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Trends & Prospects

India’s biotechnology sector is expected to growby 40 percent annually, with a projected 70 percentgrowth in exports. The number of biotech industries isalso expected to grow by more than 1-fold every yearuntil 2005. A more rapid growth is seen in thepharmaceutical industry, expected to become a US$25billion industry with a market capital of about US$150billion by 2010.

Growth of genetically modified (GM) crops I alsoexpected to increase; though the issue remains highlycontroversial with Monsantos’ Bt cotton experiencingmixed growth results in many states.

The Indian population is generally averse to GMfoods and scientists have joined in the debate by allegingthat non-GM pulses grown locally will satisfy India’snutritional needs better than recently developedgenetically modified potatoes and tomatoes. As recentlyas March of this year, US relief agencies caused uproarby attempting to import a cargo of US corn, whichcontained GM components. Several countries hadalready refused the shipment before the Indiangovernment rejected it.

Even without strong demand in the GM food sector,India’s biotechnology industry currently comprises 110companies in the health care products sector, 140 inagriculture, and over 300 in the industrial and otherbiotech products sector. Several products in particularlook to drive growth in the future, with vaccines,diagnostics, therapeutic proteins, hybrid seeds, tissueculture raised plants, bio-pesticides and bio-fertilizersidentified as promising areas of development.

General Information & Statistics

Australia

Health Research atMonash UniversityBoosted by Grants

Melbourne — Monash University recently receivedan AUD22 million (US$15 million) grant by the NationalHealth and Medical Research Council (NHMRC) to fundits researches focusing at the role of bacteria in human

disease, and the molecular basis of several importantdegenerative diseases including dementia and arthritis.Meantime, the grant can enable the scientists to studythe biochemical basis of some of the most importantdiseases like osteoporosis, dementia and thrombosis thataffect the aging population. According to Prof. JulianRood, Head of the Department of Microbiology atMonash University, this grant serves to bring localscientists to work together rather competing with eachother.

New Laser ResearchFacility in Australia

Newcastle — A state-of-the-art Laser DiagnosticLaboratory has been opened at the University ofNewcastle, a joint initiative by the Discipline ofChemical Engineering at the University of Newcastleand the Australian Research Council (ARC).

This AUD1.5 million research facility will cater forresearches in emerging fields that have been identifiedas areas of national importance by the Australiangovernment. A significant portion of funding from ARCwill open new initiatives in the key areas of research.

The identified key research areas cover thefollowing:

• Nanotechnology,

• Bioengineering engineering,

• Biomedical engineering,

• Pharmaceuticals,

• Wastewater treatment,

• Production of artificial organs and implants,

• Medical diagnostics, and

• Food industry.

According to Dr. Behdad Moghtaderi, Head ofFaculty of Engineering and the Built Environment,University of Newcastle, the new laboratory is fullyequipped with a wide range of the latest technologiesto fulfil its role.

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China

Analysis of the InsulinMarket in China

Insulin is currently the most common drug used totreat Type I and advanced Type II diabetes. In China,the insulin market accounts for more than 20 percentof the total diabetes medication market. There are about20 companies producing insulin in China.

Most produce animal insulin, notably XuzhouWanbang, which produces 21 percent of the insulinsold in China, and Shanghai Biochemical, whichproduces eight percent. The other local companies havea total market share of seven percent. Two foreignbiotechnology firms dominate the recombinant humaninsulin market. The joint venture between Novo Nordisk(US) and Tianjin Biotech has a market share of 44percent while Eli Lilly (US) has 20 percent.

Animal insulin is generally preferred in ruraldistricts as its unit price is less than a third of that ofrecombinant human insulin. However, increaseddemand for recombinant insulin has accounted for mostof the growth in the insulin market since 1999. In thethree year period between 1999 – 2001, recombinantinsulin use increased by more than 50 percent whileuse of animal insulin decreased sharply, with the twomajor producers of animal insulin, Xuzhou Wanbangand Shanghai Biochemical experiencing falls of morethan 50 percent in their market share. This is due toseveral advantages that use of recombinant insulin offersover animal insulin.

Firstly, animal insulin contains antigenic epitopesthat may lead to an allergic reaction in injected patients.The protein structure of recombinant insulin is identicalto that of human insulin and is therefore more effectivein treatment of symptoms and causes far fewer allergicreactions. Secondly, the introduction of animal productsinto humans carries a risk of any animal viruses presentin the sample transfecting the human host, which is slightbut cannot be ignored.

With four leading producers controlling 93 percentof the insulin market in China, the market is highlyconcentrated. Market shares of Xuzhou Wanbang andShanghai Biochemical have continued in theirdownward trend and the market may soon come to bedominated by the two foreign firms, Novo Nordisk andEli Lilly. Two local companies, Jilin Tonghua DongBao

and Shenzhen Kexing Biological have developed andlaunched their own brands of recombinant insulin buttheir market shares are almost zero compared to thetwo foreign companies at present.

However, if demand for recombinant insulincontinues to increase at its present rate they may wellbe able to capture the market share lost by local animalinsulin-producing companies. It is worth noting herethat a small but not insignificant number of diabetics,who require insulin injections, experience allergicreactions to human but not to animal insulin and thatcompanies producing animal insulin can probablyremain viable though with greatly reduced market share.

