Vol. 5, No. 9-10 October 2001

Zydus BYK Healthcare, an equal partnership between Germany's BYK Gulden and Gujarat-based Zydus Cadila Healthcare, has started trial production of intermediates for the anti-ulcerant drug pantoprazole. It is planning to commence commercial manufacture at its Navi Mumbai plant from next month. The entire production of Zydus BYK (a 100 per cent export-oriented unit) will be taken by BYK plant in Germany to make the finished product. BYK holds the patent for pantoprazole, a proton pump inhibitor used to treat various gastrointestinal disorders. The joint venture is expected to achieve sales of Rs 80 crore in the first year.

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Dr. Reddy's lab has got the go ahead from Drug Controller General of India (DCGI) for the product insert of the company's first biotechnology product, Grastim. According to the suggestion of DCGI the company had submitted a modified product insert on September 28. Nicholas Piramal had filed a complaint against Grastim claiming it was not filgrastim as claimed by Dr. Reddy's but G-CSF (Granulocyte Colony Stimulating Factor) and Dr. Reddy's had expressed its willingness to amend certain portions of the product information.

The company is also planning major R&D efforts to tap emerging opportunities in biotechnology. The Atlanta-based laboratory of the company is currently working on a series of biotech products and it has formed Aurigene Discover Technologies to work exclusively on proteomics or study of proteins.

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Dr. Reddy's Laboratories is expecting a milestone payment from Novo Nordisk this year for a drug it licenced to the Danish firm. The payment will be received when the diabetes drug NN622 enters phase III clinical trials end of this year. The drug was licensed to Novo in 1998 and is the first to be introduced in the market among a new generation of dual action sensitisers. It simultaneously lowers lipids and sensitised the body's insulin receptors to the circulating hormone.

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Ranbaxy Laboratories is ready to introduce an off-patent version of an anti-bacterial called cefuroxime axetil and the US Food and Drug Administration is expected to approve the drug shortly. However, there is a patent infringement suit filed by GlaxoSmithKline pending in the US courts against introduction of this drug but the company hopes that this will be cleared soon. The anti-bacterial being marketed by Glaxo is Ceftin and is still under patent protection, the patent expiring in 2003.

Meanwhile according to another report, Lupin has tied up with Canadian drug firm Apotex for the supply of a key ingredient in an anti-bacterial drug to be sold in the US. Lupin will supply the bulk drug cefuroxime axetil to Apotex, the largest off-patent drugs company in Canada. Apotex is waiting for the US FDA's approval to launch the final product. Lupin also intends to make its own application to market Glaxo's form of cefuroxime axetil in "amorphous" form after 2003 when the patent expires.

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One of the world's largest clinical research organixation Parexel International is in negotiation with Suven Pharmaceuticals for its entry into India. Suven has already done research on a contract basis for Borregaard of Norway and GlaxoSmithKline. The idea is to float a separate company in which Paraxel could pick up a stake. Clinical research involves conducting trials of new drugs on human subjects. Suven which conducts researches on raw materials and intermediates that go into the final product of leading multinationals expects to gain experience in working on new chemical entities of leading research-driven companies in the process.

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051006 Cipla Putting Up Manufacturing Facility in Goa

Cipla, India's third-largest drug maker is investing Rs 100 crore to put up a manufacturing facility in Verna, Goa meant largely for exports (around 70 per cent of production). The company expects to save between Rs 10 and 20 crore in taxes in the first year of commissioning (Goa offers tax concessions which has been made use of by several pharmaceutical companies like Aventis Pharma, Ranbaxy Labs, Glenmark Pharma and Unichem Labs). Cipla intends to manufacture finished dosage forms ranging from injectables and inhalers to tablets and capsules at this plant.

Meanwhile, Cipla has offered to supply large quanities of anti-anthrax drug to the US following the anthrax scare. In India at least 78 companies manufacture Bayer's Cipro - the only US-approved treatment for anthrax. But Indian companies cannot sell in the US until Bayer's patent expires in 2003. However, if there is a severe shortage the US government is expected to request Bayer to grant compulsory licences to generic drug makers to sell Cipro-equivalents. Meanwhile, hoping the restrictions on marketing these Cipro-equivalents would be lifted in the US Morepen has doubled its ciprofloxacin production. However Morepen has yet to get FDA clearance to sell the drug in the US.

