Time and again, the Indian Pharma industry has been accused of lacking innovation. Industry critics have charged this business community of playing it too safe, and therefore driving India’s potential to become a knowledge partner to the developed world, into being the mundane back-office. They suggest that organisations, and more importantly, upcoming entrepreneurs, should take up enterprising research projects. Research agencies, including CROs, should have a stake in whatever novel research they are conducting.
The problem, however, is a little more complex. It all boils down to a chicken and egg situation. Entrepreneurs seem to lack start-up funds and funding parties search for experienced entrepreneurs. Therefore, this fortnight, we bring to you two stories linked to innovation and finances.
In our Market Cover we have taken stock of the venture capital investment in Indian pharma. There has been much ado on India’s capability to conduct low cost research. In a discussion on the influx of venture capital, someone from the industry said that the appetite for risk among venture capitalists is increasing. If considered, these two statements should bode for a massive pouring in of capital for Indian research start-ups. Unfortunately, the two communities, pharma entrepreneurs and venture capitalists, in India, are yet to find faith in each other.
While this implies slow growth for the small segment, it still does not spell bad news for the Pharma sector at large. In financing options, private equity has found better favour than venture capital. That of-course is a clear trend with large sums being raised by established companies such as Dr Reddy’s and Cipla. While that does increase parity between the small and big, it is perhaps still in keeping with the international trend of a few established bigwigs.
Innovation through IT
The bioinformatics market was one that received some venture capital in the recent past. In our Management Cover, we have homed in on whether that was a passing phase or a pattern that would pan out over the years. Quite in keeping with our expectation, bioinformatics solutions, for those using it to generate IPR in pharma and biotechnology, are well-guarded secrets.
It is therefore natural that companies prefer customised solutions, or at least develop them partly in-house. So instead of just perfunctorily touching on market figures, we decided to break down the technology into simple terms to evaluate its value.
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