India's Take on Innovation
Small-scale innovation generates large results
As evidence that the life sciences are more human driven than profit driven, the sector is often insulated from the turbulence that slows down other facets of the economy. In the face of uncertainty, global innovation in pharma prevails.
The word ‘innovation’ in a pharmaceutical context often evokes thoughts of emerging fields like cell and gene therapy, or perhaps a protein structure that could hold the cure to Alzheimer’s. We envision start-ups with millions of dollars in funding pushing for a breakthrough cure. Yet this is not the only formula for innovation, and India is home to tinkerers who have proven over the past few years that a company does not need to introduce a new molecule to the market to make a significant impact on its surroundings.
One way Indian companies are pushing the pharmaceutical sector forward is by working to dramatically reduce the amount of time it takes to develop and manufacture a drug, whether it be at the discovery phase or further along during the coatings application process. Naresh Raisinghani, CEO and executive director of the India division of the consulting company BMGI, likens the approach to improving a company’s hiring process. “A simple process like recruitment may take two or three months to complete. If you were to analyze the process, you would see it takes the HR personnel perhaps an hour to conduct the initial interview and scan the person’s CV,” he said, explaining that most HR staff might invest around four hours of work into the process during the entire three-month timeframe. “The same thing happens in the drug discovery process. You have to run experiments, conduct research, and do analysis. But between all this, the time lapse is significant. There is an equally significant opportunity to extract waiting times."
“We do our portfolio selection targeting products that are either near patent expiry and we believe will be on a day one launch with some competitive advantage or that are niche, older molecules with limited competition.”
Vishwa Savla, Managing Director and CEO, Pinnacle Life Science
Wait times can be caused by the lack of timely availability of necessary materials. Brian Zehr noticed many Indian biotech companies were ordering their critical specialty reagents from MNCs with long lead times. This was one of the main reasons he decided to help create Biofoundry Technologies, a start-up that manufactures recombinant proteins and kits for end users with a focus on specialty proteins used in biopharma. "When you are developing a product, long lead times can compound delays in arriving at answers," said Zehr. “If I have to wait a month to receive new raw materials to run experiments each time I order them while in the R&D phase, my three-month product sprint can turn into a year-long endeavor.”
A speed-based approach to innovation can also help reduce bottlenecks at certain time-intensive stops towards the end of a product’s journey to the consumer, and Indian generics companies have excelled at demonstrating how effective it can be to make downstream processes more efficient. Vaishali Tawde, managing director of excipients and coatings supplier Ideal Cures, believes many Indian companies have created a competitive advantage in identifying ways to shorten processes that may have otherwise taken years to generate a finished formulation. “Coating is one of the most time-consuming steps in the entire process of developing solid dosages. Sugar-coating in particular can become a bottleneck for the entire production of a product,” Tawde said, explaining that this was the driving force behind her company’s development of its INSTACOAT 4G offering, a ready mixed powder that can reduce the time required for coating from 10 hours down to four. “With this product, the batch can be ready in one shift, which is especially helpful for customers with high volumes who otherwise experience bottlenecks.”
In addition to cutting production processes to increase output, another spin on innovation that Indian companies have found success with is finding improvements to be made within molecules that are already on the market. "Innovation does not have to be the creation of a new chemical or drug that is not currently in the market. It can also be about finding engineering improvements to reduce costs or a packaging innovation, or even something that just makes things easier for the consumer,” said Vishal Rajgarhia, marketing director of Finecure Pharmaceuticals, while explaining that his company has conducted its own innovative work in this way, including in finding stable formulations for antibiotics that are not typically stable in atmospheric conditions.
“While R&D itself cannot be rushed up, downstream processes can be made more efficient – Indian generics companies have done a remarkable job in demonstrating this.”
Vaishali Tawde, Managing Director, Ideal Cures
Bharat Parenterals is working to develop products that rule out the need for the lyophilization of injections, an expensive and time-consuming process that takes nearly 72 hours to complete. “Our products will be more user-friendly for doctors as well as have the commercial benefit of being more affordable,” said Bharat Desai, managing director of the company. “In the US, hospitals are only allowed to administer injectable products. When there is a powder injection, hospitals have a separate division that deals with the reconstitution of that powder for an additional cost. By ruling out lyophilization, we will be enabling hospitals to avoid this step.”
