Bio Clusters

8/8/2019 Bio Clusters

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BIO-CLUSTERS

The Next Success StoryThe Next Success Story



Page 2

bi·o·tech·nol·o·gy

n.

1. The use of microorganisms, such as bacteria or yeasts, or biological substances, such as enzymes, to perform specificindustrial or manufacturing processes. Applications include

the production of certain drugs, synthetic hormones, and bulkfoodstuffs as well as the bioconversion of organic waste andthe use of genetically altered bacteria in the cleanup of oilspills.

2. The application of the principles of engineering andtechnology to the life sciences; bioengineering.



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Biotechnology has been around for

years. Farmers have been practicingthe science of crop improvement for over 75 years. However, a lot haschanged in these 75 years. Scientific

and technological advances now allowhumans to manipulate genomesdirectly at the level of single genes andtheir constituents with great speed andprecision.

The modern biotech sector is relativelynew, and a new industry name hasbeen proposed –Life Sciences.



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Life sciences is an industry where biotechnology,agriculture, food, drugs and chemicals converge.

Through the combination of these divisions, firms areable to produce new research & products. Crops arenow being designed to produce feedstocks for plastics,vaccines, and foods that help to prevent or ward off

disease.



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Biotechnology Park - A Concept

Conceptually a life sciences park / cluster is “Planned infrastructure

developed to facilitate business of R&D intensive high technology and

science companies and brings them in close proximity with university,

colleges, hospitals and other related entities”

The objective of a life sciences park / cluster can be defined as follows:

o Growth of new ventures;

o Transfer of technology and business skills between the university,

colleges and businesses in the Research Park; and

o Promotion of technology-led economic development for the

community at large.



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Shared R & D Facilities

Companies

RegulatoryWindow

Other shared

resources

Life Sciences Park / Cluster

Hospitals &

Healthcare

Centers

Clinical Trials&

OtherFacilities

Diagnos

tic

Service

s

MedicalColleges

& Institutes

Training

Shared

Resources

Human

Resources

Universiti

es &

Colleges

Sharing of

Infrastructure

Germination &transfer of

ideas

Funding &Commercialis

ation

Equity &

Interest

Funding

Agencies

Initial

Setup

A Coherent Network



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Community Value /

Economic Benefits

Capital Development: Land, Utilities, Roads, Buildings, Equipment

Job Creation/Development: Diversification, Industry-University

Collaborations, Workforce Training/Education

Entrepreneurial Growth: Incubation centers, venture funding etc

Image: Attract new companies, attract young talent, promotes science-

driven economy (smart community)

Quality of Life: Arts, Education, Recreational, Livability, Multicultural

Economic Impact: Employment Quantity (Direct-Indirect), Higher IncomeLevels, Larger Tax Base



Page 8

Hotspots/Bioclusters

BioBusiness hotspot or biocluster - a concentration of lifescience and biotechnology-related institutions, laboratories, andbusinesses.

Some internationally recognized bioclusters /hotspots include:

o San Francisco/the Bay area

o Boston/Cambridgeo Medicon Valley in Sweden/Denmark

o Tsukuba Science Park in Japan.



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Life Sciences Cluster – Bay Area

More biotechs located here than anywhere else, > 30 companies founded each year 5 major research universities, 3 medical schools, availability of managerial and technical

staff

Home to 34% of active US VCs; receives one of the largest share of NIH funding

820 life science companies, 250,000 direct & indirect employees (85,000 in biosciences)

Ranked #1 in Market Cap—Northern California holds 24% of the $200 Billion Biotech

Market Cap

Ranked #1 in Venture Capital Investment—recipient of 34% of total U.S. VC funding

Ranked # 1 in Entrepreneurial Climate—most companies with an annual revenue growth of

more than 20% for four consecutive years

Ranked #1 in NIH Research Grants—$ 2.49 Billion in 2002

Ranked # 2 for the Number of Patents Granted in 2002

Biotech clusters attract more then 60% of NIH funding and

contribute a major share of the domestic biotech industry



Page 10

Life Sciences Cluster – RTP

136 organizations are located in the Park 112 research and development-related organizations

Approximately 82% of the employees in the Park work for multinationalcorporations

An estimated 37,600 full-time employees work in RTP

97.3 % of employees work for R&D related organizations Almost 42% of Park employers have less than 10 employees

The average salary of an RTP employee is $56,000

Development surpasses 19 million square feet

Capital investment exceeds $2 billion

Total payroll is estimated at $2.7 billion



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Life Sciences Cluster – Massachusetts

Massachusetts is a leader in biotechnology research, development, andcommercialization.

