After a year of digesting its acquisition of MWG Biotech's microarray business, India's Ocimum Biosolutions is now looking to build on its current offering by acquiring an oligonucleotide synthesis business, investing in disease-specific arrays, and securing an additional $5.5 million from private investors.
The Hyderabad-based company, which currently employs 150 people, is also looking to better integrate its offices in the US, Germany, and India and add personnel.
Ocimum currently offers bioinformatics products, custom and catalog microarrays, and research services, including oligo synthesis. Chief Financial Officer Subash Lingareddy said the company's new plans reflect its desire to strengthen these product lines.
Specifically, Lingareddy said that Ocimum is interested in expanding its oligo synthesis business from its headquarters in Hyderabad to its offices in Indianapolis and Munich, Germany.
"We are looking at acquiring companies [that sell] oligonucleotides [in the] molecular biology space," Lingareddy said. He said that Ocimum is eyeing companies with annual revenues of between $5 million and $10 million that play in markets worth at least $500 million.
"We will make Ocimum India the parent for the other companies when the private equity player comes in. We will be adding more people at all three locations as we scale up."
In an interview this month with the Indian online journal Business Standard, Ocimum's CEO Anuradha Acharya said that the company may finalize an acquisition before the end of this year.
"We are eyeing companies that are both in the IT and life science spaces or have a presence in the oligonucleotide synthesis space," Acharya said. She also said that the company is looking at transferring some oligonucleotide synthesis work from the US to India.
Acharya was not available to comment for this story.
Private Equity Financing
Lingareddy said Ocimum is in "late-stage negotiations" with a "large" undisclosed US-based private-equity player. The company expects the round, which is for around $5.5 million, to close by end of June or early July, he added.
Ocimum is owned mostly by its founders, Lingareddy, Acharya, and Chief Scientific Officer Sujata Pammi. Ocimum is also one of 11 companies affiliated with Ficus Enterprises, an Indian investment firm with interests in biotechnology, pharmaceuticals, as well as dairy, mining, and construction.
The private equity financing will help Ocimum integrate the German and US facilities it acquired with MWG Biotech last year with its Hyderabad headquarters (see BAN 3/2/2005).
"Right now all [of our] businesses are set up as independent companies in their respective country," said Lingareddy. "We will make Ocimum India the parent for the other companies when the private equity player comes in. We will be adding more people at all three locations as we scale up."
Lingareddy also said that the company is in the process of developing disease-specific arrays in the areas of cancer and diabetes that should become available in the third quarter.
The arrays will be a departure from Ocimum's current catalog arrays for human, rat, mouse, and other organisms, therefore putting it in competition with most other array companies, including Affymetrix, Agilent, and Applied Biosystems.
Lingareddy said that Ocimum is "working on specific cancer arrays and a diabetes chip" and is "working with academic and commercial partners to develop these chips." He declined to elaborate.
According to Ocimum's website, the company currently partners with the University of Alabama, Huntsville, and counts as customers Indian Institute of Technology, New York University, the University of Nottingham, and the Max Plank Institute.
— Justin Petrone ([email protected])