Growing interest of Indian Pharma in start-ups: A new trend or blip on the radar?

Posted on July 19, 2022

The Indian start-up ecosystem has been enjoying its time in glory for the past few years, but the Lifesciences sector joined the league only recently. While a plethora of early-stage companies focused on biotech, pharma and diagnostics have been replete with innovative ideas that can potentially improve human lives, funding is often a rate-limiting factor. However, the narrative is changing, slowly but surely, as illustrated by some transactions from the past one year.

The rich start-up ecosystem in the west is often fueled by pharma/biotech bigwigs that set up incubators to nurture cutting-edge science. Some notable examples are JLABS by Johnson & Johnson, Bayer’s G4A Accelerator and Astrazeneca’s A.Catalyst Network. These incubators serve as entry points for large corporations to in-license technology and assets or acquire companies in their entirety while fostering innovation. While India is still in a nascent stage when it comes to setting up such pharma-backed incubators, there is an increased appetite amongst Indian companies to invest in home-grown start-ups.

Lifesciences start-up funding: the India story

Cipla and Achira Labs: In June 2022, Cipla announced acquisition of 21% stake for about INR 25 crore in Bengaluru-based Achira Labs Private Limited engaged in development and commercialization of point of care (PoC) medical test kits in India. This investment facilitates Cipla’s strategic participation in the PoC diagnostics and anti-microbial resistance arena.

Piramal Pharma and Yapan Bio: Piramal Pharma invested about INR 101 crore in Yapan Bio based in Genome Valley, Hyderabad, for expansion of its suite of offerings in biologics. As a part of this transaction in December 2021, Piramal Pharma holds almost 28% equity in Yapan Bio that provides process development, scale-up, and cGMP compliant manufacturing of vaccines and biologics.

Laurus Labs and ImmunoAct: Mumbai-based ImmunoAct (acronym for Immunoadoptive Cell Therapy Private Limited) attracted an investment from Laurus Labs in November 2021 to the tune of INR 46 crore for 27% stake. The investment is aligned with the larger strategy of Laurus Labs to strengthen biologics business by providing access and entry into an emerging field of research.

Where do we go from here?

Irrespective of the size of the deal, one recurring theme from the three examples is a growing interest of domestic companies to expand portfolio by tapping into younger companies rather than building in-house capabilities. This allows larger organizations to have augment their suite of offerings while encouraging a new generation of entrepreneurs. We can only hope that the trend picks up as it will boost the Lifesciences start-up ecosystem in India.

Blog by Ketki Tulpule, Ph.D. (Vice President, BD & Strategy at Rx Propellant)

About Rx Propellant

Rx Propellant is India’s leading life sciences infrastructure platform that helps companies scale while enabling them to stay asset light. With a rare fusion of real estate development expertise and an in-depth understanding of the life sciences sector, we hold a distinctive position within the industry. While our focus lies in infrastructure development, we go beyond mere square footage. We develop vibrant ecosystems that inspire innovation and collaboration.

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