcare giant Merieux Alliance.
Biocon, India's largest integrated biopharmaceutical entity, produces a humanized anti-EGFR monoclonal antibody for the treatment of head and neck cancer and insulin products. Its full set of manufacturing capabilities, include mammalian cell culture fermentation, microbial cell culture fermentation, synthetic chemistry, formulation development for solid dosage (tablets and capsules) for immediate and modified release, injectables (vials, cartridges, lyophilized and pre filled syringes) and a fill finish facility.
Pune-based Serum Institute of India is one of the world leaders in vaccine production. Its product line includes MMR, a quadrivalent vaccine for diptheria, tetanus, pertussis, and hepatitis B, rabies vaccine, and a recombinant hepatitis B vaccine. Vaccine major Panacea Biotec manufactures liquid pentavalent vaccine introduced in India, which immunizes children against five dreadful diseases (DTwP+ Hep B+ Hib) of early childhood, besides other vaccines like EasyFour (DTP + Hib) and Ecovac (DTP + Hep B) and is also a pre-qualified supplier of OPV.
Intas Biopharmaceuticals Ltd (IBPL) is a fully integrated EU GMP certified biopharmaceuticals company with the capability to provide a range of development and manufacturing services. The company expanded its Contract Research and Manufacturing Services (CRAMS) business with the acquisition of US-based biotechnology company Biologics Process Development. Bharat Biotech manufactures a haemophilus influenza B conjugate vaccine for Wyeth Lederle, and a human lactoferrin product for Agenix, Inc.
Some major Indian pharmaceutical companies like Dr Reddy's, Lupin and Wockhardt are also involved in biologics. Dr Reddy's markets two generic biologics that are versions of Roche's Rituxan and Amgen's Neupogen.
According to Frost & Sullivan, in 2006, the contract manufacturing accounted for over 71 percent of the revenues of the CRAMS market. In 2007, the Indian contract manufacturing market was valued at $869 million, and consisted mainly of companies manufacturing older, generic molecules, some specialized generics and custom synthesis and scale-up of in-patent drugs. The Boston Consulting Group estimated that the contract manufacturing market for global companies in India would touch $900 million by 2010.
Currently, 80 percent of the pharmaceutical contract work undertaken by Indian firms consists of the manufacturing of active pharmaceutical ingredients (APIs) and intermediates, compared to 60 percent globally. Outsourcing API manufacturing of patented products has gradually increased with companies signing API contract manufacturing agreements with Indian CMOs. According to PwC, the pharma CMO market as a whole in India in 2010 is expected to reach $916 million from $492 million in 2007.
Hareesh C P, head, Business Development (CRAMS Biz), Intas Biopharmaceuticals, India said, “Contract manufacturing is a market-driven industry and CMOs must be competitive with not only each other, but with the option to build manufacturing capacity. The fact that the contract manufacturing industry is projected to continue growing suggests that it is delivering value to its customers. Contract manufacturing market is expected to touch $2.46 billion by 2010 with a CAGR of 41.7 percent from $869 million in 2007, according to KPMG report published in September 2008. Indian companies, through their high quality-low cost production models, have bagged some impressive deals in the contract manufacturing space. These deals validate India's potential to achieve a larger share of the global manufacturing outsourcing market. Currently, India is among the top five countries in the Asia-Pacific region in terms of biotechnology.”
However, Hareesh added, “These are challenging times where the global financial crisis has affected many biotech start up which were working on Novel Biologics. Many others that are mid-way into development may be forced to license out earlier than they had originally planned to. The large pharma is on an acquisition spree of biotechs to boost up the number of biologics in the pipeline. Under such a complex situation, it is difficult for the small or large pharma/biotechs to make decisions on outsourcing. However, it is important for the industry to stay visible and be on the radar of these companies.”
Biopharmaceutical contract manufacturing has tougher requirements for technology, human capital, and regulatory aptitude. In recent years, there have also been signs of adequate capacity, and new businesses have faced stiff competition. The market for biosimilars is yet to take off because the US and Europe have been slow in issuing guidelines in this area.
Despite all this, growth of biopharmaceutical contract manufacturing has been fairly robust at about 25 percent annually and there is going to be the need for outsourcing capacity at CMOs. Some of that may directed towards India.

Biologics
Global biologics market is estimated to be $ 53 billion (excluding vaccines) constituting 9 percent of global pharmaceutical market.
Nearly 125 biologics currently marketed.
The research and development costs associated with biologics are high because biologics are structurally complex and difficult to manufacture.
Genentech, estimated that it has invested $6.4 billion in research over the last 28 years.
Biologic treatments range anywhere from $10,000 to $25,000 a year. In some rare cases, costs can exceed $170,000 per year.
Erythropoietin is the leading class of biologic constituting nearly 22 percent of biologic market (excluding vaccines)
Companies in Indian generics universe have gross margins closer to 50 percent. This means that an Indian generics company could enter the market, manufacture the same product, and be content to sell it at $4,000-5,000, a 50–60 percent discount.
Dr. Reddy's launched a Biogeneric version of Roche's Rituxan/Mabthera in the Indian market at Rs 20,000 per vial, or approximately $505, a 50 percent discount to Roche's price in India.
With additional entrants and lower-cost manufacturing, prices could be driven down further. For example, Wockhardt recently invested $38 million to build a facility capable of manufacturing 15 percent of the worldwide supply of biologics.
Major brands of Erythropoietin products have become key targets for biogenerics, after accounting for 18.7 percent ($12bn) of global pharmaceutical sales in 2006. Amgen's Aransep held 55 percent of the EPO market in 2006, typifying the rapid growth of long-acting products.

Compiled by Dr Gita Sharma, Head, Biotech, Claris Biosciences

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