Transcript
Speaker: Something like an Olympic, what's the process it would have gone through, like from the discovery till go to market? The innovator would have gone through probably some easily inov anywhere between eight to 10 years of work before they could actually commercialize. The first Hepatitis B vaccine after seven years of research. Some cancers leave a wound that keeps people awake. Venkat is developing the treatment for it.
Speaker: He's the co-founder of Yom Holdings, a drug discovery company listed on the Nasdaq. And he's spent 25 years in a business affecting everyone but understood by almost no one. On this episode of the Founder Thesis Podcast with Akshay Dat, Venkat explains the business of medicines, why new medicines take 10 years to commercialize, and why India doesn't make any breakthrough drugs. You were saying that India doesn't have companies which are doing novel research. Probably the reason is that there are no VCs which are funding it. Nobody ever focused on novel medicines and nobody had even knowledge of there's something called novel medicines which is doing extremely well in the US. I never had to go to investors. Investors have come to me because
Speaker: Venkat, welcome to the Founder Thesis podcast. ah You're the founder of Viome, which is a pharma startup, and you've been in the pharma space for most of your career, two and a half decades now, I believe. So I'd like to first take this opportunity to understand pharma as a space. You know, what are the ah What does this space include? What are the different kind of companies or different kind of business models within this space? And if you could take names also as examples to help my audience understand the space better.
Speaker: Yeah, thank you, Akshay. Thanks for this opportunity to do podcast with you. ah Briefly about myself, I'm Venkat, currently based in USA, Princeton, New Jersey. I am the co-founder and CEO of Wyoming Holdings, a NASDAQ listed company.
Speaker: And, um you know, I have ah been an operator after my MBA at Indian Institute of Management, Ahmedabad, you know, for in pharma, biotech, and even in consumer product companies.
Speaker: Before co-founding this company along with the Harvard professor, Dr. Shiladitya Sehgupta. So in terms of addressing your specific question on the pharma industry, you know, if you see the global healthcare, care there are broadly four five segments.
Speaker: One is medicines, pharmaceuticals. so ah The another other one is medical devices. And the third one is healthcare services. Then there is health tech, you know, that started with the consumer internet revolution.
Speaker: So I'm going to specifically focus on pharmaceutical medicines. ah pharmaceutical, ah the total industry, global industry, from a value point of view, close to 1.6 trillion or so ah dollars. And a good 50-60% of that business comes from the U.S. Now, again, within pharmaceutical space, there are two broad categories.
Speaker: but ah One is new medicines or patented medicines. Another is generics. and within ah genetics you have to again broad spec segments what we call bulk drugs or active pharmaceutical variants which is the basic active raw material that goes into any medicine whether it is a tablet or an injection not a um or a cream or ophthalmic drug and the other one is the finished products Obviously, genetic in terms of value is a very smaller percentage of the total pharmaceutical market. It's around maybe 20-25% of the total
Speaker: What's an example of a generic drug? like What does that mean, generic? Generic means ah an active pharmaceutical ingredient or a finished ah form finished product that has gone out of patent and where there a lot of players who can actually copy the drug or who have no restrictions on copying the drug and selling in the market, whether it is in India anywhere else.
Speaker: Like say, crocin? In terms of examples, it could be a regular paracetamol or it could be regular amoxicillin, a regular antibiotic that is used. And there are many such generics. There are hundreds of generics out there um which have kind of gone out of patent and therefore anybody and everybody can copy them.
Speaker: and They have no restrictions in terms of marketing such products. That's a broad definition of kind of generics. And ah the new medicines are something that is protected and there are a lot of investments that go in and developing such product.
Speaker: And a lot of risk out there in terms of and all success versus failure. So that's what we call as patented medicines. Like, for example, Ozempic would be an example of patented medicine.
Speaker: Yeah, was MPEC could be an example of patented and it's kind of going out of patent. That's why you see now generic competition coming in. and And there are a lot of new drugs that are recently discovered biologicals.
Speaker: If I have to give you a couple of more examples, It could include some of the, let's say, CARP-T therapies, Ketruda, which is used in advanced cancers. It's patented drug.
Speaker: and I don't think it's even present in India at this time. But globally, it's available in the US. and So there are many patented drugs. ah But in terms of number of prescriptions, they contribute to less, but the value is very, very high, which is why in the total value market, generics is only 25% and new products is close to 70-75%.
Speaker: And again, U.S. takes the lion's share.
Speaker: So that's how the the industry is kind of broadly categorized. um So there are people who work on new products, and know including from India, handful, but U.S., the China, there are many companies who work on it.
Speaker: It's a kind of high-risk and high-reward game. It's actually, I would say, medium-risk if you do it smartly, like the make we do things, and but very high-reward if it is done successfully.
Speaker: The risk comes from ah having to invest upfront ah to get a patent? um It's not just getting the patent alone. It's about actually doing all the research in developing the molecules and subsequently bioformulation, testing on that.
Speaker: But toxicology work on you know on animals and then testing in humans phase one, phase two, phase three, that takes a lot of money. That's why you know before you get the product approved, before you're able to start generating revenue, menu So that's why you know it takes a lot of investment. So the risk happens before even products start seeing the returns.
Speaker: But the risk needs to be managed well david with a 360 degree understanding and smarter selection of products and smarter selection of for diseases and the way you actually plan clinical designs.
Speaker: Say something like in Ozempic, what's the process it would have gone through? Like from and the discovery till go to market? Just for me to understand what is the process of... Yeah, so the the the innovator, um you know, would have gone through probably some easily between anywhere between 8 to 10 years of work before they could actually commercialize whichever market they could commercialize first either Europe or US.
Speaker: So they would they would have gone through you know what we call selection of the actual molecule, the chemical structure of it by screening. ah probably hundreds of them, if not thousands, ah for the basic chemistry, stability, chemical stability, and chemical integrity of that molecule itself, then they would have tried to do formulations with this, you know, to start with, they have done and injectables and stabilize the Trawlite. Then they would have so tested many such leads of those molecules in...
Speaker: various in vitro laboratory conditions to see the both the toxicity as well as the efficacy of it in the in vitro sense ah in vitro what does that mean like in vitro means what you do in laboratory in a dish okay that's all it will it will mimic ah human cells basically and it can it can be made in some tests in chemicals some tests on cells human cells or some tests on animal cells but basically there is no live ah animal or human in the world okay
Speaker: Then you do go through a lot of tests on animals and then you go through a regulatory process of you know getting it manufactured under GMP, good manufacturing practices, conditions.
Speaker: Then you do a lot of a good laboratory practices, rigorous toxicology tests on animals and then go through a human clinical trial of phase one, phase two, phase three.
Speaker: in terms of time and effort it is the clinical trial that takes more time and more cost very significantly high cost and that so this is where you know so this the process can take it to 10 so the process is optimizing for the actual molecule selection among many ah leads that you have then looking for the stability and the chemical integrity of that molecule then for the formulation if it is an injectable injectable Then in parallel testing, you know, a lot of, you know, such leads in, know, in vitro testing, which is testing in this using, you know, any, any, anything like could be human cell or an animal cell, or it could be even some, ah some chemical kind of testing.
Speaker: And then you go through the actual animal testing in, ah highly controlled, quality-assured laboratories, then you go through the clinical trials. And clinical trials is where the maximum time and cost goes.
Speaker: And how much time goes into clinical trials? And what does each phase do? You said there's phase one, phase two, phase three. Phase one establishes safety. And probably early, if you can see, if you're doing on the deceased patients, but if you're doing unhealthy water, it just establishes safety and availability of the drug in the blood.
Speaker: And phase two is early efficacy and trying to see multiple doses. And phase three is a large, it's a very large trial in relation to phase two, unless it's a rare disease where you test for a hypothesis and where the control measures are very stringent.
Speaker: so that you have a proper approval by any of the regulatory authorities of any country so that people are convinced that the Traveen lead works.
Speaker: And how much time does each phase take? Phase one is typically small. it could take anywhere between six months to one year based on the disease and the rarity and the recruitment. v And phase two can take anywhere between one and a half years to two years.
Speaker: Phase 3 can take anywhere between 2 3 years. Again, it's based on the disease, based on the number of patients, based on the rarity. These are just all indicated timelines. Things can vary, you know, a little bit here and there.
