Over the last 15 years, Ramesh Hariharan, co-founder and CEO at Strand Life Sciences, and Adjunct Professor at Computer Science Department of Indian Institute of Science (IISc), Bangalore, has led teams building analytical tools for high-throughput molecular profiling. These tools are widely used and have been cited in several thousand publications. He and his team at Strand have been lately working on technology to make DNA sequencing for genetic disease diagnosis affordable in India. This recipient of the TR100 Award of Young Innovators by MIT’s Technology Review magazine, and the Global Indus Technovator Award from MIT, spoke to BusinessLine on oncology, and specialised testing in India. Excerpts:

Your strengths are oncology, and specialised testing. What sets you apart from other testing lab companies in the market?

Our focus on quality and scientific rigour sets us apart. Our tests are the only ones in India to have extensive validation and clinical experience published in peer-reviewed journals. Our software and bioinformatics automation for these tests is leading-edge globally and also used by US-based diagnostics companies. We were the first in South Asia to get our lab CAP-accredited for these high-end tests and continue to be the only lab with such accreditation for several tests.

How much do these tests typically cost?

The routine clinical diagnostic test involving biochemistry and IHC cost from several hundreds to a few thousand rupees. The average cost of Molecular Pathology and Cytogenetic tests may range between ₹5,000 and ₹7,000. The bulk of NGS-based genetic tests may be around ₹15,000 with some tests priced at ₹50,000 or more.

Is India ready for such specialised testing? Won't costs prove to be an impediment? What is the size of the market in India?

Patient need is the same everywhere, and even more acute in India, given the growing levels of cancer. Cost is a challenge, but India has a large middle-class that can afford it, and we are continually doing R&D to bring down costs.

The size of the market in India can be quite substantial eventually — to the tune of hundreds of thousands of individuals going in for these tests.

What is the size of the oncology diagnostic market now; where would it be in 2020?

There are more than three million people living with cancer at any given time. The overall market for cancer diagnostics is probably about $100m in size today, and growing at 18-20 per cent annually. In the longer term, new markets will be created due to innovative screening and early detection products and could multiply this market size 10-fold.

Who are the competitors?

We do not propagate competition but rather advocate and practice excellence in our work. This enables us to have a strong client base of doctors who trust the reports provided by us. However, there are various companies which are involved in the service industry that we are into. Some of them are Oncquest, Core Diagnostics, Datar Genetics, Medgenome, Positive Bioscience.

You have labs across India. How many do you have now? And how many more are in the pipeline?

We have 23 operational labs across the country which provides us access pan-India. Some of the upcoming sites are in Kolkata, Cuttack, and Kochi.

Are genetic tests covered under insurance?

Because genomic testing is a rapidly developing area of medical science, there are newer tests that enter the market every few months and with variable price tags. The insurance sector should open their arms and accommodate more of these tests.

You are scouting for business (specialised testing) in the US and UK. I believe you will be using your labs in India to carry out these tests. Won't distances become a hurdle to achieve profitability?

Our tests (either in entirety or the informatics and data analytical components) are already licensed to some labs in the US for use there. We are the only Indian diagnostics company to do so. The task of importing samples and running the test in India is something we are still exploring. Our model might be to out-license the test to local partners in emerging geographies.

Are the Gulf countries also a big market for you? How do you intend to develop business in that market?

We already get samples from the Gulf into our labs in India. Our scaling approach would be to team up with local partners who do some tests locally and outsource the more specialised testing to us.

Kiran Majumdar Shaw is an investor in Strands. Who are the other big-name investors?

Kiran Mazumdar Shaw is an investor in her personal capacity as is GV Reddy of Dr Reddy’s Labs. Quadria Capital is the main financial investor and HCG is a key strategic shareholder and partner.

Tell us about your growth plans, in India and internationally.

Our focus now is to grow our diagnostics and clinical research businesses organically. For diagnostics, growth is driven by expanded sales and new offerings — we released our HLA testing products recently and will be releasing our fertility products shortly. For the clinical research business, growth comes from expansion of our pharma and academic relationships, and our growing network of hospital partners.

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