APIDC Venture Capital Ltd's 'The Biotechnology Venture Fund', India's first national fund focused on biotechnology companies, has decided to invest a total of US$ 1.62 million (approximately Rs. 8.1 crore) in three companies - Bioserve Biotechnologies, Genomik Design Pharmaceutical Pvt Ltd and Silico Insights. APIDC-VCL is a public-private partnership between the Ventureast Group and the Andhra Pradesh Industrial Development Corporation (APIDC).
US-based Bioserve Biotechnologies Inc specializes in custom laboratory services, biomedical research, and the development of diagnostic reagents. Bioserve is the first Clinical Research Organizations set up to leverage the India advantage, providing custom lab reagents; genotyping and diagnostic services for both US and Asian markets. The company has already built an order book of US$ 6.7 million. Additionally, Bioserve has recently acquired the genotyping division of Qiagen (a top-10 biotech supplies company) that has pre-existing business, which could accrue to Bioserve. The acquisition significantly adds to the company's IPR status in bringing with it 78 patents as part of the deal. APIDC-VCL is its first VC investor and will invest US$ 540,000 in Bioserve.
Genomik Design Pharmaceuticals Ltd. (GDPL) and its US-based parent, deliver drug design services for drug discovery companies and addresses 'niche' product/drug opportunities. Founded by a world-renowned scientist in drug design platforms, Dr. U. Chandrasingh (AMBER, GIBBS, GAUSSIAN), the company will service contracts for drug identification and validation using the proprietary platform GALAXY. Additionally, GDPL will identify niche drugs (unpatented) by screening molecules that have been FDA approved for other indications and offer these for sale to drug majors subsequent to preliminary testing in India. The Company already has a US$ 1.5 million service contract. APIDC-VCL is its first VC investor and will invest US$ 540,000 in GDPL.
Silico Insights Inc is a US-India Clinical Research Organization. It has developed a proprietary computational platform that identifies disease genes and proteins that may be used as drug targets or diagnostic markers. The platform - i-Sight - differentiates itself from other efforts in being able to select disease targets based on both tissue and disease pathways. This is an important distinction and has lead to key alliances for the Company. The company has already built a unique portfolio within cancer and inflammation-based diseases that consists of markers and methodologies. This will lead to commercialization of these markers as diagnostic tests and drug targets. The Company also has service a contract pipeline of about a $1 million. APIDC-VCL is its first VC investor and will invest US$ 540,000 in Silico Insights.
In a press release, S.M. Balasubramaniyam Chairman, APIDC-VCL felt that the "opportunity for venture capital investment into early-stage companies and into 'biotechnology' companies is huge in India but there is little venture capital targeting such companies. The Biotechnology Venture Fund from APIDC VCL will increase the fund availability for such companies. In line with this view and the Funds philosophy, we are the first VC investors into these companies"
Sarath Naru, Managing Director APIDC VCL added, "These three cross-border companies are pioneering in using the India advantage, have a strong and capable founding team, , innovative proprietary technology/processes and a risk diversified approach with a service & product offering. We are pleased with our decision as they offer tremendous opportunity to maximize returns for our investors."
The Fund is raising capital commitments of Rs. 150 crore from institutional investors. It has reached a corpus of Rs. 4 crore with commitments from GIC for Rs 5 crore, Life Insurance Corporation of India for Rs 10 crore, Government of Andhra Pradesh for Rs. 15 crore and Rs. 10 crore from Andhra Bank. The Fund is in discussions with a number of financial institutions, banks, and insurance companies etc for investment to reach the targeted Rs. 150 crore.
The Fund will operate primarily as a start-up and early-stage investor in businesses focusing on life sciences-related areas such as health care, drug discovery, agriculture, dairy, environmental and industrial applications.
The Fund's objective is to achieve attractive returns primarily through the generation of capital appreciation by investing in equity, equity-related and mezzanine capital instruments of unlisted companies as per SEBI guidelines for venture capital venture capital investment in India.
The Fund would normally invest up to 15%, but no more than 25% under any circumstance, of the committed capital of the Fund in an investee company. The investment exposure per Investee Company would be between 2% and 49% of its total share capital. The Fund would make investments in about 20 to 25 deals during the initial three-to-four year period of the Fund life) and begin disinvestments thereafter.
The Fund anticipates exits from its investments through a variety of avenues: strategic sale to the corporate co-investors or other corporations; sale to other financial investors (including investors in the Fund or a separate fund focused on acquiring such investments); mergers and acquisitions, public offering or buyback with co-investors or partners; and a sale of assets of the investee company such as its intellectual property. The Fund may also seek to list itself or transfer its holding in an investee company directly.