More than 300 biopharmaceutical companies, leading academic andmedical institutions

Massachusetts Biotechnology Council (MBC), is the largest trade

association representing biotechnology companies in United States. Major commercial market sectors:

o Agricultural Biotechnology

o Biological Devices

o Bioinformatics Services

o Contract Manufacturing / Researcho Genomics / Proteomics

o Human Diagnostics / Therapeutics

o Other



Page 12

German BioClustersRegion

Nordwestl.

Nieder-sachsen

Region

Bremen

Bioinitiative

Nord

(Hamburg-

Kiel-Lübeck)

BioRegio

Greifswald-Rostock

BioTOP

Berlin-Brandenburg BioRegio N

(Braunschweig-

Hannover-

Göttingen)BioRegio

Rheinland (Köln-Bonn-

Aachen)BioMIT

Mittelhessen

(Marburg-

Giessen)

BioRegion

Halle-Leipzig

BioRegio

Jena

BioRegion

Rhein-Main

(Frankfurt-Mainz)

BioRegion

Rhein-Neckar-

Dreieck BioRegio

Stuttgart/

Neckar-Alb

(Tübingen)BioRegio

Freiburg

Biotech-

nologie

Ulm

Biotechnologie

München

BioRegio

Regensburg



Page 13

India’s Biotech Clusters

• IBPL Biotech

Park – Hikal,Shreya,

Emcure,

Advinus,

others

• R&D – NCL,

NIV, Agharkar

• MNC R&D Centres

– Monsanto,

AstraZeneca, GE,

Sigma-Aldrich

• Startups – Strand,

X-Cyton, Metahelix,

Avesthagen,Gangagen

• Services –

ReaMetrix, MWG,

CROs, Jubilant

• Other – Apotex,

Aurigene

• R&D – NCBS, IISc

• SP Biotech, ICICI

Knowledge Park

• Biological

manufacturing -

DRL, Shantha,

Bharat Biotech,

BE, Zenotech• Bioagri –

Emergent,

Nuzeeveedu, JK

• R&D – CCMB,

CDFDRI, IICT



Page 14

Biotech Clusters



Page 15



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9.4 % of Country’s

Population ( Produces19% of National output )

Most Urbanized

State: 43% (India

28%)

Urban Population > South

Korea.Only 15 Countries have

higher Urban Population

Average Annual Growth

in Last 10 Years : 7%

(9.3% last 3 years)

22%New Company

Registration

50%Of India’s Foreign

Trade is Handled By

Seaports &

International Airport

Facts About Maharashtra

67% Share of Younger

Population(Below 34

years)



Page 17

12 % of Country’s Universities

17 % of Medical Education institutions

13 % of Engineering Education institutions

19 % of Management institutions

Sound Social Infrastructure



Page 18

•Mumbai

• Nagpur

• Nanded

• Chandrapur

• Kolhapur

• Nashik

•Pune

• Jalgaon

• Ratnagiri

• Aurangabad

SubsequentPhases

•Horticulture

food

processing

•Paper

based

• Copper,

manganese

coal-power-

intensive

•Sugar-based

•Chemicals

•Cotton

•Food

processing

Knowledge

Corridor

GeneralIndustries

Auto

Industries

Bi T h d PhBi T h d Ph



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Fast Growin IndustrFast Growing Industry

Bio-Tech and PharmaBio-Tech and Pharma

• Contribute about 40% of thetotal turnover

• Presence of Internationalplayers like GlaxoWellcome,Novartis, Pfizer, Johnson & Johnson, Abbott

• Major Indian companiessuch as Wockhardt, Cipla,Lupin, Nicholas Piramal aremaking big headway in theareas of biotechnology.

• Bio-Technology Park in Puneand Agri-Biotech Park inJalna are shaping up



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Critical Factors for Cluster Development Critical Factors for Cluster Development

Strong Science Base

Entrepreneurial Culture

Growing Company Base

Ability to attract key staff

Availability of Finance

Premises and Infrastructure

Business support services and large companiesin related industries

Skilled workforceEffective networks

Supportive Policy environment



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Experience suggest to consider some issues (1):Experience suggest to consider some issues (1):

Strong Science BaseWhich specific fields of excellence ?

Regional brand needed : Biotechnology is a buzzword.

