May 21, 2010
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A slightly different FSR this week with a spotlight on Global Health, right on the heels of the recent Grand Challenges Canada announcement. An interesting report in Nature Biotechnology, led by Drs. Abdallah Daar and Peter Singer at the McLaughlin-Rotman Centre for Global Health, mapped the collaborations between health biotech companies in developing countries. The study is a first for tracking “South-South” partnerships and they offer some interesting insights:
South-South collaborations have become a widely chosen path for health biotech companies:
- About a quarter (27%), participate in collaborations with another developing country and many (21%) are involved in multiple initiatives.
- South-North collaborations with developed countries are still more common (53%).
- The most active countries with the highest percentage of firms engaged in South-South collaborations are Cuba (~75%) and South Africa (~45%), followed by Egypt, Brazil, India, and China.
- These leading developing countries in health biotech make up the majority of the linkages (see figure below)
- Many of the collaborations are within their own regions such that they are establishing free trade zones to encourage trade with one another.
South-South Collaboration Network
Some of the motivations for companies in developing to collaborate include:
- Minimizing risk and cost by sharing the burden with a partner.
- Expanding their potential markets with an easier or facilitated access to a foreign market.
- Gaining specific knowledge or skills, particularly since there are many specialized skills and technologies involved in biotech research that may not be available locally.
The nature of the collaborations, however, is mainly end-stage commercialization agreements rather than R&D.
- Distribution agreements (72%) and marketing activities (34%) account for the majority of the collaborations with only 13% involving R&D and 9% involving clinical trials activities.
- Innovation based knowledge sharing would likely have greater long-term benefits and future policies should encourage more of these types of collaborations.
To further promote such initiatives, Government organizations and other third parties can, and should, play a larger role to cultivate joint ventures since the majority of the South-South collaborations were initiated by the participating companies themselves. It is important to realize that South-South collaborations in the biotech sector are just as valuable as North-South collaborations to sustain a growing culture that addresses global health issues.
Also note that this study follows a pair of Nature Biotechnology publications last year by the same group at MRC – one explores “South-North” health biotech collaborations and the other focuses on Canadian biotech collaborations with developing countries.
March 2, 2010
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This blog has been tracking increasing innovative activity in India and China as part of our Biotech Trends series, the idea being that as innovative activity increases, the host countries will take a kinder view of property rights.
The trend toward innovation in India is undeniable — as the WSJ’s Venture Capital Blog noted recently, India even has its own version of Y Combinator, an incubator/early-stage fund. India also has many notable successes in pharma and biotech innovation, including Jubilant and Glenmark.
Yet, as Ronald Cass notes in a WSJ editorial, the groundswell of Indian innovation hasn’t yet worked its way up through the legal system. Citing a Delhi High Court decision that allowed generic copies of Merck’s cancer drug Nexavar, Cass infers that India does not “want drug innovation.”
I disagree. India does want drug innovation. Like everyone else, India wants lucrative knowledge economy jobs. But even with a broad desire for policy change, turning a judicial ship is a slow process in a common law jurisdiction.
My bottom line: It will likely take time, and may take facts more sympathetic than Merck’s, to break with precedent and habit and to develop a more innovation-friendly jurisprudence in India. Make no mistake, though, that’s the direction India is heading. Patience, but not complacence, is the order of the day.
January 28, 2010
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One of the biotech trends we’re following in 2010 is the increasing innovative activity in India and China. Both are booming not only as low cost manufacturing centers but also as innovative hubs adding R&D expertise and specialized know-how.
This week, the Indian company Jubilant and Endo Pharmaceuticals announced that they are expanding thier partnership following early and rapid success by Jubliant’s team. Jubilant has been developing pre-clinical candidates for Endo’s oncology pipeline. As Endo’s R&D VP says, they are executing on a “strategy of building Endo’s pipeline using a virtual discovery approach” as a complement to their in-licensing strategy.