Speaker: Okay, understood. ah What does India specialize in? I believe India has a strong pharma industry, but it's mostly in generic side, like say a CIPLA all these household names that we have heard of. Are they doing drug discovery and patented drugs or are they into generic manufacturing?
Speaker: Yeah, until very recently they've been focused on generics, both the the active pharmaceutical ingredients, that is the main raw material that goes into pharmaceuticals, or they're focused on generic final products, formulations.
Speaker: They also have entered into what we call biosimilars, that is a generic version of a biological product, not a chemical product, a chemical pharmaceutical. ah And they've been successful at it.
Speaker: But India, you know, except leaving one or two big companies, Indian big companies like Sanpharma, and not doing much on the real ah novel, first in class or first in world type of innovative medicines.
Speaker: ah And even in terms of startups, ah it's just been a handful of situations. Though there is some granks by Bairac, you know, for some scientific enthusiastic startups, but in terms of scale, there's only a handful that happens in novel pharmaceutical drug discovery type of companies.
Speaker: Yeah, but but that is the way to go for India to move from general. In terms of value realization, and a lot of it is talked about it, but... That's a different subject altogether if you want to really get it.
Speaker: Something like a Biocon, what does Biocon do? Biopon as a company, it does, ah see there are two types of kind of molecules in a pharmaceutical. One is a what we call a small molecule, which is kind of a chemical type of molecule.
Speaker: Now that is a biological, a biological means it's made out of human biological material. So biopron has been doing, you know, what we call the name suggests they have been doing the generic versions of biologicals.
Speaker: Okay. So they've been doing generic version. They do ah have some small molecules, but see insulin. Insulin is actually made out of ah a a protein that is originally sourced from humans, but they produce that protein ah and scale it up, you know, by producing large vegetables through certain metallologies.
Speaker: But that technology is not new. It is it is already done by the the big pharma in the U.S. or in Europe, and the product got launched. They made a similar product.
Speaker: So it's, in some sense, it's a genetic version in biologibles, not in the chemical type of molecules. so they didn't focus on that and they were pretty successful there and they still continue to be focused on that ah ah but but I wouldn't say that they got into novel biologicals ah in a big way I know they're trying to do a couple of things there but it is kind of nowhere near ah what happens to let's say let's say in the US or China in terms of novel biologicals
Speaker: So, Biocon is a lab or a manufacturer? Biocon is an integrated company. They have RLD, they have manufacturing, they have marketing, and they have everything that they're like a big 360 degree company.
Speaker: But their RLD had been focused on biosimilars and... ah And they but they need their manufacturing, most of it their own, because manufacturing itself also is a critical kind advantage ah or or a critical success factor in terms of how you do manufacturing by complying with the U.S. recreations indiaa recreations european rec regulations, regulations.
Speaker: So that's a skill set and that's an intellectual property you know in a kind of direct sense. So they invested there and they do also have marketing arms, a regular branded the you know formulations in India um or partnerships with a lot of other companies and globally or own marketing in the US.
Speaker: So it's a kind of an integrated large company. Okay, okay. and Understood. as a As a group, they have lot of other companies, including CDMOs and CROs, which is, you know, which is just what we call pay-for-services without any ownership of IP or anything.
Speaker: So CRO is a clinical research organization. Yes, it's a clinical research organization where they are the service providers. So they it's like a lab on hire in a way.
Speaker: It's a company on hire ah for conducting clinical trials. Okay. Okay. The human phase one, phase two, phase three, those trials. But they do work who have a similar kind of contract research organization. It's actually C&O is not clinical research organization. It's contract research organization, which is called paper hire.
Speaker: Okay, ah so they also have CRS contract with research organization for animal testing, ah what we call non-trinical work. And they have CDMOs.
Speaker: See CDMO means contract development and manufacturing services. This is with respect to the actual product, nothing to do with the animal for humans. It's with the actual product. Okay. Okay. Okay. Understood. Okay. ah So now, you know, um take me through your journey. If you can like connect the dots, you would have possibly 2011, you started Viome. You would have connected the dots somewhere, seen some gaps in the pharma space because of which you started it out.
Speaker: ah You know, but what had you seen over your career in pharma space, which led you to want to start Viome? So, you know, marra after my management, i was more focused on marketing, business, finance.
Speaker: So I was president at this consumer product company called Cubbing Kit from Chennai. when When did you pass out from IIM Ahmedabad? Started in 1988.
Speaker: Okay. And you became president by 94. 94, 95 actually, more precise. So, seven years out of college, you are the president of one of the divisions of Cavincare, the consumer division of Cavincare.
Speaker: Cavincare had only one division that time. So, you are the president of Cavincare. How did that happen? Seven years out of B school. I taught him as a marketing controller and it was a very ah interesting journey and something that was very close to my heart carrying from education at IIM Amtabhad.
Speaker: So... if ah you know So when I joined, ah they had some you know very niche brands that needed to be scaled.
Speaker: They had this brand called Chick Shampoo, Meera Hairable Powder, and which is also for hair wash, and Nyla Hairable Shampoo. And then we launched a plethora of brands after I have joined.
Speaker: um But but the the the beauty of that is that it had its own niche, but it was suffering, you know, for Norek to have scape, both from a brand building point of view and sales and distribution, and then the remaining 360 degree integrated, know, what we call killer building approach.
Speaker: So that's where... What building, sorry? Killer? I mean, multi-pillar building, like human resources, finance, okay ah the multifunctional, you know. See, when you build an organization, you need to build all pillars simultaneously.
Speaker: Then only, you know, you know you can build a what we call a house with multi-floors. You know, if youre if you if you build, focus just on one pillar, but don't focus on others.
Speaker: You know, you may not have, you know, a scale that can last and can collapse anytime. So that's what I meant here. so So we started i started though when the company was just 25 crores. Then I left when I grew the company in five to six years, ran to 200 crores. And then I left.
Speaker: You didn't tell me how you became a president in seven years. be I joined as a marketing controller. And within one year, given my approach, And my passion, and of course, a lot of work that went in in terms of streamlining sales and distribution, initiating that new brand launches.
Speaker: um I think I got recognition and the promoter made me the president within one one and a half years, the time that I worked in that company.
Speaker: And I was running the whole business. ah ah And ah then the journey continued. So I think I joined when the turnover was 20-odd crores. I became president when it became 35-40 crores.
Speaker: Then I continued till, you know, we kept 100 crores in five to six years' time. ah with With, again, all-rounded growth of multiple brand launches, consolidating the existing brands, building the teams, you know, across all divisions, meaning marketing, sales, finance,
Speaker: ah building new IT systems, you know, so I would say it's all all rounded and everything kind of synergized well to kind of give that final result. So essentially like you would have joined a, like a promoter driven company and professionalized it.
Speaker: Yeah. You're right. Absolutely. Completely professionalized it. And promoter also has been very receptive to that idea.
Speaker: So that's how that journey was. So that kind of putin take took me pretty quickly, you know, within eight, nine years of my career into looking at things from a top management perspective, but at the same time, hands on operations to make things more.
Speaker: um Then I kind of switched to Shanta Biotech. Shanta Biotech is a Hyderabad-based company. it's ah It's a story by itself. It's a very inspirational story.
Speaker: So this is a this is an engineer and another MBA from Hyderabad. who had experience in various governmental organizations, industry development, like industry development cooperation and all. And then he had his ah battery business as a partner, and he got off the partnership due to some issues.
Speaker: And he was hunting for a business. Then he visited his friends in biotechnology, you know or who were in biotechnology at the UNS, and that kind of he start decided to start a biosimilar company.
Speaker: So, and there's nothing like a biotechnology or a biosimilar with India. There was a, you know standard chemical based active generics and formulations at that time. This was way back in late 90s.
Speaker: And um so he came back and started that company, invited a few scientists from the US. He talked about the the India passion and India evolving into that technology. It's only after Shanta Biotek Biocon actually started looking at that.
Speaker: There, of course, a lot of other companies. So he launched the first Heparitis B vaccine after seven years of research, going through a lot of hazards with actually creating the regulatory framework for the Indian government ah before he could actually get the product out. And then that's when I joined. We kind of took a complete... One quick question. Vaccines are typically biosimilars.
