Suven Life betting big on its key molecule

Suven had spent Rs 360 cr on drug discovery. The company is investing 80% of profit generated by its CRAMS on research and development

Hyderabad-based biopharmaceutical company Suven Life Sciences Limited is betting big on its key molecule 'SUVN-502', meant for treatment of Alzheimer. Phase-I trials of the molecule have been completed in the US and it is expected to move to Phase-II A (proof-of-concept) stage by 2015.

"We will be filing for Phase II A trials in the US during the January quarter of 2015. It is the first molecule of Suven to reach that level," company chairman and chief executive officer, Venkat Jasti, told Business standard.

According to Jasti, reaching Phase-II A in the new chemical entity (NCE) space represents a huge success in the global pharmaceutical industry. "As our molecule reaches the late stage development, we expect to emerge on the radar of large global pharmaceutical companies seeking CNS (central nervous system) in-licencing (partnership) opportunities, representing the monetisation of a painstaking multi-year effort," he explained adding that if the trials were successful, the partnership could be possible by the end of 2016.

He said three more molecules of the company addressing depression, Alzheimer's and schizophrenia were being readied for Phase I trials. Toxicology studies on one of these molecules on animals have been completed in the US and it was expected to go for Phase I trials by this year end. Similar studies on the other two molecules would be finished in a span of six months and they would also go for Phase I trials by the end of 2015.

So far, he said, Suven had spent Rs 360 crore on drug discovery. The company was investing 80 per cent of profit generated by its contract research and manufacturing services (CRAMS) on research and development.

Jasti said the company would be spending an additional Rs 120 crore on SUVN-502 in the next two years. It was planning to raise $20 million (Rs 120 crore) either through a private equity or some other route for this purpose this year or next year.

For the first time in the company's CRAMS business, he said, three NCEs addressing depression, diabetes and rheumatoid arthritis, for which Suven had developed intermediates, moved into commercial launch stage last year. This provided a big opportunity and the company got an additional revenue of Rs 175 crore from supply of intermediates. As a result, the company's revenue in 2013-14 jumped 99 per cent to Rs 510.31 crore from Rs 257.88 crore in 2012-13.

This also meant the global innovators of the NCEs, two European and one US companies, would commercialise the product in 18-24 months and enjoy exclusivity for 8-10 years. "Since we would be one of the approved suppliers of the intermediate, we would be assured of business volumes across an extended period, translating into revenue visibility and liquidity," Jasti stated. Consequently, Suven was expecting to register an annual growth rate of 20-25 per cent from 2015-16.

Suven is also setting up a Rs 100-crore manufacturing unit in the Jawaharlal Nehru Pharma City at Visakhapatnam to offer CRAMS for speciality chemicals business. The 250,000-litre capacity facility is expected to be operational by March 2015.