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VILLOO MORAWALA PATELL
Founder and CEO, Avestha Gengraine Technologies |
As
a 10-year-old at Hyderabad's prim St. Anne's (boarding) School for
girls, Villoo Morawala would routinely add to the despair of her
teachers, mostly Italian nuns, by making it a habit to push her
chair back to the tipping point. Thirty eight years on, a child's
playful defiance has turned into an adult scientist's abiding quest
for pushing the frontiers of biotechnology. Morawala, now Patell
and mother to two girls (Farah, 22 and Sanaya, 20), is the founder
and CEO of Avestha Gengraine Technologies, a three-year-old biotech
company (yes, she was 45 when she started it!) that is defying popular
wisdom-which is to do something that fetches money every quarter-to
bet on basic research.
That makes Patell's Avesthagen-which draws
the first part of its name from the Zoroastrian holy book, Zenda
Avestha, or book of knowledge, and the latter part from a combination
of words Gene and Grain-the only biotech start-up of its kind in
the country. Biocon, another Bangalore-based biotech player founded
by a woman, Kiran Mazumdar Shaw, started as an enzyme company and
still does bacteriology-based biotechnology, which mostly does not
involve creating a new product from scratch. Strand Genomics, again
Bangalore based, is a bioinformatics company that makes software
for drug discovery and development. Shantha Biotechnics, a biotech
player in Hyderabad, makes recombinant drugs, which involves experimenting
with two existing drugs to create a new, more effective drug. So
basic research is still a no, no for most.
Not surprising, because a business model like
Avesthagen's is not terribly lucrative. In fact, in the last three
years, the 96-employee, privately-held company has earned a bare
$2-3 million, or Rs 9-14 crore, in total revenues, although it has
sunk Rs 45 crore in investment. Sure, the company has filed for
42 patents and obtained seven, but profits are non-existent. The
company hopes to break even in the current fiscal, but that still
leaves Avesthagen and its two subsidiaries, AvGen Inc. and Avesthagen
Quality Agriculture Services (AQUAS), perennially scrambling for
funds.
Understandably, then, there are people who
dismiss Patell as a biotech romantic, whose stated mission (''to
improve productivity in agriculture and develop agro-technologies
that would lead to value addition in food and pharma products'')
and chosen route are at odds with business logic. Says a Bangalore-based
venture capitalist who has been watching the company, but did not
wish to be identified: ''I have the highest respect for Dr Patell
as a scientist and an individual, but I have doubts about Avestha's
ability to deliver. They are too confused about their business model,
there's too much emphasis on basic research, which is a more misses-than-hits
game.''
But that's something Patell-a petite, short-haired
woman, with dark brown eyes and a strong-set jaw-has been hearing
ever since she launched Avesthagen as a concept at the University
of Agricultural Sciences in Bangalore, where she was a professor.
In fact, the first person to tell her so was the otherwise prescient
Dr K. Anji Reddy of the eponymous pharma company in Hyderabad. Although
Reddy, an old acquaintance of hers, did give her Rs 50,000 to put
together a project report, when it was done (she titled it From
DNA To Drugs) he merely heard her out without committing anything.
''He made polite noises, but basically thought the project was ahead
of its time,'' recalls Patell.
Doing the rounds of venture capitalists proved
even more disappointing. All of them wanted to know just one thing:
What was the revenue model of Avesthagen and when would it turn
cash positive. ''My numerous explanations that I was out to create
IP (intellectual property) in the genomic space and that the services
part of Avestha was fundamentally different and would take time
to break even, fell on deaf ears,'' says Patell, whose affluent
forefathers moved to Hyderabad in 1920s on invitation from the then
Nizam. So, in September 1999, she was surprised when one state-funded
venture capital firm showed a keen interest in funding her. But,
of course, there was a catch: It wanted half the company for a paltry
Rs 1.5 crore. It was a moment of anguish. Patell had to decide whether
to accept the humiliating offer or abandon the whole idea of setting
up a plant biotech company.
Summoning every ounce of courage in her, Patell
decided to do neither, instead make one final attempt at tapping
friends for funds. In 1999, when all this was happening, Keon Wentink
came to town. Wentink, a Dutch national, had been a student at ICRISAT
(International Crop Research Institute for Semi-Arid Tropics), where
Patell used to do research before she left for a PhD at the Louis
Pasteur Institute in Strasbourg, France (that's another interesting
story we'll come to in a moment). Wentink heard Patell out and decided
to invest his life's savings as an angel investor in Avesthagen.
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India has some of the best scientists in
the world but very few entrepreneurs. The price of failure is
too high |
The first two years of Avesthagen at the University
of Agricultural Sciences, before it was spun off as a separate company
in 2000, was funded out of the money put in by Patell and Wentink,
and two research grants from the Rockefeller Foundation. Then, the
tide started to turn for Patell. ICICI Ventures came in as an investor
in March, 2001, investing $1.5 million for a 25 per cent stake.
GTB chipped in with Rs 2 crore, and four months later, Tata Industries
put in another Rs 1 crore. Says Renuka Ramnath, MD & CEO, ICICI
Ventures: ''Villoo is very passionate about the job she does. Inner
strength and confidence in herself are the factors that have helped
her come so far.''
