)
The new investment arm is shifting focus into a venture capital way of investment, with plans of raising a new fund under CNV. According to the management, CNV has got a lot of interest from investors who want to join hands to launch a new health care fund. However, the legal structure of the fund is not yet defined.
"Our plan is to create a new business for Cipla with a size of today's Cipla in the next 10 years," said Chandru Chawla, head of CNV. Cipla had appointed Chawla as head of New Venture a year ago. He joined Cipla in 2011 in the international business division, having worked in Lupin and Wockhardt, and took charge of CNV a year before.
Cipla has already made four investments through the investment arm, in Stempeutics, Chase Pharma, MabPharma and BioMab.
"As of now, we have three incubators under CNV -Ciptec, Biologicals and Consumer Healthcare. However, we keep expanding into newer areas which will suit Cipla's business opportunities," he said.
This is a first of its kind in India, where a pharma company is taking on a strategic investor's role to nurture smaller companies across the globe. "Every day, we are getting two-three enquiries, with interest for co-investments in various health care and pharma companies. We're seriously considering those," said Chawla.
He said Cipla planned to launch a new fund where outside investors can participate. "It's too early to disclose the nature of the fund. Cipla might act as anchor investor and bring outside investors or it might be a joint venture," he said.
Last year, the biotech industry in India had formed a new angel investors' group, termed Biotech Angel Network, in line with other such groups like the Indian Angel Network and Mumbai Angel Network, under ABLE (Association of Biotechnology-Led Enterprises).
Viren Mahurkar, chairperson at ABLE entrepreneurship and investment committee and MD, HitchinRock Advisors Pte. Ltd. said, "Bangalore and Delhi have seen the emergence of pretty robust innovation ecosystems and several interesting health and life sciences start-ups. However, these ecosystems have been incomplete because they lacked investors who are able to evaluate and take risks in R&D. Cipla and Indian generic companies have the capital and can hire the right talent to evaluate and take such risks. This will complement the few family offices and angels who have seeded such innovation efforts over the last few years."
CIpla New Ventures has already made 2 investments in biotech companies (25% stake in Goa-based MabPharm, and 20% stake in Shanghai-based Biomab) which focus on biosimilars (copycats of biotech drugs). "The world is turning out to be a biological-oriented industry. Seven out of top 10 selling drugs are biologicals. It caters to a small number of patients. Their values are becoming bigger and the treatment costs are fairly expensive," Chawla said.
"Private equity investors' horizon is limited as they always keen for exits with a decent return, while we, as a strategic investor with experience in healthcae space, can play lead role with understanding the complexity of work and plan accordingly in turning the company well," Chawla said.