Jubilant has been running with these types of “virtual discovery” deals, including its collaboration with AstraZeneca that we noted at the time (even as AZ is shedding in-house capacity today), a successful partnership with Lilly and tie-ups with academic institutions including Duke University and UAB.
FierceBiotech reports that Biocon’s Kiran Mazumdar-Shaw predicts a $5 billion Indian biotech business in 2011 that will “double to $10 billion by 2015″ based on “opportunities in clinical trials, manufacturing and more.”
The greater the contribution R&D makes to India’s growth, the better positioned the country (and the region) will be in the coming years to lead the global industry forward.
January 11, 2010
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Two stories noted by the WSJ’s Health Blog highlight the trend we’ve been following of blurring lines between branded/innovator pharma and generics companies:
The biggest development I’d cite is Pfizer’s deal to sell 40 generics made by India’s Strides Arcolab and South Africa’s Aspen. This deal seems to go a step farther than other innovator/branded deals with generics in that it treads on U.S. soil. The Pfizer Established Products Business Unit has in-licensed more than 200 products and has an overall portfolio of approximately 600.
“Generics” companies are not sticking to their traditional role either. Noting Teva’s projected growth and market cap, Jacob Goldstein says that “[i]t’s no longer correct to think of generics manufacturers as scrappy little competitors nipping at the heels of big pharma,” especially where 30% of their revenue comes from branded drugs.
Add those to increasing innovation in India and China and in collaborations with companies there, and the whole global industry is starting to look a bit more homogeneous.
November 12, 2009
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India and China both ranked in the third quintile of countries in the 2009 IPRI Report, with India ranking 46/115 and China ranking 68/115 for protection of IP rights. In an earlier post, we predicted that this ranking would change rapidly, with both countries strengthening their IP regimes as their domestic R&D capacity ramped up.
Both countries have continued to win R&D collaborations and make investments in research, most recently including an Indian R&D park project by Alexandria (a U.S. developer) and Novartis’ $1 billion investment in R&D in China.
However, China and India may not be moving at the same pace. Novartis is facing its final appeal of lower court rulings in India denying it patent protection for Gleevec, and CEO Daniel Vasella calls the pending decision “the turning point” for Indian R&D in a recent article in The Economic Times (picked up by FierceBiotech). He also reportedly says the decision to invest in R&D in China is “not driven by its bad experience with Gleevec in India.”
Vasella has a dog in the fight, of course, but that’s the point. The correlation between R&D spending and IP enforcement couldn’t be clearer.
November 3, 2009
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We have been tracking increased innovative activity in India and China as part of this blog’s Trends in 2009 series, because it has the potential to impact the constituencies that negotiate the IP aspects of global trade agreements. Generally, with this blog’s focus on pharma and biotech, posts have mainly considered commercial collaborations to develop novel products.
Two recent stories focussed on different areas highlight just how far China has come from its perceived role as a country completely neglectful of innovators’ IP:
- A Thomson Reuters study released yesterday shows “explosive growth in research output from China,” with output doubling since 2004. There is no way the developments China is making in physical, biological and chemical sciences will fail to translate into innovation and new demands for IP protection.
- The first salvo wasn’t in biotech, as it turns out, but in copyright. According to a recent Forbes article (H/T @TechLaw_Elman):
A Chinese writers’ society accused Google of infringing on the copyrights of at least 570 Chinese authors by scanning and uploading their books into Google’s digital library without seeking consent.” and is “soliciting all Chinese writers to voice their opposition before a U.S. court finalizes a settlement at a hearing scheduled for Nov 9.”
Still, these developments move China much farther toward being an enforcer of intellectual property rights both domestically and on a global scale.