As China continues to develop and thesocioeconomic status of its citizens rises, dietary patternsare changing and with them the prevalence of diabetesis also increasing. Currently the annual consumption ofinsulin per patient is two units on average, whereas inthe US and Japan, the figures are 250 and 50 unitsrespectively.

The insulin market in China is therefore expectedto grow at a rate of 10 – 20 percent per year for sometime to come, with sales of short action insulin, used totreat the vast majority of new diabetic patients requiringinsulin injections, expected to increase in particular.

India

GM Seed PiracyWidespread in Gujarat

Farmers in the state of Gujarat, an agriculturalcenter, were among the first to plant GM cotton in India.The new cotton plants, developed by Monsantos,contain an inserted gene which, when expressed, makesthe plant lethal to many insects. This trait is particularlyuseful to farmers in developing countries, who are oftentoo poor to buy large amounts of pesticides and lackthe equipment needed to spray the pesticides effectively.

However, Indian farmers have been creating theirown hybrids by crossing the GM plants with normalcotton plants. The resulting offspring are viable but notas healthy as the modified parent crops but can be soldat half the price charged by Monsantos for their seeds.

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Trends & Prospects

It is thought that almost half the GM seeds nowsold in Gujarat are pirated and that they are selling fasterthan the original version. Monsantos is seriouslyconcerned by the spread of the illegal seeds and itsIndian partner has lodged an official complaint withthe Gujarat government asking it to clamp down onseed piracy.

Tamil Nadu Decides toBuild Bio-Fertilizers Bank

Recognizing the growing demand for organic cropsand slow shift away from chemical-based fertilizers,Tamil Nadu has decided to build a bank of bio-fertilizers.The Tamil Nadu SSI department has been tasked withthe setting up of the bank.

The bank will give graduates from the state’sagricultural universities — especially those in theTiruchirapalli region of central Tamil Nadu — rawmaterial to produce manure and bio-fertilizers on a largescale. Small farmers will also be aided to go for compostproduction. The produce will be collected and storedin a bio-fertilizer bank.

Officials said that 50 farm university graduateswould be assisted in forming cooperatives, which wouldbe trained to run agri-clinics. Funds for these enterpriseswould come from the National Bank for Agriculture andRural Development. The first such cooperative societywill be in Tiruchirapalli.

The bank will have a ready stock of manure,available to anyone who wants it all round the year.Officials also revealed that bio-fertilizer-based foodproduction and agro-processing would be promotedacross the state.

Korean Shares of China’sMedical Industry

Five Korean hospitals groups — Maria Hospital,SK China, Dr. Crezio, Wooridul Spine Hospital andLeeJiHam Cosmetics — are investing and transferring

Korea

advanced medical technologies into China’s MedicalIndustry. This move comes after China’s new policy toencourage foreign joint medical ventures to enter itsmarket and repatriate profits.

The latest change in policy is driven by Chinese’sincreasing demand for high-level medical care. Sinceearly last year, foreigners are permitted to invest morethan RMB 20 million (US$2.4 million) and own shareas high as 70 percent.

To date, the five Korean players reveal thatpartnership agreement had been signed with a localChinese medical group in Liaoning. Under theagreement, the Korean partners will be sending medicalofficers to work in the hospital set up in China, andMaria Hospital will be the fist to do so by July 2003.

SK China, a subsidiary of SK Telecom, and Dr.Crezio, a local medical venture company, will besending several staff to Beijing this fall to kick off thebusiness from November later this year. In addition, SKChina and Wooridul Spine Hospital has plans to branchout to other cities such as Shanghai. LeeJiHam Cosmeticsopened a skin care center in Dalian last year and hasplans to set up similar facilities in Beijing andShanghai.

Biotech Corn to MeetDomestic Demand

Philippines has recently started to harvest the firstbatch of its commercial genetically modified (GM) cropby Monsanto — Bt corn. In an effort to achieve foodself-sufficiency and reduce imports (grain) dependency,the government plans to increase production of biotechcrops for the next crop season.

The annual corn yield stands at 4.0 – 4.5 millionton of corn while the demand is about 5.5 million ton,the deficit can only be met through imports. Thegovernment hopes to boost the annual corn productionto six million tons within the next five years with BtCorn.

In December 2002, the Bureau of Plant Industryapproved Monsanto’s application for limitedcommercialization of Bt corn, after satisfactory fieldtrials. The company has since started Bt Corn plantingin January this year, covering 120 hectares of land.

Philippines

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According to Blo Umpar Adiong, Director of the Bureau of Plant Industry, the approval for commercial Bt cornplantation would pave the path for more biotech crops. “We are going to encourage more biotech crops. Ouragricultural land is becoming scarce because of industrialization, housing and growing population. Biotech cropswill help us move towards our goal,” he added.

Alternative Medicine

China Takes Lead in Export of Traditional Medicines inthe World

China leads Japan and Korea in exports of traditional Chinese medicines (TCM), according to a press releasefrom the SDA. In 2001, China exported a total of US$610 million in TCM while Japan and South Korea exportedUS$100 million and about US$3 million worth of traditional medicine respectively.

Chinese companies’ efforts to take advantage of the growing demand for natural medicines have been hamperedby lack of funds and new technology. The Chinese government has called for TCM enterprises to invest at least fivepercent of their sales revenue into new drug R&D to develop traditional Chinese medicinal materials. They wouldalso like to see TCM companies expanding into the poorer West China regions to attract investments from thefinance sector and other fields.

China

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