Outsourcing deals raining for small Bio Informatics Firms

November 2, 2011: The bioinformatics market which is dominated by big established players is now being explored by the small firms. They are trying to fill the gaps in the market left by the big companies in the outsourcing area. 

But the condition of mid sized companies is not that encouraging as they are affected by increasing overheads. Mid sized companies are finding it difficult to compete in the fast growing market.

It is forecasted that the global bioinformatics market will grow at a Compounded annual growth rate (CAGR) of 16% and that the Indian bioinformatics services outsourcing opportunity is expected to grow at 25 % on an annual compound rate.

In India the bioinformatics is emerging as an independent discipline since the need for bioinformatics services is increasing globally. The small players in the Indian bioinformatics industry have started to develop products and solutions that meets the requirements of contract research and development (R&D) services of those companies that outsource to India.

The small players operate in areas such as molecular biology, molecular modeling, DNA sequencing, drug development etc. According to estimates the total worth of Indian bioinformatics market is Rs 250 crore and it is growing at a rate of 5- 10 per cent.

 

Mr Utkarsh Palnitkar, Managing Director, Pluripotent Capital has said that small firms are bringing outsourcing orders  to India as they are flexible and fast in developing products that will suit the requirements of big companies.

A problem faced by many of the bioinformatics companies face is the difficulty in finding the second and third round of funds along with difficulty in obtaining quality talent. A survey conducted by Association of Biotech Led Enterprises (ABLE) says that most of the firms are located in cities such as Mumbai, Bangalore, Hyderabad, and Pune and that some companies were able to find funds for their operation.

IT giants like Wipro, TCS and HCL are also entering into the Bioinformatics sector.

According to DR Binay Panda, Head of Ganit Labs, the outsourcing is controlled by large companies, but there are small and medium companies which are finding good business.

The bioinformatics sector is mainly dominated by large players as the investment is high as a result companies prefer to buy existing companies. MS Dipta Chaudhury, Senior Consultant at Frost and Sullivan says that new companies opt to buy from existing companies rather than new ones. She also added that they would buy from small and medium companies too.




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