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3 US biotech firms plans unit in AP

Fakir Chand in Bangalore | September 02, 2003 19:40 IST

Three US-based biotech firms, promoted by non-resident Indians, are setting up their subsidiaries in Hyderabad with state venture funding to capitalise on the domain expertise, low-cost of operations and market potential in the sub-continent.

To be part funded by the Biotechnology Venture Fund, floated by the Andhra Pradesh Industrial Development Corporation Venture Capital Ltd, the firms are Bioserve Biotechnologies Inc, Genomik Design Pharmaceuticals Ltd and Silico Insights.

According to APIDC VCL managing director Sarath Naru, the three firms are pioneering in using the India advantage, with strong founding teams, innovative proprietary technology and processes, and a risk diversified approach towards service and product offering.

"The AP government-promoted venture fund, set up primarily to promote the biotech industry, is making an identical investment of $540,000 in each of the firms though the holding vary from each other, ranging between 15-25 per cent," Naru told rediff.com in Bangalore on Tuesday.

As a clinical research organisation, specialising in custom laboratory services, biomedical research and the development of diagnostic re-agents, the $3.2-million Bioserve will provide custom lab re-agents, geno-typing and diagnostic services for the US as well as the Asian markets.

"We already have an order book worth $6.4 million, and about 80 clients in India alone are taking our products and services. We see an exciting growth in this sector on account of the scientific talent, resources and the growing market potential in India and abroad," Naru stated.

Bioserve has recently acquired the genotyping division of Oiagen, a biotech supply firm, to boost its IPR status with 78 patents as part of the deal.

Genomik offers design services for drug discovery firms to remain focused on their niche products and emerging markets. Founded by medical scientist U Chandrasingh, the young NRI firm will service contracts for drug identification and validation using the proprietary platform Galaxy.

Incidentally, Chandrasingh is credited to have developed in the US some of the leading drug design platforms, including Amber, Gibbs, and Gausian.

"The company is set to identify new drugs for patenting by screening the molecules approved by the FDA and sell them to global drug majors. It has bagged a $1.5-million service contract to launch its Indian operations," Naru disclosed.

Similarly, Silico Insights, an Indo-US clinical research organisation, has developed proprietary computational platform to identify disease genes and proteins for drug targets or diagnostic markets.

The platform -- i-sight -- will be able to select disease targets based on both tissue and disease pathways. The company has also built a portfolio in cancer and inflammation-based diseases to develop markets and methodologies as diagnostic tests and drug targets. It has bagged a service contract of $1 million in the pipeline.

The biotech fund is looking for healthy returns after a gestation period of 5-7 years. Apart from being on the board of the investee firms, the fund will be providing consulting and technology inputs for turning the ventures into viable and profitable entities.

With a corpus of Rs 4 crore (Rs 40 million) and firm commitments to the tune of Rs 40 crore (Rs 400 million) from GIC (Rs 5 crore), LIC (Rs 10 crore), AP government (Rs 15 crore) and Andhra Bank (Rs 10 crore), the fund is targeting Rs 150 crore (Rs 1.5 billion) for raising the capital requirements during the fiscal 2003-04.

APIDC-VFL chairman M S Subramaniam claimed that the International Finance Corporation, an affiliate of the World Bank, had also expressed interest in investing in the Fund along with other banks and financial institutions.

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