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Page 1
Life Sciences /Biotechnology Attracting Risk capital and Stimulating Alliances and Joint Ventures
Vishal Gandhi Asst. Vice President
Life Sciences &Technology,YES BANK LTD
Page 2
The AgendaThe Journey
India – The Vision
India – The Opportunity
Life Sciences Clusters/Biotech Parks
About YES BANK Life Sciences credentials
Page 3
The Journey
Page 4
Statistics • 5,500 companies worldwide• 500 are publicly owned• $60bn USD plus revenue base
• Hundreds of products on the market
Page 5
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 6
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 7
USA’s USP
Page 8
The Fuel: Capital
Government
Spending
($27 bn pa)
CAPITAL
Venture
Capital /
Private Equity Scientific
Expertise
CONCEPT TO MARKET
Page 9
Entrepreneurial Environment
Faith in Science
Motivating Small companies &individuals
Page 10
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
Contd.
Page 11
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 12
India - The Vision
Page 13
Statistics
• 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.
Over 200 biotech companiesTotal bioscience investment of nearly $150 million USD Significa
nt promise of Growth
Page 14
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Page 17
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Page 19
India –The Opportunity
Page 20
Research & Development
India is positioned to grow into a major R&D center for biotechnology companies on the basis of
Low Cost
Skilled Workforce
Page 21
Advantage India
• Growing demand for biotechnology products
• Rich biodiversity
• Strong R&D base
• Wealth of well educated human capital.
Page 22
Base
Powerful and inexpensive information base
India advantage from a clinical trials standpoint
Access to large number of patientsSophisticated networkShort patient recruitment times
Page 23
Patent Protection being strengthened
Regulations established to approve
Genetically modified cropsRecombinant therapeuticsGuidelines for Stem Research
Effective 1st Jan, 2005TRIPS agreement expected to increase foreign investment and improve the environment for R&D and forging new global alliances
Achievements
Page 24
Venture Capital & Government
• SBIRI (DBT)• APIDC-TDB• PRDF (DST)• NMITLI (CSIR)
Page 25
Life Sciences cluster /Biotech Parks
Page 26
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 27
Elements of Life Science Cluster
R&D Institutions with strong industry
linkages
Availability offinance
Support Services Companies – vendors,
suppliers, law firms, VCs
Life Science Parks/Incubators to nurture
SMEs
Innovative SMEs, Startups
Anchor companies
Life ScienceCluster
Good commoninfrastructure
Page 28
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 29
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 30
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 31
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 32
VC Value Proposition
• Financing: long-term equity • Business Partner: share risk and
reward• Networks: Access to expertise and
alliances• Mentoring• Exit
Page 33
India biotech investment opportunities driven by its competitive advantages1. 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.
7. Stem cell / GM crops: Enabling policies that help development in Stem cell/ banking research, GM crops, etc.
Page 34
Tech Transfer
Page 35
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 36
Commercial & FinancialCommercial & FinancialConsiderations of aConsiderations of a
Biotech/PharmaBiotech/PharmaLicense AgreementLicense Agreement
®®
____________________________
Page 37
®®
____________________________
Commercial Clauses Commercial Clauses • Commercial Due Diligence Commercial Due Diligence ClausesClauses
- Clauses Relating to Development- Clauses Relating to Development- Clauses Relating to - Clauses Relating to
Working/MarketingWorking/Marketing Product-By-ProductProduct-By-ProductMarket-By-MarketMarket-By-Market
Page 38
®®
____________________________
Financial Clauses Financial Clauses
• MilestonesMilestones
• Annual Annual Payments/Maintenance FeesPayments/Maintenance Fees
• Upfront Upfront PaymentsPayments
Page 39
Life Sciences & TechnologyLife Sciences & Technology
Page 40
Corporates : Private Equity and M&A
United Phosphorus Ltd.United Phosphorus Ltd.
Advisory for Acquisition of agrichem business in India
20052005
Ranbaxy Laboratories Ltd.
Ranbaxy Laboratories Ltd.
Exclusive advisor to Ranbaxy for divestment of 100% holding in Ranbaxy Fine Chemicals Limited
20052005
Medreich LimitedMedreich Limited
Advisory for private equity fund raising of US$ 25 million
20052005
Page 41
Corporates: Business Advisory
Large Global Generic Company
Large Global Generic Company
Advisory for product portfolio analysis and
suggested growth strategies for the domestic market
20052005
Large Global Pharmaceutical
Company
Large Global Pharmaceutical
Company
Advising a large MNC Company for setting up its R&D facility in
India
20052005
Page 42
Corporates: Key Relationships
Page 43
Membership of various national & international level bodies OPPI
IDMA
ABLE
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
team
Sectoral Focus & Strength
FICCI
CII
PHDCCI
Page 44
M&A League Tables
Page 45
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 46
Pune BT Park
The Proposed Concept
Specialised biotech facilities
(BioResource Centre)
Common Utilities
Specialised office space for
customised labs
Business Facilitation Centre
Common Amenities Block
Developed land area for
GMP facilities
Biotech Park Infrastructure
RESIDENTIAL COMPLEX
Page 47
Pune BT Park
Current Status
o TCG (88% Equity) is developing the park in conjunction with
MIDC
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 48
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 49
Thank you