BALA'S FIVE OPPORTUNITIES FOR INDIAN LIFE SCIENCES PLAYERS

Bala is no pirate, but he sure has mapped where the booty is for India in the $1.4 trillion life sciences market 1. Biopharmaceutical Contract Manufacturing "Do the Japanese automotive number in this industry; get the process and quality right and the world will beat a path to your door" Bala is confident that India can do to the biotech industry what Japan so successfully did to the automotive one: mastering quality, efficiency, and costs to achieve a competitive advantage. Most biotech drugs (usually proteins) are discovered by small companies with little or no manufacturing expertise. There are some 300 of these in various stages of development right now. Bala is confident that Indian companies can leverage these facts to their advantage. The Biocon experience has proved that it is possible to build a hi-tech biopharmaceutical manufacturing plant in India for a fraction of what it costs in other parts of the world. Two other facts reinforce Bala's conviction: Big Pharma doesn't have the expertise to manufacture biotech drugs; and biotech successes such as Genentech and Amgen do not have the capacity to tap the contract manufacturing opportunity. 2. Tools For Biotech Research "Sell spades to the gold diggers; let them look for that magic molecule and we will make it easy for them" Reagents (materials used in research) and assays (tests that measure the effectiveness of and the responses to reagents) are key to biotech research. Bala estimates this market's value at over $10 billion and says there are no large players in the business. Expectedly, his latest start up, ReaMatrix is in the business; so is Bioserve, a company funded by the APIDC biotech fund in which he is a partner. 3. Hospital Services Outsourcing The emphasis today isn't on treating illnesses but maintaining wellness. That calls for screening, essentially the process of visualising and analysing images. This is labour intensive: for instance, if the 55 million women in the US decide to go through screening tests for cervical cancer every year, and one cytologist can screen 80 slides a day, the US doesn't have enough of the breed to screen all the women. Wipro is already tapping the radiography segment of the market, but Bala believes similar opportunities abound in nuclear medicine, magnetic resonance imaging, and the like. Then, there's the recent trend towards storing a patients entire medical history in digital form. More work. 4. Pharma Sales Support The populace in the US and Western Europe is rapidly graying. Older people, especially those in first world countries, are on multiple drugs. However, it isn't possible for a physician in these countries to spend his time explaining dosages and exploring for possible interactions-the process isn't cost effective. Bala is convinced a call centre run by trained professionals can provide this service. 5. Ayurvedic Pharmacopia There are a finite number of known allopathic drugs. And the search for new ones is prohibitively expensive. Bala is convinced Ayurveda holds the key. These medicines are non-toxic and have been used for centuries. Bala believes there is an opportunity to put them through allopathic style clinical trials and isolate the active ingredients and re-combine them to ensure that the output is consistent. Given the growing belief among pharma researchers that a cocktail of drugs can work better than individual ones (this is how Ayurveda has always operated), he could just be right. The Kottakal Arya Vadiyasala, arguably, India's best known Ayurvedic institution, is already documenting its drugs. The APIDC biotech fund has already funded a start up Indus Biotech that will tap this opportunity. Bala himself is helping the company design clinical trials and is also looking at the activities of the CSIR's labs in this area.

Bala who? Bala Manian will take that any day. "It's not about me; it's the message that is important," he repeatedly tells this writer. It's the man as much as the message, but we'll buy his argument. The message itself is nothing short of revolutionary: this one-eyed visionary-he lost the other in a school accident involving a compass-has seen the future of life sciences. Don't take our word for it? Talk to anyone who is anyone in life sciences and Bala's name is sure to come up. When VC firms such as Kleiner Perkins Caufield & Byers and Sequoia want a proposal from a life sciences company vetted, it is Bala they turn to. And the man is a veteran of seven start-ups, most in the life sciences area (he is currently on his eighth, ReaMatrix). Better still, Bala walks around with a sort of pirate's map of life sciences burned into his brain, complete in every detail, including prominent Xs marked for areas where opportunities exist for Indian companies (we've featured an abbreviated version on page 58). Some message, that.

Now 60, Bala didn't always believe that India has what it takes to make it in the life sciences business. The irony doesn't escape Narayan Vaghul, his elder brother. "I spent many years convincing him about India and he would come up with reasons why it wouldn't work." And so, for well nigh 40 years, Bala lived life as an entrepreneur-scientist-technologist-VC in the US. Just for kicks, his first company, Digital Optics developed the technology that was used in creating special effects for motion pics such as Indiana Jones And The Last Crusade and Return Of The Jedi; in 1999, the Academy of Motion Picture Arts and Sciences awarded Bala a Technical Academic award for this technology.

In 1998, Vaghul, then on a visit to the US told Bala how it cost a tenth what it would in the US to build a lab in India. Bala was sure his brother had got it wrong, but Vaghul (as one would expect from the chairman of a bank) knew his numbers; besides, he had been spending a considerable portion of his time trying to build a biotech park, an effort in which his collaborators were former HLL Chairman Ashok Ganguly and Central Scientific and Industrial Research (CSIR) Director-General R.A. Mashelkar.

