Diagnostics

Diagnostics is a second major contributor to the total biopharma revenues. It accounted for about 19 percent to the total

biopharma sector. The sales of diagnostics kits have been on the rise in the recent years in India with increase in per capita income, changing life style and urbanization. The revenue of diagnostics kits has gone up from Rs 601 crore in 2004-05 to Rs 905.33 crore in 2005-06.

The market is witnessing both rapid growth and increased competition. With only two companies in 1976, now the diagnostic sector has about 25 manufacturers besides over 30 players including the multinationals who are doing diagnostic business in the country. Transasia Biomedicals, Roche Diagnostics and Tulip Group of Companies dominate the Indian diagnostic sector with each contributing over Rs 100 crore.

Further, companies like Eisai Pharmaceuticals India, Nicholas Piramal India, Bharat Serums & Vaccines, VH Bhagat & Co, Claris Lifesciences Ltd, Arun & Co, Ruchi Corporation, Qualigens Fine Chemicals, a division of GlaxoSmithKline Pharmaceuticals, Abbott Healthcare, and Ortho Clinical Diagnostics, a division of Johnson & Johnson have been importing diagnostics kits for marketing in India along with a few other companies.

In addition to these, the Indian market has been flooded with imported low cost Korean and Chinese kits. Multinationals like Abott Healthcare, Bayer Diagnostics, and Randox Labs have also been doing well in this space.

However, big Indian pharmaceutical companies are shifting their focus to their core strengths from this low margin business. Ranbaxy had divested its part of diagnostic businesses during the year to ICICI Venture Funds Private Ltd. Ranbaxy Fine Chemicals Limited (RFCL), till recently a 100 percent subsidiary of Indian pharma major, is now owned by ICICI Venture Capital Fund and has four special business units. Its business unit Diagnova operates in in vitro diagnostics.

Another major trend has been more and more BioSuppliers distributing diagnostic products. For example, BioRad has a strong clinical diagnostics focus and has announced several new products. Wipro Biomed has a diagnostics system group and a significant strategy that it adopted this year was to launch its own brand LabLife, with a range of diagnostic equipment and reagents. Some of the products it launched include reagents, automated haematology analyzer, ELISA washer and reader, etc. Take another example. Millipore has entered into a partnership with ReaMetrix Corp., which launched Accuford TriTStat assay, a critical diagnostic for managing HIV patients. The product will be marketed by Millipore India.

Several new diagnostics businesses got established during the year. Companies like Anamol Laboratories, a new venture from M J Dashora, former Managing Director of Accurex Biomedicals, Excel Diagnostics, Aspen Labs, Genetics Specialties, Kan Healthcare, IMMCO Diagnostics, Dade Behring, and ReaMetrix have started their diagnostics businesses last year. Reliance Life Sciences too has a diagnostic division and has been marketing many molecular diagnostic kits.

The Indian government too is keen on encouraging companies to invest in the diagnostic sector. The Department of Biotechnology (DBT) has been facilitating the transfer of many technologies for diagnostic kits to the industry developed at the CSIR labs. It has also been funding many projects on developing new diagnostic kits. During 2005-06, Span Diagnostics, one of the leading Indian diagnostic companies, launched SIGNAL-KA, an indigenous rapid test system for the early diagnosis of kala azar. This is a technology developed by AIIMS with the financial aid from DBT. The government has supported many such projects in the past and later transferred for commercial applications.

Many companies are seeking technology transfers of foreign and in-house developed technologies for diagnostic manufacturing in India too.Existing manufacturers are upgrading their manufacturing facilities and are increasing their product portfolios.Clearly,the diagnostic market is growing at a healthy rate companies are continuing to see India as major diagnostics market and are keen to invest here.

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