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When Krishna Ella and his wife, Suchitra, arrived in India in 1996, he had only a dream and $1,000,000 in his pockets. Okay, that’s a lot more money than most immigrants bring with them. But it was necessary seed money for Ella’s mission: to start an Indian biotechnology company from scratch.

Nine years later, Bharat Biotech has more than 350 employees and will soon hire an additional 200 workers. With annual revenues of around $10 million, the company has an R&D pipeline packed with more than a dozen potential blockbuster drugs for the Indian market and beyond. And it has crafted alliances with at least four major pharmaceuticals to do joint research and development.

“We not only survived,” says Ella. “We thrived.”

It’s a case study that breaks several global business molds. For one thing, well-trained Indian professionals traditionally traveled to the West to make their fortunes. For another, India has become a destination – but mainly for companies outsourcing programming and service jobs.

Bharat, on the other hand, is a home-grown, highly skilled R&D enterprise. What’s more, pharmaceutical manufacturing, the main source of the firm’s revenue, relies on high-cost equipment, which should level the playing field between an Indian startup and its established Western competitors.

Yet Bharat has succeeded – in part, because Ella wrote his own rulebook. In addition to the traditional entrepreneurial hurdles, such as finding investors and hiring staff, Ella had to overcome some classic Indian obstacles: a byzantine and often corrupt bureaucracy, strike-prone labor unions, and government interference.

On arriving in his native country, though, Ella’s first problem was money. He had collected a million dollars from friends and colleagues at the Medical University of South Carolina, where he’d taught for a decade. But then the offer of a loan from Indian investors fell through soon after his arrival in India.

As a result, Ella and his wife had to spend the first months convincing banks to loan them money. It didn’t help that Ella was a repatriate. “Nobody could understand why someone would come back to India,” Ella says. “Everyone’s first question was: ‘What went wrong in America? Did you break some sort of law?’”

After almost giving up several times, Ella finally secured a loan big enough to build a modest pilot plant, where he started developing a Hepatitis B vaccine – the first ever produced in India. More than a financial success, though, the vaccine was also a giant step in reducing the cost of the vaccine in India.

“He single-handedly brought down the price of Hepatitis B vaccination from $22 per child to a few pennies,” says C. Durga Rao, professor of virology at Bangalore’s Indian Institute of Science. “Without Bharat, nobody in India would be getting vaccinated for that disease today.”

Bharat began developing other new products, too, using an unconventional source of financing: a nonprofit. PATH (Program for Appropriate Technology in Health), an international global health outfit (and a grantee of the Bill and Melinda Gates Foundation) established a $6.5 million grant for developing a new rotavirus vaccine in India, with Bharat Biotech as its major development partner. (See the July issue of Technology Review for an article on rotavirus). That vaccine could soon enter stage III clinical trials.

 

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