Back in India, he sent the details to Bala who wasted no time in building a network he could leverage in India (See The Network Is The Individual). "Well, I have to be excited every morning I am awake," he says. "Till recently, that was not possible out of here; today, it is." Bala was very clear on what he would do in India. "Eugene Kleiner (the Kleiner in KPCB) who funded my first start up told me that if I were going back to India I should model myself on the venture capital scene in the valley in the 1970s." That would involve early-stage funding (something that both brothers agree hasn't really been practised in the right spirit in India).

That's more or less what Bala has done in his frequent visits to the country (every four weeks or so): tapped contacts, built new ones, started up a company, ReaMatrix, and served as sounding board or advisor or both to venture capitalists and companies alike. ReaMatrix could well be India's first real entry into commercial nanotechnology, the science of working with materials at the atomic or molecular scale or creating new material or machines, a few atoms at a time.

Nanotech has the potential to change an entire slew of disciplines, including life sciences. Take the drug discovery process, for instance. Today, a critical part of this is mapping reactions at the cellular level. One way to do this is to attach tiny semi-conductor crystals called Qdots or Quantum dots with specific colour emission properties to the molecules or cells (cancer cells, for instance). When illuminated by light, the Qdots of different sizes glow in different colours.

This enthralling cellular display is on at Peenya, an industrial suburb on the outskirts of Bangalore where ReaMatrix is based. "I want to do an East India Company in reverse," says Bala. The office is nearly empty. A PhD in white lab coat mans the reception. The others are in Mysore for a colleague's wedding, explains Bala, dressed in valley-chic: dark trousers and black shirt.

The reference to the East India Company is in sync with ReaMatrix's business model: ship proteins and antibodies to India, mark them with Q-dots, and ship them back to the US. "Didn't the East India Company ship raw materials out of here and then ship the finished product back here?" he laughs.

The Man. The Message

Mapping a space-much like Bala has done with life sciences-requires an understanding of the underlying theoretical concepts, awareness of the work that is being done in the area, contacts in companies and institutions at the vanguard, hands-on experience managing companies in the business and the ability to connect the dots Bala understands the entire life sciences chain. When he doesn't, he taps those who do. "When I wanted to learn immunology, I gave Stanford a little grant; they let me attend lab meetings," he chuckles.

Bala's ongoing passion is to map the life sciences space and point out areas where India has an advantage (or an opportunity or both). Every additional piece of information he comes across, every new person he meets, every new technological innovation he encounters alters the map.

Information is the currency of choice in today's knowledge economy and Bala has enough of it to serve as, arguably, one of life sciences' most prolific information-exchange. So, when Bala comes across something that doesn't quite fit into the picture, it is like a puzzle he has to solve. He reads up, calls people he knows, and generally works at it till it does.

That explains his knowledge of the Indian life sciences space. Reliance Life Sciences? Technically excellent in stem cell research but has to find a business model, he says. Biocon? Has proved it is possible to build a biopharma plant in India at a fraction what it costs elsewhere.

One of Bala's big ideas is to tap what VCs call "the US-India corridor". This essentially involves breaking work up between the US and India and is something India's software firms have been doing for long; however, it is a revolutionary concept in life sciences and the Andhra Pradesh Industrial Development Corporation's biotech fund in which Bala is a partner hopes to exploit it.

The software firms understand the dynamics of the corridor and Bala has been spending time with July Systems' Ashok Narasimhan and Moschip's Ram Reddy to get up to speed. "He is a guru, a true imparter of unbiased knowledge," says Vivek Sekhar of venture capital firm 2i Capital. Sekhar knows Bala through a mutual friend, an investment banker on the US East Coast. "If we ask him advice about a company, he comes back with holistic feedback- on the people, market, technology, users, clientele; it's brutally honest."

Others echo Sekhar's opinion. "Bala is our mentor," says T.K. Kurien, the CEO of Wipro's health sciences business. "We have no commercial agreement with him, but every time he comes to Bangalore we buttonhole him." So, when 2i is considering an investment, or Wipro an acquisition in the life sciences domain, it is Bala they turn to.

They come to him largely because of who he is and how he works (think open source in terms of information sharing). And they stay with him because of what he says. His counsel to Wipro: look for inefficiencies in the pharma research and manufacturing process and come up with solutions that can work out of India.

So, how does the message-minded Mr Manian like to be remembered. "I am a Hindu," he says. "And I'll be cremated." "But if I had an epitaph, I'd like it to have what Eugene Kleiner said of me." That goes something like this: Bala will treat your investment as his own, you will always know the truth, good and bad and if he encounters a problem he will try and figure it out or will find the person who will help him figure it out no matter what.