Spanish biotech BioTools has partnered with ag-bio firm Kilpest India to form a new company in India that will develop and sell products to the local healthcare and agricultural biotechnology sectors.
The companies said they hope the venture, which hasn't been named yet, will eventually serve as a base to serve other markets in Southeast Asia. They have already started to assemble the new firm and expect it to be operational by February.
As part of the deal, the newly formed company will next year begin offering nutrigenomics services on arrays and other platforms developed by BioTools' spinout BlackBio. The chips could appeal to food companies in India as well as laboratories offering food-intolerance testing, according to a BioTools official.
"India has a big ag-food sector and food export market and there are also segments of the Indian population that have high income and are attractive customers for these kinds of [dietary testing] products," said Michael Sohn, managing director of Madrid-based BioTools.
Sohn told BioArray News this week that the firm has developed products for the nutrigenomics market because it is growing among individuals who are interested in dietary testing, as well as among food companies that want to back up claims of the special health benefits of their products with scientific data.
Founded in 1996, BioTools has to date specialized in supplying molecular biology reagents, selling PCR and quantitative PCR kits to the clinical-diagnostics, food-testing, and environmental safety-testing markets. The firm last year established BlackBio to commercialize tests based on newer technology platforms, such as its microsequencing assays and microarrays.
Sohn said that BioTools has been interested in expanding from its European base into emerging markets, and last year established a subsidiary in Brazil. The joint-venture company in India will likely first support BioTools' PCR and qPCR kits before adding microsequencing and array-based testing.
Sohn said that BioTools agreed to the venture with Kilpest because BioTools' ambitions for the Indian market matched Kilpest's desire to diversify its offerings. Established in 1972, Bhopal-based Kilpest has traditionally sold crop protection products, such as pesticides, as well as public health products, micro-nutrients, and mix fertilizers.
Recently, though, Kilpest decided to get into the healthcare and food-testing sectors, which led to the partnership with BioTools.
"We were looking to get into a big emerging country like India with a local presence, so we needed a partner that wanted to diversify its present business and also had facilities where we could host a project," said Sohn. "Kilpest started to get into ag-food R&D and had set up a healthcare business, so they were very interested in getting into that sector, which is higher growth than ag-food."
Representatives for Kilpest referred questions to Sohn. Kilpest Director DK Dubey said in a news report that by maintaining a production facility in India, the firm will be competitive against rivals, most of whom import their tests from abroad.
"It's an import industry where resellers are importing the reagents and selling [them] to the Indian biotech industry," Dubey told CNBC-TV18, an Indian business news network. "Once we put up the production facility here we will be very cost competitive vis-à-vis the manpower cost of India versus European and the air freight involved and the cost of the customs duty. Once we are cost competitive and the technology of Biotools is well established, we will have a major share of the market."
Dubey said that Kilpest and BioTools' initial investment in the new venture will be INR 100 million ($2.3 million). Kilpest will hold a 51-percent stake in the new firm, while the remaining 49 percent will be held by BioTools.
The new company will initially make and offer BioTools' range of PCR and qPCR-based tests, and BlackBio's microsequencing and array-based products will be added at a later time. Sohn estimated that the new company could begin making and selling arrays by the beginning of 2012.
BlackBio's main array offering for the nutrigenomics market is Diet-Chip, which the firm claims can help nutritionists set a personalized diet for an individual.
The expression microarray contains 133 genes divided into nine groups that cover hydrocarbonate, protein, fat, and cholesterol metabolism, as well as the risk for cardiovascular disease, diabetes, obesity, and stress. Each group of genes is linked to a group of recommendations that allow nutritionists to personalize diets for their clients.
Using an internally developed software platform called DietCheck, nutritionists are able to recommend foods to avoid and activities that should increase metabolism.
In addition to offering dietary recommendations, Sohn maintained that food makers can use the array to assess the health benefits of their products.
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"What we are seeing now is a change in the mentality of food companies to reevaluate their products with these kinds of tools to make claims about them," Sohn said.
He cited European Union regulations that compel food manufacturers to certify that there is data to back up certain claims, such as that their product is free of genetically modified organisms. "That's why there is a huge market in this field," he said.
A number of other companies have also expressed an interest in the nutrigenomics market. Last year, for example, Super Religare Laboratories launched a service for food testing using Genesis Diagnostics' Genarrayt 200+ Food IgG Kit (BAN 6/23/2009). Hopedale, Mass.-based Brendan Bioscience also offers a food-allergy microarray.
BlackBio's arrays are manufactured by Beijing-based CapitalBio under an agreement signed in 2007. Still, Sohn said that the markers on the Diet-Chip can be used on several platforms. How the chip will eventually be made available in the Indian market has not been determined.
"In India we have to set up a production and R&D facility, and explore how the Indian market will accept array technology in a clinical setting, a routine setting," said Sohn. "The price level is different to what they are used to, so there is still a big question mark in this sense."
Before it gets to India, BlackBio's Diet-Chip will undergo an evaluation at home. Sohn said that the company has partnered with a Spanish government-funded program that will involve a number of local ag-food companies and will start in January.
After the project concludes, BlackBio will look to make its array available to other European ag-food companies and will seek partners in the US to begin offering the chip there. Sohn added that BioTools is eyeing opportunities in other emerging markets, including more countries in Latin America and South Africa.