Scientist-turned-serial entrepreneur Krishna M Ella has shown that Indian R&D can be driven by society’s needs, not western markets
Andhra Pradesh boasts several first-generation entrepreneurs, particularly in the pharmaceutical sector. Several have made a lot of money; a few have made it big. Krishna M Ella has done both — but with a difference. “We are a new generation of entrepreneur, driven to solve some of the problems of society. So, we don’t look at money or profit as the motive,” says the scientist-turned-serial entrepreneur.
An alumnus of the University of Wisconsin-Madison, Ella taught at Medical University of South Carolina at Charleston after completing his PhD. He wanted to return to India in the early 1990s. In 1994, he was approached by a large company that wanted to hire him as its R&D chief.
However, Ella discovered that research & development (R&D) at that company was seen as just a tax-saving activity. It wanted to utilise his expertise to develop a pineapple crop. “I told myself, this is not my game. I want to use my scientific expertise for the benefit of society,” he says.
Ella finally landed in India in 1996. His quest turned him into a bio-entrepreneur, which led to the birth of Bharat Biotech International (BBIL). Today, it is the largest producer of hepatitis-B vaccines in the world, with a capacity to manufacture 100 million doses a year. Started with an investment of Rs 12.5 crore, BBIL’s turnover last year stood at Rs 300 crore. Ella envisages a topline of Rs 2,000 crore in five years.
Ella, however, has not confined himself to BBIL. He set up Biovet at a cost of Rs 100 crore in 2005 to develop and manufacture products like foot & mouth disease vaccines. It is Asia’s first and the world’s second bio-safety level 4 (BSL-4) manufacturing facility.
That’s not all. Ella is building the Konark Knowledge Park in Bhubaneswar as a public-private partnership (PPP). Work on the project began in 2009 and will promote biotechnology, pharmaceutical and information technology industries. Investment in the park will be around Rs 100 crore.
Ella has also set up Innova Agri Bio Park in Bangalore at a cost of around Rs 17 crore. Spread over 90 acres, again as a PPP project, it aims to help farmers and consumers. It has a Gamma irradiation facility that not only increases the shelf-life of farmers’ produce, but also helps overcome quarantine barriers in international trade.
As if that wasn’t enough, Ella was also instrumental in setting up a biotech knowledge park in Hyderabad that culminated in Genome Valley. The project emerged from a presentation Ella made to then chief minister N Chandrababu Naidu, who acted on his recommendation to set up such a park. BBIL was the first to come up in Genome Valley, which currently has over 100 biotech units.
Ella’s foray into the corporate world has not been smooth. He conceived of producing the hepatitis-B vaccine in India in 1995 while he was still in the US. At that time, the vaccine was sold in the country at around $35 a dose. He wanted to make it available at an affordable price.
Accordingly, he came up with a project that envisaged an investment of Rs 12.5 crore and sale of the vaccine at $1. He presented his proposal to an Indian venture capital fund. The VC sanctioned the funds, but before the project could take off, there was a change in its management. The new management doubted the project could be set up at such a low cost and the vaccine could be sold at such a low price. So, it sanctioned the funds only after successful completion of Phase-I and II clinical trials.
But Ella needed the funds before clinical trials, not afterwards. So, he approached a British VC, which agreed to bankroll the project on condition that if execution was delayed even by a day, the VC would have the option of acquiring the company.
“The bottomline is they did not trust a scientist saying cost can be brought down with new technology. They only compared one company to the other,” Ella says, adding that one day he would like to write a book on this experience.
BBIL finally received funding through the promoter’s contribution of Rs 3 crore and IDBI’s contribution of Rs 2 crore to the equity. The remaining Rs 7.5 crore came as a loan from the Technology Development Board and IDBI Bank.
BBIL now is all set to become the first Indian biotech company to launch a new therapeutic molecule, a cardiovascular thrombolytic agent that dissolves clots in the arteries of the heart wall. It is also engaged in the development of a vaccine against malaria. “It is a high-risk product. We don’t yet know how well it will work. The chances of taking it to market are just 1 per cent,” Ella says.
But, won’t BBIL lose money if it fails to develop the product? “There will be no loss. The reason is that even though we may not come out with an entirely new molecule, we may come out with a better vaccine. Science is a step-by-step process. We have to keep testing and retesting.”
According to Ella, though process patent protection has catapulted the Indian pharma industry to a higher level, it has killed innovation. “We are only becoming an efficient process developer. For instance, Indian scientists are very good in chemistry. But they have not developed a single chemical molecule for the treatment of malaria.”
He says Indian companies and institutes should work on the treatment of malaria because it is one of the most important health problems in the country. “But we are driven by the market, not by society’s needs. We always focus on diabetes and cardiovascular drugs targeted at US and European markets.”
BBIL invests around Rs 35 crore a year on R&D. Its mission is to become an Indian multinational catering to the needs of emerging markets, which collectively have a population of 5.8 billion. “I am not looking at the markets of developed countries, which have a population of just 0.75 billion,” he says. Ella believes scientists must take risks and be innovative. As a scientist, he is committed to taking risks and combating infectious diseases. Public health is his priority.
