Dr Vishal Gandhi by zhangyun


									 Life Sciences /Biotechnology Attracting
Risk capital and Stimulating Alliances and
Joint Ventures

                                  Vishal Gandhi
                                Asst. Vice President
                            Life Sciences &Technology,
                                  YES BANK LTD
                   Page 1
              The Agenda
The Journey

India – The Vision

India – The Opportunity

Life Sciences Clusters/Biotech Parks

About YES BANK Life Sciences credentials
                      Page 2
         The Journey
Page 3
• 5,500 companies worldwide
• 500 are publicly owned
• $60bn USD plus revenue base
• Hundreds of products on the market

                      Page 4
                What does LS Encompass?

•   Therapeutics – novel and generic
•   Diagnostics
•   Devices
•   R & D Tools and Reagents
•   Instruments
•   Health Care Delivery – hospitals, clinics
•   Services:
     CRO; Chemistry; Labs; Pharmacy

                              Page 5
The Changing Global Life Science Industry
 • Key Issues
    • Need to reduce “time to market”
    • Need to sustain profitability
    • Disease and healthcare management
 • Leading to
    • Changing industry structure
    • Outsourcing and Partnerships
    • Research Alliances
    • Mergers & Acquisitions
    • Emerging service areas
                       Page 6
 Page 7
    The Fuel: Capital

                Capital /
              Private Equity   Scientific
($27 bn pa)

                Page 8
Entrepreneurial Environment

Faith in Science

Motivating Small
companies &individuals

                   Page 9
      Recent licensing transactions between Biotechnology and
                     pharmaceutical companies

• Neurocrine/Pfizer( Indipion, an insomnia agent): Pfizer gains exclusive
  worldwide development and marketing rights in exchange for upfront,
  milestone and royalty payments

• Millennium/Ortho Biotech (Velcade, a first-in-class chemotherapeutic
  agent): Millennium retains all US commercialization rights whereas Ortho
  will keep rights out side the US. Millennium will receive royalties from
  Ortho on sales outside the US and received an upfront payment of USD 15
  million. Milestone payments for clinical development, regulatory
  development out side the US and sales milestones are included

• Avanir Pharmaceuticals/Peregrine Pharmaceuticals (An anticancer
  antibody): In exchange of license fee, milestone and royalty payements for
  Avanir’s antibody
                                      Page 10                         Contd.
            Indian Response
• Increased focus on R&D
• Increased focus on CRAM services
  (including biologics)
• Marketing alliances
• Brand acquisition
• Adoption of product patent regime
• Life Science focused VC funds
• Development of Life Science Clusters with
  shared wet lab infrastructure
                      Page 11
  India -
The Vision

             Page 12
 Over 200 biotech companies
 Total bioscience investment of nearly $150
 million USD                                       Significant
                                                   promise of

• Domestic market
   – $1.46 billion in 2005-2006
   – Estimated at $5 billion by 2010

• India expected to contribute 8% of the world's
  biotechnology market by 2010.

                                Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
    India –
The Opportunity

Page 19
            Research & Development
India is positioned to grow into a major R&D
center for biotechnology companies on the basis


                     Skilled Workforce

                          Page 20
               Advantage India
• Growing demand for biotechnology

• Rich biodiversity

• Strong R&D base

• Wealth of well educated human
                      Page 21

Powerful and inexpensive information base

 India advantage from a clinical trials
    Access to large number of patients
    Sophisticated network
    Short patient recruitment times
                   Page 22
Effective 1st Jan, 2005
                                    Patent Protection
TRIPS agreement expected to
                                    being strengthened
increase foreign investment
and improve the environment
for R&D and forging new
global alliances
                  Regulations established to
                        Genetically modified crops
                        Recombinant therapeutics
                        Guidelines for Stem
                        Research 23
Venture Capital & Government

               Page 24
Life Sciences cluster /Biotech Parks

                 Page 25
Characteristics of Life Sciences Cluster
• A Cluster can be defined as a geographically
  proximate group of companies and associated
  institutions in a particular field linked by
  commonalities and complementarities
  – Where, value of the system as a whole is greater
    than the sum of its parts
  – Are usually seeded and evolve organically
  – It is observed worldwide that innovation driven
    companies thrive better in clusters