Speaker: All vaccines are typically biosimilars, but with different technologies. Like if you're taking a very old DPT, that's ah that's a very easy to make technology. It existed in India long years, you know, with the collaboration of past years, you know, the Sanofi company and some global companies, government adapted it. But hepatitis B was new. It's based on a different modern biotechnology, ah which is very different from DPT and very old vaccines that we had in our childhood.
Speaker: So this technology did not exist, ah but it is biological. But all vaccines are biologicals in the sense they're never made of small molecules, chemicals.
Speaker: Okay. Okay. Mostly it's viral bacterial component, ah not human component. I like to correct myself, either dead or alive, but it is a biological material that you take out of virus.
Speaker: Okay. okay Yeah, all that biologicals, except what Shanta Biotech did is based on a completely novel biotechnology method. Because without that method, he could not have developed hepatitis B vaccine.
Speaker: ah For hepatitis B vaccination, vaccine development, you needed that technology. living put the And in nobody in India had the technology. So he developed it ah using some scientists who worked on that by hiring them from USAID.
Speaker: And then and i got um ah what we call Omani foreign minister as a partner you know from Oman, country Oman. It's, I think, called venture capital and all available at that time, between the late 90s.
Speaker: And finally launched. And i you know so that's when I joined but during the time of launch, around the time of launch. We kind of ah went direct to consumers. ah by conducting large camps and generating revenue versus, and by a much cheaper price versus, ah you know, the multinational GSK at Sonofi doing marketing in South Mumbai, South Delhi for a fairly high price, 800 rupees versus our dose being at 100 rupees. You know, you need typically three doses for children or adults.
Speaker: So we were kind of pricing it around at 300 rupees versus very long. so So that kind of cost a lot of volumes and then subsequently a lot of global institutional sales to UNICEF and all. And then we kind of move away, you know, just focused being focused on technology, we kind of looked at consolidating a vaccine portfolio.
Speaker: And that kind of, with all the WHO Geneva approvals for UNICEF supplies, that kind of took the company to a different league. Also set up some manufacturing, case additional manufacturing facilities ah beyond what we had at that time.
Speaker: So I was more focused on business marketing and you know sales growth. And finally, that company got sold twice. It got sold to a France company, BioGen.
Speaker: Not BioGen. It's a reagents company. I'm not able to get that lead. Bio Meridian or something like that. Okay. And then and then in 2010, it got sold to Sanofi.
Speaker: I was not there. at The company got sold to Sanofi, but the value I think Sanofi paid was close to $800 million. Wow. Okay. well okay Then I was also part of Imami. It's not a consumer products company. It's a public company. I was CEO and executive director of that company. And I ran that company for three and a half years. Imami an FMCG business, right? like Yeah, yeah. Consumer products company. Shampoos and soaps and stuff like that. Yeah, but all Ayurvedic based.
Speaker: Okay. Okay. herbal based yeah so there is no pharma component here in emarmi there is no ayurvedic pharma but not you know hardcore the residual pharma okay so kind of increase the sales that three three and half years from I think it was around some 350 crores, 2000 odd crores, including an acquisition and increase the value of the company from 200 million dollars to close to 1.5 billion dollars.
Speaker: So that was my first kind of a public company experience. And then we we, you know, me and Shribatia came together and co-founded this company. I took a break and was wondering, you in terms of startups, what I could do.
Speaker: um So we started this, ah you know, to answer your question, if you recall in your question, you said how the journey, why all we come, so what is different and why we started.
Speaker: So why, you know, I kind of wanted it to be part of that journey, the Vyol's journey is that I i come with the ah some pharmaceutical experience and a lot of business experience. And but in the two pharmaceutical companies that I worked, in fact, I worked in Aurobindo firm also, which is a plain genetics company, but focused on regulatory markets as well as semi-regulated markets. What does that mean, regulated markets?
Speaker: Regulated markets means it's US, Europe, Japan, where the regulations are pretty tough, pretty elaborate and documentation is elaborate. Less regulated means, you know, like India and other emerging markets,
Speaker: which are which are equally tough. But at that time, this was in 2006, you know, they have lesser demand of the documentation. and also a certain little of you know experimentation already earlier and the lesser demand so i was in arubindo pharma looking at olli you know markets and ah but generates ah the active pharmaceutically ingredients and the poorflationians actually hitting the business ah
Speaker: selling them you know in various global markets So that gave me an experience in both pharma and the business side of things. so I thought, you know, 20 odd years, 22 odd years that I worked, I thought, ah so let me just try to do something by myself and joined Vichalakitia and started this business.
Speaker: looked at this co-founding this company. So we kind of chosen um ah ah initially a dermatology as a field to be focused on, to look at some you know low-hanging fruit type of companies to showcase confidence to venture capitalists.
Speaker: uh uh like a you know cost-per-sew-tiple type of product but everything is patented and novel nothing is kind of a generic of there cosmoceutical that's a new term i'm hearing i i can i can guess the meaning like cosmetic with pharmaceutical pharmaceutical is something that a doctor has to prescribe Cosmaceutical that is used for cosmetic use, but it has advanced technologies and also certain medical ingredients that need not be prescribed by the doctor because the regulations state that it can be launched as a cosmaceutical.
Speaker: So let's say if you have an advanced, you know, anti-aging cream or some advanced anti-dandruff lotion or shampoo,
Speaker: or less cosmos. But the the the actual inside is not classified as pharmaceutical. The active material causes that effect. so So, we looked at some dermatological products and we got them developed, and tested them. So, we got support from you know various groups you know initially that included Manipar Group and you know Kalari, one of the ah well-known and very fine venture capital company from Bangalore. And so these people have supported and we had an early invested investor seed investor called Navab Capital from Kolkata.
Speaker: So we are able to actually showcase some success and get some products to clinically test and even launch them in India and partner them with Sun Pharma. So this ah seed fund you raised was before the products were actually launched. This was like purely at the idea stage.
Speaker: Seed fund and CECA we launched, we we raised even any product was launched. Even when it was under development stage. Series B is when we kind of had near commercialization event of the early products, the dermatological products.
Speaker: Just for the audience. So I believe your is seed was about 3 million and ah no your series A plus seed combined was about 3 odd million.
Speaker: Yes, SEER and Series A combined around three three and half or so. and Which was ah somewhere around 2012, you closed your Series A and then Series B was about 8 million. So this is when you're saying you were near commercialization.
Speaker: Yeah, near commercialization of those early products. and But then when Series B was raised, we moved our platform to the pharmaceutical, you know, more...
Speaker: you know, more more value generating, more US focused products in the immunoinflammatory space. So but that's a pretty solid pivot. Like it's not a minor pivot. ah what What made you do that? Like from India to US, from ah cosmetic or cosmeceutical to ah pure hardcore, ah you know, patented drug. Oh, even phosphorylase were patented. Okay. Okay.
Speaker: ah They were patented. um See, that the thing is, you know, we come with a blended experience. You know, we are not to start with. We were not focused on India alone, but kind of positioned as a low hanging fruit. You know, when you are growing,
Speaker: You cannot, you know, start climbing, you know, much say tougher mountain, right? You need to cross the a small mountain and then move on to the next level. You had the credibility to raise for India, right? Because you had scaled businesses in India. so obviously vc would Yeah, yeah. Shiladeti also comes with the credibility of a lot of US companies because he's always been in the US. Okay. Yeah.
Speaker: and The question is not what we should have done from today the it is not just from a credibility point of view, but it is also to some extent it did help my credibility from a pure business point of view.
Speaker: But from a funding availability point of view, people would have got scared. ah If I say that, you know, I need a lot of money and that maybe 10 years to commercialize a product, though in US, though with much higher value, because that kind of risk appetite would not have existed.
Speaker: In fact, you were saying that India doesn't have ah companies which are doing novel research. Probably the reason is that there are no VCs which are funding it.
Speaker: There's no capital. I think it's a multifaceted problem. We see no capital being won, but it's all chicken array. What is causing what? It's very difficult to say. But you know probably I'll spend ah five minutes on that somewhere in the end. But let me finish the buy-on story.
Speaker: So we started quite deliberately to showcase low-hanging fruits to the investor, the seed and CDCA, to get gain their confidence and trust so that they can keep supporting the subsequent rounds. And if they support, then it's easy to get new investors, the lead investors, right?
Speaker: So that is when we pivoted because the bigger value is in you ah pharmaceutical programs ah with US focus. and by by philosophy or company, we were focused only doing patented, never focused in doing a genetic medicine or a a typical FMCG type of product where there are no patent, it's all branding, right?
