Thursday, January 31, 2013

IRR v/s Social Impact: Do financial institutions necessarily go through this dilemma?

The news on Times of India Social Impact Awards & what Nicolas Aguzin, chairman and CEO of JP Morgan- Asia-Pacific said during his speech there about JPM's commitment to its social responsibility triggered a cackle of thoughts that're simultaneously standalone, contradictory, inter-connected and inter-dependent;

  • CSR (Corporate Social REPONSIBILITY) isn’t necessarily the same as CSI (Corporate Social IMPACT)
  • Given all the progress out there in the science of measuring impact, it’s possible a lot of companies have figured out OR will figure out sooner than later, how they could reposition their CSR as CSI
  • In an effort to make their social impact measurable, it’s possible that corporates' inadvertently project & expect social-change in a defined, time-bound (& not practicable) fashion?   - While objectivity & accountability are a must, through my wife’s  work in the development sector (at an implementation level..), I could sense/ witness how some inappropriately designed impact measures of a funding organization can/ have killed or maimed a promising social initiative, which if supported on a longer term could've indeed resulted in replicable, scalable & sustainable social change
  • Finally, if not blatantly so, at the very root most CSR initiatives tend to carefully (& smartly?) avoid any conflict of interest with the organization’s business goals – while this is understandable since the very purpose of a business is NOT social impact but profitability in the longer-term, it definitely makes more long-term business sense to ‘tangibly’ align the CSR/ CSI with an organization’s core business mission. While I wouldn’t risk associating this with the “social business model” of Prof. Muhammad Yunus, I’d think it’s nevertheless related, but limited to formulating the CSR plan – Social-Aligned Business Responsibility-SaBRe anyone?? :-) 

While attempting to apply, superimpose the above ethos onto the social sensitivity of the investing universe out there, I could only come up with a posse of questions, but no obvious answers – ponder this;

  • What would amount to a social impact of a financial institution (LP)? – i.e. apart from making sure the eventual investments (through GPs) are in alignment with certain mandated geo-political guidelines – I do see some institutions following macro-level charters like the Equator principle et al & that’s no doubt a great start, but not sure if that’s comprehensive enough in all complex geological, social contexts and effective for what length of a long-term?
  • In a climate where the accepted investment efficiency measures employed are the time-bound investment-to-exit cycles & IRR, is there a safety catch, any checks & measures that’d  ensure sustenance of an innovative enterprise that may have a greater social impact, if not an eye-popping ROI?

Food for thought…

Monday, January 28, 2013

Drug discovery unable to attract big money! - Is innovation, rather the lack of it to blame?

Some interesting observations on early-stage funding for healthcare from the 2012 Venture Capital Activity Report published by CB Insights (report abstract at this link);

  • Healthcare gets a not-so-insignificant share of 23% of all venture capital in 2012, but the overall investment into healthcare is lower than 2011 numbers, inline with the overall decrease in VC funding from previous year
  • The year also saw overall deal-sizes within healthcare fall from 2011 levels,  again like in other industry segments
  • Within healthcare, medical device & equipment related investments took 40% of the total dollars distributed and this shift of money towards devices & equipment segment has gotten stronger in 2012
  • Within the remaining 60%, drug discovery, development & biotechnology seemed to have got ~35% share, of which chemistry based drug discovery/ development got ~20%
  • and finally, within the 35% share share towards drug development, a majority seemed to have gone towards late-phase funding (>60 %?)

Thus the funding received in 2012 by individual companies towards early stage (discovery pre-clinical et al) seems much lower than the 2011 average (while ~10mio USD seems to be the average deal-value for all phases included, ~2 million USD could be the average value for early phase funding) - I don’t see any reason to believe that 2013 will be any different and if this trend indeed continues, the introduction of new candidates into clinic will continue to lag as before and economizing the cost of discovery & early-development will continue to be a rational strategy to be employed by the small & virtual discoveries - not sure if that'd compromise on innovation further....

The tilt of VCs towards medical device/ equipment segment looks like a commonly employed de-risking strategy of most investors. It also simultaneously suggests a seemingly prevailing weak-sentiment in investor universe towards the quality of innovation happening in biotech & chemical drug development.

While innovation domain should go through its own disruptive innovation now...., any major positive swing from 2012 trend would happen only if GPs (& LPs of course....) innovate their conventional low-risk investment strategies resulting in a) significant increase in number of deals and b) an appropriately incremental average funding on each deal and both towards drug development. 

