Biotech innovators fret over harsh laws, government funding dearth

From a lack of government funding for high-risk research projects to stringent laws tied to biodiversity and foreign exchange management, biotech entrepreneurs raised many concerns with the government at a recent startup conference - Indian Global Innovation Connect - convened by Smadja & Smadja Advisory in Bengaluru.

The biotech industry, which managed to win only $145 million out of the $73 billion raised by the entire startup sector in the last financial year, wants more help from the government on initiatives to nurture upcoming entrepreneurs.

Barring the setting up of the Biotechnology Industry Research Assistance Council (BIRAC), there have been few initiatives by the government towards research in this space, said Anandi Iyer, Director, Fraunhofer Office India, a German-based research organisation.

“There is not enough government funding in high-risk research. Only seed level funding is there,” Iyer said.

Healthcare startup founder Jagadeesh Gopalan agreed, highlighting how there was no Y-combinator type of accelerator for Indian startups.

“At least Rs 10,000 crore need to be spent on a good accelerator,” said Gopalan, who is a senior professor at the Indian Institute of Science and co-founder of Ykrita Life Sciences.

There is also a need for people to change the way they looked at research and development.

“Indian companies consider spending on R&D as a cost but not an investment. This needs to change,” Iyer said.

Some others stressed the need for major reforms in regulations and laws.

“The Indian Biodiversity Act does not allow any foreign company to tap into the Indian bio life to innovate and develop new solutions. As per the Act, any company where even a single share is held by a foreigner is considered to be a foreign company,” said Shrikumar Suryanarayan, the co-founder of Sea6 Energy, a technology developer that taps the potential of oceans.

Suryanarayan added that acts like the one around biodiversity and FEMA (Foreign Exchange Management Act) were too stringent in their nature, thus driving entrepreneurs to set up their bases outside India.

“Due to the tight laws, you see many innovators give up on the cumbersome procedures and relocate to Singapore or Delaware,” he said.

One such company which faced the funding winter in India was Bugworks, a clinical-stage biopharmaceutical firm which researches and develops affordable and accessible antibiotics.

“We raised about 95% of our funds from outside India,” said Anand Anandkumar, the co-founder of Bugworks. He hoped big pharma companies sitting on a lot of cash could invest in the budding entrepreneurial initiatives to take the industry to the next stage.