Speaker: Our sales and distribution or whatever you call it. so So when we were focused on that, it was easy to showcase these two dermatological products, which we clinically tested, clinically approved. And so there's some validation of technology and the partnership with Sun Pharma, Sun Pharma evaluation validated and began easy to see speed.
Speaker: Okay. so so So then we focused on immunoinflammatory indication US. We raised series B. What does this term mean? imun Immunoinflammatory indication.
Speaker: Okay, good question. So immunoinflammatory means our human body has immunological reactions. You know, you you must have heard this term autoimmune, right?
Speaker: The AIDS is an autoimmune. No, it is driven by virus. Okay. When you lose immunity because the virus kills immunity cells, that's another immunological problem. But autoimmune is always these rheumatoid, some thyroid, a lot of other immunological deficiencies because there is some dysregulation happens to our immunity.
Speaker: not because of there is an outside bacteria or virus on a continuous basis, but maybe because of some genetic makeups or some cherry root, you know, some something going wrong. you could have immunity problems.
Speaker: So that causes inflammation in the body. Like when you have a rheumatoid arthritis, it causes inflammation in joints. If you have thyroid, you know, if you don't treat it, you know, but you lose so your thyroid gland. And ah then, so like that, there are many such, if we, you know, if you lose ah immune, ah if if the immunity gets dysregulated, not we will be losing immunity, you can have psoriasis and what.
Speaker: So this is one part of diseases. Another is pure inflammation. Inflammation can happen, let's say, you know, if you have a bacterial infection or let's say if you have a wound also, if you fall down and if you have a wound, there's an inflammation, right? Because immune cells have to come and do something about it, which is extraordinary, like unlike a normal skin, a wounded skin will have some inflammation. That's why you take inflammatory medicines.
Speaker: um So this is ah this is the area that we wanted to focus on. It's a very hot market in the US and global. There are many drugs that are getting developed and there's a generic kind of industry. There's lot of investor interest for the pharmaceutical novel travel development.
Speaker: Now, within that, we are focused on only two, three indications right now. ah One is we are focused on... A rare disease ah called malignant fungating wounds, which happens in advanced terminal cancer patients, where the skin ah that the cancer spreads to the skin and they know you have very large broken wounds. You must have seen those oral cancer acts in movies. where In the cigarette boxes. the Yeah.
Speaker: People have large gory looking wounds. that is the That is an outcome of how the oral cancer spreads ah to the skin and then it breaks open the tissue of the skin. Then it looks like a a very back looking gory type of wound.
Speaker: And that wound ah can be only treated if cancer gets treated. okay So what we are not going after treating the wound. ah We are going after treating the symptoms that wound causes. the same mother The biggest symptoms which kind of causes huge emotional burden on patients as well as cat caregivers and family members and nurses is a terrible malorder, a rotten meat kind of smell.
Speaker: so that needs to be cured ah ah because otherwise the patient loses you know in his end end stage this is terminal right he loses even the you know the dignity that's what we are going after so we have a product there which is now hopefully entering into phase three uh or a pivotal study i would say uh pivotal study means a study for registration if it is successfully done and the data looks good so we we we kind of ah it's a publicly disclosed or we plan to have ah some kind of fda interactions uh in the second quarter of this year the calendar water april to june and if everything looks good then we'll proceed to the trial starting in third or fourth quarter
Speaker: So the the third, fourth quarter trial is the phase three trial. Yeah, it's a pivotal trial. we call it phase three, but we use a pivotton pivotal meaning. ah It's a trial that... Make or break.
Speaker: i mean No, that that it is successful. That gives you approval. The previous trials, phase one and phase two alone trials will not give you an approval. will give you a moment to the next time.
Speaker: Here, you know, if you are successful, the moment is... Approval of the product in the US market. By the FDA. By the FDA Food and Drug Administration, which is like a local health authority.
Speaker: so so we are there and uh so so that that's what we are counting on in terms of a significant value creation if everything goes well and that's what is currently the value driver and the second program we have is uh so again so let me uh you know tell you in terms our thesis uh the way we operate company ah from a business strategy point of view is that we look at existing molecules and repurpose them First time in a different form.
Speaker: Let's say there is, like for instance, this is cream that we're talking about for treating malorder and malignant fungative implants. So here this molecule existed, you know, for octalmic drops, but it never existed in the form of a a cream that can be applied on the womb.
Speaker: okay So that's what we did for the first time. And that's where the patent comes into picture and excludes it. Second thing about this strategy is that we selected this indication to showcase a rare disease and therefore there are no epidural drugs.
Speaker: So which means the competition, ah the bar on competition is low. And number three is because it's a rare disease, the clinical trial design and clinical trial number of patients required are less, and therefore the cost can be less. While it may take time because it's rare, it's difficult to recruit patients.
Speaker: Number four is that, you know, we can potentially get various design designations in the U.S. called, you know, there's an orphan drug designation, there's a breakthrough designation multiple designations that has both timing and financial benefits. For example, we already applied for the orphan drug designation.
Speaker: I think that news is a public domain. We will have a result of that application from FDA sometime in next quarter. And if that result comes through, then we could have a significant financial benefit like roughly three to four million dollars of, you know, the final approval fee waiver and also a standalone exclusivity of seven years beyond what patents, you know, give you that exclusivity.
Speaker: And there is some tax credits that for all the clinical trial money that we spend on this pivotal study in the US, ah there is some in our tax rebates for the money that we spend later, let's say when we start having profits in the company.
Speaker: So orphan drug designation would be a government scheme to encourage drug development in overlooked areas. Yes.
Speaker: Okay. And rare. There is a definition of rare. Now, in the US, within the US population, the the incidence of that disease should not be more than 200,000 patients.
Speaker: It should be below that. So, we talking about 200,000 300 million ah population Yeah, okay. Okay, got it.
Speaker: If it is such rare, only they get these benefits for people who develop drugs for such a rare incidents, incident diseases. If I understand your strategy, let me recap.
Speaker: ah You want to go after overlooked disease or indications ah which reduces the go-to-market cost like the cost of approval etc and you want to not do from scratch but you want to find diseases where existing molecules can be repurposed, reformulated to cater to that disease, which therefore ah like ah allows you to play in profitable niches. like Each niche by itself could be profitable.
Speaker: ah And you can play in multiple niches. So the sum of all niches makes you a large opportunity. Right. You are right. So, ah yeah, your your understanding is absolutely right. But, you know, I will kind of bulletize them in terms of five bullets.
Speaker: Repurposed, but first in class in that particular form, meaning, let's say, if something is existing in orthomic drop, but we are doing first time in euthyri. If something is existing in a tablet form, we are doing an orthomic drop form.
Speaker: Okay. So that gives, you know, good path and protection. second is because the molecule is known extensive toxicology work safety work has been done so the chances of drug hard drug failing because of safety is you know close to being minimal production we still have safety problems for local applications once you convert into a different form this is number two number three we are focused on immuno-inflammatory space which is ah broadly a hot space uh both from a market know potential and also investor optics point of view number four within immuno-inflammatory we are looking at rare diseases where there are niches where the less competition and
Speaker: lesser number of patients in trials because the FDA allows you to take with lesser patients and then certain designations that gives you financial benefits like orphan drug designation. x This is the fourth.
Speaker: And number fifth strategy is, you know, because we are able to choose this, so we are able to apply are very smart ah kind of clinical design strategies ah To showcase ah data, but for instance, for the malignant fungating wounds, we did a phase 2 proof of concept study in 15 patients.
Speaker: Because it is rare, 15 patients is accepted, the phase 2 data. and And we got good data and it has given us good value inflection. okay And also the ability to list the company.
Speaker: so so So, there are multiple advantages here. Given all this, we are able to showcase value and with less capital compared to another standard US biotech company that is focused on, let's say, diabetes or heart diseases.
Speaker: you know, neurological diseases that are large, where you need a lot of capital and a lot of work to be done. So, but the market sizes are reasonably attractive. It's not that we are talking about, you know, less than 100 to 100 million dollars. We're talking too close to a billion. In fact, our malignant fungating wound programs, we had an independent valuation expert to do analysis, is very respected and company called Destum Partners Inc.
