An open letter to the Indian Prime Minister-designate

Dear Mr. Modi,

Heartiest congratulations on receiving a clear and emphatic mandate from the people across India!

I always believed great leadership is what India needs at the current juncture and in your relatively successful demonstration of a development based governance model in Gujarat and in your super-effective execution of the poll blitzkrieg unleashed by BJP, I see a definite promise of this leadership need getting fulfilled.

Cynicism however being the hallmark of an oft-let-down individual/ population, I am a tad cynical despite nurturing a predominant hope of seeing a promise materialize. Upon introspection, I realize that my current bout of cynicism has been triggered by what I repeatedly hear about this verdict of Indian population being a mandate against corruption; a mandate for a long overdue Indian-spring, no less & finally a mandate for development.

Mandate for development? Probably yes. But is it against corruption & pro-clean governance too? The cynic in me doesn’t agree….

I’m cynical largely since a small but a startling fact I’ve stumbled upon pretty much trashes the claim of this election being a mandate against corruption; the fact being that AAP that contested on a national scale on an anti-corruption platform manages a mere 2% vote share and trails behind the 2.5% of an upstart regional party that symbolizes everything corrupt in Indian polity.

Even if I discount this as owing to the tell-tale impact of an escapist-legacy that AAP couldn’t shrug-off, this for sure underscores the fact that corruption wasn’t the top-of-the-mind issue for the average Indian citizen headed for the polling booth & there was every sign out there to say that money flowed like water in this general election and a significant proportion of the voting junta had had a field time letting one party out-bid the other.

I am cynical also because in the revamped scheme of things within your party, the past blemished have sauntered back right-in and have been duly resurrected and reinstated honourably, all in the larger context of coming to power and providing an alternative to the chronically fatigued dynasty that grappled with corruption at all levels.

Finally, I am cynical because there is this improvised practical theory gaining ground among the Indian citizens that corruption isn’t a big issue as long as development happens & within the narrower realm of visible development.

I absolutely loved it Narendra bhai, when during the victory speech at Vadodara, you reiterated the importance of inclusiveness in development. Unlike many liberals who raised an eyebrow on what you didn’t state explicitly, I indeed understand you meant to include all segments of population in the development process without malice towards any one in particular. I know for sure anyone who has come to power on such a unique mandate, much less you, would waste such an opportunity by indulging in antics that result in polarization & marginalization of a specific segment. Only, I’m worried that all this inferred disengagement between development & corruption in the Indian psyche shouldn’t end up making inclusion merely a term to denote equitable sharing of spoils among a corrupt polity and a corruptible populace, irrespective of region, community or caste.

Notwithstanding the oft-employed reproach that Indian growth rate over the past few years has been way above the rate of most advanced countries’, I know you understand well that we aren’t exactly comparing apples to apples here & in reality India lags behind these nations in infrastructure and civic amenities by a decade at the least. I trust that you fully realize that development at this scale isn’t possible merely by launching or going after symbolic, disjointed developmental initiatives that neither impact the quality of life nor help improve the perception of an ever-doubting international community on India’s capability to operate as a transparent & corruption-free business nation.

Cynicism apart, I am thrilled by the fact that the clear mandate will help you avoid the oh-so-typical arm-twisting, blackmailing politics of the coalition/ alliance governments and this in-turn will allow you to focus on executing your vision that much more smoothly and without hindrance. Given this and given your own leadership potential this is the closest, I suspect, India would ever get to an Indian spring.

I’m positive Mr. Prime Minister-Designate that you’ll seize this moment to redefine the paradigm & give me a reason or a score to feel more proud of being an Indian wherever I go.

I wish you, your cabinet and all Indian citizens the very best in the days to come!

Acchey din…, bas ab aane hee chaahiye!!

Respectfully yours,

A fellow Indian

Being a CVC - A perspective on Novartis Venture Fund's investment (& exit) strategy

If anything, the recent news of Novartis agreeing to sell its vaccine & veterinary businesses while simultaneously acquiring oncology assets from GSK consolidates my earlier view/ observation that the investment philosophy of a corporate’s venture arm seldom reflects the strategic goals pursued by the corporation itself - effectively meaning that there’s hardly any difference between a CVC and a VC as far as the ‘intention behind the investment’ goes – the intent in this context being a tangible ROI.

