Hikal to foray into biotech sector

Mumbai: Hikal Chemical Industries, promoted by the Hiremaths and the Pune-based Kalyani group, is planning to foray into the biotech sector. The company will convert some part of its recently-acquired bulk drug plant and the research unit from Recon as the hub for its biotech startups.

"Our biotech plan is in its infancy. We are planning to appoint a consultancy to advise us in this venture," say company sources. "The biotech segment is closely related to pharma and agrochemical segments, where we have a good presence. So it makes sense for us to foray into the biotech segment. Also, with the patent regime materialising very soon there are great possibilities for contract research and clinical trials in India as far as biotech is concerned."

The sources say Hikal's decision to foray into biotech is a strategic business move, which is important for the company's growth plans. It is already involved in contract manufacturing for multinational pharma and agrochemical companies. The number of cooperations and alliances between biotech companies and pharma-agro companies is expected to increase dramatically during the course of the next few years. During the last five years, all over the world large pharma companies have entered into over 500 alliances with the biotech industry — 1999 itself saw around 250 alliances.

The sources say the Human Genome Project has opened up a significant opportunity for Indian manufacturers. "There are a larger number of biotech products in various stages of development that require clinical samples for product development. The US industry does not have the capacity to handle the manufacturing for all such products, so Indian companies can target manufacturers of such high-margin products for MNCs.

Recently, Hikal Chemical Industries had signed a deal to acquire the Swiss multinational Novartis' crop protection chemicals manufacturing unit at Panoli, Gujarat. The company has also strong linkages with Japanese agro giant Sumitomo and the US transnational Merk and Company. Both these companies have invested heavily in the biotech sector.

The sources say it will use the research and development units in the newly-acquired facilities for drug discovery and molecule synthesising projects aiming for the export market on a contract basis. "Later, the company may also venture into formulation manufacturing."

The company, which has started operations in its Bangalore plant, manufactures bulk drugs like gemfibrozil, cinnarizine, pentoxyfilline, gabapentin, buzepide, flunarizane and some intermediates, according to client requirements.