So when is the new paradigm shift in drug discovery happening & who is going to drive it?

Sunday, January 27, 2013

Generic Drug User Fee Act (GDUFA) - What will be the implications for the consumer & for the generic API manufacturers based outside NA & EU

20 August, 2011
Posted in Linkedin Answers by Murali Apparaju

For those who remember SOCMA & EFCG making a fervent pitch in 2006 for a level playing field for domestic (read: NA/ EU) and foreign (read India, China) API manufacturers, this is an announcement of their first success & how.....

Two days ago, GPhA, EFCG & SOCMA reached an agreement with US FDA on the proposed final form of the Generic Drug User Fee Act (GDUFA).

While at the conceptual level this act is for higher patient safety through a tighter regulation of Ingredient manufacturer, this also appears to be an apparent back-door strategy to wall-out "old-technology" (read: "No QbD/ PAT" also read: "Cheap") Indian & Chinese API manufacturers in favor of the more-regulated, domestic, safe & costlier? local manufacturers.
(the NY times brief in the above link is titled "A deal to get Cheaper & Safer drugs" - wonder how exactly was this deduced?!)

What do you think GDUFA will eventually achieve/ cause & do you think consumer is the real beneficiary?

Hoping to see some comments here.

Murali Apparaju

Saturday, January 26, 2013

NRAchists in gun-afflicted america....

December 2012

My comment on a LinkedIn article on need for Gun Control in USA, I only see the comments now, no article!!, still an interesting read...

As per the chart, USA has ~90 guns for every 100 people. Despite this startling fact, I still see many below demanding a more scientific & non-discriminatory analysis rather than brooding over the above fact. - know what, to hell with more stats.... it is probability! - the probability of a gun being used is directly proportional to the number of guns that are available for use........ stop kidding yourselves gents & ladies, face it instead & save the kids.

Caste, gender & slur - Quite an explosive cocktail!! :-)

01 March 2009

Wow, this repro' is a dinosaur, way back from 2009!!! - my comment below was on a real flamer of a topic that was originally posted in November 2007 & still going strong with 983 comments amounting to terabytes of sane words & insane rhetoric. I don't want to be another blogger to do the same mistake & hence have disabled comments on this - If you have a compulsive impulse to add to Uday's woes, post your comments on the original site below - cheers, V

My observations on the original post (rather on the content of Brahmin Ponnu’s statements) – to keep it simple, I will assume she’s indeed a brahmin ponnu & the feelings indeed are true…

“Familiarity breeds contempt – Over exposure to a certain kind makes one nauseated – the insider knowledge causing prejudice”
  •  Doesn’t this happen in your company, aren’t the insiders the last choice for the new post created & don’t outsiders look eminently more attractive than insiders to the management – this is a similar syndrome.

“Choice of mate instincts keeps changing with age..”
  •  At college I’m sure the lure is of big talking, macho & adventurous guys – which an average brahmin male may not demonstrate owing to upbringing.. PHYSICAL & SOCIAL QUALITIES COUNT WHEN ONE IS LOOKING FOR A PRINCE ON THE WHITE HORSE TO TAKE YOU ON A DATE – SWEEP YOU AWAY?….FOREVER?….. THINK AGAIN…
  • 5 years down the line, I’m sure ponnu would settle for a Bay area techie in favour of the college stud who may not have settled as well & earning that well – MONEY COUNTS WHEN YOU ARE LOOKING TO MARRY

“The lady’s comments are possibly reflecting the general liberation of minds in either sexes in this modern age…”
  •  Perhaps an indication of a growing & general reluctance to accept limitations in partners & aversion to compromise.
  • May be polygamy/ multiple partners is making a come-back… (check out the Axe Deo ad where mixing makes babes better….:-))
  • Perhaps, the ever increasing domination of “I” over anything else

“Brahmin men caught in a time-warp? – starting to live the stereotypes showcased by society, films??
  • Someone said this before, buck-up guys, change, work-out, change your attitude to looks, you have the basics in place, all you need to do is polish the stuff..
  • Forget about the simplicity your grandfather so believed in — he was in a different era… re-package your body, spirit, get attractive to the opposite sex…
  • I’m sure those who have done/ doing this already see the results, non-brahmin girls falling for them & yearning for them… (all the above applies still to these wide-eyed wonders, grass is greener on the other side of the fence)
  • finally it’s an appraisal, part-true, part-crap —- well…take some good out of it…. emerge better… don’t justify & get labelled more harshly…

all the best…

Friday, January 25, 2013

3200% premium for innovation!!

