Services on offer by Indian firms now cover the lifespan of the drug development process from research and development through to clinical trials and manufacturing, however, along the way, many of these entrepreneurial firms are also simultaneously using the skills gained to further advance themselves.

"They [the services] are beneficial not only because they provide a financial resource, but also afford Indian companies access to valuable technology and expertise," said the authors of a feature article that appeared in Nature Biotechnology (25, 403-417; 2007.)

"The expertise and efficiencies that reside in the domestic private sector are essential for the translation of knowledge into products and services for Indian citizens."

According to the researchers, they have produced the first detailed, independent, publicly available research on health biotech firms in India based on face-to-face interviews with company representatives.

"The results reveal a sector preparing not only for future growth, but also, in some cases, for developing innovative products for global markets," they said.

Bangalore-based Avestha Gengraine is one example given by the authors of an Indian company's thirst for growth. The biology-focused firm is using early-phase contract services and collaborative arrangements with other firms to build the necessary infrastructure to become a fully integrated drug discovery company.

Syngene, also based in Bangalore and owned by the Biocon group, is another example of a company focused on contract services in basic research and synthetic chemistry with the hope of one day developing products of its own. Currently the firm has lucrative contracts with major multinational corporations such as Novartis and GlaxoSmithKline (GSK).

Furthermore, multinational corporations are conducting more and more clinical trials in India and appear to be increasingly relying on local contract research organisations (CROs) to manage these trials. As a result, numerous Indian firms have been adapting their services to accommodate this new business opportunity.

For example, Mumbai-based SIRO Clinpharm conducts all Indian clinical trials for Covance and has 100 employees working on Pfizer projects while Bangalore-based Clinigene, also a Biocon subsidiary, has become the first company in India to have a laboratory certified by the College of American Pathologists and runs trials for large firms such as Merck, AstraZeneca and Pfizer.

In the course of this contract work some Indian companies have developed significant domestic clinical networks, said the report authors, who point to Biological E, which relies on its wide network of 13,000 physicians and hospitals for its clinical trials, and Reliance Life Sciences in Mumbai, which has linkages to tertiary eye care and cardiac hospitals for its regenerative medicine programme. In addition, Clinigene has developed one of the first diabetes registries in India in partnership with local research programmes and hospitals.

Through all this clinical trial infrastructure and experience that has been established, much of which has been initiated and funded by multinational pharmaceutical companies, domestic Indian firms will be well placed to benefit when they eventually come to run clinical trials on their own innovative products.

"The knowledge generated from these partnerships is in turn being translated into innovation at home," said the researchers.

Meanwhile, the trend is also evident in the manufacturing arena, with many Indian firms now generating revenue through contract manufacturing services, placing them in a strong position to bring their manufacturing capabilities to new heights and open new doors that were previously closed to them, both in attracting new international business and manufacturing their own drugs.

One example is Bharat Biotech International, which through its contract for producing Wyeth's Hib vaccine, is the first vaccine manufacturer in a developing country to produce a foreign proprietary product.