Rajesh Jain, Joint Managing Director, Panacea Biotech
The major growth driver for Panacea will be the out-licensing (commercialising by offering marketing rights to other companies for various markets) of its ten odd worldwide patented molecules to multinational pharma companies. The company has already initiated the process and is in talks with a few MNCs to out-license once the registration dossier for the molecules is ready, says Rajesh Jain, joint managing director, Panacea Biotech. Although he declines to put a figure for out-licensing, but says that it will be substantial in the form of upfront and milestone payments.
Towards this, Panacea has already identified key companies in the European Union (EU) and in the United States and has signed confidentiality agreements with them.
We expect to obtain the registration in 24-36 months from now in major countries in EU. Thereafter, each year we will be filing 2-3 product applications for registration in these countries, Mr Jain says.
For Panacea, exports today contribute almost 60 per cent of the total revenues and it is expected that its share will continue to be substantial to the companys overall revenue. Apart from export of vaccines to Unicef, the company is also aggressively looking at direct exports and has initiated the process to obtain registration of its brands overseas.
The new formulation unit coming up in Punjab will be in compliance with the standards of US Food and Drug Authority (USFDA) and UK Medicine Control Authority (UKMCA), which will help the company penetrate into the regulated markets of the US and Europe.
The company has also recently set up a new vaccine facility to manufacture Hepatitis B recombinant in technical collaboration with Heber Biotech of Cuba. The plant has a capacity of 80 million voils and the company hopes to achieve full capacity in the third year of operation. Further, Panaceas Hepatitis B vaccine-Enivac-HB-will be launched in the market by January next. The new vaccine facility has been set up with an estimated cost of Rs 40 crore. In all, the company is spending over Rs 100 crore in setting up a formulation facility and enhancing its research and development facilities. A new formulation plant is coming up with an investment of Rs 25 crore and will be operation over the next 15 months.
Apart from spending Rs 20 crore in its second R&D facility at Lalru, Punjab the company has set up its third R&D facility at Mohali, Punjab.
Currently, vaccines and biotechnology products contribute around 60 per cent of the companys total revenues. The balance is contributed by pharmaceutical products. It has a pipeline of brands both in the field of pharmaceutical and vaccines. These brands will offer lot of clinical advantages to the doctors for the patients currently not met needs of today, Mr Jain claims.
The company has increased its market coverage both in the domestic as well as international markets ensuring a consistent and continuous revenue and profitability growth.
The growth drivers for us in the future will also come in the form of Contract Research Opportunities (CRO) with multinational pharma majors and Indian giants. The other area of opportunity lies in the area of production and marketing of Novel Drug Delivery System (NDDS) of patented drugs in domestic and regulated markets with strong Intellectual Property Rights (IPR) protection, Mr Jain adds.
The company is developing anthrax vaccine (in collaboration with Biotechnology Consortium of India (BCI), Hepatitis C (for liver) and a combination vaccine of diphtheria (DPT) and Hepatitis B, which has already been registered with the Drug Controller of India (DCGI).
While the anthrax vaccine has already passed the toxic and animal studies and is undergoing animal efficacy study, Hepatitis C vaccine is undergoing pre-clinical studies.
Mr Jain says that Panacea Biotechs brand range follows the principal of integrated health care marketing approach wherein all new brands are synergistic and complimentary to existing brands portfolio. This integrated approach ensures that each brand grows and assists the other in the family to grow. Each brand has multiple indications, which allows the brand to be marketed across a bigger specialty index ensuring optimum efficiency per brand. For instance, our Nimulid family brand can be prescribed by an orthopaedician, gynaecologist, physician, surgeon, dentist, ENT physician or a paediatrician, Mr Jain adds.
Panacea Biotech is expected to continue to fortify its current therapeutic coverage by bringing in molecules which will add value to the existing brands and continue to identify and cater to existing gaps in the therapy.
We will lay a lot of emphasis on individualised disease management protocols as two patients of the same disease are very different from each other, Mr Jain adds.
The company also plans to unveil an integrated health care education plan for the patients by involving the medical fraternity, which will go beyond medication and would involve dietary modification, with much more nutrition and less food, coupled with exercise programmes and lifestyle modification.
Further, it has plans to launch new brands in therapeutic areas like anti-asthamatics, gynaecology and gastroenterology segments.
Focus on R&D
The company started its R&D focus way back in 1993. Since then, Panacea has made strong progress by patenting around ten products in various countries.
Panacea intends to up the R&D spend to around 15 per cent by the year 2004 from the current level of just over three per cent. The company has given further impetus to its research efforts by opening a new R&D centre in Mohali (Punjab) dedicated to genetic research in the field of diabetes and asthma. The company is also looking at collaboration for funding research in the area of genomics, identifying new drug targets and developing new molecules.
The company has been carrying out R&D in the areas of Novel Drug Delivery System (NDDS) for anti-diabetic, anti-tuberculosis and anti-inflammatory drugs. The drugs belonging to high growth segment areas like anti-hypertensives, cholesterol lowering agents and anti-depressants are also being researched.
It has ventured into research in the area of gene therapy by taking the technology of delivering therapeutics and genes by f-virosomes, researched by University of Delhi, South Campus. The process of technology transfer is under progress.
Panaceas topline has grown consistently over the years: From a turnover of Rs 113 crore in 1998-99 to Rs 283 crore in 2001-02. Exports today contribute almost 60 per cent of the companys revenue.
The net profit at the same time has shot up from Rs 10.6 crore to Rs 24.9 crore. Further, the company expects the turnover to grow to around Rs 320 crore and net profit to Rs 30 crore this year.
It has also maintained a healthy net profit margin of around 9-10 per cent of over the past few years.As a result of a small equity base of Rs 5.2 crore, which has remained stagnant over the years, the earning per share has improved from Rs 18 to the current level of Rs 42.
Impact of Patents Bill
Mr Jain says he anticipated some of these changes long back and in 1995 oriented the companys thinking towards innovative R&D mode. The state-of-art research and development centre was established which has been successfully operational and has researched and commercialised several products for which Panacea Biotech has secured the IPR by patenting.
We at Panacea ensure the optimism of the sunrise scenario and have been aggressively planning to meet the challenges of the post-GATT scenario. We see the wide opportunities for the company as India integrates with the world economy by introducing product patents. These include marketing of branded patent protected products in domestic market, production and marketing of novel drug delivery system (NDDS) of Patented drugs in domestic and regulated market with strong IPR protection, Contract Research Opportunities (CRO) with MNCs and Indian majors and licensing-out of novel technologies to MNCs in developed markets, Mr Jain adds. Clearly, it is looking far into the horizon as it develops it future plans.