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 061101 Torrent to Produce Heart Disease Drug for Novartis

Reportedly Torrent Pharmaceutical has "in-licenced" a novel research compound from its research stable, which has the potential to treat heart disease and diabetes-related blood vessel complication for Novartis. This is the second such deal Novartis has entered into after its deal with Dr. Reddy’s Laboratories, which was for diabetes compound. Torrent is reported to be receiving $ 0.5 m (Rs 2.45 crore) as a non-refundable initial payment at the start of the agreement. It will also do early stage research and development activity up to defined stages. After this stage Novartis has the option of acquiring exclusive global rights for further development and commercial exploitation. If Novartis exercises this option, Torrent will receive milestone payments of $ 3 m (Rs 15 crore). If not, Torrent will be free to develop the compound by itself.

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Sun Pharmaceutical has finalised a plan to begin filing for products on its own even as its subsidiary Caraco has received approvals for some products. They will be focussing on para IV filings under section 505b2 and have already started ground work towards it. Para IV filings are very complex but have the advantage of exclusivity. Abbreviated application are filed for generic products. Caraco which recorded sales of $ 5.9 m for the year ended December 2001 is concentrating on abbreviated new drug applications (ANDA). It is waiting for six more approvals.

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Ranbaxy is in talks with Aventis Pasteur for a strategic tie-up in the field of research and development for joint development of vaccines for infectious diseases commonly found in India. Ranbaxy is learnt to be exploring collaborating with Aventis for widening the scope of the marketing rights for Verorab vaccine by extending them to overseas markets where Aventis doesn’t have marketing set up. Right now Ranbaxy only has the marketing rights for India. The overseas markets on which it has trained its sights include Vietnam, Myanmar and Sri Lanka. Verorab vaccine for which Ranbaxy has an exclusive marketing right for the Indian market is for treatment of rabies.

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Zydus Cadila through its division Zydus Vaccicare is planning to introduce four new vaccines in the Indian market in the next five years. It has just introduced a rabies vaccine called "Vaxirab" in collaboration with Berna Biotech of Berne, Switzerland. It will also be introducing vaccines for chicken pox and hepatitis A in the near future. The company is in talks with the Korean company Cheil Jehdang and is planning to bring in "Varicella" a vaccine for chicken pox next year. These vaccines will be introduced under a licensing arrangement with the companies holding the patent rights.

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Cipla has tied up with three companies in Germany to supply chlorofluorocarbon (CFC) free inhalers containing budesonide, an asthma medication. Strada, Hexal and Fujisawa will import Cipla’s inhalers into Germany and market them in a profit-sharing arrangement. Reportedly the company has entered into collaboration for this purpose. The current market size of budesonide inhalers in Germany is around $ 200 m (Rs 1,000 crore).

Cipla has completed clinical trials on the inhaler and is now awaiting the regulator’s approval. Reportedly Hexel has already ordered 3 lakh inhalers from Cipla. Most companies in Europe have recommended that inhalers should be free of CFC as CFCs are believed to deplete the ozone layer in the upper atmosphere. The depletion of the ozone layer will lead to higher ultra violet radiation reaching the earth and giving rise to skin diseases. If approved Cipla’s will be the first CFC-free budesonide inhaler in Germany.

Inhalers deliver salbutamol, fluticaone, budesonide, beclomethasone and ipratropum. Cipla is the market leader in the inhaler segment in India and has a 75 per cent market share and has been selling CFC-free salbutamol and budesonide inhalers in India for three years.

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An increasing number of drug companies are appointing franchisees to sell brands whose sales are going down. These companies include: Ranbaxy, Dr Reddy’s, Nicholas Piramal, Zydus Cadila, Alembic, Emcure and Lyka Hetero.

Zydus Cadila’s franchise division is called Rejuven, those of Alembic and Emcure are named Alfra and La Paz respectively. Zydus lanched Rejuven earlier this year and has handed over around 35 products to the franchisee whereas Alembic has entrusted its franchisee with around 25 products. The trend has been that when companies introduce new molecules they lose interest in their old products and thus these products’ sales tend to decline. Additionally, more and more companies are concentrating on fast growing new segments and thus have no time for their older brands. The fast growing segments or the prima donnas now are cardiovasculars, anti-diabetes and neuro-psychiatry drugs. When concentrating on the prima donnas it is advisable to appoint franchisee to oversee their older brands than hire more staff and add to the overheads.

