MNCs defy slump, bet big on drug R&D

Sign a dozen pacts with Indian firms in Jan-Sept period.

Multinational drug companies have entered into a dozen new drug research collaborations with leading Indian pharmaceutical companies in the first nine months of 2008, compared with six such pacts during the same period in 2007.

This is despite a growing concern in the West about the manufacturing standards of Indian companies and data protection by India's patent system.

Eli Lilly, which yesterday announced an equal joint venture to develop drugs with Jubilant Organosys, has a “share risks and rewards model” partnership with Nicholas Piramal. In exchange for milestone payments and a royalty, if a product reaches the market, Nicholas Piramal is developing selected molecules from Eli Lilly’s pipeline up to the end of phase II, during which there is an option to bring them back into the Eli Lilly portfolio.

 

Eli Lilly has a similar risk-sharing collaboration with Suven Pharmaceuticals, which was expanded in 2008.

Advinus Therapeutics, which entered into drug development deal with Ortho-McNeil-Janssen Pharmaceuticals last week, managed to strike two such deals in 2008. The first deal has been with drug discovery venture DNDi to develop a drug for Visceral Leishmaniasis (Kala Azar) and the second with Genzyme Corporation and Medicines for Malaria Venture to develop drugs for neglected diseases.

“We collaborated with Merck when our company was just two months old and in three years we have reached three milestones, beating the industry average time required for start of a discovery project to identification of a clinical candidate," says Dr Rashmi Barbhaiya, CEO and managing director of Tata-funded Advinus Therapeutics.

Approximately 33 per cent of the $40-45 billion spent by the US drug companies annually on R&D is now outsourced, and this is projected to increase to 41 per cent ($24 billion) by 2009. India's contract research industry is expected to garner about $3 billion of this share by 2015, according to a recent YES Bank and Organisation of Pharmaceutical Producers of India(OPPI) study.

"The deals of Merck with Nicholas Piramal, Orchid and Advinus, and of Eli Lilly with Jubilant and Suven, show that the centre of gravity in drug research is slowly shifting to India. The R&D industry here is maturing and Indian companies have been able to impress the big pharma with early stage drug development end-to-end chemistry skills," said Sujay Shetty, Associate Director Pharma Life Sciences with PriceWaterhouseCoopers(PWC).

A recent PWC report says that India, China and Singapore will maintain their position as the “hotspots” of the Asian pharmaceutical sector and significant R&D outsourcing will take place to theses countries in high-end drug research space.

Experts cite that many of these deals in India's New Drug Discovery Research(NDDR) space, entrust Indian companies to undertake cutting-edge basic drug research to find new drugs from unscreened compounds, a process of starting drug research work from scratch, with a risk and reward sharing model.
 

DOUBLE DOSE Drug discovery deals in 2008
COMPANY	PARTNER	AREA OF RESEARCH
Ranbaxy	Merck & Co	Anti-infectives
Dr. Reddy’s	7TM Pharma	Metabolic disorders
Piramal Healthcare	DXtech	Diagnostic tools
Piramal Healthcare	Pierre Fabre Lab	Cancer drugs
Piramal Healthcare	Eli Lilly	Expands scope of earlier deal
Jubilant Organosys	Amgen	Multiple diseases
Jubilant Organosys	Eli Lilly	R&D joint venture
GVK Biosciences	Wyeth	Pre-defined drug targets
Suven Life Sciences	Eli Lilly	CNS drugs (expanded)
Advinus Therapeutics	Ortho McNeill	Unidentified targets
Advinus Therapeutics	Genzyme & MMV	Neglected diseases
Advinus Therapeutics	DNDi	Kala Azar

Normally, drug scientists identify targets from a library of thousands of known compounds and work on to develop and optimise drug leads based on information on disease epidemiology, pathways and mechanisms of action of the screened compounds.

In original novel drug research, the work has to start from the basics — to identify the right compound that can be taken up for further development to a drug candidate. Such advanced research was so far confined only to the modern inhouse laboratories of multinational drug companies.