You can say that again. Patell was already
31 years old, married for 10 years and a mother to two daughters
when on an impulse she decided to chuck up her job at ICRISAT and
pursue higher education. ''After 10 years at ICRISAT, I was bored.
The work was repetitive and tedious. I wanted to do things differently,''
recalls Patell. Through a mutual acquaintance, she met a professor
of molecular biology from the Louis Pasteur Institute. After a three-hour
discussion, he agreed to take her on as a doctoral student. So at
the age of 31, Patell found herself moving, family in tow, to France
to make a new beginning.
After six years of research, Patell got her
PhD and came back to India. This was when she initiated efforts
to start a company (she had not decided on Avesthagen till 1998,
she says), but was rebuffed by all the VCs she approached. In 1995,
she moved to the University of Ghent in Belgium for post-doctoral
work. This is where Patell's resolve to return to India and set
up her own biotech company would get strengthened. Here' s what
happened. During her stint in Belgium, Patell closely observed a
company called Plant Genetic Systems (pgs), which despite a 13-year
history only had patents to show, but no revenues. Yet, it was considered
a hot biotech company. In 1996, pgs was scooped up by Hoechst for
a whopping $800 million. ''I could not believe it. I then began
to understand how valuable IP could be and decided to build a research-based
company in India,'' says Patell.
Returning once again to India, she joined the
University of Agricultural Science in Bangalore, where she resumed
her efforts to launch a company. To start with, she used the university's
resources to get working on her ideas. Her first experiments were
on developing drought resistant strains of rice and other hybrid
seeds. You already know what happened when Patell set about wooing
investors. Laments she: ''India has some of the best scientists
in the world but very few entrepreneurs. The price of failure is
too high.''
Fortunately for Patell, either there's no dearth
of risk-taking scientists or her conviction and enthusiasm are infectious.
For example, take Victor Moreno, a PhD from Cornell University and
former director of R&D at both Nestle and Procter & Gamble.
In October 2002, Patell met him through a mutual acquaintance in
the US, and lost no time in selling him the biotech opportunity
in India and particularly Avesthagen. Recalls Moreno, five feet
six inches tall with a head full of shocking snow-white hair: ''Here
she was explaining to me what she wanted to do and how she planned
to go about it. It was simply amazing.''
Six months later, Moreno, who incidentally
was involved in the development of P&G's famous Vicks lozenges,
was on board Avesthagen as the head of its US subsidiary, AvGen
Inc., which focuses on developing nutritional compounds for drugs
related to diabetes, obesity and bone loss. Wentink's decision to
join Avesthagen was also settled by Patell's conviction. Says Wentink,
CEO of the group's services subsidiary, AQUAS: ''What attracted
me to invest and join Avestha was Villoo's vision, commitment and
research capabilities.''
Other top scientists at Avesthagen, such as
Rajyashri K.R. and Swati Bhattacharyya, have also come on board
simply because the start-up gives them an opportunity to work on
the cutting edge of biotechnology. That, however, doesn't mean that
researchers at the company get packets of gm seeds for pay. All
employees have stock options.
Because she's passionate about what she does,
Patell can sometimes seem like a control freak. For example, she
likes to look at every piece of scientific documentation before
it is sent out of the company either for filing of patents or for
any form of public disclosure. The lady herself bristles at such
allegations. ''If I don't part with a major chunk of the company
for an unreasonable price, and if I want to be kept informed of
all important developments, does that make me a control freak?"
she asks.
To be fair, Avesthagen is at a stage where
it demands-and, indeed, does get-the full attention of Patell. So
much so that ask her what her biggest challenge has been and she'll
tell you that it is in making sure that her family doesn't get totally
neglected. ''I don't think I've been able to spend as much time
as I would have liked to with my children when they were growing
up,'' says Patell. ''So is the case with my husband.'' Her hubby
Zareer, a martial arts instructor and the owner of a chain of gyms
in Hyderabad (he's also an ace jazz pianist), has been her pillar
of strength, even as Patell rode the highs and lows of her dream.
Her efforts, though, have started to bear fruit.
Two months ago, Avesthagen received US patents for transgenic modification
(GM) of everything from basmati to maize. With that come potential
licensing deals with seed companies. For example, its transgenic
Basmati 370 allows seed companies to create new hybrids cheaper
and faster. Says Patell: ''The seeds based on our technology will
be available in less than a year with the gm tag. As only plant
genes are being used, we do not expect any farmer or consumer resistance.''
The technology can be applied to anything from
rice to cotton to maize to even vegetables like brinjals and tomatoes.
In other words, every plant that has a commercial hybrid seed available
in the market can be transgenetically modified using Avesthagen's
technology. The company does not, however, plan to get into seed
production; it will license the technology to seed companies to
produce and distribute.
Even as things look promising, Patell knows
that each of her companies-eventually Avesthagen will be holding
company for the two subsidiaries and a third joint-venture company
that it is setting up with the government of Kerala for phytopharmaceuticals-needs
oodles of more money to pump up R&D. It may be years before
serious money starts rolling in, but Patell is loath to shift focus
away from her basic-research-to-services model. ''We cannot be a
me-too player. If for that reason some business is missed, so be
it,'' she says. Her critics are right: She is a biotech romantic.
But for our sake let's hope she stays one. Incurably.
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