Download Life Sciences

Life Sciences /Biotechnology Attracting
Risk capital and Stimulating Alliances and
Joint Ventures
Vishal Gandhi
Asst. Vice President
Life Sciences &Technology,
YES BANK LTD
Page 1
The Agenda
The Journey
India – The Vision
India – The Opportunity
Life Sciences Clusters/Biotech Parks
About YES BANK Life Sciences credentials
Page 2
The Journey
Page 3
Statistics
• 5,500 companies worldwide
• 500 are publicly owned
• $60bn USD plus revenue base
• Hundreds of products on the market
Page 4
What does LS Encompass?
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Therapeutics – novel and generic
Diagnostics
Devices
R & D Tools and Reagents
Instruments
Health Care Delivery – hospitals, clinics
Services:
CRO; Chemistry; Labs; Pharmacy
Page 5
The Changing Global Life Science Industry
• Key Issues
• Need to reduce “time to market”
• Need to sustain profitability
• Disease and healthcare management
• Leading to
• Changing industry structure
• Outsourcing and Partnerships
• Research Alliances
• Mergers & Acquisitions
• Emerging service areas
Page 6
USA’s USP
Page 7
The Fuel: Capital
Venture
Government
Spending
Capital /
Private Equity
Scientific
Expertise
($27 bn pa)
CAPITAL
Page 8
Entrepreneurial Environment
Faith in Science
Motivating Small
companies &individuals
Page 9
Recent licensing transactions between Biotechnology and
pharmaceutical companies
• Neurocrine/Pfizer( Indipion, an insomnia agent): Pfizer gains exclusive
worldwide development and marketing rights in exchange for upfront,
milestone and royalty payments
• Millennium/Ortho Biotech (Velcade, a first-in-class chemotherapeutic
agent): Millennium retains all US commercialization rights whereas Ortho
will keep rights out side the US. Millennium will receive royalties from
Ortho on sales outside the US and received an upfront payment of USD 15
million. Milestone payments for clinical development, regulatory
development out side the US and sales milestones are included
• Avanir Pharmaceuticals/Peregrine Pharmaceuticals (An anticancer
antibody): In exchange of license fee, milestone and royalty payements for
Avanir’s antibody
Contd.
Page 10
Indian Response
• Increased focus on R&D
• Increased focus on CRAM services
(including biologics)
• Marketing alliances
• Brand acquisition
• Adoption of product patent regime
• Life Science focused VC funds
• Development of Life Science Clusters with
shared wet lab infrastructure
Page 11
India The Vision
Page 12
Statistics
Over 200 biotech companies
Total bioscience investment of nearly $150
million USD
• Domestic market
– $1.46 billion in 2005-2006
– Estimated at $5 billion by 2010
• India expected to contribute 8% of the world's
biotechnology market by 2010.
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Significant
promise of
Growth
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India –
The Opportunity
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Research & Development
India is positioned to grow into a major R&D
center for biotechnology companies on the basis
of
Low
Cost
Skilled Workforce
Page 20
Advantage India
• Growing demand for biotechnology
products
• Rich biodiversity
• Strong R&D base
• Wealth of well educated human
capital.
Page 21
Base
Powerful and inexpensive information base
India advantage from a clinical trials
standpoint
Access to large number of patients
Sophisticated network
Short patient recruitment times
Page 22
Achievements
Effective 1st Jan, 2005
Patent Protection
TRIPS agreement expected to
being strengthened
increase foreign investment
and improve the environment
for R&D and forging new
global alliances
Regulations established to
approve
Genetically modified crops
Recombinant therapeutics
Guidelines for Stem
Research
Page 23
Venture Capital & Government
• SBIRI (DBT)
• APIDC-TDB
• PRDF (DST)
• NMITLI (CSIR)
Page 24
Life Sciences cluster /Biotech Parks
Page 25
Characteristics of Life Sciences Cluster
• A Cluster can be defined as a geographically
proximate group of companies and associated
institutions in a particular field linked by
commonalities and complementarities
– Where, value of the system as a whole is greater
than the sum of its parts
– Are usually seeded and evolve organically
– It is observed worldwide that innovation driven
companies thrive better in clusters
Page 26
Elements of Life Science Cluster
Innovative SMEs,
Startups
Anchor companies
Support Services
Companies – vendors,
suppliers, law firms, VCs
R&D Institutions
with strong industry
linkages
Life Science
Cluster
Life Science Parks/
Incubators to nurture
SMEs
Availability of
finance
Good common
infrastructure
Page 27
Leading Life Science Clusters
• According to Minnesota Biomedical and Bioscience Network
report on leading life science clusters as of 2004-05 there are
– 12 Life Science Clusters in EU (Germany, France,
Switzerland, Belgium, Sweden, Finland)
– 11 in USA
– 14 in Asia-Pacific (including Hyderabad,Bangalore and
Uttranchal from India)
– 4 in UK and Ireland
– 3 in Australia
– 3 in Canada
– 2 in South America
– 1 in Africa
– 1 in Middle East
Page 28
Genome Valley Cluster, Hyderabad
• 600 sq. km in three blocks around Hyderabad designated as Genome
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Valley for life sciences growth
Life Sciences R&D institutions
• CCMB, IICT, CDFD, NIN, ICRISAT, Univ of Hyderabad etc.
Biopharma Companies
• Shantha Biotechnics, Indian Immunologicals, Bharat Biotech,
Biological Evans, Krebs Biochedmicals, Ocimum Biosolutions, Dr.
Reddy’s Laboratories etc.
Contract Research Organisations
• Vimta labs, Suven Life Sciences, GVK Biosciences, Magene Life
Sciences etc.