A franchisee usually is a former area manager with 10 to 15 years’ experience. He will be given a basket of around 25 products with two to three products in each speciality and he hires his own field staff to promote the brands. Usually a target of 20 per cent growth in sales is set and commissions go up when the target is exceeded. The franchised products mainly consists of analgesics, antibiotics and vitamins.

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Bharat Biotech International has received a world-wide patent for its version of Lysostaphin, the recombinant DNA therapeutic protein used for treating infections by the virulent bacterium staph. The world-wide patent for this drug was owned by AMBI of the US and was sold to Bionexus which is developing a variation of the drug which is now in its pre-clinical phase.

AMBI still holds the US patent on its version of the molecule and Bharat Biotech has developed the protein indigenously. Staph (or staphylococus aureaus) has the potency to cause fatal infections of vital organs like heart valve and kidney and has become resistant to the latest class of antibiotics such as Vancomycin. The estimated global market size of Lysostaphin is estimated to be around $ 12 billion. Bharat Biotech has received pre-human trial test licence for GMP-grade material from the Drugs Controller General of India (DCGI). The drug is expected to hit the market in two years from now.

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Reportedly, shares of Ranbaxy Laboratores has jumped about 4 per cent on the BSE on the news that the company has filed its application with the US FDA to market an off-patent version of cholesterol reducer, Lipitor, the world’s largest pharmaceutical product. The company has filed this application under paragraph 4 of an American law governing generic or off-patent drugs.

The date when Ranbaxy’s product can enter the market is 2010 when the product patent of Lipitor expires, which is a long way off. The Lipitor patent is currently held by Pfizer, the world’s largest selling drug maker. Lipitor is the world’s largest selling pharmaceutical product with sales of over $ 6 billion.

Under para 4 the company could either challenge the existing patent on Lipitor or could claim that its product does not infringe any patents. If it wins approval, it will get six months of market exclusivity where no generic is allowed into the market for that period. This law has been designed to encourage competition of generic products with high-priced patented drugs.

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Reportedly, Glaxo SmithKline (GSK) may sell its bulk drugs manufacturing unit in Ankleshwar, Gujarat to Glenmark Pharmaceuticals for Rs 15 crore. The two are believed to be close to signing an agreement. GSK curtailed production at the unit in Ankleshwar in August. Since then it has been outsourcing its requirement of bulk drugs. GSK has concluded a VRS scheme for its workers in Ankleshwar and is working out another scheme for its management staff. Glenmark is expected to upgrade the manufacturing unit to meet regulatory standard set by important markets like the US and UK. The Ankleshwar facility manufactures ranitidine bulk drug, the key ingredient in GSK’s popular ulcer drug Zinetac and the anti-fungal griseofulvin.

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Zydus Cadila Healthcare’s manufacturing facility at Moraiya has received approval from Brazilian food and drug agency, ANVISA, marking the beginning of the company’s foray into the largest pharmaceutical market in the world. The certification qualified Zydus Cadila to enter the Brazilian market with its oral tablets, capsules and soft gelatine capsules. Brazil is considered among one of the largest pharmaceutical markets in the world with sales of Rs 48,000 crore.

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Dr Lal Pathlabs (LPL based in Delhi), the premier clinical testing lab network in India, has bought the diagnostic laboratory run by the Mumbai-based Raptakos Brett Diagnostic Laboratories (RBDL) for an undisclosed amount. Under the deal LPL proposed to expand its network of diagnostic facilities to other cities in Maharashtra and Gujarat. However, the Raptakos brand will not cease to exist. LPL and RBDL are among the few pathology lab networks in India pathological results of which have been approved by the National Accreditation Board for Testing & Calibration Laboratories (NABL) in Delhi. LPL is also approved by the college of American Pathologist. LPL intends to set up 25 collection centres in Mumbai and another 25 in other cities of Maharashtra and Gujarat. LPL will also start comprehensive neo-natal screening of infants from birth to 28 days and also collection of samples for analysis from homes. LPL has over 100 collection centres around the country.

