Life sciences: India at No.2 behind China

The life sciences industry in Asia clocked a growth of 3.4 per cent to record revenues of $110.89 billion in the calendar year 2009, with nearly half the revenues -- $54.24 billion -- coming from listed companies, according to a survey by BioSpectrum Asia.

With revenues of $22 billion, Chinese publicly listed companies grew the fastest at 51.82 per cent, followed by India. The combined revenues of Indian life sciences companies was $21 billion taking India to the number two spot behind China.

India accounted for 19 per cent of the total revenues in Asia Pacific. South Korea, Australia and Singapore followed India in terms of revenue.

This figure includes total revenues from sales, licensing, and service income of the companies in the Asia Pacific region, excluding Japan. General healthcare and equipment providers are excluded from this survey.

China had the largest share of the pie at 32 per cent, while China and India together accounted for more than half of the revenue of Asia Pacific life sciences industry

In terms of verticals, pharma and biopharma put together were 92 per cent of the publicly listed companies revenue, followed by MedTech at 6 per cent and biotech makes up the rest. The research and development spend averages at 9.44 per cent.

The publicly listed companies grew at 24.03 per cent. BioSpectrum Asia estimates the growth of life sciences, covering pharma, biotech and medtech segments, in 2010 to surpass that of 2009, even though the range is likely remain the same: 3-5 per cent, as the economic climate begins to change for the better.

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With revenues of $2 billion, Taiwan posted a robust 46.29 per cent growth. Indian publicly listed with revenues of $14.59 billion grew the slowest, at 1.42 per cent.

Seven Indian companies were in the Asia's 'Top 20 Publicly Listed Life Science Companies', which accounted for 82 per cent of the overall revenues of publicly listed companies.

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These include Cipla, Ranbaxy Laboratories, Dr Reddy's Laboratories, Cadila Healthcare, Lupin, Aurobindo Pharma and Sun Pharma.

The strong growth registered by the Indian economy helped drive its life sciences industry.

India's expanding middle class, with growing affordability and greater access to healthcare were the main drivers for the current growth of the industry and economy.

Executed over a period of two months starting in April-May 2010 the third BioSpectrum Asia survey was limited to publicly listed companies in the life sciences industry in the Asia Pacific region.

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Cipla became India's No. 1 company, clocking revenues of $1.17 billion. It also became the one of the two Indian companies in the billion-dollar club. Last year, Ranbaxy held India's Top slot.

The India Top 20 life sciences list comprises pharma companies with the lone exception of a biopharma - Biocon, at Rank 16.

In generics, the highly-competitive market in India continues to be dominated by Indian pharmaceutical companies, but remains fragmented.

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The medical devices and supplies market in India is expected to touch $1.7 billion in 2010, growing at the rate of 23 per cent annually.

According to industry estimates, imports of medical devices constitute over 50 per cent of the market. Most imported products have high gross margins. Currently, the high value imported products include cancer diagnostics, medical imaging, ultrasonic scanning, plastic surgery equipment and polymerase chain reaction technologies.

However, the market is becoming increasingly competitive due to low entry barriers (for MNCs), an increasing number of players and an expanding consumer base.

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With a slight improvement in the economy and business, in 2009, there was a marginal increase in the R&D spend, according to the BioSpectrum Asia survey.

There was a slight fall in the spending from companies in India and Malaysia as against an increase from companies in Australia, Taiwan and Singapore.

Companies from Taiwan and China successfully raised money by listing on stock exchanges during 2009.

In terms of segments, pharma gets the major share of the R&D spending followed by MedTech and BioPharma.

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BioSpectrum Asia Pacific Survey 2010 estimates the market capitalization of the life sciences companies in the region to be $85.46 billion at the close of the calendar year 2009.

India with 11 companies leads the tally with over $22 billion in market cap.

This excludes the market capitalization of the companies from Taiwan, Singapore, Korea and some companies from China as the actual historical data was not available so extrapolation was used to arrive at the overall figure. Compared to last year the overall figure has grown only marginally.

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All major markets grew at a healthy double digit, with the exception of India which grew just 1.4 per cent.

China and Taiwan were the fastest growing countries at 52 per cent and 46 per cent respectively.

Ten of the fastest growing companies this year were in the revenue range of $100-$500 million and 5 of these were from China.