Box 2. Case study: Avestha Gengraine Technologies

Avesthagen (Avesthagen, Bangalore) is a private, spin-off company from the National Center for Biological Sciences and the University of Agricultural Sciences in Bangalore. The company started in 1998 at Villoo Morawala Patell's laboratories and has since expanded to nearly 200 employees, with a long-term goal of becoming an integrated drug discovery company. Its initial agricultural biotech focus has since expanded to include pharmaceuticals and nutraceuticals. Avesthagen currently has significant in-house basic biology skills, employing over 130 employees in its R&D program. The company is also expanding its manufacturing facilities and has local partners for conducting clinical trials.

Patell's initial work was supported by several prestigious grants from institutions, such as the Rockefeller Foundation (New York), the Indo-French Center for the Promotion of Advanced Research (IFCPAR; New Delhi, India), and India's Council of Scientific and Industrial Research. In 2001, the company raised $2 million from Industrial Credit and Investment Corporation of India (Hyderabad) Ventures, Tata Industries (Mumbai) and Oriental Bank of Commerce (New Delhi). Other strategic investors include India's Godrej Industries (Pirojshanagar, India), Cipla (Mumbai, India) and France's bioMérieux (Marcy L'Etoile, France).

Because of financial limitations, Avesthagen relies on extensive domestic and foreign collaborations with companies and research institutions (Tables 4 and 5) to develop new products and apply novel processes to basic drug discovery. Its pursuit of collaborative codevelopment projects is designed to bolster the company's financial position in the longer term, through shared IP, manufacturing or marketing revenues. Currently, 60% of its revenues come from pharmaceutical and diagnostics projects, 30% originate from the nutraceutical segment and 10% are derived from agricultural biotech products. The company is now in a position to invest in cash-poor foreign firms with innovative technologies to expand their product portfolios and has entered into a number of joint ventures (Table 2). In early 2005, it acquired Good Earth Foods (Bangalore, India) to expand its foray into branded nutraceuticals.