Can indian SMEs address healthcare solutions?

Kannan Vijayaraghavan

The rapidly growing world population has become more and more prone to communicable diseases. As humans move across the world, they carry disease vectors to regions that were hitherto insulated from major incidences of communicable diseases. Human movement, zoonotic disease spread and travelers from different parts of the world converging in busy airports has resulted in a situation where the threat of epidemics is no longer limited to the southern, less developed regions of the world.

Enterprises in India have come a long way from manufacturing traditional plasma derived vaccines to producing multivalent recombinant vaccines, therapeutic streptokinase and other biotechnology derived products for preventive and curative health care.

While large enterprises generally limit themselves globally to products with lucrative revenue opportunities, emerging enterprises have a significant opportunity to seize growing markets for an array of vaccine products and therapeutic applications. However, these emerging enterprises lack access to deep pockets to fund resources to engage in discovery level research. Discovery level research requires comprehensive inter-disciplinary skill sets within the enterprise level and it is hard to create comprehensive inter-disciplinary capacity in any small enterprise when very few multinational companies themselves possess such strong inter-disciplinary competency. However, the emerging enterprises in India possess the ability to apply discovery led solutions for the development of affordable products by engaging in product development, translational validation and clinical regulation related research, development and commercialisation efforts. Several factors contribute to the accomplishment of this amazing feat by small and medium biotech enterprises in India.

There are a couple of key factors that are important in this discovery led commercialisation process with the active engagement of Indian SMEs.

Gaining access to biomaterials and contemporary technologies: The fundamental research in life sciences is carried out in an academic environment with OECD countries committing large resources for accelerating discovery pathways. DNA sequence data has provided a better understanding of biological function and genotyping and phenotyping technologies and complex algorithm driven predictive models have provided innumerable leads to develop new medicines. However, these discovery outcomes are patented by leading global academic bodies or large companies. Prior to the creation of a WTO compliant patent regime, Indian SMEs access to global biomaterials and technologies were greatly limited. With the elimination of such constraints, Indian ventures have the potential to be responsible recipients of discovery outcomes to validate the applicability of such discoveries for the development of preventive and curative products. The model is akin to the spread of chip technology in the realm of information technology. As successful companies like Intel develop faster and cost effective chip technologies, other innovators adopt these technologies for their own product applications.

Intel technologies are licensed to various end users depending upon the nature of the products that they innovate for the markets. A gene of interest or a biological strain with known functional applications is accessible through this licensing process.

Sathguru’s efforts in the recent decade to provide such access to innovators has resulted in a number of discovery led biotechnology products reaching the markets. However, the pace of innovation in competing countries such as China, Taiwan, Korea and even Vietnam is catching up and therefore, the demand for such biomaterials and technologies are constantly on the rise. Nations that are effectively accelerating innovation have the potential to access similar biomaterials and technologies and over a period of time, they themselves will become generators of such technologies. Technology access has connotations for the end product application and its public good relevance. There are a number of instances where Sathguru has facilitated pro bono access to contemporary technologies if there is considerable public good relevance for such technologies. The dream of every inventor in the world is that his or her technology should reach the billions of people around the world, and India can make that dream a reality. The speed of innovation drives the innovators to downstream technology application in partnership with the private sector in order to ensure that the innovations do not turn obsolete.

Access to external research capacity: Indian SMEs now have wider access to research capacity both within and outside the country. The creation of large inter-disciplinary infrastructure within Indian public research systems, accelerated investment by third party service providers within India, entry of global service providers for third party services and the ability of Indian ventures to access global infrastructure have all contributed to Indian SMEs with limited internal research capacity, augmenting their research capacity manifold by accessing such infrastructure. There are a number of Indian ventures that have accessed the international incubation infrastructure available at universities such as Cornell and have gained from accelerated research results. In India, large infrastructure establishments such as the Faridabad Biotechnology Cluster built by the Department of Biotechnology, the C-CAMP in Bangalore and their international linkages will go a long way in supporting SMEs to accelerate their product development efforts based on effective biomaterial discoveries and contemporary technologies. Licensed technologies come with enormous stewardship responsibilities and the Indian SMEs are in the process of learning to comply with these. Globally there are also centers for validating the devices that are indigenously developed so that they can be assessed for their design efficiency, product reliability, delivery efficiency, cost reduction factor and regulatory compliances. There are centers of excellence in leading universities such as Cornell, which have partnered with enterprises in perfecting the device technologies and delivery consistencies. Over a period of time, I do perceive India to create such a center duly triggered by major public investment in creating such a center.