There is albeit a definitive difference between a CVC & VC as far as the ‘intelligence behind the investment’ goes – the intelligence in this context being the insider-edge the CVC enjoys when it comes to identifying, qualifying and investing in a promising enterprise, an edge seemingly acknowledged by the VC & angel community given the sheer number of fundraising rounds led by the likes of Google, Intel & Novartis compared to than those led by non-CVC brave-hearts – This propensity of the investing junta to look up to the CVCs to take lead is demonstrated once again by the quantum of followers the likes of Kevin Rose (Google Ventures) & Jerry Yang (Yahoo) command on AngelList, the new age pit-stop of investors & enterprises alike.

I realize though that compared to the regular VC, an average CVC can afford to be lot more adventurous/ less-conservative since the LP, which is the corporate itself, has a far less looming presence given the non-financial nature of the corporation.  This context of less-intense LP scrutiny thus affords a CVC greater liberty & hence their investment strategy may not be that de-risked after all & this isn’t saying anything.

With no prejudice whatsoever on the relative merits of a CVC vis-à-vis a VC & going merely by the data, I think Novartis Venture Funds (NVF) is what one could refer as the ‘Google Ventures of pharmaceutical innovation’, a yard-stick, if not a bench-mark other VCs could use within the pharmaceutical domain. With this premise, I went about analyzing the NVF’s investments data, of both current & exited portfolio, the key takeaways of which I have discussed below;

DUALITY OF VISION

A quick comparison of NVF investment focus & Novartis business focus;

  

INVEST SMALL – EXIST FAST

When it comes to making small molecule therapeutics work both as a business strategy & investment focus, few seem to be able to bend it like Novartis. Despite Small molecule therapeutics being a mere 20% of the total invested value, this segment is a star performer at 63% when it comes to exits. This performance is consistent in both the major exit types of IPO (69%) and Acquisition (59%) – the relatively higher contribution of IPO as an exit also seems to suggest that the chances of an IPO are higher for an enterprise developing small molecules & that going public isn’t an easy game for a company developing biologicals.

No wonder then that the current portfolio of NVF once again is dominated by enterprises pursuing small molecule therapeutic dreams (53%). However the marginally higher percentage share of biologic therapeutics in the current investments indicates NVF is cautiously optimistic about these living herbs!  

ATTITUDE, IT’S THERAPEUTIC

The NVF investment spread across therapeutics is nothing counter intuitive & is expectedly skewed towards oncology. What’s interesting is the sentiment/ attitude driving these investments in different disease segments.

Looking at the interplay of number v/s value of investments, NVF’s investor attitude can be summarised as follows for a few key segments;

Oncology           -->          Casting the net far & wide

Hematology      -->          Betting high

Cardiology         -->          Upping the stakes

Allergy               -->          Risking it big

Infection            -->          Seeding a promise

EXIT THROUGH ACQUISITION THAN IPO

With companies having FIC assets making up 60% of the total current investments & since FIC assets are typically more attractive acquisition targets, it can be surmised that NVF is not counting on IPO as the primary exit path.

BULLISH ON EARLY & BEARISH ABOUT LATE-PHASE ASSETS

Perhaps this is more of an alert to enterprises seeking venture funding than other VCs – the date clearly shows NVFs reluctance to risk its green-backs on the very volatile PIII assets – this once again underscores the primal premise that for NVF’s vision is limited to supporting viable clinical assets and NOT in seeing them through to the market.

The message hence for the biotech is - knock at the doors of NVF after your IND is filed & count on their support till end of Phase II & showcase the potential of your clinical asset to get acquired even as it is still in PI or PII.

SLOWER, LONGER & BIGGER – NVF’s NEW MOTTO?

VC is more a patient fund than earlier & NVF seemingly realizes that – that’s what the numbers say at least

Despite the now apparent & clear segregation of objectives of a corporate & of its venture fund, a CVC seemingly still employs the insider-edge in making its investment & exit decisions.

Meray Chaaraaney.