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GlaxoSmithKline has reportedly handed over the rights to market AIDS medicines in South Africa to a local drug firm in an attempt to end the controversy over access to treatment. Drugs companies were criticised for not supplied drugs at lower rates to African countries earlier. Now, Aspen Pharmacare, South Africa's largest generic company has been granted a voluntary licence on patents belonging to GlaxoSmithKline to market their anti-retroviral drugs AZT, 3TC and Combivir. GSK and Shire Pharmaceuticals will waive their rights to royalties on sales. Aspen will pay 30 per cent of net sales to one or more NGOs fighting HIV-AIDS in South Africa. Aspen's Combivir would cost around $ 1.80 per patient per day with AZT priced at $ 1.60 and 3 TC around 60 cents. However Indian drug companies have been offering these drugs for just $ 1 a day. Aspen's drugs will be supplied to NGOs and charities.

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Kopran is close to finalising a deal for strategic alliance for formulations with Zydus Cadila which would involve funds inflow of more than Rs 95 crore. The deal would also involve the sale of its 35-crore heart drug Aten. Aten is a brand of the anti-hypertensive and anti-anginal drug atenolol. With this acquisition Zydus will be strengthening its cardio-vascular franchise, where it already has strong brands like Atorva and Losacar. This acquisition will make Zydus the leader in cardiovascular therapy with a market share of 8.3 per cent. Kopran has been searching for a strategic partner since plans to raise funds through an equity issue with financial investors failed. The company had earlier segregated its commodity bulk business from the formulation and speciality business. It also merged the over-the-counter healthcare products company Kopran Pharmaceuticals with itself.

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Orchid Chemicals is in the process of buying Medicorp Technologies, a bulk drug manufacturer and exporter. The company had earlier bought Ajanta Pharma's bulk plant. Medicorp is promoted by Chennai-based Sriram Group with a 40 per cent equity in the company. Last year ICICI with TCW picked up 30 per cent stake in the company. Medicorp is a strategic takeover for Orchid as the former has been catering to regulated markets like the US, UK, Canada and Europe. Orchid had recently chalked out an aggressive business plan with McKinsey which aimed at product market diversification in bulk products, consolidation of nutraceuticals and a push to export of formulations.

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Bayer's world-wide acquisition of Aventis Crop Science will give rise to a Rs 750-crore agrochemical company in India. This will make Bayer the largest company in the Rs 2,700 crore agrochemical sector. Aventis Crop Science has, at present, about 14 per cent share of the agrochemicals market in India. Bayer also has a wide range of agrochemicals in its portfolio catering to pest and crop protection.

Aventis Crop Sciences has products catering to all three agrochemical sectors namely, herbicides, insecticides and fungicides. The company promotes its products as crop packages for various agrochemical needs. Anilophos, a rice herbicide developed by its German parent is marketed in India under the brand name Arizon. However, there would be excess manpower arising out of the merger and downsizing may result.

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Core Healthcare is in the process of announcing its long-delayed financial restructuring plan by December 2001. The restructuring will see a drastic change in the company's ownership with 20 banks and financial institutions converting their loans into equity. After the restructuring exercise the creditors will be the majority shareholders and the Handa family will lose its majority shareholder status. ICICI is leading the consortium of creditors of the company which has over Rs 1,200 in debts. The company has shown improved operations for this year and are making a profit before interest and depreciation.

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The task of updating the list of pharmaceutical companies and drugs upto March 2001 to provide a database to the proposed pharmaceutical policy has been bogged down because of consideration of fresh parameters for formulation of the policy. The ministry of chemicals and fertilisers has returned the database submitted by the National Institute of Pharmaceutical Education (NIPER) to correct some technical data and provide clarifications. The institute has been asked to provide information on bulk drugs used, market shares and so on. NIPR was confident of completing the report by end of September and the policy is expected in October.

