Last week’s quiet exit by the Tatas from Advinus Therapeutics may not have surprised many.
The writing was on the wall, say industry insiders. Advinus had reportedly laid off employees and last year co-founder Rashmi Barbhaiya too stepped down as Managing Director. The Tata house is seeing its own set of changing priorities that possibly rendered Advinus’ clincial research organisation (CRO) a non-core area. And, most important, research and drug discovery are long gestation businesses that call for strategic promoters with deep pockets, ready for the long haul.
Though details of the Advinus sale to Luxemborg-headquartered Eurofins Scientific are still to be revealed, the transaction marks a couple of endings and some beginnings. To start with the silverlining, the Eurofins deal could set a benchmark in terms of a local CRO being bought by a foreign company, says an industry representative. The size of the Advinus deal is as yet undisclosed by the Tata group. But the domestic space has till date only seen a lower profile of CRO acquisitions or local ramifications of global acquisitions, he explains.
The Eurofins transaction also signals a slow lifting of the shadow that looms over clinical research, he says, as greater clarity emerges on rules that govern the sector, albeit under the watch of the Supreme Court. Depending on how the Eurofins deal works out in the present regulatory environment, it could herald more such, says the research-head of a drugmajor.
Not-so-happy endings At another level though, there is disappointment that a company like Advinus that started with much promise and the support of the Tatas to boot, had to face such an exit. Industry colleagues agree that the company did set itself ahead with its pre-clincial research and had indeed notched up deals with multinationals including Merck, Novartis and Takeda. The Advinus investment had marked Tata’s secondcoming into the pharmaceutical sector, something many industry representatives say, was a mistake given that pharmaceuticals is a different ball game when compared to its agri-solutions and chemistry-led business under Rallis India.
Following the deal, all Advinus employees will move to Eurofins, a Tata Industries spokesperson said, without indicating how many will shift. However, details on Advinus’ Pune operations handling drug discovery are more sketchy.
An industry source familiar with the transaction said that the intellectual property generated by Advinus through its research would be housed in Impetis Biosciences Ltd (promoted by its existing shareholders) and monetised at a later date. Impetis was incorporated in late-May this year. A clear understanding on what happens of the Pune facility and employees there is expected to emerge as the transaction closes in the coming weeks.