April 2012
Discussion posted on Pharmaceutical Discussion Group on Linkedin

PhRMA says price as trigger for compulsory license is not provided for in TRIPS - wonder if TRIPS provides for 3200% premium for innovation?

Reference article:

PhRMA’s Special 301 comments to the U.S. Trade Representative include a section on the compulsory licensing provisions in India’s Patents Act.  PhRMA recommends that “India should ensure that the CL provisions comply with TRIPS...

Why won't Gates spend a few more cents (per dose) on non-mercury biocides & shut-up the vaccine detractors?

April 2012
Discussion posted on Pharmaceutical Discussion Group on LI - by Murali Apparaju

I remember trying to promote ProClin (Supelco) as a viable safe non-mercury alternative to Thimerosal (Sigma), both Sigma-Aldrich products for the uninitiated - I've seen that despite obvious interest & some intention, vaccine manufacturers solely surviving from the bulk purchases by the likes of gates foundation continued to use Thimerosal owing to the cost-advantage it offers in a climate of 50% price fall each year… - 7 years hence, I’m wondering if all the noise on autism by Trump motivated Mr. Gates to at least encourage his supplier base to start looking at safer alternatives to Thimerosal albeit at a few cents higher per dose?... if not, why bill?

Reference video 

Thursday, January 24, 2013

Review of Mahendra Ramsinghani's "The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies

21 Aug 2012

Review Posted on

5.0 out of 5 stars A 'must' for all those who fancy the bucket & probably the ocean too!August 21, 2012 By Vishrasayan

As someone aiming to venture into VC, and moving quite laterally at that, I was on lookout for a book that not only strengthens my basics but would also help me develop my own perspective of how the ecosystem behaves & how I could synergize and coexist with the same - `The Business of Venture Capital..' by Mahendra Ramsinghani fit the bill perfectly.

While essentially structured as a comprehensive guide to the VC process, the author took pains not to make the style pedagogic & peppered it liberally with quotes, case-studies and his own witty one-liners that helped the overall learning process while not getting your goat. Even as I persisted through all chapters, I did realize that the composition of each chapter allows one to skip a chapter or two & still make sense of the flow.

The book ends with a quote by David Ogilvy "Don't bunt. Aim out of the ballpark. Aim for the company of immortals". Interestingly (for me at least...), the epilogue starts with the sentence, "At its core, VC is truly an apprenticeship business" - This seeming contradiction/ irony is what defines the approach taken by the author Mahendra Ramsinghani in establishing that a true venture professional is essentially a lifelong apprentice who nonetheless perpetually aims to challenge the boundaries of a conventional success.

Highly recommended for aspiring & established VCs and anyone else who fancies the `bucket' in whichever way!

The clinical attrition of INX-189 post a 2.5 billion acquisition - are investors into life sciences really looking at where the buck is headed?

October 2012
Discussion initiated onGlobal Private Equity & Venture Capital group on Linkedin

Agreed BMS is no VC & acquisition of Inhibitex at 2.5 billion was more a survival tactic, but probably the outcome could be such for many investments into the life science (drug discovery). I believe the investor due-diligence of the investee should go beyond market projections of the pipeline candidates & a rational assessment of the druggability & clinical longevity of the pipeline candidates is what should interest the investor the most – not sure if this happens to the extent required?

Would love to hear what the investor community feels about this.


PS: My love went totally unrequitted :-)... zero response

Is the LP bias against investment into life-sciences contra-logical?

17 January 2013

Early Stage Biotech Showing Positive Signs of Scaling Its Wall of Worry by Bruce Booth on Forbes

Despite the apparent consensus opinion at JPM that innovative new start-ups are continuing to attract capital, I wonder if in reality the venture funding, particularly from big-pharma CVCs, is mostly channeled into development/ acquisition of potential clinical candidates - THIS anomaly of an 'uncharacteristic aversion of domain biggies themselves towards investing into early innovation that'd feed their own pipelines' is WHAT I feel is the primary reason for a strong bias in the LP universe against investment into Life Sciences......

INX-189 clinical attrition - a call for re-look at single isomer strategy of Gilead?

October 2012
Discussion posted Pharmaceutical Discussion Group on LinkedIn

Is the purported toxicity of the non-active diastereoisomer in a P-chiral nucleotide prodrug (protide) a scientifically derived hypothesis OR is it merely a surmise from a coincidence that no active-isomer is found toxic till date? (considering very few 'single isomers' entered PI till date..)