September 15, 2009
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Following up on Sunday’s post noting the new survey of Canadian biotech collaborations with companies in the developing world, it’s worth paying attention to two U.S. deals from last week that emphasize the growing role of India and China in the drug development process:
- Amylin Pharmaceuticals, Inc. (Nasdaq: AMLN) and Biocon Limited (NSE: BIOCON) agreed to jointly develop, commercialize and manufacture a novel peptide therapeutic for the potential treatment of diabetes, and will share development costs; and
- PerkinElmer did one deal each in China and India:
- In China, they paid over $60 million for SYM-BIO Lifescience, a Shanghai, China-based diagnostics firm that will double its access to hospitals in China and provide it with “substantial” manufacturing plant capacity
- In India, they picked up the genetic screening business of Surendra Genetic Labs, a lab in Chennai, India, that provides fetal, maternal, and newborn screening.
The McLaughlin-Rotman survey distinguishes (usefully) between R&D collaborations and marketing and distribution activities. Although Ellen Licking wonders whether “cheaper off-shore manufacturing [is] a reason for the deal,” Amylin is clearly focused on Biocon’s R&D capabilities. The press release quotes Amylin CEO Daniel M. Bradbury praising Biocon as a “biologics innovator.”
Even if not all transactions in India and China are innovation-centric (cf the PerkinElmer deals), all involvement by innovative companies shifts the incentives of China, India and other participating countries towards a more innovation-friendly IP regime.
September 13, 2009
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A very interesting article in Nature Biotechnology from a group at the McLaughlin-Rotman Centre for Global Health provides some empirical support for a trend we’ve been following of increased innovative activity in developing countries.
According to the article, over 25% of Canadian biotechs collaborate with developing countries. Of these, however, the vast majority of companies do so alongside collaborations with other developed country partners — only 4% collaborate exclusively with developing countries. Also, gaining access to developing countries’ markets is the most frequent (66%) reason cited for collaboration.
Still, some of the data reflects the growing importance of developing country collaboration (China and India in particular):
- Canadian firms’ collaborations with India (17) and China (22) nearly equal the number of collaborations with Japan (18) and Germany (23); and
- Accessing knowledge from developing countries’ partners (24%) is approaching providing knowledge to developing countries’ partners (37%) as a reason for collaboration.
How do these collaborations look overall?
The figure from the paper on the left shows the geography of, and rationale for, the collaborations. Part “a” shows marketing and distribution collaborations, and part “b” shows those involving an R&D component.
What is the effect of all this activity?
Well, it’s hard to quantify, but the authors review revenue data from public company respondents and find that:
“average total revenues of firms that have North–South collaborations are nearly four times higher than firms that do not have such partnerships.”
My bottom line: causal or not, that’s a correlation that should cause all biotech companies to take note.
July 9, 2009
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In our continuing Trends in 2009 series on shifting IP constituencies, we’ve been following increasing innovative activity in the developing world, and innovator pharma’s increasing moves towards generics and biosimilars. This week saw updates on both fronts:
- PerkinElmer announced plans to open a Bio-pharma Center of Excellence in Hyderabad, India, later this year, citing “growth opportunities in environmental monitoring, neonatal and maternal screening, and pharmaceutical research.”
- In other India news, Mylan, a U.S.-based small molecule generics company, did a deal with Biocon for help with biosimilars.
- On the pharma front, a WSJ post this week explains the attractive economics behind big pharma’s growing investment in the developing world’s generics market. Two words: branded generics.
- Finally, China’s budget saw a huge R&D boost: up over 25% from 2008 (although it still lags Japan’s R&D spend by a third and the spending is heavily focused on applied technologies).
May 14, 2009
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An announcement by the State Council in China that was picked up by Fierce Biotech yesterday touted $9.2 billion in technology spending that will include biotech and genetically modified products (as well as large-scale aircraft, broadband wireless technology and new oil, gas and coalbed methane exploration). The cabinet also reportedly approved new policies with the goal of creating large internationally competitive biotech companies as well as fostering the formation of smaller biotechs.
Check out the Trends in 2009 page for our other posts on increasing innovative activity in China and India and the effect on global IP policy.
March 31, 2009
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