Biotech industry gives birth to an angel to boost investment for new deals

The biotech industry in India, which was totally deserted by venture capital (VC) and early stage investors, have a reason to cheer. In line with other angel investor groups such as Indian Angel Network and Mumbai Angel Network, the biotech industry in India has formed a new one — Biotech Angel Network.

The entrepreneurship committee of ABLE (Association of Biotechnology-Led Enterprises) has given shape to the angel network last month. ABLE represents Indian biotech industry.

Kiran Mazumdar-Shaw, chairman & managing director, Biocon, said, "Angel investment has always played a catalyst’s role in every entrepreneur's business journey. It spearheads the risk-taking path. Biotech needs angel investors to bridge the critical gap between government seed funding and VC or bank funding.”

SHOPPERS’ LIST Top private equity/venture capital deals in the Indian biotech sector
Target	Buyer	Deal value ($ mn)

Itero Biopharmaceuticals IncBiotechnology Venture Fund21 Ocimum Biosolutions LtdKubera Cross–Border Fund 17 Glori Oil LtdGTI Group LLC, The Energy and Resources Institute10 Bharat Serums & Vaccines LtdOrbiMed Advisors LLC9.29 Sri Biotech Laboratories India India Agri Business Fund Ltd.8.79 Source: VCCedge

Viren Mahurkar, executive vice-president & head - healthcare, investment banking with ICICI Securities, said, "Our idea behind the initiative is to find investors or HNIs (high net worth individuals) with money as well as knowledge on biotech industry — such as promoters of pharmaceutical companies, expatriate Indian scientists." We look for investments in range of $1 million-2 million each, he added. Mahurkar is the chairperson of ABLE’s entrepreneurship development committee.

According to a VCCedge data, last year saw two VC deals and a PE deal in the biotech sector, against no deals in 2011 and four PE deals worth $19 million in 2010. The biotech sector in India saw eight VC deals worth $55 million and 11 PE deals worth $43 million in the last five years. However, 2012 witnessed 172 VC deals worth $1.1 billion. Nitin Deshmukh, CEO, Kotak Private Equity, said, "While there are a couple of angel networks in the country, they are pretty much focused on technology, e-commerce and consumer businesses. The primary reason being that all these networks have successful entrepreneurs in similar businesses.” Deshmukh is former director general of ABLE and currently a board member.

“Such investments require very specialised knowledge and insights of the life sciences sector, which this angel network could be expected to have besides the required mentoring skill sets, " Deshmukh added.

According to the ABLE report, in 2011-12, the Indian biotech industry registered 18.5 per cent growth, recording Rs 20,440 crore in revenue. The industry has registered a CAGR of 14.75 per cent in the last five years.

Apart from Mahurkar and Deshmukh, Sunny Sharma, senior managing director, Orbimed Advisors, a US-based PE firm, who had worked in the healthcare investment banking group of Lehman Brothers in London, is also one among the key figures behind the initiative.