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Reportedly Cadila Pharmaceuticals is in talks with three Far Eastern pharmaceutical companies for a tie-up to manufacture auto-disable syringes which are replacing the traditional syringes for their greater safety. Casil Health Products, a subsidiary of Cadila, is negotiating with a firm each in South Korea, Japan and Indonesia for the technology. CHPL intends to invest around Rs 255 crore in the proposed facility with the foreign partner putting in its own share.

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Wockhardt is aggressively targeting European and US markets and is developing non-infringing processes for some drugs through biotechnology. The company has invested Rs 150 crore to create three facilities near Aurangabad, two of which are expected to be commissioned by the end of 2003. These products will cater to the regulated US and European markets that use technology platforms like genomics. Wockhardt had introduced botech products in the market including "Biovac" (Hepatitis A vaccine) and "Epox" (Erythropoetin). The company is also exporting its recombinant Erythropoetin to the US. The company is also aiming to introduce its recombinant human insulin in 2003.

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German Remedies (now part of the Zydus group) is in the process of buying trademarks for its five brands from Zydus International the Irish subsidiary of Zydus Cadila. The brands include Deriphyllin, Aractol, Ildamen, Xipamid and Beta Xipamid and will cost Rs 53 crore. Deriphyllin, an asthma drug, is the largest prescribed brand in its category. This is a virtual homecoming for these brands as GRL had been marketing them as they were then owned by Asta Medica (which held a stake in GRL at that time). When Asta sold its stake to Zydus Cadila in 2001 it had separately assigned the brands to Zydus International for a price.

In yet another development GRL has tied up with Ranbaxy to market the latter’s new urology drug. The generic name of the drug is Tolterodine. The drug would be manufactured by Ranbaxy and marketed by GRL. The brand name of the drug has not been finalised yet.

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Mr. Sushilkumar Handa, Managing Director of Core Healthcare (CHL) has reportedly relinquished his post in the company in what is believed to be the attempt by the banks and financial institutions to appoint professional managers to revive the company. The banks and financial institutions have invested Rs 1200 crore in the company. The company had approached BIFR last year to be declared a "sick" company which the banks and financial institutions had opposed. They argued the company should not be declared sick as there was enough chances of a revival by appointing professional managers.

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The share of the healthcare industry in the total gross domestic product (GDP) of India will touch 8.5 per cent in 2012. The present share of the healthcare industry is only 5.2 per cent. This was revealed by a CII-McKinsey study. The report has shown that the expenditure on healthcare will more than double by the year 2012. Healthcare spending will increase from Rs 86,000 crore at present to Rs 2,00,000 crore in 2012. The reason will be the changing lifestyle of people with increasing cases of heart diseases.

In this the private healthcare industry will have the largest share. Spending in this segment will double from Rs 69,000 crore at present to Rs 1,56,000 crore by 2012. The study also points out that if health insurance cover becomes operative, the private spending will further go up by an additional Rs 39,000 crore.

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Pharmaceutical trade between Asian countries is set to grow exponentially in the coming months. Regulatory stumbling blocks have been dismantled giving unprecedented opportunties for Indian exporters of bulk drugs and formulation in the Asian region. Drug regulators in China and Korea have, agreed to give their assent to Indian-made pharmaceuticals. Countries such as Philippines, Indonesia, Thailand and Bangladesh are also in the process of approving pharmaceuticals manufactured in India.

Out of India’s total pharmaceutical exports of Rs 9,000 crore, exports to Asian countries account for roughly Rs 3,000 crore which is much below the estimated potential of the burgeoning market. However, this will change with the dismantling of controls and the building of trust in the drugs manufactured by India. Chemexcil along with Korean Pharmaceutical Traders’ Association and China Chamber of Commerce of Medicines and Health have formed an Asian Pharma Trading Association to promote intra-Asia trade.

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