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Contn. The Molecule Millionaires TORRENT PHARMA
Typical of the man who created it, Torrent Pharmaceutical's 30-acre research centre in Bhat near Ahmedabad is low-profile, but industrious. In fact, in terms of R&D investment, Torrent-founded by a former medical representative, U.N. Mehta-ranks ahead of both Dr Reddy's Lab and Ranbaxy. So, what does the Rs 436-crore company have to show in return? Not one, but three molecules at different stages of development. TRC 3XX, an anti-arrhythmic (read cardiovascular), is at Phase IIA of clinical trials; TRC 2XX, a cardiovascular-anti-angina molecule, and TRC 4XX, an anti-diabetic, are at the pre-clinical stage. Then, it has two NDDS (Novel Drug Delivery System) molecules that are in the pre-clinical stage. Some analysts believe that it's a matter of months before Torrent clinches licensing deals. And Samir Mehta, Vice-Chairman of Torrent Group, acknowledges the fact that talks are on. ''For the molecule in Phase II, we are in an advanced stage of discussion. Even for the molecules in the pre-clinical stage, we have begun dialogue,'' he says.
Mehta would not reveal the names of companies Torrent is talking to. But given that unlike DRL or Ranbaxy it has neither licensed a molecule before or nor carried them to a higher stage of trials, the licensing fee-if it manages one-will likely be modest. Says a Mumbai-based analyst: ''The first deal is usually the toughest one to get.'' Just the same, there is little doubt that Torrent is playing the game right. For instance, it has identified two high-profile and high-margin areas-cardiovascular and metabolic disorder such as diabetes-for new drug discovery. Again, unlike Ranbaxy or DRL, it has two collaborative contracts with UK-based firms. That means it gets to cut its teeth into molecule discovery at a relatively low risk to itself. Says Mehta: ''As we have been developing the capability, research opportunities have unfolded. But the first priority is to focus on our own requirements. As we grow, we could look at contract research.''
Torrent, which has been clocking a 20 per cent rate of growth in domestic formulations, has been hedging its risks by working on multiple indications, or more than one molecule, in each project. For instance, in anti-arrhythmic, its star molecule is at Phase II, but there are four other 'back up' molecules, should the star come a cropper. Similarly, TRC 2XX (anti-angina drug) has one back up molecule. One thing that Mehta seems confident about is the basic research's ability to catapult companies like Torrent into the global arena. He says: ''We have good quality professionals. Look at the batches coming out of our academic institutes-they really are of an international class. Further, the cost advantage is there and will remain for some time.'' The company recently conducted a review exercise with the Boston Consulting Group and as a result has decided to up its R&D expenditure from 8 per cent of sales at present to 50 per cent in the near future. -Seema Shukla ZYDUS-CADILA
Its research centre at Moraiya, Ahmedabad, just went on stream, it has no breakthroughs to show in new drug discovery or even in value adding to existing formulations (NDDS), but ask Dalal Street analysts what they think of Cadila's research potential and they will give you a thumbs up sign. Reason? B.B. Lohray, an IIT-Kanpur grad and a post-doc from Massachussetts Institute of Technology, who joined Cadila around two years ago from DRL. Lohray is supposed to be a scientist with the midas touch, being the man who led the project which resulted in DRL's first successful diabetes molecule. Now at Cadila, Lohray is expected to pump up the new molecules pipeline. As an ask Raymond James report puts it: ''We foresee that under (Lohray's) vision its R&D programme will bear fruits." That may well be the case. Cadila has been closely looking at synergies while picking areas to research in. Ergo, it has zeroed down on cardiovascular, anti-inflammatory/pain management, and anti-bacterial. Not incidentally, the three segments contributed to more than 40 per cent of Cadila's topline in 2001-02. Explains Pankaj R. Patel, a director at Cadila: ''Our strategy has been to pick up newer targets from research being done in hospitals. This gives a rationality to the project design, and makes research cost-effective.''
By next year, Patel hopes to have a compound in the clinical phase, and begin scouting for a licensing partner. Cadila has already filed for a patent for its new cardiovascular molecule, which reportedly seeks to combine the benefits of two broad categories of existing cardiovascular drugs. The innovative molecule will offer a combined effect of lowering cholesterol and triglycerides (fatty substances). While it's anybody's guess how much the compound would be worth in the hands of a drug major, analysts say the figure could be between $500 million and $2.5 billion. What's also notable about Cadila's research efforts is that it is looking at emerging areas of treatment. For example, its research on TNF-Alpha has to do with the latest in the field of pain management receptors. In the area of improved drug delivery, it is working on pulmonary systems (taking drugs by inhaling) and has acquired technology platforms for transdermal delivery systems (delivery through the skin).
