India: Manufacturing and R&D Hub for Bio-Pharmaceuticals

1. India: Manufacturing and R&D Hub for Bio-Pharmaceuticals Himanshu DAVE Senior Vice President Corporate Business Strategy & Development Avesthagen Limited himanshu.dave@avesthagen.com 1

2. Next decade Biosimilars would fuel the growth • The global biopharmaceutical market is expected to grow to over $320 billion by 2020 (GBI Research) • More than 30 branded biologics, with combined estimated annual sales of $51 billion,will lose patent between 2011 and 2015. • Global sales of biosimilars reached $243 million in 2010 and are projected to grow to $3.7 billion in 2015 (Datamonitor) • Estimates $100bn worth of biopharmaceuticals will have lost patent protection by 2020. (Frost & Sullivan)

3. Three major clusters for biosimilars 3

4. Can India can aspire to become Biopharmaceutical R&D & Manufacturing hub?

5. But why India? • Largest number of USFDA-compliant manufacturing facilities outside the US. • India holds 8% (8.5% for China) of the global concentration of capacity and employment [source: Top 1000 Global Biopharmaceutical Manufacturing Index, BioPlan] • Indian companies ahead of the Chinese companies in meeting US-FDA’s cGMP standards • India's low-cost-high-value proposition offers an edge amidst global shortage of biomanufacturing capacity • The Indian biopharmaceuticals market is currently worth nearly $2 billion a year and growing rapidly. • 20 biopharma companies are already producing biosimilars

6. India’s main national competitors in the biopharmaceutical space include China, Israel, South Korea, Singapore and Taiwan. These countries have initiated a number of infrastructure support and policy initiatives that provide an environment conducive to the growth of strong domestic industries

7. Competitive Analysis

8. Manufacturing Capacity would Create Competitive Edge Projected 2013

9. India Scores over China in Manufacturing FOB

10. Current State of Indian Biopharma

11. Indian Companies need to spend more on R&D R&D spend structure in India in 2010 REF: 12th 5 year plan

12. Academia - Industry Need for Academy – Industry linkage Ref: FICCI report

13. Increase in talent pools Trend in Growth of R&D Centers and talent pools Ref: http://yourstory.in

14. Govt has become supportive Various funding options offered by Ministry of Science & Technology Ref: FICCI report

15. Govt has become supportive • BIRAC (Biotechnology Industry Research Assistance Council) has initiated Biotechnology Ignition Grant (BIG) scheme. • This scheme is designed to stimulate commercialization of research discoveries by providing very early stage grants for the development and maturation of those discoveries into marketable product or intellectual property (IP), in particular to help bridge the gap between discovery and invention. Ref: birapdbt.nic.in

16. Govt has become supportive • A significant R&D tax incentive in India is a 200% accelerated deduction on scientific research expenditure incurred by an in-house R&D facility within bio-technology or on the manufacture or production of an article or thing. This incentive has a sunset clause of March 31, 2012, but may get extended in Budget 2012 with the delayed introduction of the Direct Taxes Code (DTC). • Other R&D-related tax benefits include 100% deduction of revenue and capital expenditure (other than land costs) in scientific research related to the business, and 125-175% deductions for contributions made to a scientific research association, university, college or other institution towards scientific research.

17. Budget 2012, the first Budget of the Twelfth Five Year Plan, is likely to address short-term measures to support R&D, pending the introduction of future legislative reforms.

19. Foster Research & Development Build Protein Characterization Laboratories and GLP-Certified Animal Study Facilities Create a National Animal Breeding Facility Expand Viral Testing Facilities Provide Financial Assistance for Ensuring Compliance with Global Standards Promote the Development of Pre-clinical Service Providers Provide Practical Support for Clinical Trials Simplify the Procedures for Importing and Exporting Biologics

20. Improve Manufacturing & Commercialization • Create a Single-Window System for Approvals and Clearances • Introduce Flexible Pollution Controls • Invest in Better Transport Links and Cold-Chain Facilities • Provide Fiscal Incentives

21. Strengthening Human Capital • Expand India’s Capability in Toxicity Studies • Foster a Trilateral Relationship between Industry, Academia and Government • Improve and Expand the Workforce Development Pipeline • Establish Exchange Programmes, Finishing Schools and Scholarships • Increase Public Awareness about Career Opportunities in the Industry • Provide More Training for Existing Employees

22. Simplify Regulatory Framework • Simplify the Procedure for Approving Biologics • Create an Independent Inspection Facility • Modify the Regulations on Process Validation

23. Incentivising Innovation • Provide Seed Funding for Innovation • Construct Biotechnology Clusters • Promote Translational Research • Provide Financial Support in Specific Areas of Innovation

24. Longterm Goal India will not only need to build a robust biopharmaceutical infrastructure, it will also need to become a source of innovation. There are at least five initiatives the GOI could implement to help the domestic BioPharma industry leverage its unique advantages. • Create a framework for Intelligent Regulation • Invoke Market Pull • Seek Opportunities for Growth through Acquisitions • Encourage Highly Skilled Expats to Come Home • Leverage India’s Expertise in Holistic & Traditional Medicines

25. focus Convergence of Food, Pharma & Population Genetics Predictive approach leading to Preventive & Personalized Healthcare AVESTHAGEN LIMITED India’s leading and only integrated systems biology platform company 25

26. AVESTHAGEN LIMITED Business Model – Theranostic approach Predictive Diagnostics Personalization • Products: • Medical Foods • Dietary Supplements • Conditions: • Bone health • Cardiovascular health • Metabolic syndrome (diabetes, weight) • General wellness • Products: • Biosimilars • NBEs • Conditions: • Cancer • Autoimmune disorders • Anemia • Cardiovascular Prevention Therapy Nutrigenonomics Pharmacogenomics 26

27. THANK YOU