BioWorld International Correspondent
LONDON - Avesthagen, a star of the burgeoning India biotech sector, is looking abroad for a third round of private funding in advance of listing on an Indian market in 2008.
The company has made advances to investors in the U.S. and Europe, and is finalizing pricing on a €20 million to €25 million (US$32.2 million) round that is expected to close in the next two months.
"We know the venture capitalists in India and private equity here is starting to take off, but we want global recognition, and the VC industry is stronger outside [India]," Villoo Patell, founder and CEO, told BioWorld International.
"We want to find the best strategic investors and a number have shown an interest in Europe and the U.S. We are now trying to get the best valuation."
The money is earmarked for a pilot scale manufacturing plant for the company's biopharmaceuticals unit and a plant extraction facility for nutraceuticals. In addition, Avesthagen is looking to buy an Indian seeds company to bolt onto its agricultural biotech business.
These three arms of Avesthagen are supported by a fourth R&D division, which also provides external R&D services. Patell is in the process of giving the four units operational independence, by appointing a chief business officer to head each division.
"They will be managed under the same umbrella for now: the spectrum of activity means you could be looking at different kinds of investors. But the work so far to bring guys in shows that they are interested in different pipelines, but want to be in the main company also," Patell said.
The current plan is to await the launch of the first two products, due in 2007, and then make a decision on whether to spin out separate companies.
For now, said Patell, there is a lot of synergy across the four business units based on the common genomics, transcriptomics and metabolomics technology platforms. "That's the beauty of the model; our technology platforms crisscross over and support all the business units," Patell said.
But, she says, it is very challenging to manage the four, hence the decision to appoint individual CBOs.
The first, a former European pharmaceutical executive, is relocating from the UK to head the biopharmaceuticals and nutraceuticals divisions.
In biopharmaceuticals, Avesthagen has a joint venture with Cipla Ltd., of Mumbai, one of India's leading drug companies. There are 11 biosimilar products in the pipeline currently, and Cipla has an equity investment in Avesthagen.
In nutraceuticals, Avesthagen has a partnership with the Swiss food company Nestlé Nutrition SA for the development of plant-based bioactives as food ingredients. The products are based on traditional Indian plant remedies, with the first, for treating metabolic disorder syndrome, due to be launched by Nestlé in 2007.
"The nutraceuticals market is in its infancy, but is developing rapidly, particularly in Japan. Our approach is unique in basing [products] on traditional Indian medicines with a long record of safe use and then conducting formal clinical trials to show proof of efficacy," Patell said.
On the agbiotech side, Avesthagen is partnered with Limagrain SA, of Clermont-Ferrard, France, the world's fourth largest seeds company. The deal involves setting up a joint venture in India to market existing Limagrain products and those generated through the joint venture.
In house, Avesthagen has a range of products in its agbiotech pipeline, including rice varieties that are genetically modified to be salt and drought resistant.
Other partnerships include one with bioMerieux SA for the development of diagnostics for tuberculosis, and with Sequenom Inc., for the validation of gene biomarkers for breast and lung cancer, and diabetes.
To date Avesthagen has raised €10.3 million since it was founded in 1998 by Patell, who earned her Ph.D. at Louis Pasteur University in Strasbourg, France. The company had turnover of €3.7 million this year through March.
Following this funding round, Avesthagen expects to go public in 2008. Legal requirements oblige it to list first in India, but Patell said she will be looking for an international listing, possibly on Nasdaq, or in Tokyo or London.