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Perlecan pharma, a new company created by Dr Reddy's, will undertake clinical trials for DRLs' NCEs. By Kushan Mitra Dr Reddy's Laboratories (DRL), India's second largest pharmaceutical company, did something quite revolutionary recently - and it had nothing to do with medicine. Armed with $52.5 million (Rs 231 crore) in funding from Citigroup Venture and ICICI Venture ($26 million or Rs 114.4 crore in the first phase), the company has created an altogether new company - Perlecan Pharma - that will undertake the tedious and expensive process of clinical trials for new chemical entities (NCE's) discovered by DRL's R&D department. Alongside creating the company, DRL also transferred four NCEs to Perlecan, including the promising diabetic treatment NCE - DRF 10945. Perlecan will initially handle only the Phase-II trials of all compounds from DRL, but officials believe that going forward it will start handling Phase-III trials also. And not only compounds from DRL, but GV Reddy, CEO, DRL expects the company to in-licence compounds from other companies as well. There are a multitude of reasons behind this decision, explains Satish Reddy, COO, DRL. Firstly, the establishment of a new company allowed DRL to raise venture capital funds easily. Secondly, there is the factor of risk mitigation - DRL will not take a hit in case any of the NCEs fail. In fact, as the NCEs cross certain milestones, DRL's share in the new company will rise from the mid-teens to almost 80 per cent in the next three years. And with Ajay Relan of Citigroup Venture estimating Perlecan to become a billion dollar company in the next few years - DRL might have created a nice new revenue stream for itself.
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