The company provides database products to pharmaceutical companies for drug discovery and development. Betting big on the transition taking place in the global pharmaceutical industry, the company is now looking to grow through both inorganic and organic routes.
Molecular Connections is a joint venture between Idea2solutions, a venture capital arm promoted by the founders of Dr Reddy's group and a bioinformatics research centre in Singapore.
The mid-sized company has on its rolls about 200 employees with expertise in drug discovery, informatics and information technology.
With a view to gain newer customers and market access in Europe and Japan, Molecular Connections, headquartered in Bangalore, is planning to acquire a firm in Europe.
The European firm, employing around 200, is a provider of bioinformatics for customers mainly in Europe and Japan. The deal, involving 100 per cent buyout of the European firm, would cost about $10 million to Molecular Connections.
More From This Section
Speaking to Business Standard, Jignesh Bhate, executive director of Molecular Connections said the proposed acquisition will help the company get a front end in Europe and acquire a high quality team.
"We are in the early rounds of negotiations with the European firm. As of now, the plan is to keep the firm as a 100 per cent subsidiary of Molecular Connections so that the brand value of the firm can be leveraged."
Molecular Connections has its corporate and development centre in Bangalore and a marketing office in London. It has its distribution network in Japan, the USA and Germany.
The company is also planning to invest about $3-4 million to facilitate its growth through the organic route. It involves setting up offices in Europe and the US this year and opening a development centre in Singapore.
The company will fund its new ventures through a mix of internal accruals, foreign currency debt and raising additional equity, said Bhate.
Bioinformatics is the application of information technology to the management of biological information. It is used to gather, store, analyse and integrate biological and genetic information.
Molecular Connections offers bioinformatics products such as NetPro, CliPro and Receptome to some of the major drug companies including GSK Pharma, Pfizer and Merck.
NetPro is the largest database in the world on protein-protein interactions, said Bhate. An accurate study of protein interactions is critical to drug development as any shortcomings on this front may lead to severe side-effects caused by the drug.
Molecular Connections' products enable scientists to retrieve relevant information in optimum response time in a seamless fashion. This helps drug companies achieve higher accuracy and lower cost in drug development, he added.
US-based companies Ariadne Genomics and Ingenuity, and Bangalore-based Jubilant Biosys are the other significant players in the bioinformatics space.
Manufacturing efficiency and compliance to good manufacturing practices have become critical to business success in the global pharmaceutical industry which is characterised by increased competition, rising costs, reduced patent protection and stringent regulatory norms. Bhate sees in this a huge opportunity for bioinformatics providers.