July 3, 2010

Daiichi Sankyo Company and Ranbaxy Laboratories announced today that the latter's New Drug Discovery Research has been transferred to Daiichi Sankyo India Pharma Private Limited as part of the strategy to strengthen the global research and development (R&D) structure of the Daiichi Sankyo Group.

Established in 1994, the New Drug Discovery Research has high-level synthetic chemical research capabilities. According to the stock exchange announcement, the transaction has been approved by the Department of Scientific and Industrial Research, Ministry of Science and Technology.

The new organisation, Daiichi Sankyo Life Science Research Center in India, based in Gurgaon, will play a key role in the Group's global Drug Discovery research to create promising new drugs especially in the area of low molecular weight infections and inflammatory disease treatments.

July 3, 2010

Tata Capital, the private equity and financial services arm of the Tata group, is looking at over Rs 600 crore investments for its standalone healthcare fund.

The Tata Healthcare Fund will look at taking minority stakes in fast-growing healthcare and pharma companies in India. This fund, which is starting to find its feet, is spearheaded by Visalakshi Chandramouli, who was with Merrill Lynch and Cipla Pharmaceuticals earlier.

The domestic component of the fund is understood to have been assigned a target size of up to Rs 200 crore. The offshore component of the fund is being co-partnered by Tata PE along with HBM Partners, a Switzerland-based global investor in early-stage life sciences and healthcare companies. This offshore fund is expected to mop up $70-100 million (Rs 325-465 crore), according to investment bankers.

The fund is understood to be considering investments with ticket sizes in the range of Rs 25-65 crore in unlisted healthcare and pharma companies. Tata Capital had last year announced plans to raise private equity funds to the tune of $350-400 million (Rs 1,625-1,857 crore), with some of the proceeds allocated towards setting up a standalone healthcare fund. The company declined to comment on the fund's planned investments, or when it intends to close investor rounds for the healthcare fund.

The vast potential for outsourcing in the healthcare sector and the growing volumes of contract research outsourcing in the pharma sector are seen as opportunities by the fund. Hence, it will look at investing in small contract research outfits and diagnostics firms.

Recent report have suggested the fund is likely to invest $8-10 million (Rs 37-46 crore) to pick up minority stakes in healthcare firms Intas Biopharmaceuticals Ltd (IBPL) and NovaLead Pharma, the demerged R&D division of VLife Sciences Ltd. Both these firms have Kotak Private Equity as an investor. However, this could not be independently confirmed.

NovaLead Pharma develops small drug molecules with multiple mechanisms of action to treat diseases. The company's pipeline has a mix of new chemical entities and new indications for US Food and Drug Administration-approved drugs with an addressable market estimated at over $15 billion (nearly Rs 70,000 crore). According to reports, the firm has an R&D pipeline of about 11 molecules for various diseases like colon cancer, malaria, leukemia and diabetic cataract.

Tata Capital has been looking to create various funds under such themes as mid-market, distressed assets, healthcare and innovation.

July 3, 2010

Swiss-based Novartis is expected to be the world’s best performing pharmaceutical company over the next five years, bolstered by its vaccine and generics businesses.

According to industry analysts, Novartis is expected to deliver a compound annual growth rate (CAGR) of a little over four percent through to 2015, based on sales projections of around $US10 billion. This compares to the pharmaceutical industry’s average growth rate of 1.4 percent.

London-based Datamonitor analyst Simon King said that Novartis’s strength lies in the heavily diversified nature of its prescription pharmaceutical offering, key elements of which include Sandoz, itself the world’s second largest producer of generics, while the vaccine business - gained through the acquisition of Chiron - is the world’s fifth largest.

“Whilst exposure of blockbuster brands to generic competition from 2011 onwards will decelerate sales growth from the branded pharmaceuticals portfolio, neither the vaccine nor Sandoz businesses will be exposed to a directly comparable competitive threat,” King said.

“This is an inherent factor that has both driven Novartis’s investment in these market segments and which will dictate stronger sales growth performances for these units over 2009-15”.

Meanwhile Novartis announced today that a Phase III study looking at its Afinitor (everolimus) tablets combined with best supportive care (BSC), resulted in better than double progression-free survival, or time without tumor growth, compared to placebo versus BSC in patients with advanced neuroendocrine tumors (NET). Afinitor is already approved for the treatment of patients with advanced renal cell carcinoma (RCC).

July 3, 2010

A study by the Netherlands-based non-profit organisation Access to Medicine Foundation has highlighted that GlaxoSmithKline, Merck and Novartis are leading attempts to make medicines available to people in developing countries.

The study says pharma companies have given more insight into their policies and actions to increase people’s access to medicines in developing countries.

While the top three are familiar names, the surprising entry at the fourth rank is that of Gilead, which markets anti-retroviral drug Viread —- one of its top-selling products. Trailing Gilead are Sanofi and Roche, which are vigorously exploring newer methods of improving market access.

In India, Gilead has entered into manufacturing deals with companies like Emcure and Strides but at the same time, it is embroiled in litigations with Cipla over Viread.

Wim Leereveld, who heads the Dutch foundation, has said that the 2010 rankings show important progress, if only because companies have shown far greater willingness to open up.

The study notes that several new organisations and funding mechanisms have been established both in terms of increasing attention as well as business opportunities.

In India, that trend has become strongly visible from the moves made by Sanofi Aventis, GSK and Novartis, to toss a few names. Other smaller companies like Novo Nordisk have gone deeper in their disease management approach. Essentially, these companies have to an extent recognised that business can grow only when linkages are built with the local population. This is akin to what Unilever is trying to do with its own consumer products businesses throughout India.

However, not enough is being done on improving access of medicines to treat neglected diseases. The Dutch agency says neglected tropical diseases continue to cause significant health burden, while research to develop treatments for them remains limited. Diarrhoea and pneumonia are the biggest child killers in poor countries, while AIDS, TB and malaria are taking ever increasing tolls.

Another important observation made in the study is about greater collaborations in the field of research to develop drugs relevant to poor countries. Increased sharing of intellectual property, such as “compound libraries” for research purposes and several high-ranking originator companies increasing collaborations with generic companies, especially through non-exclusive voluntary licensing arrangements, are indicated by the authors of the study as progressive steps in improving access to important drugs.

Without referring to GSK’s big initiative to open up its library of anti-malaria compounds for open sourcing and patent pooling, Access to Medicines study said they have proved to be some of the most innovative in the sector. The same point is made for efforts taken by Merck and Novartis. Merck is taking a very strong commitment on developing vaccines in partnership with the Welcome Trust and is working on establishing a large base in India.

The generic industry has also been seen favourable to increasing access of medicines in developing countries. The study says more research work has been done for adapting existing products to the needs of developing countries and there are emerging examples of capacity advancement in the poorer countries.

Another interesting trend captured is of high ranking generics companies forming increasing collaborations with originator companies through non-exclusive voluntary licensing arrangements.

It is heartening that the study ranked three Indian companies —- Ranbaxy, Cipla and Dr. Reddy’s as those having significant market presence in the developing countries and carry out adaptive research for diseases covered under the index.

The other companies figuring in the analysis are Mylan, Sun Pharma and Teva. The study has, however, pointed out that the general low level of disclosure and responsiveness to data request hampered the analysis of generic companies.

If this pursuit gathers momentum, those who need medicines would have greater access to them. The change is already visible. In frontline African countries, it is noticed that the basic drugs are becoming available. In fact, this may have already resulted in the AIDS-related deaths plummeting in many smaller countries.

Drug makers appear to be on the right course. As a senior executive from a multinational company said several decades ago, if medicines are made and patients are treated, profits will follow.