Hospitals, clinicians involved in R&D and clinical research
Dedicated biotech fund - APIDC Venture Capital
Life Science Parks/ Incubators
• ICICI Knowledge Park, SP Biotech Park, ICRISAT Agri-park and
Incubator, Incubator at Univ. of Hyd.
Page 29
Offerings of Life Science Clusters
• Generally infrastructure driven shared facility offering innovation
driven SMEs and startups the right location and fulfilling some of the
other listed needs
– Shared infrastructure & admin support lowering overheads
– Low capital investment – ready to use infrastructure
– Network creation and international knowledge flow
– Competitive environment
– Facilitating Technology Transfer, fundraising, marketing
– Mentoring for incubatees
– Knowledge building - introducing/ strengthening codes and
conventions through shared learning
• Can be government driven, private initiative, public-private
partnership or university led
– Government’s role in removing entry barriers crucial
Page 30
What VC’s Look For
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Technology backed by defendable IP
Business model
Valuation/Exits: 5-10x return
Cost of development and time lines
Competition
Page 31
VC Value Proposition
• Financing: long-term equity
• Business Partner: share risk and reward
• Networks: Access to expertise and
alliances
• Mentoring
• Exit
Page 32
India biotech investment opportunities driven by its
competitive advantages
1. Drug Discovery:
Deep knowledge base of traditional medicine to aid in drug discovery.
Large Bio diversity of plant / marine / animal to aid in drug discovery /
production & nutraceuticals.
2. Clinical trials:
Large drug naïve populations for rapid and low cost clinical trials.
3. Services focusing on the huge domestic market:
– Huge domestic markets with specific needs that can provide scale
advantages to companies addressing these needs: availability of drugs,
diagnostic services, healthcare delivery, health insurance, etc.
4. Contract research/ manufacture:
– chemistry skills, that can lead to strength in process design, contract
manufacturing, laboratory drug discovery related services.
5. Orphan drug discovery & development: Low cost skilled labor with easy
availability provides the ability to build contract manufacturing and services
businesses; build drug discovery businesses focused on orphan drugs, etc.
6. Bioinfomatics services: strong IT skills to aid in developing IP in a number of
the services areas that Indian companies are involved in.
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7. Stem cell / GM crops: Enabling policies
that help development in Stem cell/
banking research, GM crops, etc.
Tech
Transfer
Page 34
Technology Transfer Licenses
• Potential Licensees/Licensors
– Small company that lacks the facilities to do
basic research of its own and wishes to buy the
products of others’ research
– Larger research based-based company which
wishes to expand its product line or
investigate new areas of research
Page 35
®
Commercial & Financial
Considerations of a
Biotech/Pharma
License Agreement
____________________________
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®
Commercial Clauses
• Commercial Due Diligence Clauses
- Clauses Relating to Development
- Clauses Relating to Working/Marketing
Product-By-Product
Market-By-Market
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Financial Clauses
• Upfront Payments
• Milestones
• Annual Payments/Maintenance Fees
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Page 38
Life Sciences & Technology
Page 39
Corporates : Private Equity and M&A
United Phosphorus Ltd.
Advisory for Acquisition of agrichem
business in India
2005
Medreich Limited
Advisory for private equity fund
raising of US$ 25 million
2005
Page 40
Ranbaxy Laboratories Ltd.
Exclusive advisor to Ranbaxy for
divestment of 100% holding in Ranbaxy
Fine Chemicals Limited
2005
Corporates: Business Advisory
Large Global
Pharmaceutical Company
Large Global Generic
Company
Advising a large MNC
Company for setting up its
R&D facility in India
Advisory for product
portfolio analysis and
suggested growth
strategies for the domestic
market
2005
2005
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Corporates: Key Relationships
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Sectoral Focus & Strength
 Membership of various national & international level bodies

OPPI
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FICCI
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IDMA
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CII
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ABLE
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PHDCCI
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BCIL
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TiE
 Providing advisory and fund based services to agriculture, life
sciences & biotechnology companies and government bodies
 Provide advisory services for Infrastructure related projects such as
life science and IT parks etc. jointly with YES’ Infrastructure team
 Assist customers in their M&A transactions by coupling our
sectoral / industry knowledge with the experience of YES’ M&A
team
Page 43
M&A League Tables
Page 44
Case Study - Pune BT Park
 Background
o MIDC wanted to set-up the first ever Biotech park at Pune
o An offshoot from new expressway between Mumbai and Pune.
o Supporting bio-pharmaceuticals, diagnostics, vaccines companies
o MIDC invited private developers for joint development, promotion and
marketing of the proposed park
 Consultants’ Role
o Carried out the overall conceptualization of the park
o Created Information Memorandum to invite private participation and
created the selection criteria for private partner
o Provide hand-holding till the finalization and structuring of the deal with
the selected private partner
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Pune BT Park
The Proposed Concept
Biotech Park Infrastructure
 Specialised biotech facilities
(BioResource Centre)
RESIDENTIAL COMPLEX
 Common Utilities
 Specialised office space for
customised labs
 Business Facilitation Centre
 Common Amenities Block
 Developed land area for GMP
facilities
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Pune BT Park
 Current Status
o TCG (88% Equity) is developing the park in conjunction with
MIDC
o Three of YES BANK’s clients have already taken space at the park
o YES BANK recently got a client from US for leasing facilities at
Pune BT park
o TCG has approached YES BANK for advisory services towards
building the requisite infrastructure and inviting new tenants
 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
Page 47
Government Assignments -examples
 Advising GOM for developing Mumbai into a Biotech Hub
 Member of the Screening Committee in SBIRI. SBIRI is a scheme
launched by DBT that supports the high-risk pre-proof-ofconcept research and late stage development in small and
medium companies
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Thank you
Page 49