EVOLUTION OF INDIAN BIOTECH

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EVOLUTION OF INDIAN BIOTECH FINANCING
IMPLICATIONS Rajiv Shukla Executive
Director Avendus Advisors
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HUMAN ACTIVITY TAKES PLACE IN CLUSTERS
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BIOTECH CLUSTERS IN THE USA THEIR SEED FACTORS

• Universities
• UCSF
• Cal-Berkeley
• Stanford
• PhDs p.a. 200
• NIH funding
• 700 M
• Top 50 VCs
• 21
• Biotech companies
• 350
• Public companies
• 100
• Mkt cap 100 B

• Universities
• Harvard
• MIT
• Boston University
• PhDs p.a. 350
• NIH funding
• 1,400 M
• Top 50 VCs
• 10
• Biotech companies
• 300
• Public companies
• 60
• Mkt cap 50 B

• Universities
• UCSD
• Scripps
• Burnham
• PhDs p.a. 80
• NIH funding
• 680 M
• Top 50 VCs
• 4
• Biotech companies
• 350
• Public companies
• 35
• Mkt cap 25 B

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FINANCING ENVIRONMENT SUPPORTS THESE CLUSTERS

• VC funding
• 05 1,215 M
• 06 1,176 M
• 07 H1 603 M
• Companies funded
• 05 77
• 06 97
• 07 H1 46
• Research alliances
• 96-01 1.2 B

• VC funding
• 05 543 M
• 06 552 M
• 07 H1 515 M
• Companies funded
• 05 50
• 06 40
• 07 H1 28
• Research alliances
• 96-01 1.6 B

• VC funding
• 05 628 M
• 06 845 M
• 07 H1 451 M
• Companies funded
• 05 57
• 06 71
• 07 H1 42
• Research alliances
• 96-01 3.9 B

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FOCUS ON CORE COMPETENCY/CONTINUOUS INNOVATION
CRITICAL FOR SUCCESS
Biotronik
Broad Institute
Biotec Thailand
Bruin Pharma
Bayer
Human Genome Sciences
Emisphere
Cerimon
Avantec
Genelabs Tech
Elan
Idenix
Celgene
Avanir
Eisai
Genentech
Idera
Lohmann
Avalon
Abbott
Chiron
Dana Farber
Cell Thera
Infinity
Kyorin
Astex
Ajinomoto
Dainippon
Cellzome
Kythara
Cubist
Astellas
Alnylam
Conor
Cytopia
Arrow
Anadys
Cytos
ArQule
Applied Pharma
Argenta
Not exhaustive May not be current
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CONTRAST THIS WITH INDIAN BIOTECH
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WHAT IS THE DIFFERENCE BETWEEN PE AND VC?
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IMPLICATIONS FOR INDIAN BIOTECHS

• Principally the domain of Government and
  Academic/non-commercial Institutions
• We need something as substantial as NIH and
  world-class research institutions like MIT, UCSF,
  etc.
• Excellent area for PPP
• Build it in a SEZ will be Indias best SEZ for
  sure

Research Funding

• Even small Indian funds dont want to do this
  size success
• Dont have the talent base for world-class VCs
  yet (they are still working on their start-ups,
  the first batch of successful entrepreneurs will
  be it)
• Rely on HNIs, bootstrap on Government funds,
  Leverage the cross-border story to raise money
  in Bay Area/Boston

Seed/Series A Funding

• Somewhat mature start-ups can rely on VCs located
  outside India
• Be prepared to measure up to global standards on
  the drug development data package
• You will get funded only if your molecule is
  differentiated/clinically advanced than global
  competitor should plan for this from the
  beginning
• Have realistic valuation expectations dont
  rely on newspaper articles for licensing deal
  information

Venture Funding

• Generic companies spinning off units is not the
  same as an IPO
• Pipeline of only Discovery and Preclinical
  candidates will result in massive stock
  volatility
• Tough to recover from a clinical failure
  analysts will paint the rest of your portfolio
  with the same brush
• Research based companies with limited newsflow
  and negative bottomlines are not ideal public
  companies unless their commercialization/licensing
  event is near

IPOs