Speaker: So they kind of estimated at a at a what we call a branded product, meaning patented product premium pricing model, roughly $2.2 billion as the broker addressable market in the U.S. And given ah at least as of now no competition, and if the resumption stays and close to a billion dollars valuation after phase three success, they were to study success for our program.
Speaker: so So, that's the and thats our second program in UVIT is something very similar. They're trying to address this. UVIT, can you just explain that? UVIT.
Speaker: UVIT is an eye disease. It happens again because of autoimmune reactions where... Because of unregulated and excessive immune reactions from brain signals sending, you know, ah that that the cells that that are supposed to control the immunity, they get sent more than required into the eye.
Speaker: and that causes what we call one portion of eye called uvea. Uvea is basically not the cornea, the entire ah surrounding of the eye that gets inflamed because this excessive immune cells, because of some some brain signals on this dysregulation.
Speaker: They come and, you know, damage the UVA and over a period of time people can become blind. In fact, it is one of the largest blindness cause, you know, globally. ah Because of the disease, not because of any accident or because of, you know, somebody who's born, you know, ah blind at the birth stage.
Speaker: Okay. So, so here it's an autoimmune disease and therefore it causes inflammation and causes then eventually blindness. We have but the first line therapy is topical steroid.
Speaker: meaning in the form of drops that you apply a steroid drops. like But the problem with steroids, see this disease is not going to go away. There is nothing like a permanent healing. You need to control it.
Speaker: Probably, ah you know, lifelong, the way you control, let's say, a rheumatoid arthritis. You must have seen some rheumatoid arthritis patients, right? Not first hand. I'm aware of rheumatoid arthritis, but I haven't seen it. Yeah, it is the bone joint inflammation. Yes, yes, yes. And it's very painful for them to ah like yeah even do this. Well, you need to be on the lifelong you know medication. know and Absolute permanent he, very rarely it happens.
Speaker: So similarly, the case with uveitis, the disease that I just explained. So the topical steroid is the first line. But the problem with topical steroid is that it cannot be used continuously because it has a side of significant side effects, which is causing cataract.
Speaker: Even if it happens at the young age, the patient uveitis, if you apply topical steroid for certain months, because it has to be used sp continuously, there's cataract formation and there is also high pressure formation in glaucoma.
Speaker: So we are kind of looking at a non-steroidal class first time in an ophthalmic drafts form to kind of address that need. ah ah So that is the story. And here we are still doing what we call pre-phase 1 work.
Speaker: Have you identified the molecule here that you will? yeah We identified the molecule. We've done the formulations. We've done some early. Again, it's a molecule which already is in use.
Speaker: Yeah, and molecule is in use in the form of injectable and in the form of tablet for a different purpose, like ah purpose being kidney transplant rejection and a few other, you know, immune kind of diseases.
Speaker: ah We are repurposing that into an ophthalmic drop. Okay. Okay, so that is the second product. And in fact, ah with the product that I told you, a topical cream, topical gel actually to be more precise for treating malorder in malignant fungative mode, the same product, we have done trials up to phase 2 for inflammatory acne. Acne is a it's not a rare disease, but moderate to severe acne is a fairly...
Speaker: ah tough medical condition, it happens in teenage, you know that right, maybe up to 2021 and it has, it's painful but also there's a big stigma, you know, for the teenagers with acne, it needs treatment.
Speaker: So there this product we have positioned as, you know, ah the current drugs, ah you know, the current antibiotic, crinomycin, resistance, and way at birth where people have developed resistance.
Speaker: or the Bacchia, the development of the system for Climamycin, we have kind of positioned the drug as a topical product. We've done up to phase two. There again, we are phase three ready, but there we are looking at partnerships instead of and not doing the trial by ourselves ah because you know those trials need a much larger number of patients and a lot of capital.
Speaker: So we're looking at partners for this, is you know both in US and ex-US.
Speaker: So we have fairly evolved a clinical stage company with little revenues coming from Sun Pharma, from the early dermatologicals. And I also want to tell you in this journey, we started as an Indian company. We raised a CDC, CDC, A, B, and C. C is when we had a large, in fact, two US-based investors who have no presence in India have invested into India.
Speaker: Then that time, we pivoted completely to the... you know, novel pharmaceutical and focused on the US market. We've decided to... So, like when when you were raising your Series C, you were already telling investors that we are raising this round to do the MFT.
Speaker: The... ah law we we We've done the MFT meet. What, you were about flipping to the US? and No, no, this... The Daligran fungating rooms.
Speaker: Malignant fungating. Malignant fungating wounds is a subsequent program. That time we had acne program. So your pitch to investors was clear that this is for US market that we're doing now.
Speaker: Yeah, everything's focused on US. Private focus is US. Okay, you may have some early news later. Let's see if everything goes well, the product later, and different markets.
Speaker: So, but the story is different here. The story is moving the corporate headquarters, Holko, from India to US by externalizing the company.
Speaker: Because we wanted to come to USA, the capital, the talent, the... and the ecosystem understanding of various nuances of development strategy regulatory and then even ability to list eventually because you know archive of company we cannot list in india uh listing is required to give an exit to investors right or do an m and a so we tried for both and but we are successful initially in listing but we'll see how that goes you know in terms of any future
Speaker: But right now there is no such plan. Okay. So the the CDC investors were US investors and and they encouraged you to ah move the company to us got correct correct absolutely how does that happen how does one move a company's headquarters oh it's a big corporate finance legal structural matter um ah there are various ways to do it but we had pwc as our consultant who helped us to kind of do that so we had uh
Speaker: So, what we did is, you know we the the the one single company that was existing in India, we kind of transferred the most part of the R&D business the drug development business into a newly formed company in India which had a parent company in US.
Speaker: They were initially founded as Shells, the US company and the other India company. So, we transferred from the legacy Indian company a big chunk of business which are all related to these drugs which I just explained to you.
Speaker: And that process called demerger. It went through an NCLT approval, then went through an ah RBI approval, which was pretty complicated. And we got all those approvals. And so, therefore, the U.S. pairing company became the whole co.
Speaker: And the business were transferred from the Indian legacy company to the subsidiary of the U.S. company. And for which, because the business got transferred, the U.S. company has issued the shares on a mirrored basis to the legacy DHE Motors.
Speaker: This is in nutshell. Yeah. Okay. But if you have to understand schematity, then I can help you. Okay. This is good enough. Most of the people who wanted to externalize have done it. there A lot of people have got exposed to Singapore, right? In the tech space.
Speaker: But now we are talking about coming back to India. That's another different matter. Reverse flipping. Yeah. Yeah. Okay. Okay. and Understood. So, and by when did you move to US? When did this move finish?
Speaker: It happened in the end of 2018, early 2019. Okay. And ah when did you list? ah you You went public on the NASDAQ. When was that? 2025, August.
Speaker: yeah we had uh obviously you know things got slowed down with covid and uh you know a few other things and we needed it to develop some more data generate some more data on these three programs that i make sure to you so it took us some time in the markets were down with the ukraine war and you know a few other things you know particularly 22 23 was bad so it took some time finally we got rest and how much did you raise when you went public so we raised concurrent financing at the time of listing and also some a few months before that in form of convertible loans close to around 7.5 million or so all put together yeah and then subsequently recently after uh uh
Speaker: After that, we also did a public announcement sometime in January 27th. We raised some 6 million using some existing facility that we had. Again, ah it's not dilutive at all. and It's a pretty ah good ah for the existing shareholders in terms of ah not being dilutive at the same time, useful for actually extending the runway.
Speaker: Isn't all equity fundraising dilutive? I didn't understand this. No, no. Equity fundraising is all dilutive, but not not superly dilutive. That's what I meant. We raised at bull valuations, is what I'm saying.
Speaker: Good rising. Okay. ah I believe till date you've raised north of 50 million dollars. Yes, I would think somewhere around that figure, right? North of 50 million dollars from the very old legacy Indian company seed stage funding till till what we raised in January of this year. don't know why we are in public by that time is around 50 plus.
Speaker: this This JAN raise would be like a rights issue. ah Not so. Yeah, it's like um it's like an existing offering, you know, at a good price we sold ah to the market, general public. It's not Okay, to the market. Got it. Okay.
Speaker: Everybody was interested. yeah Right. It's not a follow-on offering. not a rights offering. It's more of a... and There are different ways of doing things here. yeah It's a simple flat raise based on the price.
