‘We are in transformation phase’

Following de-merger of Avesthagen Ltd into three entities, Business Line spoke to Villoo Morawala Patell, Ph.D, the company’s founder and CMD, to discuss the future prospects.

Excerpts from the interview:

What are the key focus areas for Avesthagen Ltd?

The broad theme for Avesthagen is the convergence of food, pharma and population genetics, leading to predictive, preventive and personalised healthcare and food security. It is a holistic model for innovation and generating a pipeline of products using the existing bio-diversity of bacteria, food and medicinal plants, and human beings.

Avesthagen recently made its de-merger plans public. Can you explain the rationale behind this? When do you expect to commercialise your products?

Avesthagen is now in a transformation phase and it needs capital to take its products to the market. We were hoping to fund them through an IPO in 2008, but were forced to shelve our plans due to the meltdown. Now we’ve worked out a de-merger plan wherein Avesthagen Ltd will be spun off into three companies — Avesthagen Pharma; Avesthagen Nutrition and Ava Seeds with focus on pharma, nutrition and agri business respectively.

All three will be incorporated outside India in order to raise capital at the right valuation. The companies will have a wholly-owned operational subsidiary in India and Singapore to hold the patents and execute further development and clinical trials as well as to do region-based sales and marketing. The pharma company, Avesthagen Pharma AG, Germany was recently incorporated, and will be the holding company for the pharma business. Avesthagen Nutrition and Ava Seeds will also be structured on similar lines. Avesthagen Pharma AG is in the process of raising $60 million capital. Following this, Avesthagen Nutrition and Ava Seeds will raise $35 and $30 million respectively. Shareholders of Avesthagen will hold proportionate stake in the new entities.

The pharma business has a pipeline of eight bio-similars with a current market of $40 billion. Subject to successful trial completion and timely regulatory approvals, the first biosimilar drug Avdesp (Darbapoetin), followed by Avent (Enbrel), will hit the market by 2015.

On the nutrition side, we have AvesthaDHA, a 100 per cent vegetarian Omega-3 fatty acid used for animal feed. We recently signed a licensing agreement with a leading specialty chemicals company for this product.

In the agri portfolio, we have genetically engineered rice plants with a gene called superoxide dismutase which allows the rice to survive with limited water at the seedling stage — called Droughtfit.

We also have Salinityfit plant prototype with salinity tolerance up to 300 millimolar salt.

We have a technology called Nutritionfit which enhances the anti-oxidants in vegetables. We are also developing a technology for modified Jatropha line for enhanced biodiesel production and bioethanol from genetically modified pearl millet. Both these projects are funded by the Department of Biotechnology. We have used only plant genes in our food chain modifications, which we believe will appease both the NGO community and the common man.

Post the de-merger, what will Avesthagen’s focus be? How will it be funded?

Avesthagen Ltd will do what it does best: invent and create new technologies and products. The avestagenome project will form the basis of the phase II of innovation. It will involve delivering personalised health care and nutrigenomics (personalised preventive healthcare).

Under the personalised healthcare and nutrigenomics project, we have initiated parsi-genomic project under which we are collecting samples from the parsi community in India.

We will focus on getting information at the genetic, protein and stem cell levels to create new product lines for cancer, neuro-degenerative diseases and metabolic disorders. Avesthagen will continue to raise capital, in addition to the upfront payments it will receive from the de-merged entities.

How is a personalised healthcare programme different from other novel programmes?

Assuming both of us suffer from hair fall, the reasons for that may be very different. For instance, your problem may be due to a particular gene or environmental factor while mine may be due to some other gene or hormonal issue. So the treatment that works for you may not work for me. So we want to work at the genetic level, identify the genes and pathways linked to the disease and then design a therapy.

This project is now being done on Parsis. The reason being that this community has married among themselves for almost 1,200 years and so it is easy to find the gene linked to a disease. Moreover, as Parsis have a higher longevity and, hence, suffer from age-related diseases such as Alzheimer and Parkinsons.

Hence, this will help us study the genetic basis further and design a therapy — biological or chemical. Once this is done you have a diagnosis and a therapy, which is what we call personalised healthcare or targeted therapeutics.

Where do you see the three de-merged entities over the next five years?

All three have a very strong product pipeline. We are in the process of getting a top class team for all the three businesses. So once we complete the fund-raising exercise and have the management teams in place, the products will be launched.

Each of these three companies has potential to become a $0.5-1 billion company given the kind of products, over five-to-ten year time frame. All that is needed is for the companies to be well understood by the public and adequately funded to reach the goal. They are all set to fly.

On a personal note, what triggered the transformation from a scientist into an entrepreneur?

When I returned to India after completing my Ph.D from the University of Strasbourg (Louis Pasteur), France, and post doctorate in Belgium, I found a lacuna between the industry and academia that kindled my desire for novel research.

I received the Rockefeller Foundation grant and for the next four years I carried out my work at the National Centre of Biological Sciences, Bangalore. My first project was to develop rice for drought and salinity tolerance.

Using differentially expressed genes, I developed what is referred to today as Environment Adjusted Crops Technology for drought and salinity tolerance.

We filed some of the earliest patents on genes and transformation technologies. These patents provided a base to establish the platform organisation today called Avesthagen.

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