We are at the end of a decade-long learning curve in R&D

Written by MG Arun | Updated: Apr 25 2012, 07:25am hrs
Investors are watching how Piramal Healthcare (PHL), which sold its domestic drug business to US-based Abbott Laboratories in a $3.8-billion deal in May 2010, is utilising the money. PHL, since, has bought 11% stake in Vodafone India in two tranches, made a foray into financial services and announced entry in the defence sector. It now plans to inject new vigour into drug research & development, which was not part of the Abbott deal. Having pumped in close to R1,200 crore over a period of ten years in R&D, it is now pursuing a model where drug molecules extracted from plants are being developed at PHLs R&D centre at Goregaon near Mumbai, which has 400 scientists, and at the same time, acquiring molecules in late stages of human trials and taking them to commercialisation. This twin strategy, says Swati Piramal, the director-strategic alliances and communications, PHL, will help the company widen its possibilities of developing its own medicines, open up new geographies where drugs can be tested and manufactured, and create niche avenues to market personalised medicines. Excerpts from an interview she had with MG Arun.

What is the overall R&D direction of the group What is the novelty you will generate from your research in drugs from plant extracts

In 2000, we had acquired Hoechst Marion Roussel research centre, along with some 100 scientists. They had a very good plant and microbial library, collected over 25 years, but had not gone down to making new drugs from it. We started using library for finding new drugs and today, the largest number of drugs we have are from the library. The company today has 16 new chemical entities (molecules that are developed into medicines over several years) and owns 350 patents.

Also, to mine Indias rich biodiversity, we went into a partnership with nine national laboratories, where each lab would collect samples in their area, while we would do the high throughput screening (a scientific experimentation) to find new drugs. We decided to focus on four therapeutic areas, important for India as well as globally relevant metabolic, cancer, infectious disease and inflammation.

One of your cancer drugs is in the final stages of trial. How challenging has been the journey

Cancer drugs are toxic as they kill normal cells. Therefore, it is important to balance their toxicity with efficacy. Although most pharma companies do work in cancer, there is still room for innovation, since cancer is not one disease. What is useful for breast cancer isnt useful for cancer of the kidney. So we have to go down and find which cell line the cancer worked. We partnered with the Tata Memorial Hospital to use their cell line, and with many companies in the West. Today, we are making our own screens, our own genome chip, our own assays (an analytical procedure), against which we are testing our cancer drugs. We have moved significantly in fundamental science in ten years. Of 16 NCEs that we have, five are in cancer.

Isnt R&D a risky and expensive proposition, even if an Indian company is able to discover and develop drugs at a fraction of what it would cost in the West

We have spent around R1,200 crore in R&D over ten years. From 2000 to 2010, it was funded by the domestic sales of generics, the business that was sold off to Abbott. After that it is being funded through internal accruals. The money is not from any grant, or government, but from the business. In the past, all big pharma companies have bet on the success of one drug. But that is the past. Competition is tougher, personalised medicines will make markets smaller.

How would the expensive procedure to develop cancer drugs affect its prices, especially at a time when the government recently allowed compulsory licensing for a domestic firm to make Bayers cancer drug Nexavar at lower prices

Yes, cancer drugs are difficult to find, they are expensive since they are toxic, and have to be tried in combination with different existing drugs. That adds to the complexity. One of our drugs works for a mutation in one type of blood cancer which affects only a few percentage of people. So, the marketing is very limited. Personalised medicine is the future, where you give a drug that attacks only that one target. Personalised medicine makes your markets and manufacturing limited, and cannot be made in many countries. In Nexavar, when they make in one country, it is illogical to expect them to manufacture in India, since the number of patients is very small.

So, compulsory licensing can be a negative for even a domestic innovator like you

Compulsory licesing will hurt Indian research as well. When I am making a particular drug, which will affect only one mutation, and I am told by some other country to manufacture inUK or Australia, it doesnt make sense to set up a toxicity plant for a few number of patients. So, the nature of the science has changed, and we have to change our mindset along with it.

Suppose I make a drug and fail 50 times, I have to pay for that failure. If you tell me tomorrow that I should sell this drug for R8,000, when I would have roughly spent $400-$500 million, the complexity that went into the drugs making is not being considered.

What targets have you set for your scientists in drug discovery

We have given our people three investigational new drugs (IND) every year. It starts with a few millions of investment, but later, we will have to pick and choose, since it becomes expensive. We are at the end of a decade of learning curve. We have many horses in the finishing line.

You have got European approvals for selling innovative cartilage repair product BST-CarGel, and acquired the molecular imaging portfolio of Germany's Bayer. Is the model of acquiring products in mid-phases of development more viable

In a risky business like research, you need to have more options, since you dont know where the next successful compound will come from. In the new world view, the earlier way of doing development and exporting from here has changed. We think export is an obsolete word. Development could be done in three different countries, manufacturing could be done in a fourth, and the market would be in a fifth.