Bioneeds India, a Contract Research Organisation (CRO), has received a fund infusion of Rs. 25 crore from Canbank Venture Capital Fund. The latter through its Fifth Fund or Emerging India Growth Fund has now acquired a 25 per cent minority stake via equity shares and convertibles. This will see Bioneeds to pursue a massive expansion plan to offer discovery, development and regulatory service for pharma, biotech, agrochemical and medical device companies.
The Bengaluru-based company which is OECD GLP certified and AAALAC accredited has a 1,10,000 sq. ft vivarium and supporting laboratories at Devarahosahally, Nelamangala Taluk in Sompura Hobli, Tumkur.
“Our earlier expansions were based on funds raised through debt and internal accruals. This is the first time, we are going for a venture capital funding. It indicates our concrete intentions to garner growth from the pre-clinical research market which is envisaged to open up ample growth prospects,” Dr. S.N. Vinaya Babu, managing director, Bioneeds told Pharmabiz.
“We have been actively looking for funds to strengthen our balance sheet and also expand our services. This will help us to strengthen our rapport with over 250 customers. Besides, we are gearing up to comply with USFDA and EU regulations. By 2018, we are looking to become a Rs. 100 crore company from the current Rs. 20 crore,” he added.
The facility expansion programme will lead to addition of 1,20,000 sq ft area, of which 55,000 sq. ft. will be added immediately. The total 2,30,000 sq ft will consist of biopharma discovery labs for molecular biology, cell culture, upstream and downstream, DPD, bio-analytical and QC. The NEC discovery labs for chemistry, DMPK, safety pharmacology, bio-analytical and canine units will also get a facelift.
The company set up in 2006 has a current strength of 150 personnel. The expansion will see us increase our workforce by another 75 scientists taking the total number 230 people, said Dr. Babu.
According to independent reports, global R&D expenditure for the pharmaceutical industry in 2014 was about US$ 139 billion. Penetration of outsourcing to independent CROs is estimated to be at CAGR 12.5 per cent.
Early this year, Bioneeds went on to start Mybiosciences Laboratory in Malacca city where the Malaysia government provided a Rs. 60 crore grant. It got a 30 stake as technical partner and has hired 17 people. Efforts to seek GLP certification has commenced. “We provide pre-clinical services and embark on training programmes for this region, said Dr. Babu.
There is ample scope for Bioneeds to garner a fair share of global opportunities. This is because several international pharma companies are looking at India for drug discovery and pre-clinical research. The country is 30 per cent cheaper compared to the regulated markets for this service.
According to S Thiruvadi, managing director, CVCF, the EBITDA, PAT margins and strong customer base will offer significant returns through dividends and capital appreciation on exit.