Biotech in Countries Starting with “I” — Part 2: India

This is a guest post from Susan K Finston, President of Finston Consulting. Do you have a response to Susan’s post? Respond in the comments section below.

Susan Kling Finston

In comparison with the United States, starting a biotech company in India is like the experience that Ginger Rogers had in partnering with Fred Astaire in the classic Hollywood musicals:  he got most of the credit, while she did everything that he did – in high heels and backwards!

As challenging as the funding environment may be in the United States for young biotech companies, it is even harder in developing countries like India where investors have largely shunned innovative biotechnology ventures:

Going back five years, India has seen exactly 11 private equity deals totaling $43 million, and eight VC deals worth a combined $55 million. That’s an embarrassment in a nation that actually drew $1.1 billion in total venture capital in 172 deals last year—only to see nearly all the money go to IT, e-commerce, and consumer goods startups.

Critics blame lack of clarity and consistency in policy signals from the Center, including the lack of effective tax credits or similar incentives for investment in high-risk, high-reward biotechnology ventures.   Additional issues that have cropped up in recent years relating to proposed caps for foreign investors (not implemented), price controls (soon to be implemented), incentives for translational research (nearly absent), and effective IP protection for bio-pharma (compulsory licenses, new pending guidelines for review of biotechnology inventions, lack of data exclusivity) – all contribute to ongoing investor malaise.

With the lack of VC and angel support for higher-risk early stage biotech, it is hardly surprising that the Indian market is characterized as biotech without start-ups.  India’s impressive growth in the biotechnology sector – from $150 million USD in 2001 to over $3.5 billion by the end of 2012 –  is due largely through expanding contract services including everything from discovery and CRAMS work through clinical research services, and continuing prowess in generics and biosimilars.

Western companies continue to look to India for partnering as a low-cost service provider and also have found good acquisition opportunities in recent years.  For all its size and research potential, however, India has yet to produce a single original drug for the global market.   What does this mean for the future of innovative biotechnology in India?  Is it possible to launch a successful biotech start-up?

So far, as co-founder of Amrita Therapeutics Ltd., I have more questions than answers.  Amrita has had a number of near death experiences, along with encouraging developments from time to time that renew our commitment to bring novel cancer therapies to world markets that are truly ‘Made in India.’  Only time will tell as to whether Indian policymakers  will provide needed incentives and support for innovative biotechnology – inclusive of start-ups  that have been so productive in the U.S. context, yet are largely absent in India.

About the author:
President of Finston Consulting LLC since 2005, Susan works with innovative biotechnology and other clients ranging from start-up to Fortune-100, providing support for legal, transactional, policy and “doing business” issues. Susan has extensive background and special expertise relating to intellectual property and knowledge-economy issues in advanced developing countries including India and South Asia, Latin America and the Middle East North Africa (MENA) region. She also works with governments, s and NGOs on capacity building and related educational programs through BayhDole25. Together with biotechnology pioneer Ananda Chakrabarty, she also is co-founder of Amrita Therapeutics Ltd., an emerging biopharmaceutical company based in India with cancer peptide drugs entering in vivo research. Previous experience includes 11 years in the U.S Foreign Service with overseas tours in London, Tel Aviv, and Manila and at the Department of State in Washington DC. For more information on latest presentations and publications please visit

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  1. Nalina Nagarajan
      February 28, 2013

    May I add that although the drawbacks of opening a biotech company in India are correct; there are companies like Biocon Group that launched biotech in India. The numbers do not reveal the actual capacity of these companies. If one looks at funding- most Indian companies and the investing public want to see ROI. Therefore it follows that the money goes to fund IT startups, e=commerce and consumer goods.Investing in research for a new product out of the blue does not come about due to the large amount of funds it entails with almost no hope of having a marketable drug at the end. On the other hand the CRAMS have thrived because they are paid to do the work at a lower price and can carry out trials even on molecules that CANNOT be worked on here in the USA. They serve your unmet need. They do get ROI on that. Once they have built potential, they would invest in biosimilars; because they can market at to the lower cash value and cater to the general Indian population, & other countries.(cures are needed everywhere) They will build internal revenue to invest in R&D (Biocon group is doing just that) and get new drugs to market. That seems reasonable to keep an income generating stream and grow- a good business model.They do survive within their limitations….but it is a long hard road!

    I am an ex-Bioconite and have many contacts within the Biocon group of companies. I have posted the company’s website for the bloggers.

  2. Nalina Nagarajan
      February 28, 2013

    May I add, I respect all these scientists irrespective of where they are as they are working toward a common end ie.Standup2Cancer. In the process of destroying cancer cells we introduce toxins into our body. I hope someone finds a way to stop poisoning ourselves and prevent Cancer.