Development connectivity: In the current context it is becoming increasingly difficult for any enterprise to carry out all the activities in the product development pathway all by themselves. Development connectivity accelerates the development process and brings innovation to markets in an accelerated manner. The connectivity may be created by wider geographical footprint in regions of innovation for the same entity or by connecting or partnering with different entities in different regions. The development connectivity also triggers resource pooling from intended partners, as they perceive the accelerated gains from product delivery in needy regions. When we succeed with five candidates in the area of prevention of communicable diseases, we are contemplating an investment of $ 60 to 70 million per candidate and pooling such resource will be a seamless process, if such product development partnerships are systematically pursued. I perceive a combination of approaches bringing accelerated innovation to both Indian and global markets. Some of these approaches are:

Technology flow to research centers created by ventures in emerging regions: While multinational companies have advantages in bringing currently de-regulated products from other regions to countries such as India, they also look forward to accelerating their current pipeline by establishing their own entities in India. Our experience in such multinational companies indicates the contribution such centers are making to their global research programme. Indian research centers of major global players have contributed enormously to the acceleration of global discovery pathways to such companies in addition to providing local resources with the ability to integrate with the global advancements in research. When the global research centers explore indigenous technologies without violating the national biodiversity laws and other restrictions that are imposed in accessing indigenous knowledge, there is accelerated competition for enterprises to turn them into globally marketable products. The SMEs perceive a threat to their indigenous markets and therefore are forced to innovate faster to retain their current markets.

Technology partnerships for joint product development: Joint venture partnerships have occurred in the past significantly in the chemical pharmaceutical sector. Global biotech majors are no exception for adopting this strategy. And globally, Sathguru has been associated with creating and nurturing a number of partnerships for biotech majors with local SMEs and in all such joint initiatives that have been formed with an innovative structure that result in a win-win-situation through the emergence of successful products from such partnerships. Considerable efforts go into structuring such partnerships to determine the background intellectual property, investment milestones, and human resource pooling needs, confidentiality covenants and usage rights of research results. It is necessary for any Indian SME to determine these terms in advance, so as to avoid losing out on lucrative opportunities.

While there are certainly contract research development opportunities, they are distinct from the two approaches detailed above. The contract research approach does not provide access to IP and the service provider gains a fraction of the stream of values that is likely to be created resulting from commercialisation by the primary developing entity. Indian SMEs are bound to increasingly opt for co-creating innovation rather than remaining third party service providers. The innovation funding platforms such as Biotechnology Industry Partnership Programme (BIPP) and the Small Business Innovation and Research Initiative (SBIRI) of the Department of Biotechnology will encourage Indian SMEs to take the journey through the innovation pathway. When the SMEs co-create innovation over a decade, working with global corporations, they secure the ability to move to the next layer of the innovation journey to lead the innovation pathway on their own. In our experience in the area of biomedical research, we believe that over 100 Indian ventures will have potential to drive this co-creation opportunity and about 10 of them will graduate to sole innovators in a span of five years or so. Their dreams will call for larger investment to take their products to the last mile delivery and there will be enlarged interest for development partners as well as strategic investors to take stakes in such ventures to make these dreams a reality for these ventures. These strategies will help SMEs to pursue the profits and the passion for finding affordable solutions for communicable and other diseases and place them among the global innovators. An exciting time indeed for Indian ventures and the global partners.

Kannan Vijayaraghavan is also the Regional Coordinator for the Cornell University – Sathguru led life science initiatives in the region and recently co-authored a World Bank publication titled “Biotechnology innovation for inclusive growth” with Dr Mark Dutz of World Bank.