With several biotech companies making breakthrough in research and reporting huge earnings, there is good scope for funding this sector. India could be a great destination for funding creative ideas, according to Rekha J Hemrajani, the US-based Biotech Investment Banking Consultant.

Speaking at the recently concluded two-day International Knowledge Millennium Conference (IKMC) 2002, in Hyderabad, on Drug Discovery and Healthcare in the Knowledge Economy - India's Opportunities, Rekha said funding would come in gradually to companies that demonstrate good capabilities. "Indian scientific skills are much more cost-effective than those in the western world. With a well-developed pharmaceutical industry and recognition of intellectual property rights, it will have advantage in leveraging the opportunity."

She said the problem of depleting pharmaceutical pipelines and increased R&D costs would be further exacerbated. This would call for more investments and funding in matured drug research and biotech companies.

Speaking on "Biotech Financing Cycles, What's hot and what's not," Rekha observed that progressively drug development in the biotech industry would get increased funding. While the boom time in 1998-2000 witnessed a broad-based funding pattern, which had certain distinct characteristics, the funding now had changed to a more rational approach.

Other speakers said there was a significant unmet need for greater efficiencies in the pharmaceutical and healthcare industries from a cost, speed and productivity perspective. They maintained that the biotech and healthcare sectors are recession proof.

Dr E Premkumar Reddy, Director, FELS Institute, Philadelphia, said that the major barrier for drug discovery had been the prohibitive cost of development. "This has to be tackled by creating a library of compounds from where we can selectively pick and choose for focused development, which will save on both cost and time."

Describing venture capital investment support as vital for the growth of the sector, Dr Bala S Manian, Chairman of EPPIC, USA, said VCs in India and US had different approaches to funding. While VCs in the country were focused on investment strategy, those in the US focused on entrepreneurship building. This makes a significant difference where enterprises are supported over a long time.