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Intellectual Property
Biotechnology in India:
the Next Wave through StrategicR&D and Intellectual Property
Rights
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Presentation plan
India is making its presence felt in the global biotech market.
Intellectual Property Rights offer both opportunities and threats to
Indian biotech companies and research institutions.
Indian biotech companies must increase their focus on strategic
R&D and IPRs.
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Slide
Presentation plan
India is making its presence felt in the global biotech market.
Intellectual Property Rights offer both opportunities and threats to
Indian biotech companies and research institutions.
Indian biotech companies must increase their focus on strategic
R&D and IPRs.
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India has appeared on the biotech radar
Indias share in the global biotech market is currently about 2%.
Sales of biotech products in India are growing at a CAGR of 8.4%.
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
1997 1998 1999 2000 2001
Source: A Report on the Indian
Biotechnology market
Mindbranch.com
$
billion
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Indian biotech companies are active in many sectors.
Agro-biotech (including seeds) is the largest sector with 42 companies
Source: Biotech India 2003
Distribution of Indian biotech companies across different segments
24%
3%
4%
9%
6%18%
5%
6%
4%
12%
1%8%
Agro-biotech
Bioremediation
Biopesticides
Biodiagnostics
Enzymes
Human health
Vaccines
Bioinstrumentation
Veterinary
Contract research
Bioengineering
Other
Total number of companies =
175
Major PlayersMonsanto
Biocon
Nicolas Piramal
Cipla
Biocon
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Major Indian biotech players are actively involved in
research
COMPANY R&D/REVENUE (%) LINE OF RESEARCH
Workhardt 10.5 Genome technology
Zydus Cadila 7.5 Genome technology
Torrent Pharma 6.4 Pharmaceuticals
Ranbaxy 6.0 Pharmaceuticals
Biocon 5.0 Enzymes
Dr. Reddys Labs 4.4 Therapeutic proteins
Cipla 4.0 Vaccines
Sun Pharma 4.0 Pharmaceuticals
Average 5.9
Sources: A Report on the Indian
Biotechnology market
Mindbranch.com &
Biotech India 2003
Major Indian companies, with their R&D expenditure expressed as a
percentage of their revenue, and their key line of research:
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The government is also supporting research through
various agencies.*
AGENCY BUDGETARY ALLOCATION *
(RS. CRORE)
University Grants Commission (UGC) 1407
Indian Council of Agriculture Research (ICAR) 1399
Council of Scientific and Industrial Research (CSIR) 912
Department of Science and Technology (DST) 779
Indian Council of Medical Research (ICMR) 147
Department of Biotechnology (DBT) 136
Department of Scientific and Industrial Research (DSIR) 58
Source: Status and Development of Biotechnology
in India: An Analytical Overview
Sachin Chaturvedi
RIS Discussion Paper
The total budgetary allocations amount to ~ Rs. 50 billion
*Total research budget allocations of agencies
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Slide
Presentation plan
India is making its presence felt in the global biotech market.
Intellectual Property Rights offer both opportunities and threats to
Indian biotech companies and research institutions.
Indian biotech companies must increase their focus on strategic
R&D and IPRs.
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The Indian patent regime is changing
India needs to comply with the TRIPs agreement by 2005.
Drugs will become patentable as products, and not just as processes.
Important changes in the Indian Patent Act:
Patentable
subject matter
Before 2005 After 2005
Only process patents
for pharmaceuticals, food products,and agrochemicals
Product and process patents
for pharmaceuticals, food products, andagrochemicals
Process patents for these inventionshave a term of 5 to 7 years.
Process as well as product patents forthese inventions will have a term of 20years.
Provision for EMR grant tocompanies filing product patents
First Indian EMR granted to Novartisfor Glivec in November, 2003
Product patents will be issued. Hence,there is no need for EMRs.
Term of patent
Grant of EMRs
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in light of these changes, Indian biotech companies
face a number of opportunities and certain threats as well
STRENGTHS
Trained manpower and knowledge base Good network of research laboratories
Rich biodiversity
Well-developed base industries(e.g., pharmaceuticals, seeds)
Extensive clinical trials and research
Access to vast & diverse disease populations
WEAKNESSES
Missing link between research andcommercialization
Lack of venture capital
Relatively low R&D expenditure by industry
Doubts about the ability of Indian products tomeet international standards of quality
OPPORTUNITIES The large Indian market can be captured by
gaining IP protection.
There will emerge new revenue streams frompatent licensing and litigation.
Strong IP protection increases the lucrativenessof India as a destination for contract research.
THREATS Existing business models will not work.
Fresh investments need to be made in newdirections (strategic R&D set up, IP protection).