The reason so many companies take efficiency-based or enhancement-oriented approaches to innovation rather than aim for a therapeutic step change is because India’s funding ecosystem still favors SMEs expanding their development of generic products over innovative drug development. There may be further logic supporting this more conservative strategy. In September 2022, global consulting firm McKinsey & Company released a report stating that financial productivity has fallen in most life sciences subsectors as the cost of developing innovative drugs continues to rise. According to the study, the average internal rate of return from innovation is around 3%, which is below the cost of capital. As large pharmaceutical companies around the world seek the solution to long-lasting productivity gains, many smaller Indian players have already found their answers.
“As a country, we have to keep prioritizing innovation. This does not have to be the creation of a new drug – it can also be about finding engineering improvements to reduce costs or a packaging innovation or even something that just makes things easier for the consumer.”
Vishal Rajgarhia, Marketing Director, Finecure Pharmaceuticals
Will Indian biotech have its day?
Chemistry still dominates India’s pharma industry. The sharp eye will see, however, the potential that biologics hold to reshape the landscape. This shift is already underway; the Covid-19 vaccines distributed to billions of people around the world are a great example of what lies on the horizon for the nascent sector. The talent and the will are present; what Indian biologics companies need now is the funding.
To understand the extent to which large molecules hold the power to propel the industry, it is helpful to look at projections for the growth of the sector as a whole. The Indian pharmaceutical industry currently generates around US$50 billion in revenue per year. According to Viranchi Shah, director of Saga Laboratories and national president of the IDMA, the CAGR has been over 10% for the last decade, and many trends predict the sector will scale up to a US$500 billion industry before 2050.
“While the future of IP law in India is dynamic and likely will present new challenges, the entrepreneur-driven India pharma industry will emerge as a global pharma superpower within the next 10 years.”
Gopakumar Nair, Managing Director and Owner, Gopakumar Nair Associates
“To put this into perspective, the Indian pharma industry took 75 years to go from zero to US$50 billion, but may go from US$50 billion to US$500 billion in just 25 years,” Shah commented. “In this journey, however, the generics growth story alone is not going to be sufficient, and that is why there is the necessity for India to develop and manufacture innovative value-added products. Historically, India has been strong in small molecules, and we lag a bit in the areas of biologics. The Indian pharma industry needs to strengthen itself in the large molecules space as this is where we can add more value for what we are doing.”
Despite being an area of high growth potential, investment is perceived as too high risk for many potential investors. “The risk appetite in India is still not there,” observed Bhaskar Krishna, managing director and CEO of Maiva Pharma. “There is so much money to be made in innovation, but the preference seems to be towards expanding pre-existing manufacturing capabilities.”
Compounded to the lack of funding is the fact that whatever resources become available are often fragmented across the sector. “Although significant progress has been made, becoming a large player in molecular discovery is still a bit distant for the Indian pharma industry as the country does not yet have the mechanisms to play in this space,” said Gopakumar Nair of GNAs. “The Indian pharma industry, compared to any other pharma industry in the world, is highly fragmented – there are so many players, and investments are extremely broadly distributed.”
Nair believes industry and academia should learn to collaborate more effectively to create a more robust network of drug discovery research and an ecosystem that will enable breakthrough innovations in molecular drug discovery.
Though India’s biopharma sector remains constrained when it comes to access to risk capital, industry leaders like Ajay Tandon, managing director of Veeda Clinical Research, see potential. “While it may not be to the same extent as in the US, the emergence of venture capital available for innovative biopharma companies to develop their programs has increased substantially over the past decade in India,” Tandon commented.
“Our products that rule out the need for lyophilization are more user-friendly for doctors and are more affordable because they enable hospitals to avoid the step of reconstituting powder injections for an additional cost.”
Bharat Desai, Managing Director, Bharat Parenterals
He also pointed to the work India’s government is taking to amplify industry capacity to support innovation, including phase 1 clinical pharmacology, analytical and bioanalytical facilities. “There are discussions currently underway regarding how to build this infrastructure, in collaboration between the government, academia and industry to create the right ecosystem,” Tandon added. “Overall, I believe these cross-industry collaborations to build the right ecosystem for innovation along with the push for risk capital are driving the industry forward. If this all gets into rhythm, I see the industry in a very different place five years from now.”
Whether it takes five years or 10, the seeds that are already being planted for a frenzy of biotech activity create an exciting atmosphere within India’s life sciences, because while nobody knows exactly how and when the space will explode, there is little doubt that it will.
Image courtesy of Deposit Photos