Private Equity (PE) investments in the life sciences sector have been increasing in the last few years. The emergence of life sciences opportunities in India is supported by a growing healthcare industry and strong human capital.

While several fund managers have identified life sciences as a promising new area in the country, few have the investment and technical knowledge to address early stage opportunities, experts said. Most current investment focuses on later stage, larger investments in the pharmaceutical and biotechnology sectors. APIDC VCL and GVFL had initiated funding for the early stage life sciences sector in India.

Among the recent PE investments, Blackstone Group and its affiliates have announced that they will invest $50 million in Emcure Pharmaceuticals, during July 2006. This represents Blackstone's first investment in India after the launch of its private equity business in India in the middle of last year.

Between January 2005 and June 2006, several PE investments have taken place in the pharmaceuticals front, which include- ICICI Ventures and Citigroup investing USD 45 million in Perlecan Pharma; General Atlantic Partners investing USD 25.3 million in Jubilant Organosys; Temasek investing USD 24.8 million in Medreich; ICICI Ventures, IIML, Sander Morris Harris investing USD 23.3 million in Malladi Drugs, Carlyle investing USD 20 million in Claris Lifesciences, according to a Venture Intelligence study.

During the quarter April-June 2006 alone, five Private Equity investment deals have taken place in the healthcare and life sciences sector amounting to USD 60 million, accounting to seven per cent in terms of volume of deals and three per cent in value of deals, as part of the total investments across sectors. Dubai-based Evolvence Capital has recently announced the launch of a $150 million fund for investing in small and medium sized life sciences companies in India.

The International Finance Corporation during May 2005, committed equity of up to USD 4 million to APIDC Biotechnology Fund, a private equity fund formed to invest in start-up and early stage life sciences business in India.