Indian pharma company Cipla Ltd is floating an in-house venture fund which will incubate firms involved in biotechnology, medical devices and chemical entities, and target startup hubs like Boston and London besides other markets, according to The Economic Times.
Quoting the company’s new global CEO, Subhanu Saxena, the report said the objective is to build companies that will complement the future of the company.
"I strongly believe that you don't want to mix running today with building tomorrow; so this way, I have the organisation focus on the operating business and I have a team that is able to, with sensible risk, place bets for the future. And of the five or six bets I place, only two or three need to pay off," Saxena told the newspaper.
The company invested in growth of startups earlier also. In 2005, Cipla invested in life sciences and R&D (research and development) company Avesthagen Ltd and continues to be a shareholder which is now undertaking a major organisational restructuring.
Saxena did not give details of the corpus allocated for the fund but said it would be funded through the cash generated by the public listed firm.
The venture will be led by Chandru Chawla, who has been appointed as head of the new business ventures. Samina Vaziralli, daughter of Cipla's joint managing director MK Hamied, will also be involved with the new fund.
Cipla’s initiative is one of the first such moves by an Indian pharma company. However, internationally, most MNC pharma companies have investment arms such as Pfizer Venture Investments, Novartis Venture Funds and GSK Venture Fund.
The development comes at a time when Cipla is taking bold initiatives to expand. In February this year, the company announced that it is looking at acquiring South Africa’s Cipla Medpro for Rs 2,850 crore. It has also entered the US market for the first time since it started operations 60 years ago.
(Edited by Joby Puthuparampil Johnson)