The quintessential 'Indian vegetarian meal' prototype on Emirates

23 Nov 2012

On FB McKinsey article "the trouble with Travel distribution"

Yes indeed - the globe trotting traveler these days can negotiate and get deals on anything & everything, except if he/she's an Indian vegetarian, flying any global airlines and hoping for a gourmet food experience.... Get real chum, eat ur paneer, okhra, rice & all together :-l


11th January on FB

Akbar bhai.... meraa bhi ek sawal hain baataan shadab cafe mein chai pe chotti samosa khatey waqat bolney hain, woh baataan camere ke samne kaiku karrain miyaan? panga kaiku lerain phursat mein khali-peeli sarkar sey? 

The mahaul at Nirmal is such that anyone can get into a rhetoric mode, get irrationally impassioned and indulge in senseless bravado....... while some of the allegations, sentiments voiced by Akbar bear a semblence to reality, truth, a lot of it was hyperbole & it would be foolhardy to say the listener would take it all as God's word...... Akbar is no polished politico, he comes across as immature, kiddish...... more than what he said about the infamous 'pandrah minute', more worrying is the way the crowd erupted in cheer & approval of that idiotic posturing........... dimaag khaan bhoolkey phirrain yaaron ye logaan?

Secular India would do good to focus on the funny side of all this & show it to the understanding Muslim population out there which also has a sense of humor... (believe me... there were a few concerned, confused and amused faces right behind the sher-e-deccan :-)...) to me this speech is nothing more than a excitable shahri showing off to the vulnerable dehathi....

(main section is between 48th & 60th minute)

Climb down from the towers BoDs..

We are all Board Members on LI by Lucy P Marcus

As an employee who always worked with a sense of ownership, accountability, I always felt its strange that the board's engagement with key employees (second line, executing level) within the organization is non-existent & more often than not, its strategic guidance is based on a colorful slide-deck or an birds-eye-view executive summary that rarely reflects the subtler aspects of business realities and it's short & long-term sustenance. While I see a common thread here that the board has a responsibility towards company's vision & and should represent the stakeholders interest rather than it’s own, I am wondering why so many critical decisions are still taken by boards without ever engaging directly with the stakeholders that actually go about translating the vision into action? & I’m presuming that employees at key positions too are considered a part of the stakeholder pool & not just the investing PE universe.

Provoke, par zara bachkey :-)

Want to Deepen Impact in 2013? Be a Provocateur on LI by Ben Mangan

Quite nicely provoked :-)... I though see most provocateurs use the 'why' primarily for disruptive purposes (unfortunately) than otherwise.... I guess these belong to the category of 'those who don't give a damn (like Veronika J wrote below...), but provoke nonetheless for the heck of it' (OR to topple some apple-carts...) Whichever type one is, my message to all prospective provocateurs is "Ask WHY?, but be well prepared when countered by 'WHY NOT'?" 

Wednesday, January 23, 2013

Your message bothers me Esther and how....

Should I Bother With Your Message? Persuade Me! on LI by Esther Dyson*1_*1_*1_*1_recentPosts_*1&trk=who_to_follow-b

With all respect to the departed soul, I'm starting to get why Aaron Schwartz decided to end his life...... sender of a message pays on a social network? - Monetizing a few lines as though it were a validated piece of patented intellectual property? – bad enough reason for any cyber-socialist to give-up on hope and die! 

I remember & believe that cyber communities/ DBs started out in a spirit of sharing knowledge, thinking & perspective with whoever displays a similar trait to engage & evolve. If companies like LI & FB monetize this engagement for their own stock valuations, I still understand, particularly seeing how FB is struggling with its sub-par listing & trading post such a hyped-up public issue. What I don't understand is the increasing tribe of self-appointed thought-leaders & experts who believe a mere mail to them deserves a valuation!!!!! – Is it that I should’ve been a citizen of Pandora OR Is this really the most obscene manifestation of assumed self-importance? 

If I have a need that requires me to pay to someone just so that he/she receives my mail in a non-spam folder & for which he/she may not necessarily respond even, I’d think my need itself is ill-articulated &/or illegitimate and the person whom I’m trying to pay to get through to isn’t worth reaching out to after all 

Indeed, a good self-image is important in life..., but gents & ladies extreme self-importance is avoidable - never forget the “Rule Number 6” (