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The stand-off between Dr. Reddy's Labs and Nicholas Piramal regarding Grastim has reached the Monopolies and Restrictive Trade Practice Commission as Nicholas claims that Grastim marketed by Dr Reddy's is not really a filgrastim. This is because Nicholas itself markets a filgrastim called Neupogen in India. Neupogen has been licensed to Nicholas by Swiss multinational F Hoffman La Roche since 1993. DRL's Grastim is the first locally manufactured filgrastim in the country while Neupogen is imported into the country. Grastim sells at Rs 2,460 per 300 mcg vial while Neupogen sells at Rs 5,163 per vial.

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The US Government is apparently having second thoughts about the patent Frankenstein that it has created. With the threat of Anthrax looming large the US government has been having doubts if it should allow free marketing of generic forms of ciprofloxacin instead of giving a particular company proprietary rights over the drug like it is doing now to Bayer. Seventy-eight Indian companies are manufacturing ciprofloxacin and are eager and willing to supply it to the US at drastically lower rates. If the US government doesn't accept the offer made by Indian drug companies there could be a backlash from the American public who need to stock the drug to protect themselves and their families.

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Germany's health ministry said on Friday that 616 people world-wide had died after allegedly using Viagra, Pfizer's pioneering anti-impotence drug. The Sweden-based Uppsala Monitoring Centre (UMC) stated that it has recorded 616 recorded case of people who had died after using Viagra. Reportedly, Pfizer has not commented on the report. The German Institute for Pharmaceutical and Medical Products has recorded 77 cases of deaths in the European Union out of which 30 are in Germany. However a spokeperson for German government said that the deaths occurred when the patients died some time after they had consumed Viagra due to a heart or circulation complication.

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Reckitt Benckiser India has sent 18,000 telegrams to doctors around the country informing them that the analgesic Disprin Plus does not contain aspirin as the name suggests, but another painkiller called paracetamol. Therefore, unlike the other Disprin which contain aspirin, Disprin Plus cannot be taken by heart patients as a blood thinning agent. Reckitt was replacing Disprin with Disprin Plus to remove it from price control. Though Disprin is a painkiller, it had also been used by heart patients as a blood thinning agent. A detailed letter will follow the telegram sent to doctors, according to Reckitt. Reportedly other analgesic manufacturers have also shown preference to paracetamol instead of aspirin due to the government's policy of price control on aspirin.

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The slump in the global economy following the terrorist strike on the World Trade Centre on September 11 has affected exports of pharmaceuticals from India. The exports of pharmaceuticals from India in the last quarter has shown a distinct downward trend. Exports in 1999-2000 had grown by 15.57 per cent and projections for 2000-2001 had been placed at 20.73 per cent growth. But it seems the terrorist strike has put paid to this ambitious projection. However the industry is hoping that there would be interest in drugs like Ciprofloxacin in the US due to the Anthrax scare.

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On the back of the successful introduction of Penegra and its acquisition of German Remedies, Zydus Cadila Healthcare is planning to launch a slew of new drugs including Gatifloxacin, used for treating respiratory and urinary tract infections. Zydus will be the first Indian company to launch Gatifloxacin (under the brand name Zyquin) the latest generation fluoroquinolone anti-bacterial agent in both tablet and intravenous forms. The launch is scheduled for October. The company is expected to launch nine new drugs in the next two months. Apart from Penegra, the company has launched Zycel (used in pain management) and Atorva (used to lower cholesterol). Another product awaiting launch is Raloxifene a selective oestrogen receptor modulator used in treatment of post-menopausal osteoporosis, Leuprolide Acetate used to treat prostrate cancer and infertility and Venod which will be used to treat depression and general anxiety syndrome.

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Mutual Funds are showing a marked preference for pharmaceutical scrips after the infotech melt down. And that too Indian pharmaceutical scrips, mind you, not only MNC pharmaceutical scrips. The market capitalisation of MNC pharmaceutical stocks have shown a decline while that of Indian pharmaceutical stocks has shown an increase. MNC pharmaceutical holdings once accounted for almost two-thirds of the pharmaceutical portfolio of mutual funds. Today that has come down to just one-third. Today 80 per cent of the holding is of Indian pharmaceutical companies. Also things are looking up for Indian pharmaceutical companies due to the opportunities in the US generics formulations market and also the opportunities in the novel drug delivery systems being introduced. All in all, the prospects of Indian pharmaceutical companies vis-à-vis MNC pharmaceutical companies is looking up.

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