Entrepreneurial Culture

Growing Company Base

Ability to attract key staff Regional attractiveness not to be neglectedAttracting staff = attracting familiesCompetitive wages rather than stocks

Availability of FinanceNeed for public early moneyFunds will eventually come where critical mass is



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Experience suggest to consider some issues (2):Experience suggest to consider some issues (2):

Premises and InfrastructureAdequate facilities at the right moment.Do not expect empty buildings to attract companies

Take care of your own companies, they attract new tenants

Business support services and large companies inrelated industries

Skilled workforceEffective networks

Find movers, doers and shakers.Intensity is critical : no dead links in networksWithin networks, energy is a differentiator

Supportive Policy environmentCoherent support : cf regional brandLong-term political commitment is compulsory



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BioclustersBioclusters

What do we have ?Inventory of local actors and facilitators. Think WIDEFederate local actors before attracting external resources

What do we want ?Sustainable Economic developmentNew Knowledge-based economy

Wealth from innovation

What do we need ?Partners and friends : join networksPolitical commitment, national, federal, localShared vision and roadmap

Build from scratch ? See Scripps Florida modelBiotechnology : be more specific.



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US Science Park Model : Scripps FloridaUS Science Park Model : Scrip ps Florida

A Biocluster from Scratch ?A Biocluster from Scratch ?

Florida was not considered a major US BioCluster

Scripps Research Institute opens second US Site in South Florida

Intends to duplicate California Cluster effect (Scripps La Jolla)Scripps Florida : a magnet for companies, scientists,

research institutions

Big Bang Biotech in the US : will it deliver ?Big Bang Biotech in the US : will it deliver ?

Florida Federal Govt Investment : 310 MUSDPalm Beach County Investment : 450 M USD

Estimated benefits in next 15 years : + 6,500 jobsAdditional state Income = 1.6 B USDincrease in state GDP = 3.2 B USD



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French model : no model ? French model : no model ?

No particular incentive towards specific regions …No particular incentive towards specific regions …

General initiatives : incubators, YIE statusRegional support : parks and poles, regional funds

…… untiluntil Now ?Now ?

National fund to support « proof of concept »« Pôles de Compétitivité » : a non-specific national contest to support

« Branded » regions.

But Biotech remains today a regional matter with regional actorsTechnopolesIncubatorsBICs



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Need for Bio-Clusters

• Effectively addressing the outsourcing opportunity

• Contract Research / Sourcing industry in Life sciences is expected to be around USD 60 Bln• Around 9500 small scale Pharma cos under threat - lack of quality standards

• 30% of the Contract Research / Sourcing rupee is spent on analytical / testing services

(Instrumentation)

• Most of the instrumentation is expensive and has higher throughput vis-à-vis requirement of a small

scale unit / academic institute / research lab

Contract

outsourcing

Analytical / Instrumentation

Requirement

Industry /

Entrepreneurs

Research

institutes / R&D

programs

High Cost of

equipment

Utilization low for small

/ start-up players

Characteristic of Biological / Chemical

Instrumentation Facility

High Average

Capital Investment



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Capital requirement stifling growth

High Average

Capital

Investment

High Entry Barriers

Fewer Playerscan enter

Slow down of Industry growth

Reduced Pvt.Equity capital Inadequate

Capitalisation

Lack of strongPromoter equity

Companies burnout the Equity

More failuresthan success

High Entry

Barriers

Fewer Players

Stifled Industry

growth

Low Private

Equity Flow

Inadequate

Capitalisation

Lack of strongPromoter

Gestation High

Equity Burnout

High FailureRate

SIAS Targets

bringing this

down

The IT success can only be replicated by creating enabling environment

for technopreneurs / small players to enter the field



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CAPACITY BUILDING

Directed Investments and further facilitation through Managerial Inputs

Liaison support (Funding agencies /

Regulatory Bodies etc)

Industry linkages and other support

Capacity Building

Shared Instrumentation and

Analytical Infrastructure

Pure Commercial

Rental / services

QA / QC

services

Entrepreneurs

I2I, AR2I

Academic

Research (AR)

Incubation

Infrastructure



Page 29

Key Constituents

Shared Instrumentation and Analytical Services (SIAS)

– Provide expensive analytical and instrumentation equipment through public-private

partnership between research institutes and private partners to provide shared

instrumentation services (both infrastructure & operators) to small users

Incubation Services

– Promote research based entrepreneurship by providing built out incubation labs and

provide end-to-end support through the subsidized use of SIAS services minimizing

the upfront capital investment

Direct Capacity Building

– Build capacity through Training services (Academic / Vocational Programs) &

Research facilitation services (funding agency linkages, regulatory window etc.)

Revenue Streams

– Analytical Services (Instrumentation Time / Development and testing effort based)

– Quality Testing / Validation Services

– Income from incubation centres



Page 30

Key Constituents

Centre of Excellence

– A unit established to support and promote a particular activity and open for

collaborations.