Speaker: But we chosen to do it, you know, when the pricing was good and therefore it's less diluted. It's diluted, but much less diluted there, you know. Yeah.
Speaker: So I want to ask an uncomfortable question. Like, I believe your current market cap is about $10 million. Yeah. Yeah, so this is based on our you know current carbon share. No, it's not 10 million. It should be 7 multiplied by 3 roughly, a three or 3 or 2 and half, 20, 21, 22. Yeah, so this is how ah markets behavior.
Speaker: If you leave all this Iran stuff and all for this thing, otherwise, you know we started at 10, actually, Around fourteen fifteen dollar price at listing.
Speaker: what What was the market cap then at $14? See, of Fulida, you did shares worth around $9-$10 million at that time. But if you remove those securities like stock options and other things, it's around $6-$7 million. So, to ten around Now, we are whatever.
Speaker: Yeah, so, yeah, so, so that obviously, you know, ah investors are looking for, shareholders are looking for the phase three inflection. So the FDA interactions in second quarter and what they say and ah then subsequent start of trial will actually, will kind of hopefully take us back. And I can't say that for sure as a public company CEO, will help us creating that potential value and, you know,
Speaker: Then phase three weed out, so by end of 2027, early 2028 could be a potentially a big inflection point. For the micro caps, ah you know, the small small kickbox small cap, micro cap biotechs behave.
Speaker: It needs stable. See, we did not do an organic listing, right? We did through a reverse merger. And there is a lot of legacy to the old company, correct? So this reverse merger is like a SPAC, similar to SPAC? SPAC is very different. SPAC has much more bad optics. if you It had developed bad optics. There is an existing listed business which you acquired. It's a company which is not doing well because of their own operational reasons over years. It's not that it has failed overnight.
Speaker: Over years and they kind of want to give it up. And that's when they offer ah you know to private companies for the USMAR. The private company takes all the management and they probably have a bigger majority, you know, when you do swapping, you know, private company and so on. Like in our case, we ended up being close to 92% or so for our value and they ended up being just 8%. I mean, they means their shareholders.
Speaker: This company which you acquired was, what was it doing? like Forward-looking statements, you ah you know,
Speaker: I would say it's currently undervalued because of the market characteristics than the inherent value of the assets. And that's how it affects most of the companies. yeah See, unless you are a very, are a mid-size, a big company, a billion dollar, two billion dollar valuation and revenue generating where your kind ofvalluations of valuations are linked to your EPS, positive EPS, and then also linked to the pipeline. Here we are completely free revenue from a US point of view, apart from a little revenue we had in Sunfar.
Speaker: And we are at the development stage. Plus, we are a small company with low flow. Due to various factors, it will be always you know will be less than what it should have been.
Speaker: But what it will be potentially you know is based on our performance on the milestones. That's all I can say at this time. But how much can be, I cannot talk about any forward-looking statement.
Speaker: Understood. Yes, and understood. This company you acquired, ah was it in the pharma space? or It is in medical devices space. But we had nothing to do with their assets or their programs because ah concurrent to merger closing, they have sold off their business, medical devices, to some some other company.
Speaker: Okay. You just bought the shell of it, basically. too Yeah, we bought the public company kind of as... Got it. Okay. Okay. Which is why your ah ticker is, I think, HIND. I was wondering why.
Speaker: ah We shape life sciences, RSLS. We changed the ticker to HIND at the time of listing in August. but Was that due to the patriotic reason? Yeah, just one of our themes, you know, in terms of macro themes is that US-India Innovation Corridor.
Speaker: You know, if you leave this little bit of quirmishes on barrier ah tariffs, ah But generally, you know, a macro theme that it that was good for investors was the US-India collaborations on multiple things. So we wanted to use that.
Speaker: and mean yeah And in fact, we are doing it. Most of our work, um you know, particularly on manufacturing, you know, we outsource to India. Clinical, we are focused on the US. Where does your team sit? yeah is Is more of your team in India or in US? We are kind of totally 18 odd people, um employees plus retainers, individual retainers.
Speaker: ah So we have, ah you know, it's kind of yeah maybe around 6ish or 7ish in the US, the balance in India. And the 6, 7 are largely CXOs.
Speaker: Except one or two who are like accounts manager and some associate. But largely, it's ah it's me. It is Shila Ditya, who is a science guy And there is a chief technology officer, but there's a senior vice president, clinical development.
Speaker: So, and also there's a senior medical advisor. So they're all US-based. I want to ask you this, that ah does this affect you or do you take it in stride? The fact that from a 70 million valuation today, you are at 20 million less than what you have raised till date. Does this affect your morale? Does does it cause you to question yourself or you understand it's part of the game?
Speaker: No, no, we and I understand it's far as the thing. I've seen many public companies. ah We understand. I think if we are delivering on, let's say, a few milestones as planned in the next two years, that's where that's more important.
Speaker: Right now, the... The fact that we are public, it gets a liquidity event whenever investors choose to do it. But they are completely updated about what we intend to do in next two years through our strategic clarity, press releases, of any such thing.
Speaker: So, ah it'ss it's part of the game. you know It's nothing that kind of worries. So, while it doesn't affect you, I'm sure other stakeholders might get affected. How do you stop that from spreading? Like,
Speaker: Yeah, so I think if you see most of the early shareholders who still are committed ah with the company in terms of shares that they hold, they obviously, you know, a couple of them, not couple, maybe just two of them are in the board itself.
Speaker: ah They know exactly what's happening, you know, ah and they are like kind of lead investors and some of the investors are kind of interconnected with them, other shareholders.
Speaker: a so So, you know, they are part of the process, you know, as ah though they are independent board members, they know exactly what's happening, why happening and all, and what it means, let's say, after certain quarters.
Speaker: So we're kind of more focused right now on the actual work on the delivery of the milestones. Again, and the milestones being for the LEAP program, ah focused on having fda response and then starting, affecting kind of most potentially in the same direction, starting the trial of pivotal study, the registrations in the second half and completing it by, least the readouts, the unblinded readouts by end of 2027.
Speaker: And of course, and then advancing the UVIT program. I think we just focused on that. And of course, um we are focused on you know other strategic alternative alternatives and options so with respect to you know a few other things that we can do. When I say strategic options, any potential ah licensing of the existing acne product that I described to you, or even licensing the Malignant Fungating Moves program for other markets,
Speaker: So, there are multiple options that can create value. So, these ah these are the are the actual activities, key activities we focus on. So ah people are with you for the ride. They know that ah it's a journey. and the Yeah.
Speaker: Right. Got it. Okay. and Understood. and What's like a 10-year vision for Vyom? What do you see? it you Do you see it as a platform which is building a lot of niche drugs, going after various niches? or is It will be a combination of...
Speaker: development and also successful commercialization um by partnerships largely through partnerships than own marketing particularly us ah again with the same strategic themes that i've explained you some time back ah which is which is repurposing existing products and potentially rabies ah and the smart of capital to design capital efficiency using US-India Innovation Corridor for capital efficiencies and talent.
Speaker: This is a combination of all that. But but in instead of two, three products that we have, maybe, you know, have 10, 15 products. Some are already commercialized. Some are in development. Some are in critical trials.
Speaker: That's it. And they'll then, put in and so therefore, I mean, I don't want to put a number of valuation, but definitely getting into, you know, that that level of, you know, more than multi-billion type of valuation growth.
Speaker: Right. Each niche you would see as a billion dollar niche. And so the sum of all niches would make you like double digit billion dollar. There is no clear plan laid out, you know, as a vision only, I can say right now, we just focused on what we want to do in next two years. And again, filtering down to specific actions on first two or three programs, including BDSOs.
Speaker: What you described to me, the process of ah finding a niche and then finding existing drugs which can cater to the niche, ah this sounds perfect for AI.
Speaker: Do you see that happening? you know Because AI is essentially a pattern recognition, like the ai is genius at pattern recognition. and essentially what your people must be doing would be similar to pattern recognition, right? Like looking at drugs which already exist, seeing each drug and then trying to match. And I mean, it sounds like a big data problem to me.
Speaker: It is. ah It is. ah So before the AI started, we ah know scientists used to compile a lot of Excels and data. And now, know, kind of look at po potentially, be you know, if not hundreds, you know, multiple tens of molecules.
