BioNews March 2004

Thursday, March 11, 2004

Avesthagen to spinoff another outfit for RPO

Bangalore-based hot shot research organization Avestha Gengraine Technologies (Avesthagen) plans to spin off its research activities into a separate activity in April.

The new company to be formed with an investment of $7 million (Rs 32 crore) is most likely to be named

 Avesthagen Research Partners or Avesthagen Research Consultancy.

The company will be incorporated in Bangalore formally in April. It will act as the research process outsourcing arm of the parent company, which holds highly priced intellectual property rights (IPRs) in bioagri and biopharma fields.

"We have already set up offices or in the process of doing so for the new outfit in the United Kingdom, Copenhagen, Japan and Switzerland," Avesthagen founder and CEO Villoo Morawala-Patell told BioSpectrum in an exclusive briefing.

The research outfit will have some 90 top rated scientists engaged in developing cutting edge IPRs in the core areas. The research arm is aiming to raise funds to the tune of $ 7 million. Two big investors have committed half the amount and other investments too are in the finalization stage.

Avesthagen started commercial operations in 2001 and has since spun off two other companies—Avesthagen Inc, based in San Diego, California and AQUAS ( Avesthagen Quality Agricultural Services), located in the ICRISAT campus, Hyderabad. Avesthagen Inc is in the final stages of wrapping up $ 9 million (Rs 41 crore) and concentrates on the development of biotech drugs extracted from natural compounds to treat obesity and diabetes. The US arm of Avesthagen is ready with seven highly effective lead compounds, which have been scientifically validated and clinically tried out against diabetes. Products are likely to hit the market in late 2005.

Morawala-Patell said the agriculture unit, Aquas, will have a seed capital of Rs 1.6 million (Rs 7.3 crore). The company has started to offer high quality purity testing and standardization test for exporters of agricultural products and seeds and is ramping up the infrastructure.

" We have evolved a unique model in the biotechnology sector by spinning off specific activities to provide the best value for investors and also facilitate quick ramp up, leveraging the highly sought after IPR platforms developed by the company in recent years," Morawala-Patell said. Avesthagen currently has 41 international patents and has filed another seven in recent times. Cumulatively the company will have investments to the tune of $ 22 million (Rs 101 crore) and hopes to ramp of revenues with the new model in the next few years. The company has been funded mainly by leading investors like ICICI Ventures, Tata Group, Global Trust Bank, NMITLI program of CSIR. A few angel investors too have made generous investments.