The buzz emerging from the research laboratories of Indian pharmaceutical companies is hard to miss. Glenmark Pharmaceuticals is expected to launch its new molecule called Crofelemer for its anti-diarrhoea drug by 2010. Crofelemer, that was in-licensed by Glenmark in July 2006, was originally developed by the US-based Napo Pharmaceuticals. Currently, it is going through Phase III trials in the US.
Ranbaxy Laboratories achieved a significant landmark recently in its collaborative research programme with GlaxoSmithKline (GSK). It has commenced Phase I human clinical trials on the lead compound for treatment of respiratory inflammation. Ranbaxy could receive over $100 million in potential milestone payments for a product developed by it and subsequently launched by GSK in multiple indications and up to double digit royalties on worldwide net sales. ?Several research programmes are being pursued within the Ranbaxy-GSK alliance against anti-infective, respiratory and oncology indications,? says Ramesh Adige, president, Ranbaxy Laboratories. Ranbaxy and Merck are also working together for discovery of antibiotics and antifungal drugs.
Down south, Dr Reddy?s is undertaking joint development with ClinTec International, Rheoscience and 7TM Pharma. Focus is on to develop three drug molecules for cancer, Type II diabetes and metabolic disorders respectively. While the molecule for diabetes is in Phase III trials, another molecule for respiratory diseases is in pre-clinical stage.
Similarly, Suven Life Sciences is partnering Eli Lilly on a pre-clinical drug candidate for central nervous system (CNS). The molecule is in end of Phase I trials and is set to enter Phase II by the third quarter of 2009-10. Piramal Healthcare is working with Eli Lilly and Merck on drug targets for metabolic disorders and oncology. The lure is of milestone payments going up to $175 million per target, plus royalties on sales.
Amidst the ongoing recession and economic slowdown, Indian drug companies are providing solace and much needed ?healing touch? to the big pharma. Their co-development models with pharma biggies like Eli Lilly, Merck, Forest Labs and Amgen, are working overtime on optimising early hits and bringing R&D efforts to fruition. Leading Indian pharma companies have over 60 molecules currently under various stages of development and collaborative research has played a vital role in achieving this scale.
Excitement is palpable as these molecules?also called drug hits in research circles?have the potential to fetch substantial revenues to Indian pharmaceutical companies. This will come as development payments and, not to mention the subsequent royalties on worldwide net sales. In addition, the key benefits to Indian companies include developing and honing expertise and growing business opportunities.
The key benefits to the big pharma are coming by way of huge savings in terms of money and time due to lower cost of development. Leave aside the benefits, their combined efforts are giving a strong impetus to developing medicines for diseases like asthma, cancer, cardiac disorders, diabetes, metabolic disorders, among others.
Global pharma companies have been reeling under pressure to cut costs for some time now as a result of declining R&D productivity and increasing exposure of revenues to genericisation, as more and more drugs go off-patent with a slowdown in new product approvals. In current recessionary times in the backdrop of a global economic crisis, there is additional pressure on these companies to manage resources more efficiently and enhance profitability by restructuring business models.
Therefore, partnerships and collaborations will be the way forward for the pharmaceutical industry, opines Ranjit Shahani, vice-chairman and managing director, Novartis India. ?There is opportunity to collaborate for not just research and development, but also for pre-clinical and clinical trials, bioinformatics, biostatistics and custom synthesis. The concern in all of this is the lacunae that still exists for data protection and intellectual property rights,? he adds.
?This trend is validated by the recent Jubilant?Eli Lilly joint venture set up for new drug development, in addition to several long term contractual arrangements that global pharma companies already have with Indian companies such as Dishman Pharma, Nicholas Piramal, Hikal etc,? says Hitesh Gajaria, executive-director, KPMG India. According to him, over the last few months, R&D collaborative deals between global and Indian pharma companies have increased, and in the months to come, we can expect this trend to gain further momentum.
Companies such as Merck are also reported to be scouting for multiple Indian partners for drug development collaboration.
Clearly, competing in the new world order has a new meaning for biggies in the global pharma industry. It is about delivering the highest quality drugs at the lowest cost. No wonder, there has been a surge in the collaboration between Indian pharmaceutical companies and their multinational counterparts. ?The growing number of drug discovery and development partnerships signifies the big pharma?s confidence in India?s capabilities in this fiels,? says Arvind Lal, chairman and managing director, Dr Lal Pathlabs.
A collaborative approach is a sound strategy for new drug discovery and development for a number of reasons. Firstly, it mitigates the risk associated with failure of the molecule.
Secondly, the two partners can leverage on each other?s domain expertise. Thirdly, the big pharma adds considerable credibility with its proven track record in new drug development and brings enormous value. It also provides a strong financial backing with its huge financial resources. ?We believe that such joint programmes combine the best R&D capabilities of both partners, minimise risk, increase success rate and maximise the value of the R&D chain,? says Adige.
The change in fortunes of Indian pharmaceutical companies is indeed ironical. In the 80s, Indian pharmaceutical companies were seeking collaborations with the West but today, it is a two way street. Things have changed. With India?s growing competence in R&D, the country is becoming an attractive destination for MNC pharma companies. Indian companies are also investing substantially in innovative research. ?It is now becoming increasingly evident that big pharma companies need to have an India piece to their global strategy,? adds Adige.
Interestingly, in the current scenario where the R&D pipelines are drying up and the cost of development of drug is steeply escalating, the co-development model is offering significant monetary benefits to MNC pharma companies.
According to a study conducted by KPMG, the cost of conducting clinical trials are estimated to be about 50% less than that in the developed markets. The average pay-out to an IT programmer in the clinical data management function in India is about $6,000-12,000 as against $40,000-50,000 in the US. The cost of employing a medicinal chemist in India is approximately $60,000 per annum as against $2,50,000-3,00,000 per annum in the US.
India also offers a large and diverse patient base that supports faster patient enrolment rates than that in most countries, thus resulting in faster completion of the development process. ?All of these culminate into huge cost savings for the MNC pharma companies and thus results in reducing the cost of drug development?an imperative in the current economic scenario,? insists Gajaria.
Most collaborative deals between Indian and MNC companies are not restricted to a particular phase of development, but involve taking the molecule from initial discovery to advanced stages of clinical trials. Except for one off cases where such deals have been discontinued or suspended, Indian companies are making good progress in the development value chain. This is also reiterated in the fact that foreign companies are entering into multiple development agreements with their Indian partners or even extending the existing scope of partnership agreement. ?We also need to seek academic collaboration over a long term basis, so that disease mechanism is better understood and may eventually lead to drugs of therapeutic benefit,? says a Dr Reddy?s official.