                        Page 26
  Elements of Life Science Cluster
       Innovative SMEs,                        R&D Institutions
           Startups                           with strong industry
       Anchor companies                              linkages

   Support Services                                   Availability of
                              Life Science
 Companies – vendors,                                   finance
suppliers, law firms, VCs       Cluster

       Life Science Parks/
                                                  Good common
      Incubators to nurture

                                    Page 27
    Leading Life Science Clusters
• According to Minnesota Biomedical and Bioscience Network
  report on leading life science clusters as of 2004-05 there are
   – 12 Life Science Clusters in EU (Germany, France,
     Switzerland, Belgium, Sweden, Finland)
   – 11 in USA
   – 14 in Asia-Pacific (including Hyderabad,Bangalore and
     Uttranchal from India)
   – 4 in UK and Ireland
   – 3 in Australia
   – 3 in Canada
   – 2 in South America
   – 1 in Africa
   – 1 in Middle East
                               Page 28
    Genome Valley Cluster, Hyderabad
• 600 sq. km in three blocks around Hyderabad designated as Genome
    Valley for life sciences growth
•   Life Sciences R&D institutions
     • CCMB, IICT, CDFD, NIN, ICRISAT, Univ of Hyderabad etc.
•   Biopharma Companies
     • Shantha Biotechnics, Indian Immunologicals, Bharat Biotech,
        Biological Evans, Krebs Biochedmicals, Ocimum Biosolutions, Dr.
        Reddy’s Laboratories etc.
•   Contract Research Organisations
     • Vimta labs, Suven Life Sciences, GVK Biosciences, Magene Life
        Sciences etc.
•   Hospitals, clinicians involved in R&D and clinical research
•   Dedicated biotech fund - APIDC Venture Capital
•   Life Science Parks/ Incubators
     • ICICI Knowledge Park, SP Biotech Park, ICRISAT Agri-park and
        Incubator, Incubator at Univ. of Hyd.

                                 Page 29
                    Offerings of Life Science Clusters

• Generally infrastructure driven shared facility offering innovation
  driven SMEs and startups the right location and fulfilling some of the
  other listed needs
   – Shared infrastructure & admin support lowering overheads
   – Low capital investment – ready to use infrastructure
   – Network creation and international knowledge flow
   – Competitive environment
   – Facilitating Technology Transfer, fundraising, marketing
   – Mentoring for incubatees
   – Knowledge building - introducing/ strengthening codes and
      conventions through shared learning
• Can be government driven, private initiative, public-private
  partnership or university led
   – Government’s role in removing entry barriers crucial

                                  Page 30
       What VC’s Look For
•   Technology backed by defendable IP
•   Business model
•   Valuation/Exits: 5-10x return
•   Cost of development and time lines
•   Competition

                   Page 31
       VC Value Proposition

• Financing: long-term equity
• Business Partner: share risk and reward
• Networks: Access to expertise and
• Mentoring
• Exit

                    Page 32
India biotech investment opportunities driven by its
competitive advantages
1. Drug Discovery:
        Deep knowledge base of traditional medicine to aid in drug discovery.
        Large Bio diversity of plant / marine / animal to aid in drug discovery /
        production & nutraceuticals.
2. Clinical trials:
        Large drug naïve populations for rapid and low cost clinical trials.
3. Services focusing on the huge domestic market:
    – Huge domestic markets with specific needs that can provide scale
        advantages to companies addressing these needs: availability of drugs,
        diagnostic services, healthcare delivery, health insurance, etc.
4. Contract research/ manufacture:
    – chemistry skills, that can lead to strength in process design, contract
        manufacturing, laboratory drug discovery related services.
5. Orphan drug discovery & development: Low cost skilled labor with easy
   availability provides the ability to build contract manufacturing and services
   businesses; build drug discovery businesses focused on orphan drugs, etc.
6. Bioinfomatics services: strong IT skills to aid in developing IP in a number of
   the services areas that Indian companies are involved in.
                                         Page that
7. Stem cell / GM crops: Enabling policies33 help development in Stem cell/
   banking research, GM crops, etc.

