The world’s largest drug maker Pfizer's first biosimilar (a medicine comparable to the original biotech drug) deal with India’s Biocon will trigger a new wave of outsourcing deals and acquisitions by multinational drug makers in India, feel industry experts.
Domestic companies that may benefit are believed to include biotech specialists and vaccine makers such as Panacea Biotec, Reliance Life Sciences, Bharat Biotech, BV Corp and Serum Institute of India, beside drug majors such as Wockhardt, Dr Reddy's Laboratories, Intas Biopharmaceuticals and Lupin, which are developing a large portfolio of biotech drugs.
“It is a very positive development and it showcases India's capability in biosimilars. The Biocon-Pfizer deal will result in more such deals with Indian companies,” said Rajesh Jain joint managing director, Panacea Biotec.
On the footsteps of the Pfizer-Biocon deal, Big Pharma is likely to chase Indian vaccine and biosimilar makers of cancer, diabetes, pain and cardiovascular drugs, says Ranjit Kapadia, vice-president, institutional research, HDFC Securities.
Biosimilars are copies of branded biotechnology medicines. Also called biogenerics or follow-on biologicals, these are a therapeutically equivalent version of currently marketed recombinant DNA-derived protein products, manufactured like generic drugs. Biosimilars cost many times the amount needed to launch a generic copy of a conventional, pharmaceutical drug.
“Biocon's success is entirely Indian. The country has for long been known for its capabilities to develop generic drugs. The Pfizer-Biocon deal is proof that we can do the same in biosimilars as well. What better endorsement can you expect than Pfizer?" said Shrikumar Suryanarayan, former head of Biocon's research team and currently honorary director-general of the Association of Biotechnology Led Enterprises (ABLE).
Big markets at stake
The generic opportunity for biotech drugs such as EPO (for chemotherapy and renal failure), GCSF (prescribed to make more white blood cells during cancer treatment), Interferon Alpha (for Hepatitis C and renal failure), Interferon Beta (to treat multiple sclerosis, a chronic disease that affects central nervous system) and human insulin is estimated at $7 billion in Europe alone by 2015. These drugs are expected to be a $12-bn opportunity in the US market by 2015 and $25 bn in Europe. In India alone, biotech drugs are likely to generate revenues of $580 million (Rs 2,570 crore) by 2012, according to various estimates.
Mukesh Ambani-owned Reliance Life Sciences has the largest pipeline of biosimilar products in India, with a dozen under development. The company has already launched biosimilars like ReliPoietin (Recombinant Erythropoietin), ReliGrast (Recombinant Granulocyte Colony Stimulating Factor (G-CSF), and ReliFeron (Recombinant Interferon Alpha) and MIRel (Recombinant Reteplase- tissue plasminogen activator).
Similarly, Ahmedabad based Intas Biopharmaceuticals has launched G-CSF under the brand name of Neukine, erythropoietin (EPO) under the brand name of Erykine and Epofit, and Interrferon Alfa 2b as Intalfa in India. It is also developing half-a-dozen biosimilar drugs. BV Biocorp, the biotech drug research arm of the Pune-based poultry major, the Venkateswara Hatcheries Group, also has three biogeneric drugs and a pipeline of products under development, sources say.
Companies such as Wockhardt, Lupin and Dr Reddy's Laboratories are also developing a large portfolio of biosimilars, eyeing the global opportunity.
Analysts said at least two deals in the past showed multinational drug companies were seriously looking at Indian biotech ones. The world's third largest drug maker, Sanofi-Aventis' vaccine unit, Sanofi-Pasteur, had taken over Shantha Biotechnics, the Hyderabad-based vaccine maker, for Rs 3,750 crore in July last year.
Ranbaxy's owner Daiichi Sankyo's attempt to acquire Hyderabad-based Zenotech Laboratories was to access its rich portfolio of biosimilars, noted industry experts. The company has its own versions of cancer drugs AGM-CSF and G-CSF, and three other biogenerics under development. The company also has developed generic rituximab, a biotech drug used to treat a type of cancer called non-Hodgkin's lymphoma. It is also developing interleukins (IL-2), used in cancer treatment to stimulate white blood cells.
Big pharma, faced with issues dwindling pipeline of products, inability to commercialise new drugs and high manufacturing costs, are looking at the generic business in a major way in countries like India. While Ranabaxy and Piramal Healthcare were bought by Daiichi Sankyo and Abbott, respectively, GSK and Pfizer have partnered with Indian companies such as Dr Reddy's, Aurobindo, Biocon and Strides Arcolab to access generic pharmaceutical products.