Sources: Biotech India 2003
Evalueserve analysis
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New opportunities are emerging for Indian biotech
companies
New revenue streams
Revenues from patent licensing and
litigation can re-define existing business
models completely, and shift them to ahigher value-generation plane.
Emerging business
opportunities
India will become a highly lucrative
option for contract researchonce
strong IP protection legislation is
introduced.
Capturing the Indian
market
Indian companies can introduce entry
barriers for foreign players in the Indian
market by using IP to protect their own
innovations.
Collaborative R&D
Indian companies can partner with
foreign players to enter intocollaborative R&D efforts as an initial
step towards developing an R&D focus.
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however, the opportunities are accompanied by certain
threats as well.
Current scenario By reverse engineering, Indian pharmaceuticals companies have
circumvented existing process patents, in order to produce patented drugs.
For example, consider that a company has a process patent for a drug in India.In the present scenario, an Indian company may easily circumvent the patent by altering theexistent drug manufacturing process.
The Indian company may sell this drug in the local market at lower rates, or may export it to
countries with no patent for this drug.
Post 2005 Scenario India will issue process and product patents for drugs.
Once a company obtains a product patent for a drug in India, no othercompany will be authorized to manufacture the drug in India.
Therefore, the existence of companies producing patented drugs bycircumventing the production process of these drugs will be endangered.
We need to shift to R&D-pivoted business models in the Indian
Biotechnology industry.
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Slide
Presentation plan
India is making its presence felt in the global biotech market.
Intellectual Property Rights offer both opportunities and threats to
Indian biotech companies and research institutions.
Indian biotech companies must increase their focus on strategic
R&D and IPRs.
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Slide
Indian research organizations need to redefine their R&D
approach.
A value-centric lifecycle of an invention
IdeationValue
extraction
IP
protection
R&DEarly-stage
valuation
Ideation
Value
extraction
IP
protectionR&D
An idea-centric lifecycle of an invention
Strategic R&D
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Strategic R&D transfers research from a vicious cycle to a
virtuous cycle
IP
Protection
Valuation
Large unvalued
Intellectual
Capital
Huge R&D
expenditure
Non-
commercial
Ideation
The Vicious Cycle The Virtuous Cycle
Commercial
Technology
Valuation
Ideation
Valued
Intellectual
Capital
Strategic
R&D
IP
Protection
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Evalueserve client example 1:
Identifying areas for strategic R&D
Identify possible
opportunities
Evaluate
opportunities
Identifyhigh value
opportunity areas
Invest in R&D inhigh value
opportunity areas
A case study on strategic R&D of a pharmaceutical company:
Investing in R&D
in high opportunity
areas
Licensing in
existingtechnologies
Analysis of
competitor
strengths
Identification of
disease areas withlow IP density
Identifying high
potential disease
areas with a low
IP density
Hematology TA:
large market size
and a high growth
rate
Large number ofdisease areas in
the Hematology
TA
Analysis of current
treatments
Analysis of trends
in R&D and IPR
Competitors in the
space
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Evalueserve client example 2:
Extracting value from the output of strategic R&D
Maximize IP
protection
Study the marketand technology
space
Analyze themarket
opportunities
Identify value
extraction routes
A case study on the use of strategic R&D for capturing a niche area:
Development of a
business plan for
commercializing
clients technology Identifying
possible routessuch as
commercialization,
licensing, and
partnering for
extracting value
from the invention
Identification of
immediately
competing
technologies
Identification ofthe advantages
and disadvantages
of competing
technologies vis--
vis the clients
technology
Client wanted to
identify a strategy
to commercialize
a technology
related to the
cardiovasculartissue engineering
domain.
Evaluation of
potentially
competitive
technologies in the
technological
domain
Analysis of market
opportunities in the
technological
domain
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Evalueserve client example 3:
Maximizing the scope of IP protection for your inventions
The invention:
An invention related to a new bypass surgery graft
The process:
EVS analyzed the invention, performed a prior art study, and
identified different claimable embodiments of the bypass surgery
graft.
EVS claims various embodiments of the graft in the patentapplication.
The result:
The patent covers almost all the different embodiments of the
invention.
The patent erects entry barriers so that competitors cannot bypass it
without infringing on it.
A well-protected invention has higher value-generation potential
compared to a loosely-protected invention.
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India must develop an IP focus.
Develop an IP-centric strategic R&D focus.
Obtain strong IP protection for your inventions.
Develop products and build Brand Equity.
Extract value from protected inventions by identifying and encashing
the right value extraction routes (licensing, commercialization, cross-
licensing, etc.)
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Intellectual Property
Biotechnology in India:
The Next Wave through Strategic
R&D and Intellectual Property
Rights
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