Mumbai, Oct. 31 -- When Kavitha Iyer Rodrigues chose novel drug discovery over scaling a biosimilars business, she took on a much harder problem: developing novel biologics in an ecosystem built largely around generics and biosimilars. More than a decade later, her second startup, Zumutor Biologics, is testing whether that bet can deliver scientific progress-and returns for investors.

"Scale was not my cup of tea," said Iyer. Her preference for research and development (R&D) led her away from expanding her first venture and towards the riskier pursuit of novel drug discovery.

The Bengaluru-founded company's lead candidate, ZM008, is in phase 1 clinical trials in the US. It is designed to help the immune system's natural killer (NK) cell...