In the future when molecule ''tweaking'' opportunities dwindle, companies like Cadila will need to either come up with their own original molecules, or keep their labs busy with contract work. The Moraiya lab has kept that option open. Its existing facilities allow Phase I clinical trials (involves test on a group of 20 to 100 people) as well as bio-equivalence studies (tests conducted on a sample of persons to test the similarity between the original drug and the re-engineered drug). It has a three-year collaboration agreement with Pantheco, a Danish company, for research into anti-bacterials. There's another tie-up with Onconova Therapeutics (US) for further research into oncologicals. Says Patel: ''Our primary focus will be our own molecular research. But we are not against contract or collaborative research if it is mutually beneficial.'' At the moment, though, all eyes are on the cardiovascular compound, which could give Cadila its first break. -Seema Shukla WOCKHARDT
2003 is a year that Habil Khorakiwala is looking forward to. That is when, the Chairman of Wockhardt estimates, R&D will drive his Rs 561-crore company's growth. Not that Wockhardt is a slacker today. For the past six years, it has been growing at a compound annual rate of 42 per cent. Last year, it spun off its life sciences business into a separate company (Wockhardt Lifesciences) in a bid to ease the strain on the parent's cash-flow. Investors reacted positively, upping Wockhardt's share price from Rs 350 in March 1999, to Rs 760 in October 1999. Today the stock is quoting at Rs 385 on the BSE (June 13, 2001), partly because of the market slump. But that is no reflection of market confidence in Khorakiwala's 2003 take off date. So, what does the new drug pipeline look like? There is an anti-infective molecule, used in the treatment of Sepsis and hospital acquired infections, that is in the late pre-clinical evaluation. The application for trial on humans is to be made by the end of this year. Another new compound-WCK-919, for treating respiratory tract pneumonia-should also be ready for testing on humans by the first quarter of 2002. Khorakiwala's plan now is to get some foreign companies interested in the two molecules. Says he: ''In areas such as biotechnology, oncology, and new compounds, the payback periods can be longer. But in the case of our molecules, we are seeking to partner with eventual marketing companies at an early stage so that developments costs can be shared.''
So far, the company has been pulling in money for long-term research by focusing on quick payback generic pharmaceuticals for the US and Europe, where it has one subsidiary in the UK. Khorakiwala expects further research to be part funded by the payback from the new molecules. He reckons that beginning 2005, some milestone payments should start flowing in. In the meantime, Wockhardt is looking at strengthening its presence in biotechnology (its hepatitis-B vaccine, Biovac, and anaemia management drug, Epox, have been well-received in the market) and super-speciality therapeutic segments such as cardiology. Although Wockhardt has a joint venture in India with Rhein Biotech, except for hepatitis-B and insulin-based products, all other will be launched outside the JV. BT learns that six more biotech products are to be launched over the next three years. For a man who started 35 years ago with a team of 20, Khorakiwala has come a long, long way. -Abir Pal SUN PHARMA
There are two things that people will readily admit about Dilip Shanghvi. One, that he has a nose for opportunities and, two, that he plays his cards close to his chest. Which is probably why the man who transformed a partnership firm into the eighth-largest formulations player in less than two decades, won't tell about his basic research gameplan. Still, it's not hard to see where Sun is headed. Its 210-scientists-strong research centre in Vadodara has so far focused on reverse engineering, albeit in higher value-added segments such as psychiatry. The centre, interestingly called SPARC, has also churned out new medicines based on the Novel Drug Delivery System (NDDS), besides which it has the distinction of being the first to come out with high-tech biologicals such as Lupride (fertility and anti-cancer), Octride (for pancreatic surgery) and D-void (for urinary incontinence). In fact, 40 per cent Sun's of sales and half of profits come from products developed at SPARC. Now that the market environment is less conducive to reverse engineering, Shanghvi wants to focus more on long-term research. Says he: ''By staggering research into short-term, medium-term, and long-term projects, we have worked towards a phased upgrade of skills and risks. This strategy has also ensured that the payback from the short- and medium-term projects gets ploughed back into projects with a longer-term payback.''
Shanghvi says Sun has two molecules in the pre-clinical toxicity stage, and by 2004, these would have moved to pre-clinical development. Besides, there are three NDDS-based products in human studies. At the same time, he clarifies that the areas of basic research may not necessarily be the three segments-cardiology, neurology, and gastroenterology-where Sun is the strongest. Few analysts doubt SPARC's ability to come up with a winning molecule. On an average, the research lab screens two compounds a day in vitro (on an isolated tissue), in vivo (on a laboratory animal), and ex vivo (on a specific organ, which is removed after the test). By the end of this year, the scientists at SPARC plan to push the throughput to five compounds per day ex vivo, 2 per day in animal models, and 15 per day in vitro. But unlike Xerox, which failed to capitalise on a lot of its inventions, Sun does not intend to let SPARC's innovations fall by the wayside. Abir Pal 1 2 |
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