Bangalore :

Bangalore-based Connexios, India’s first drug-discovery product startup, has signed its first out-licensing deal, marking a milestone for itself as well as for the Indian pharma industry. For Connexios, this sale of a set of its anti-diabetes molecules to German pharma major Boehringer Ingelheim is the first out-licensing deal by an Indian life-sciences company that is akin to a startup and whose only business is new drug discovery.  So far, only large Indian pharma companies, like Dr Reddy’s and Glenmark, have struck out-licensing deals.

Connexios declined to disclose the value of the transaction. But as per pharma industry benchmarks, deals of this nature generally involve upfront payments of $5 million to $10 million (Rs 30-60 crore) and milestone payments as the drug advances into clinical trials. “The deal validates our science and provides enough money to get other drug candidates to clinical trials,” says Connexios CEO Suri Venkatachalam.

The payments from Boehringer will be Connexios’ first significant revenues, after 10 years of operations. So far, all the company’s funding of Rs 140 crore has come from Nadathur Holdings, the private investment firm of NS Raghavan, one of the seven founders of Indian IT major Infosys — the largest by an individual investor in an Indian drug-discovery company.

Overall licensing deals are now a trickle in India, and Glenmark is the only company that has made out-licensing drug molecules a regular feature. “This deal is a morale booster for biotech startups funded recently,” says Nitin Deshmukh, CEO, Kotak Private Equity.

With about 180 people, Connexios has one of the largest teams in the world focussing on diabetes. The deal is important for it in many respects. First, it validates its science. Second, it validates its ideas about pipelines and what could make sense in developing drugs for diabetes. Third, it validates its ability to do deals, a very important aspect of business for a small or big company. “It is a good starting point for us to do drug discovery,” says Sriram Nadathur, director at  Nadathur Holdings. Connexios has now begun a journey that could take it to many different places depending on its ability and interest.

source: http://www.economictimes.indiatimes.com / The Economic Times /  ET Home> Industry> Healthcare-Biotech> Pharmaceuticals / by Hari Pulakkat, ET Bureau / May 06th, 2014