Low VC funding, regulatory hurdles challenges to biotech growth: BIRAC MD

India targets a $300 billion bioeconomy by 2030, up from $165 billion in 2024.

While India is making progress in biotechnology, the sector continues to face challenges in securing venture capital (VC) funding and getting regulatory clearances, according to Jitendra Kumar, managing director of the Biotechnology Industry Research Assistance Council (BIRAC), Department of Biotechnology.

 

“One is a regulatory challenge, because the products have to pass the regulatory pathway, and these pathways for many emerging technologies, for example, CAR-T therapy, are sometimes not very clear. Another challenge is funding. The entry barriers are now lower for startups with the introduction of biofoundries and other investments. However, for bio-manufacturing at a much larger scale, there is a need for more funding. Right now, early-stage venture capital in biotech is less,” Kumar said in an in-person conversation with Business Standard. 

 

He added that even if the government is extending support for the sector's growth, other factors like long gestation periods, elevated risks, and high capital are slowing the flow of capital into the industry.

 

Speaking about how BIRAC is easing regulatory challenges, Kumar said the organisation has created a division named Regulatory Affairs and Policy Advocacy (RAPA). “It handholds the innovators or startups who are facing regulatory challenges and navigate the complex regulatory pathway by guiding them, hand holding them, and liaising with the Central Drugs Standard Control Organisation (CDSCO). This way, BIRAC is playing a very crucial role in removing any kind of fog in some products for regulatory clearance,” Kumar added.

 

On easing funding flow, Kumar highlighted that the organisation has created an AcE Fund to foster research and development (R&D) and innovation by encouraging VC investment for biotech startups, and small and medium enterprises. According to the data on the official website, till April 2024, an investment commitment of ~299 crore has been made for biotech startups, with support extended to 88 startups. For this fund, 16 VCs have been empanelled.

 

“We have a very strong partnership with India Angel Network and the Indian Venture Capital Association. We also have a partnership with the Bill Gates Foundation as well as the World Bank,” Kumar added.

 

Citing some success stories in the biotech space, Kumar said, “There are many examples. One is Revelations Biotech, which is making fibrous sugar. They have already commercialised their product and are supplying to many other countries. Second is ImmunoAct, a company started by an IIT Mumbai professor, which created the first CAR-T therapy for India. Another example is Genova, which has been able to raise huge funding, some $95 million.”

 

A few weeks ago, the government unveiled India’s first Biofoundry Network, a pan-India initiative comprising 21 bio-enabler facilities with an aim at accelerating biomanufacturing, reducing import dependence, fostering start-up growth, and creating jobs. The initiative aligns with the country’s ambition of building a $300 billion bioeconomy by 2030, up from $165 billion in 2024.

 

Kumar said that bioeconomy refers to an economy using renewable natural resources to produce food energy products and services. The important renewable resources include the biomass in forest, soil, bodies of water and freshwater.