A decade is a long enough time in any business, however risky its premise or exploratory its process, to prove whether it’ll return value to its investors or not. This was evident last month when the news broke that the Tata group was selling Advinus Therapeutics to Eurofins Scientific, a contract research and manufacturing company in Luxembourg. What seemed like a masterful strategy 10 years ago, to get into a new business of discovering drugs and licensing out to big pharma, ended up in a messy exit.
No one has come out of this decadal quest looking great. Not Rashmi Barbhaiya, co-founder of Advinus, who resigned in May 2016 and returned to the US, and not the TATAs, who shut down the discovery wing in Pune in December and quietly laid off “nearly 200 people”. People close to the development say the deal with Eurofins is estimated to be between Rs 350 and 375 crore though the TATAs were hoping to get Rs 450 crore. It’s not immediately known how Advinus will shed its sizeable debt, which in FY16 amounted to Rs 348 crore, according to corporate filings.
“I’ve not really spoken about Advinus since I left,” said Barbhaiya over the phone from the US, reluctant to speak on this matter. “You know what happened to Ranbaxy [referring to the major data fudging fraud in his previous pharma company for which it was fined $500 million]. If I turn the clock back and if I were to choose between joining Ranbaxy again and joining hands with the TATAs, I’d choose Ranbaxy any day over the TATAs, just on ethical grounds.”
To be emotionally unengaged in such matters is hard. Even Ratan N Tata, chairman emeritus who was personally involved in setting up Advinus in 2005, is learnt to have shown “fair amount of patience” until he was left with little. The group had rallied around the idea, pooled in resources from Rallis India, ‘cleverly’ worked out a new company structure in Advinus and hoped its cutting-edge tech and processes would invigorate a few group companies, especially Tata Chemicals. But they cut their losses after 12 years. The ripple effects of which are felt in the drug discovery community in India, which is small and struggling and prone to second-guessing itself at such closures. They resemble what the Bay Area in the US was in the ‘70s and ‘80s when it was all hard work and no money.
For the TATAs, what came out of it was perhaps learning. “Some of it was also vague. It’s like saying what did the Indian team learn by losing the [cricket] World Cup in the years that it lost,” says Satish Pradhan, who was associated with Advinus right from the start and served on its board until he retired from the group in 2015.
