Department of Biotechnology will be  shortly introducing a  Technology Acquisition Fund by the  end of this year  which may support buyouts of companies. The fund will also look at industry academic interaction for global partnerships.

At this point of time, it would be difficult to provide the details of the fund allocation, Dr Renu Swarup, adviser, Ministry of Science and Technology, Department of Biotechnology  stated at the Finance and Investment session organized on the second day  at the Bangalore Bio 2011.

The fund will also associate a venture capitalist to look at the viability of the funding for potential partnerships, she added.

The acquisition of technology could be in the form of acquiring know-how , IP through licensing of technology or outright purchase of technology, which is carried out on similar lines in the  international arena..

In the last few years, DBT has been offering some funds to the biotech sector. These include the Biotechnology Industry Partnership Programme (BIPP), Biotechnology Industry Research Assistance Programme (BIRAP and the Small Business Innovation Research Initiative (SBIRI)
for Public Private Partnership.

In the case of BIRAP, the DBT has been able to achieve a  10 percent funding success  as stringent technical due diligence is carried out after which the financial due diligence is addressed. There are around 500 scientists on the Board which evaluate each of the project before they are finalized for assistance, said Dr Swarup.

“The key issues in the funding space are that companies  are now looking for financial assistance for large manufacturing  facilities which does not come under our purview. Government is not looking at investing, instead it is looking at partnering”, stated Dr Swarup.  

According to Dr Kratish Bopanna, president and executive director, Semler Research Centre Pvt., the critical factors for companies  when looking at the funding is the huge risk appetite for a service model in the life sciences space especially clinical development.

Companies  will need to have a clear direction, reduce risk in partnerships and ensure the credibility of expertise available in the company when seeking for funds, stated Dr Bopanna.  

Funding instruments and agencies are naïve about the  life sciences sector which  is the biggest hassle, stated Kapil Khandelwal, director, Makven Capital Private Ltd.

In the case of Biotech Consortium Ltd which is promoted by the DBT and financed by the major  financial institutions including IDBI, ICICI, IFCI, UTI and IFCI Venture Capital Funds, accelerated commercialization of biotechnology by establishing linkages among the various stake holders including industry, R&D institutions has helped it to look at supporting the biotech sector which at times venture capitalists cannot assess, stated Dr Purnima Sharma, managing director, BCIL.