– Could include the following:

• Demonstration Park

• Decentralised Technologies

• Central Coordination Office & Regulatory Support Cell

• Clinical Trial Coordination Offices

A Demonstration park is a Bio-based park catering to the R&D sector of the

Biotechnology Industry where companies can come and perform their

desired R&D activities



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Incubation Services Model

incubation and shared resources business to be run on self-

sustaining fashion out of a Biotech Park.

o Financial and Business modeling identifying the specific

services and attached revenue streams

o Detailed market analysis (including client interviews) of

specific park tenants for the interest in specific shared

services

o Coupling of commercial venture with capacity building

initiatives to enable long-term sustainability

Revenue models

o Sale of Plots and Office Space (Long Term Lease)

o Rentals from BioResource Centre, Build-to-suite

premises

o A charge on the IPR generated from the park

Case Study – IBPL Pune

RESIDENTIAL COMPLEX

The Proposed Concept

o Specialised biotech facilities

(BioResource Centre)

o Common Utilities

o Specialised office space for

customised labs

o Business Facilitation Centre

o Common Amenities Block

o Developed land area for GMP facilities



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Case Study – Mumbai

Developing Mumbai into a Biotech Hub

Tap into and simultaneously service a large number

of healthcare institutes including hospitals and

corporates located in Mumbai city

Stakeholders to provide support/services

Government of India/ Maharashtra

Private Sector participants

Life Science and Bio-Tech Consultants

Academic institutions

Hospitals

Diagnostic and Pathology chains

Key institutions such as KEM, Haffkine developing

specific projects



Page 33

Case Study – Haryana

Biotech City along KMP Expressway

Government of Haryana proposes to develop the stretch along

the Kundli-Manesar-Palwal Western Expressway in National

Capital Region (135 kms)

The proposed Corridor will consist of a cluster of self contained

townships, viz. IT City, Biotech City, Trade City, SEZ,

Entertainment City, Fashion City, Dry-Port City, Medi City, etc.

including land use allocation model.

The spatial plan of the Corridor will be developed around a

number of specialized economic activities, which can trigger

and sustain economic growth.

YES BANK mandated alongwith M/s Scott. Wilson Kirkpatrick

India to develop the Biotech City

The scope of works involves advisory services for all aspects

of planning, development, financing, phasing, marketing &

management along with institutional, financial, legal and

administrative mechanism (including corporate organization

structure) for implementation of the same.



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Some thoughts

Public Private Partnership model

o Government support addresses issue of high cost of incubation and

SIAS facilities and land / space

o Private sector partner can work towards identifying and accessing

industry linkages for park tenants

o Clarity on park focus and hence business model for park development –

sub sectors of biotechnology, risk profiling, geographical advantages

(bio-diversity, research linkages etc.)

o Create a infrastructure for unique service value proposition

Risk Core technology interest

Low

CRO, CMO & Diagnostics(Services Business)

Med.

Enzymes and Biogenerics

High

Drug discovery

Higher risk

model

Tenants

o Need to identify robust anchor companies to set up business in the Park and help in developing the eco-systemo New entrants to Indian Market (Research based firms, contract research organisations and manufacturing outfits)

o Small start-up companies and Incubation centre for nurturing ideas to inception

Regulatory & Funding agencies

o To facilitate the operations in the Life Sciences clusters



Page 35

Bio Services Consortium

Analytical Lab Incubation Labs

In houseresearch In

cubationCompa

nies

IPdrivenresearch

MNC/New entrants,

Existing Players

EntrepreneursPark tenants/Other Pvt. Players/

Government run institutes

• Self use equipment inallotted slots

• Developmental work• Sample for testing

• Intermediate capacity• Flexible infrastructure

on call

Sample processing fee, timebased usage and project

based pricing

IP basedrevenue

Leased bases rentals(differential pricing)

Model 1 Model 2



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Incubation Services

IncubationServices

Upfront CapitalRequirement

Investor Interest

Burn Rate (BR)

Reduced Time/costof transit capacity

Probability of successEquity partnerships

through cheap rentals

Flexibilityof accessing

Infrastructure

Market testingcost

Probability of incubation centre

as trial site

Probability of

India exposure

Revenue

For DSC (R)

Funding Probability

Premiumfor short time

MNC/Existing Players

Entrepreneurs

Incubation Services

IP Creation

Long term

sustainability of

Incubation

Services

+

+

++

+

++

+

+

-

--

-

-

-

+

+

+ implies positive effect of starting

parameter on next parameter

- implies negative effect of starting

parameter on next parameter



Page 37

Business Model – Web of Growth

Revenue

for BSC (R)

OutsourcedServices

Volume (OS)Shared Instrumentationand Analytical Services

CRADS

MNC/Existing Players

Entrepreneurs

Low UpfrontCapital Requirement

Overall Client ValueProposition (CVP)

Incubation Services

Low Cost of Services

+

+

+

+

++

+

+

+

+

+

IP Generation

+

+

CVP

+

+ +

+

+

+



Page 38

Thank youThank you

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Bio Clusters