VCCircle

Ozone Pharmaceuticals, a Delhi-based maker of skin care products (such as 'Nomarks' brand) was in news recently for indigenously developing a protein sequencing instrument. Protein sequencing is done to determine the sequence of amino acids in a protein, and that helps accurately diagnose reasons for the occurrence of diseases and disorders. The instrument can help speed up the drug development process. The global market for proteins sequencing is estimated to be worth $20 billion, and Ozone is taking a bite at that. If all goes well, that can change the fortunes of the Delhi-based small pharma company. The players in the global protein sequencer market include the US-based American Biotech Industries with a dominant market share of over 90 per cent and Hewlett-Packard Co. with a market share of over 6 per cent, according to a report.
The company was founded in 1992 by S C Sehgal, a first generation entrepreneur and a one time market representative with Glaxo. The closely-held Ozone Pharma registered revenues of Rs 56 crore in 2006-07, and the company is targeting a 35 per cent growth this year to Rs 75 crore. They are open to raising capital, and probably an IPO by 2008. VC Circle spoke to Chairman and Managing Director Sehgal about the new product and their expansion plans. Excerpts:.

You recently came up with a protein sequencer technology, a diversification from your existing line of pharma and FMCG products. What does this new product mean for you?
It is a breakthrough technology, developed under Research Frontier in the US, the R & D division of the Ozone group. The study of protein structure and function through this instrument could speed up drug development since protein sequencing helps accurately diagnose reasons for the occurrence of diseases and disorders. Detecting the disease in the body at a fairly early stage, by understanding the patterns of proteins sequencing through a protein sequencer (an instrument used in determining the sequence of amino acids in a protein), will in turn allow pharmaceutical scientists develop drugs with lesser toxicity, to target specific metabolic processes at the cellular level. This will thereby ensure a better and a longer life for people.

By when will it be available in the market? Do you see enough market for the same in India?
It would be made available in the domestic market before March '08. The global market for protein sequencers is estimated at around $20 billion (approximately Rs 79,000 crore). In India, sales of such sequencers stand at around Rs 70 crore.

What are the company's future plans?
We have planned the expansion in two phases. The first phase includes getting into organic farming, which will be the backward integration of all our pharma, ayurvedic and FMCG operations. For this, we have recently bought 68 acres of land in Guawahati, and have already begun with organic cultivation. We plan to make all our products organic in near future. We are looking for more land and are in the process of buying more for our "Health village". It will be a holistic one stop solution for all kinds of heath managements - ayurvedic, magnetic, therapeutic, allopathic etc. In our next phase, we plan to come up with a chain of allopathic hospitals.

What is the investment all this will entail?
In our first phase, which does not include setting up of allopathic hospitals, it is about Rs 100 crore.

How do you plan to raise funds? Are you looking to raise money?
Initially it is being borne through internal accruals. Yes, we are. But we have not appointed any investment banker as of now for the same. But we are open to any good offer.

Any IPO plans in the future?
We plan to come up with an IPO by the end of next year, by December 2008.

Are you looking for any kind of merger/alliance with any company?
Yes. Why not? We are open to an alliance with companies dealing in manufacturing of pharamaceutical products, preferably outside the country.

Do you plan any retail formats?
This is not my practice area, so I will not venture into it. But we do and will keep providing our products to leading branded chain of stores dealing in pharmaceuticals, personal beauty etc. But, we do not have plans to set up exclusive retail shops dealing in Ozone Pharma goods as of now.