Gvk Bio Lines Up Rs 100 Cr Investment Plan

GVK BioSciences, a 1-year-old closely held company of the GVK group, has lined up an investment plan of Rs 100 crore for the next two-three years.

The company plans to set up a full-fledged biotech park to focus on informatics, medicinal chemistry, process research and development and pre-clinical development.

The company is also setting up a medicinal chemistry and discovery biology facility at the upcoming ICICI Knowledge Park here with an initial investment of Rs 5 crore, which is planned to be scaled up over the next three years. The facility is expected to be operational by May end.

Announcing the company's plans at a press conference, G V Sanjay Reddy, chief executive officer, said the company plans to seek venture funding late this year or early next year so that the intrinsic worth of the company would be valuated by venture capitalists.

"To attract the best scientific talent pool, we want to offer stock options to our employees for which the valuation exercise carried out by the VCs will work as a barometer," Reddy explained the rationale behind the decision to raise venture capital. However, the company has no plans to go public for the next two years.

Reddy has also announced that the company has entered into a global partnership with the US-based $50 million Ricerca, a drug discovery and development company for the medicinal chemistry facilities being set up by GVK, which will enable small-molecule drug discovery and development.

The company will undertake medicinal chemistry and discovery biology services for Ricerca's clients as well as for jointly owned proprietary discovery programmes. Ricerca will have the exclusive worldwide rights to market the Indian partner's medicinal chemistry facilities. In return it will guarantee GVK a minimum number of medicinal chemistry contract research projects as well as provide the Indian company with some of its proprietary drug targets or early hits towards the joint drug discovery programmes.

Explaining the salient features of the partnership, Reddy said that GVK will undertake R&D on at least 4 targets per year in anti-infectives and oncology.

For the first years, the US company has guaranteed a minimum revenue of Rs 3 crore, Reddy said. The intellectual property that is generated from the jointly owned projects will be shared equally.

The company expects revenues from two streams, fee-from-services and in-house R&D. It is working on four global contracts in bio-informatics. "These are on-going projects and we are expecting about Rs 2 crore turnover from these projects for the current fiscal," Reddy said.

The company's man power of 60 is slated to be increased to 250 by December. A team of 30 scientists will be deployed initially at the ICICI Knowledge park unit, which will be strengthened to 100 by May 2004.