           Page 34
       Technology Transfer Licenses
• Potential Licensees/Licensors
   – Small company that lacks the facilities to do
     basic research of its own and wishes to buy the
     products of others’ research
   – Larger research based-based company which
     wishes to expand its product line or
     investigate new areas of research

                       Page 35

     Commercial & Financial
      Considerations of a
       License Agreement

              Page 36

      Commercial Clauses
• Commercial Due Diligence Clauses
 - Clauses Relating to Development
 - Clauses Relating to Working/Marketing

                    Page 37

          Financial Clauses
• Upfront Payments
• Milestones
• Annual Payments/Maintenance Fees

                 Page 38
Life Sciences & Technology

           Page 39
Corporates : Private Equity and M&A

                                                                               Ranbaxy Laboratories Ltd.
     United Phosphorus Ltd.                 Medreich Limited

                                       Advisory for private equity fund
Advisory for Acquisition of agrichem                                          Exclusive advisor to Ranbaxy for
                                          raising of US$ 25 million
         business in India                                                divestment of 100% holding in Ranbaxy
                                                                                  Fine Chemicals Limited

                                                     2005                                   2005

                                                 Page 40
Corporates: Business Advisory

                                             Large Global
  Large Global Generic                  Pharmaceutical Company

                                         Advising a large MNC
   Advisory for product                 Company for setting up its
   portfolio analysis and                 R&D facility in India
     suggested growth
strategies for the domestic

            2005                                   2005

                              Page 41
Corporates: Key Relationships

                     Page 42
 Sectoral Focus & Strength
 Membership of various national & international level bodies
       OPPI                          FICCI
       IDMA                          CII

       ABLE                          PHDCCI

       BCIL
       TiE
 Providing advisory and fund based services to agriculture, life
   sciences & biotechnology companies and government bodies
 Provide advisory services for Infrastructure related projects such as
   life science and IT parks etc. jointly with YES’ Infrastructure team
 Assist customers in their M&A transactions by coupling our
   sectoral / industry knowledge with the experience of YES’ M&A
                                   Page 43
M&A League Tables

                    Page 44
Case Study - Pune BT Park

  Background
     o MIDC wanted to set-up the first ever Biotech park at Pune
     o An offshoot from new expressway between Mumbai and Pune.
     o Supporting bio-pharmaceuticals, diagnostics, vaccines companies
     o MIDC invited private developers for joint development, promotion and
        marketing of the proposed park
  Consultants’ Role
     o Carried out the overall conceptualization of the park
     o Created Information Memorandum to invite private participation and
        created the selection criteria for private partner
     o Provide hand-holding till the finalization and structuring of the deal with
        the selected private partner

                                         Page 45
Pune BT Park

  The Proposed Concept                Biotech Park Infrastructure
   Specialised biotech facilities
     (BioResource Centre)                            RESIDENTIAL COMPLEX

   Common Utilities
   Specialised office space for
     customised labs
   Business Facilitation Centre
   Common Amenities Block
   Developed land area for GMP

                                Page 46
Pune BT Park
  Current Status
    o TCG (88% Equity) is developing the park in conjunction with
    o Three of YES BANK’s clients have already taken space at the park
    o YES BANK recently got a client from US for leasing facilities at
       Pune BT park
    o TCG has approached YES BANK for advisory services towards
       building the requisite infrastructure and inviting new tenants
  Revenue models
    o Sale of Plots and Office Space (Long Term Lease)
    o Rentals from BioResource Centre, Build-to-suite premises
    o A charge on the IPR generated from the park

                                  Page 47
  Government Assignments -examples

 Advising GOM for developing Mumbai into a Biotech Hub

 Member of the Screening Committee in SBIRI. SBIRI is a scheme
  launched by DBT that supports the high-risk pre-proof-of-
  concept research and late stage development in small and
  medium companies

                            Page 48
Thank you

     Page 49

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