Speaker: And then kind of checkbox for each characteristic, you know, what fits into the de disease, what fits into a different form, let's say from a drop to a cream or whatever. It is, and there are ah tools available and we work on that. In fact, there's a lot of information out there, both from a patents and characteristics of molecules and the literature about somebody who having already done some little work, you know, about keep proposing that molecule for a disease that we're looking at. And then therefore the disease characteristics, disease mechanisms, disease market sizes.
Speaker: A lot of primary information is available through all various artificial intelligence tools, but I can, once you start getting little close to convergence, that's where the human intellect is needed to kind of get nuanced about it and to have more convincing proposition internally and later for board and chair workers.
Speaker: I mean, do you see yourself building AI as an intellectual property, like this AI engine to help you scale up the process of discovering niches?
Speaker: Yes, as we kind of, you our focus is, you know, obviously, developing the lead program into you know the into the periodru trial and then either conduct the pivotal trial, followed by our second program, UVITs, and then some BDFs. That's our core focus.
Speaker: That's where we get value. but But in terms of new ideas, in terms of building AI platform, you know for fulfilling that long-term vision, we will we will work on that. And we're already working on it We use AI companies you know to work on some clinical work, small outsourcing. We use some other AI companies to look at some programs, evaluate them using ai tools.
Speaker: And we ask, as a lot of our team members use a lot of AI, personally, ah ah far far you know for for getting a lot of answers with complex knowledge base out there in this drug development space.
Speaker: I want to kind of end with the understanding that transition from running large organizations to running a startup, which is significantly smaller in scale. You said you have less than two dozen headcount currently, whereas at Imami, it would probably have been 100x of that in terms of headcount or something like that. um What was the unlearning you had to do?
Speaker: to successfully lead Vyom? Yeah, so I think the kind of experience that that I had learning large companies is, you know, ah is more to do with the building systems and structures and processes, and which are also relevant here. but And therefore, um being more a facilitator than somebody who is directly involved in few things. But in a startup, you need to get your hands wet on a few things directly. But as you scale up, um you
Speaker: and then you you know you need to have the ability to retreat and then give the handle to someone else. But in large companies, you start with that process because you when you want a company. Like, for instance, even Kamin K, when I built, we built an organization consciously building the teams, building the functional heads and building systems yeah so that everything goes in a nice, synergistic and smooth manner. on Right?
Speaker: so So here this is very knowledge-intense ah driven type of organization there are a lot of strategy within that knowledge, you know, by using knowledge. There are a lot of personal involvement and lot of discussions and it is more like playing a football. Everybody can run around everywhere and defend or even play goals, though there are some, you know.
Speaker: you know, allocations, but it's not like playing a structured game. So to that extent, it is very enterprising and it's a very demanding. But at the same time, there is a people component and people management and delegation. So it's a, it's a, it's a,
Speaker: ah it's It's actually playing as it needed, you know, in terms of where it is needed. You know, most large company CEOs fail to become large startup founders. I've rarely come across examples where someone who was a CEO of a large company ended up forming a large startup. What...
Speaker: What goes wrong? I never had to go to investors. Investors have come to me because we are always in demand. Like Kevin P.M. Gennett was 55 crores. The first the private equity, what we call the Pita Maha, the guy called some Jonathan Bond, who came from HSBC Hong Kong. He was so supposed to be the first venture guy, a private equity guy in India.
Speaker: He came to our office, me and my promoter were sitting, I was president then. And Mami was listed, sorry, you're talking about Kevin Kidd. Okay, unlisted. Yeah, unlisted. This is venture capital. So I want to give you more, only just why did you get into self-dietrogen, soaps and all, I said, you know.
Speaker: You may give any money, that is the science in developing a product and launching a brand. okay Just because money is there, we don't want to create a lot of failures.
Speaker: So, organically, so much we can do. And there is any and there's nothing like inorganic opportunities available those days. you know if No Indian promoter wants to give up and an Indian FMCG company, right?
Speaker: So, we we had to reject that money. so But if you see companies like Imami or even Aurobindo,
Speaker: Investors, we had listed companies, at least by the time I joined. Imami was just listed when I joined, know, a few months before. They had to hang successful brands, you know, positive EBITDAs.
Speaker: So yeah we didn't chase investors. We used to have investors come to our office fees and discuss. I would put presentations in investor calls and talk about the company.
Speaker: And people used to buy in the market. or When we needed money for an acquisition, it wasn't a very big task. In fact, managing acquisition managing acquisition partner was difficult than getting money.
Speaker: yeah And valuations are also pretty high for a long time in FMCG. So that's a epitomultipal. Never had a problem. But here the situation has changed. You have to go and sell the story. India, in biotech, and the novel pharmaceuticals knew.
Speaker: That's why we had to give up the stories a little bit to focus on you know and easy, quick, wind, dermatologicals before moving on to the hard US pharmaceutical products. Yeah, it is a different experience. A lot of unlearning has happened. that The comfort of you know somebody you coming to your table versus you going to somebody's table,
Speaker: yeah that had to be broken. and And ah the teams, so this is a high scientific team. yeah So therefore, there's a lot of... So I used to only ask questions. I never used to offer answers.
Speaker: So, though I used to read a lot. So this is how, again, yeah they give an FMCG kind of startup, right? So it's a basically a science-led kind of thing.
Speaker: For me to get my milestones, so I used to ask science. I used to do prospect, but at the same time, very demanding on them. So, you know, you know if you you're in a sales organization, is only one way demand typically, right?
Speaker: you We emotionally respect them to keep the energy levels high, but you don't intellectually respect them. Essentially, what you learned was humility from what I can make out. Yeah, it is, absolutely. And i enjoyed it every bit.
Speaker: And because, see, by nature, I'm a very keen learner and I'm a go-getter. So, it kind of given me that, you know, because both existed.
Speaker: Go-getter because, you know, money, money is required. I don't create value. And learning because it's all high science. Yeah.
Speaker: I'm... still a little amazed at how you kept investor confidence when you did that hard pivot to saying that we will ah focus on US market and we will go after.
Speaker: yeah yeah, yeah. So that we did that we did after getting a a big $2 billion dollars private equity fund. So not before that, right? ah Okay. So first you sold the story.
Speaker: and far First we sold the story to the Indian VCs. And then we got the big biotech fund, a private equity, $2 billion fund into the CEC. And when they have kind of encouraged the US-focused fund, because it's a validation, ah the other Indian investors have kind of followed it up.
Speaker: Yeah, then they're happy to go along because there is a US investor with the pockets. Because these biotech funds are very high, you know, they they they do a lot of diligence on science and clinical development and radiatory commercial space.
Speaker: ah You promised to spend five minutes on why India doesn't have more biotech startups. Is it because the funding is not there or what's the reason? what It's a multiple things, actually. no but I've been writing in LinkedIn and ive I've been writing in Economic Times and some pharma biz and all. I'll send you some articles.
Speaker: See, I'll tell you, um India, um in terms of entrepreneurs, ah per se, no, not now, I'm saying till probably 10 years before, they are happy to do something that is low risk in terms of technology, but everything else revolves around sales, marketing, business development and manufacturing.
Speaker: And R&D also low risk R&D, like a generic R&D, which is within one year you can launch the product. Whereas a new product takes 8 to 10 years. Except there are exceptions like Shanta Biotech that explained you, but that's just one example.
Speaker: So that's how Indian pharmaceutical manufacturers, you know, who were actually originally part of the government sector, so ADPL and all came out and started, all generics start with the Indian market, the US market, all generics.
Speaker: ah So with that, there's a lot of chemistry knowledge and formulation knowledge, very less biology and clinical development and radiatory nuances are all new products. So they are happily doing it. A lot of small companies became big like Dr. Eddie, Sun Farm.
Speaker: And a lot of, therefore, small companies have come out, local companies. ah And even local companies became big like Alchem, Mankind and all that. a Purely a marketing and manufacturing game.
Speaker: ah And the routine development, of which is low risk and look very less time-division. So nobody ever focused on novel medicines and nobody had even knowledge of there is something called novel medicines which is doing extremely well in US.
Speaker: And even this step itself, genetics itself is a big thing in terms of access to Indian consumers from those old GSKs and Pfizer in medicines versus, you know, plethora of Indian companies offering at different prices.
Speaker: That itself is a big step and it created an industry in terms of exports also. called generic export itself was big, you know, relatively, not in the global scenario, but relative to what India was in pharmaceutical.
