Moving away from the big 'O'

Reliance sees India's industry graduating from outsourcing to innovation.

Reliance Life Sciences - widely projected to emerge as one of the largest players in the biotech industry "" will not limit itself to healthcare initiatives but plans to work on a much wider canvas.

"Reliance Life Sciences' strategy builds on India's wide-ranging capabilities and potential. The company is pursuing a diverse and integrated series of initiatives, ranging from therapeutics to biofuels," says the usually reticent CEO of Reliance Life Sciences, K V Subramaniam, in Beyond Borders: Ernst and Young's Global Biotechnology Report 2006.

The report marks the 30th anniversary of the birth of the modern biotech industry. While the application of biotech in healthcare is well-known, experts feel its most "tantalising potential" may lie in its application to agriculture (an example is BT cotton) and manufacturing, and that is what Reliance is looking at.

The repertoire of Reliance life sciences currently extends to stem cells and tissue engineering to plant tissue culture to biochemicals and biopolymers to software to manage research projects.

Here is the growth path Reliance expects the country's biotech industry to follow. India's biotech industry currently derives its growth quotient from the big "O" or outsourcing.

Companies in the West can cut costs by 50-80 per cent and save time by outsourcing biotech manufacturing or research to Asia. "India's 'first act' based on life sciences services will ramp up over the next five years," says Subramaniam.

Indian companies are also acquiring capabilities "upstream" in conducting discovery research and "downstream", in the manufacturing of biopharmaceuticals.

"As capital becomes more easily available, we anticipate that other domestic players also will seek to establish a broader presence, and that global biotechnology companies will set up base in India," he says.

Meanwhile, he feels that the country is preparing for its "second act", built on the products theme. However, developing products is typically a high-risk, high-reward strategy.

"Many of the current research programmes should bear fruit by the end of the decade. The range could be impressive, including biogenerics, novel therapeutics, vaccines, biochemicals, nutraceuticals, and cosmeceuticals," he explains.

India's "third act" involves companies entering overseas markets, including those in regulated countries. That would be true globalisation.