Suven Life may tie-up for Alzheimer's drug

Suven Life Sciences Limited, which has eight product patents with potential therapeutic use in the central nervous system (CNS) disorders including Alzheimer’s disease, expects to collaborate with a big pharma company for one of these products in 2014.

It may be recalled that the company’s clinical drug candidate SUVN-502 ,which is meant for treating Alzheimer’s disease among other brain-related disorders, had passed through various toxicity tests along with human Phase-1 trials in Switzerland and is said to have found to be very safe. Other patented molecules are still at a preclincal stage.

“While it’s still a long way to go before these discoveries reach the stage of drug approvals, we are certain of entering into a collaboration in 2014 - which means an upfront payment for our molecule,” Venkat Jasti, chairman and CEO of Suven Life Sciences, told Business Standard.

Though big pharma companies are keen on the drug candidate that has a potential market opportunity of $20 billion globally, they insist on proof of concept before making any commitment, according to Jasti.

Proof of Concept involves a Phase-2 study aimed at evaluating the proof of efficacy and safety of the molecule with enrollment of targeted patient population ranging from 50 to a few hundreds. This helps companies identify a better clinical candidate at the very beginning to save time and money. The company earned Rs 204 crore revenues last year and spent about Rs 33 crore on R&D initiatives. It has yet to generate any revenues on this front. The likely collaboration with big companies, the only way for a small company like Suven to take the molecule through the next stages of drug development that involves huge costs and associated risks, will see the first signs of pay back from the investments made so far.

Suven gets most of its revenues from the contract manufacturing segment, which it says offers good margins and market opportunities. The company’s top line as well as the net profit for the quarter ending June, 2012, grew 58 per cent and 135 per cent to Rs 71 crore and Rs 8 crore respectively (revenues Rs 44.8 crore and net profit at Rs 3.4 crore in the quarter ended June, 2011).

The surge in revenues and net profit was because of several projects maturing at one time, said Jasti, who sees a growth of 20-25 per cent in net profit for the full year in 2012-13. “We are into making advanced drug intermediaries for clients in the US and Europe and also in Japan. Margins are very good but the rising costs are eating them away,” he said.Till the time the company’s drug discovery initiatives start paying back, its contract manufacturing operations would be generating enough cashflows to sustain growth, according to him.