India to launch $360m pharma fund
The Indian government is contemplating launching an INR20 billion ($367 million) venture capital fund to invest in research and development (R&D) in the pharmaceutical sector.
Commerce and Industry Minister Anand Sharma said the government was in talks about setting up the vehicle with export finance institution Exim Bank. Sharma was reviewing the Indian drug sector with industry representatives and government secretaries in New Delhi on Tuesday.
Several pharma industry representatives raised concerns however about the viability of getting approvals from the country's Health Ministry. Sharma responded by saying that such worries will be discussed by a committee of secretaries which will include the commerce secretary, the Department of Industrial Policy and Promotion (DIPP) secretary and the drug controller general of India (DCGI).
India is the third largest producer of pharma products by volume and the sector is growing at a rate of 15-20% per year.
Compared to other areas of India healthcare, pharmaceuticals has been somewhat neglected as a target for private equity investment, due to the prohibitively high price of valuations.
The first private equity deal in the space in 2012 came in February, when Fidelity Growth Partners India invested INR2 billion for a minority stake in Aptuit Laurus. The four-year-old company manufactures active pharmaceutical ingredients (APIs) for anti-retroviral (HIV-AIDS), oncological and nutraceutical products.
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