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India’s top innovation fund slated for expansion, makeover

India’s top innovation fund slated for expansion, makeover

Bangalore/New Delhi: Adding to a lean list of new drugs developed in India that seek US regulatory appro-val, Hyderabad-based Bharat Biotech International Ltd (BBIL) is set to move an application to test a therapeutic molecule on humans.

The molecule is targeted at methicillin-resistant Staphylococcus aureus bacterium that causes difficult-to-treat infections, particularly in hospital settings. Its treatment has eluded drug developers so far.

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BBIL’s molecule has successfully completed mid-stage clinical studies in India for effectiveness in humans and owes its success to one of the country’s earliest innovation funding programmes, the New Millennium Indian Technology Leadership Initiative (Nmitli), which was launched in 2000.

“If it wasn’t for the support from Nmitli, I would have out-licensed the molecule to a big pharmaceutical company," said Krishna M. Ella, chairman and managing director of BBIL, a privately held company with around Rs260 crore in annual revenue in 2008-09.

Encouraged by Nmitli, various government agencies have designed similar programmes to fund research, though none has been as successful. Nmitli, which has spent around Rs400 crore on 57 projects so far, has seen a fourfold increase in its budget to Rs230 crore a year for the next three years.

Now the programme, administered by the Council of Scientific and Industrial Research (CSIR), India’s biggest public-funded research agency, is slated for an overhaul after its first review in nine years.

While beneficiaries approve of the rigorous selection and monitoring processes and speedy disbursement of funds, a rarity in Indian funding initiatives, they are unsure how the programme will fare in its expanded role, especially since it is being brought under a new CSIR entity, its planning and performance division.

CSIR director general Samir K. Brahmachari said this is being done to “bring synergy in the units" as the scheme will now focus on delivery of the technologies. “One reason why Mobilis (a low-cost mobile computer developed by Bangalore-based Encore Technology Pvt. Ltd) hasn’t reached the target audience in ,India but took off in Malaysia with government aid, is that it had no delivery chain linked to its business model," Brahmachari said. He now wants to ensure that Soleckshaw, the solar-powered autorickshaw developed by a clutch of CSIR labs, gets 1,000 orders for the 2010 Commonwealth Games to be hosted in New Delhi in October next year.

Commercialization has never been Nmitli’s mandate. CSIR isn’t willing to reveal contents of the review report yet, but two review committee members said the report suggests having a finance and marketing professional in the core team, rather than outright commercialization.

The beneficiaries are divided on this. Mobilis creator Vinay L. Deshpande says India should implement a policy such as the First Order, a US department of defence practice, to ensure initial adoption of new technologies it funds.

Others such as Vishal Chandra, founder of Virtual Wire Technologies, a start-up incubated by the Indian Institute of Technology, Delhi, that is building a product to enable televisions to wirelessly connect to DVDs and set-top boxes, said government handholding should be restricted. “I don’t think the government should be involved beyond providing funds and an enabling environment. Stifling competition and promoting a product would amount to protectionism," Chandra said.

Some fear that in the second phase, when the focus for the programme should be on autonomy, clubbing it with the overall CSIR system might impede its swiftness.

“Nmitli should be spun off as a separate, independent body or board," said a former CSIR laboratory director, now a professor at the Indian Institute of Science (IISc) in Bangalore, who did not want to be identified. “It is known that most things at CSIR are in a mess."

G. Padmanaban, a reviewer of several Nmitli projects and a former director of IISc, also advocates more autonomy for Nmitli.

Incidentally, Yogeshwar Rao, the scientist who built the programme over the years, is leaving it to join the Indian Institute of Chemical Technology in Hyderabad. “After eight years, I decided to move on," Rao said. “Given an opportunity, I’d like to build something bigger than Nmitli."

“Most of the credit goes to Yogeshwar Rao’s dedication, who single-handedly built this programme," said M. Vidyasagar, executive vice-president of Tata Consultancy Services Ltd, which was the first firm to be funded in 2002 as a lead agency in a bio-informatics project that had 18 other research institutions as partners.

Two products came out of it—Biocluster and BioSuite, software packages for life sciences that have been established as world-class but low-cost alternatives for Indian research institutions.

Vidyasagar added that commercialization should be left to the markets and the government shouldn’t have a role in it. “Our financial system is mature enough," he said.

Many experts believe that with more money in its kitty, Nmitli should aim at bolstering its bona fides. In February, the Union cabinet gave its approval to increase CSIR’s equity share in the firms it partners, and fund a greater number of projects. Currently, only 3% of the applications are ultimately funded.

“What is needed most is a pre-Nmitli grant towards developing proof-of-concept technologies, which will seed a lot more companies, a lack of which is choking innovation today," said Chandrasekhar Nair, founder-director of Bigtec Pvt. Ltd. Bigtec has developed a point-of-care molecular diagnostics tool with Nmitli funds and is reapplying for more money to develop the device for global markets.

Experts from the industry, which is now entitled for soft loans at a simple interest rate of 3%, also said loans should be converted into grants, which currently only go to the public sector projects, specifically to CSIR labs.

“The aim of a programme like this is to allow industry to take risks," said M.S. Kohli, general manager, product development at Samtel Colour Ltd, which is working on an improved plasma display television. “So I don’t see why the government can’t give a grant instead of a soft loan."

Kohli, however, said it is unlikely that products with international appeal are going to come out of Nmitli-funded projects in the near future.

For that, said BBIL’s Ella, the programme should take up risky projects and fund it with grants. “They should now get international experts to evaluate and monitor the projects because we don’t have a critical mass of reviewers in this country," Ella said.

Biting the bullet and converting loans to grants will help, but it raises the risk of heavy-handed supervision of the projects, which so far has been “very light touch", Vidyasagar said.

Graphics by Sandeep Bhatnagar / Mint

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