Speaker: So there is a sense of focus and on that and also complacency. Let's just focus on that. Now, a situation has come where the Indian medical needs have evolved because there's lot of awareness about water apps and a lot of richness in know among the Indian consumers, at least certain segments of people.
Speaker: So they need the best to cure diseases, number one. And the us the Indian large companies have become so big, they're so cash-rich, now they're pivoting strategically. While you focus with maybe some professionals on generics, the promoters are taking keen interest in novel medicines, taking, let's say, for 2040.
Speaker: So that's where Sun Pharma, Dr. Reddy, CIPLA, not CIPLA, I would say it's more of Lupin and a couple of other companies along the Indian Big Pharma started focusing on new products and they're doing it in Glenmark in a very calibrated way without losing money.
Speaker: But the Indian analysi analytic analysist system Public Market Analysis System still do not account for the value behind such initiatives, though there is risk, but there is a reward also.
Speaker: Now coming to startups. Now the startup needs a comprehensive skill set. It needs business, it needs packaging, it needs biology, it clinical and it needs chemistry and it needs formulations.
Speaker: So what we have the talent, you know, who are some enthusiasts to do some new products, who take some buy-rack grants of 50 lakhs at one crore. They just do the product and they leave it or at best they go towards India approval. Again, a handful of companies. When I say handful,
Speaker: maybe 10 or 20 type of companies who could come to a stage of getting yeah even a product close to clinical trials in India for Indian approval. Forget global, US, FDA, all that.
Speaker: Now, the reason is because ah people are dilution conscious. They want to hold it closely. This a very high intellect game, very high capital game.
Speaker: So the promoters themselves do not have a mindset of the complexities involved and bringing the right team and bringing the right investors at the cost of diluting themselves. You think even bringing the team needs dilution? Like you need to bring in people with equity? Yeah, yeah, yeah. There are options.
Speaker: and and And there are also an equal intellect, ego issues also there. So you need to add that mindset. Second thing is... this is a There is no revenues.
Speaker: okay But there is no, it's not like internet company where you see revenues and losses because you're spending on your advertising, yeah marketing efforts. Here there is no marketing. The losses is due to that you're spending money on development.
Speaker: So there is no capital available. Indian investors VC system is not still understand the knowledge ah the knowledge the the knowledge that goes behind in what makes a drug development more likely to succeed even though it takes time.
Speaker: And therefore also have patience. you You need a VC who understands and who can assess that will this yeah that specialization doesn't exist. At least the the VC partners, you'll have a couple of them are PhD MBAs.
Speaker: Or MBAs who've learned the science for a period of time.
Speaker: Okay, you don't have that. you And you don't have the talent. That's the third thing. So you don't have the, and then there is huge global capital restrictions because of RBI and even income tax issues.
Speaker: And a lot of funds, biotech funds in US or even China or Singapore, they don't even have a focus in India for biotech. They may have focus, let's say the same fund with different division may have a focus on a general consumer space like FMC, consumer internet and all.
Speaker: They don't have a healthcare focus as far as is concerned. Unless you talk about hospitals, we have some Asian funds which invest in hospitals. So, because of all these reasons, there is no ecosystem.
Speaker: So, there's way it it has to be handled in a pretty dramatic way ah if you want to have focus on this sector, which is going to be huge. See, there is a dilemma in the Indian authorities. The dilemma is, okay, you're talking medicines, new medicines, retentary. Is it for Indian patients or is it for global?
Speaker: So, sometimes they get trapped only for Indian patients means they don't encourage companies who have an FDA focus, you know, indirectly for the new medicines. That means...
Speaker: you know, what they can do. So, therefore, there is no perspective of what is the global market, what could be the export potential if you develop and manufacture and export to U.S. or even by licensing to a big Pfizer GSP and what could the Indian, you know, novel product company can have.
Speaker: So, because they don't have that focus, you know, they don't kind of relax the, you know, the financial ecosystem, which is the RBI and income tax.
Speaker: So because of all this, it's a, it's, it's a, see, okay, now let me give you on this novel products index. This is just my gut feel. There's nowhere published. If US is a kind of 100, China is already at 40, India is probably at two or five, two or three.
Speaker: This index represents the amount of novel drug discovery happening in that country. In that country promoted by the countries, the Indian promoters, let's say in this case.
Speaker: originating from India. So today we see some activity in Sun, Glenmark. Today means maybe the last six, seven years. the This Sun, Glenmark, are they acquiring ah labs or they're doing it in-house? yeah They're sun development and they're licensing and doing further development.
Speaker: And sometimes they're even acquiring what we call patented products, which are near approval or at the time of approval in the USA. Because they make a lot of money in generics, right? They're sitting on huge cash reserves. so They have so much leverage given their market caps and all.
Speaker: so but But you need a mindset even for that. You know you need time, bandwidth, mindset, different you know teams. And if a foreigner is focused, he needs to spend a lot of time on that.
Speaker: Then not being caught up with the the daily action of generics, you know. you know, how much you did this month, how much you did next month. What percentage of your ownership is with Indian VCs?
Speaker: Roughly, it's around 20-25%, roughly. twenty twenty five percent ray pretty start with with the public, right? So, you know, people maybe
Speaker: yeah a fear around totally only five So I guess you could possibly be that poster boy if Indian VCs see that multi-bagger return, you know, post phase three, things going well, fingers crossed. and ah But still, I think, ah you know, in fact, I was suggesting one thing, which is create like how we have gift city for financial services.
Speaker: Which is Mauritius within India, meaning it's ah it's a different... It's easy to get capital in from outside over there. I was telling that the two big things if India does, and from an ecosystem creation point of view, create a ah biotech sovereign zone where the the capital can move in freely and freely out, like as if it moves into Mauritius and out or a Singapore or out.
Speaker: And then create ah Indian diaspora as well as, you know, the non-Indian biotech talent, in know, 10-year or even 15-year visas.
Speaker: And this biotech sovereign zone can be outskirts of Hyderabad or Bangalore, wherever it is. That's not a problem. And the first to create the system where people join the bandwagon that they they know something is happening in India in in multiple companies, you know, 10 companies become 20, 20 becomes 30, 30 becomes 100, let's say over five, six years. Then there is a lot of buzz.
Speaker: And these guys have to gather somewhere to understand the exchange, right? Notes. Then over a period of time, slowly and by the time, hopefully, India becomes so big that, you know, the capital convertibility goes, know, our way restrictions goes, except for any money laundering issues.
Speaker: And the Indian income tax rules become very easy. You know, today, the Indian income tax rules are able to vary. You know, the famous order form case, right? you know, you charge only, you the the tax is collected by the respective government departments only if you're a resident. If you're not a resident, you're making money elsewhere. They don't care. You just have to file the global returns. That's it.
Speaker: ah For the companies I'm talking, I'm not about the individuals. So, if those relaxations come, then it can, but till sustain, you need to give the specific exceptions for these industries. And probably it goes into a very high-tech, deep-tech industries also. Unless global capital becomes, you will not be able to develop meaningful development.
Speaker: the The way India has an AI mission or an EV mission, they need a biotech mission. Yeah, but I'm still not sure about India AI mission. The money can come freely in and out. You know, you you read the Ratithu, right? You know, some thousand, or I don't know, the numbers are in hundreds of thousands. AI guys moved to West Coast, Indian guys, to start AI companies.
Speaker: Because something fundamentally new is more appreciated here, right? If you're doing AI services, is one, but AI is product. ah Have you read that article?
Speaker: No, I don't think I have. i think I think for all the deep tech, real, real deep tech to create value, um you know, India should be an extent that there's some sovereign zone that should be from a capital and income tax point of view, it should act like a Singapore or a Switzerland, even as a US.
Speaker: So that people reside in India, do things, and then the word spreads.
Speaker: It looks like Arian, you know, okay, there's a Google there, there's a Meta there, there is, you know, Anthropic there, there is that, this, that. But if you, it's the same Anthropic and that kind of companies happening in India with the tons of capital available, it may come from anywhere, you don't care. But as long as it it it is a completely a free zone like Mauritius or Singapore, that capital can move in quickly.
Speaker: And also the Tavent visas. Awesome. Thank you so much for your time, Banker. It was a real pleasure. Yeah, thank you, Akshay. Yeah, bye.
