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Indian bio-informatics firm, Strand Genomics gets venture capital

Imran Qureshi, in Bangalore

India's first scientists-promoted bio-informatics company has received venture capital from UTI Venture Funds, marking a significant change in the attitude of fund managers.

Strand Genomics, set up by four professors of the prestigious Indian Institute of Science in Bangalore, also announced its first product -- Sphatika --, an image analysis software that reduces time for developing new drugs.

UTIVF has taken a 17.15 per cent (amount undisclosed) equity stake in the one-year-old Strand Genomics that is promoted by IISc, the four professors and several angel investors, including big names from the Massachusetts Institute of technology and Ramanan Raghavendran (Connect Capital).

"The best of technology start-ups in the US came from academic institutions like the IISc. We share the dream of the scientists to create a global bio-informatics company. We expect it to reach critical mass in 5 to 6 years. We will exit only after that," says K E C Rajakumar, CEO, UTIVF.

Venture capital companies, which lost a lot of money in the dotcom crash last year, have publicly expressed reluctance to back start-ups in the field of bio-informatics and bio-technology. Fund managers normally expect returns in 18 months in the IT sector.

"We cannot wait for 5 or 7 years for a bio-technology company to develop a molecule and reach critical mass," a leading venture capital company representative had told delegates at Bio.Com2001 some months ago, dampening the spirit of prospective entrepreneurs.

But Rajakumar was quite confident on returns.

"After the human genome project, a huge amount of funding from VCs has gone to biotechnology companies in the US. We believe it is around $30-50 million. Work from these companies is going to be outsourced to 'pure players' who will have a big role to play. This is where Strand comes in."

The four scientists of Strand Genomics, who continue to be on the faculty of IISc -- Vijay Chandru, Swami Manohar, Vinay Vishwanathan and Ramesh Hariharan -- are also part of the seven-member team that invented the common man's PC, the Simputer, which is going into production later this month or early December.

Strand's first product was developed in three months. Sphatika speeds up the determination of protein structures and cuts time by several months. It will play a critical role in monitoring industrial scale protein crystallisation experiments without manual intervention.

It can analyse over a million images a day over a Linux cluster and locate the images that require further processing, says Srinivasan Seshadri, CEO of Strand Genomics.

Right now, the total size of the market for protein crystallisation experiments is not more than $3 million, "but it will be several hundred millions in the next two years. This is an area in infancy," adds Seshadri, who was the CTO of Lucent Technologies before joining the scientists.

These technologies would ultimately help understand biological principles at a molecular level and reduce the time required for developing new drugs, adds Chandru.

"We are planning to patent it and we are holding talks with our lawyers in Delhi," says Seshadri. But the company has already signed a letter of intent with a customer for an exclusive license in "high throughput crystallography."

The company is basically laying out the infrastructure based on which the pharmaceutical companies could see dramatic changes in development of drugs.

The company has appointed D Balasubramanian, former director of the Centre for Cellular and Molecular Biology, Hyderabad, and currently heading the L V Prasad Eye Institute, on its scientific advisory board.

Indo-Asian News Service

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