Biotech sector faces challenge of getting VC funding: Experts

MUMBAI: India's biotechnology industry is facing huge challenge of attracting venture capital though the Government is playing a key role in providing funds to the sector which is yet to attain a critical mass, experts said.

"There is a huge challenge in attracting venture capital into biotech space and innovation space due to long- gestation period," Biocon Chairperson and Managing Director Kiran Mazumdar-Shaw told reporters on the sidelines of 3rd annual `Bio India' conference here.

Venture capitalists want revenue-based companies for investment and most start-up biotech firms are not revenue based and having long-gestation period, she said.

However, the Government is playing a very key enabling role through incubation fund and seed capital. There are also a lot of angel investors coming into the biotech space. Once the sector reaches some level of critical mass, that would open door for more serious venture funding, she said.

The conference, organised by Biotechnology Industry Organisation (BIO) in partnership with Association of Biotechnology Led Enterprises (ABLE) saw the industry bodies addressing key issues in tandem with major players.

The industry captains discussed issues like strong intellectual property as well as patent enforcement, robust tax and regulatory system, strong support for R&D, safety and efficacy testing and approval process.

The participants said they don't believe compulsory licensing of innovative products or technology is an effective means of promoting access or affordability of healthcare.

It undermines incentives for companies and individuals to innovate in India since it creates uncertainty about receiving economic returns for their innovations, they said.

The issuance of guidelines on similar biologics is a step in the right direction, Mazumdar-Shaw said.

"The guidelines recognise scientific and regulatory complexities presented by the development and manufacture of biologic medicines," said BIO Executive VP, Emerging Companies and Business Development, Alan Eisenberg.