• 16 September 2005
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"Sponsors are co-investors in Manipal AcuNova"

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"Sponsors are co-investors in Manipal AcuNova"

- DA Prasanna, vice-chairman and managing director, Manipal AcuNova,

What are Manipal AcuNova's lines of business and why did you enter this business?

Manipal AcuNova has four lines of business. One, it is the business development arm for discovery research for Manipal Group and is also a sponsor. Two, a division focused to conduct clinical research, mostly in the clinical development phase. This involves conducting clinical research from Phase 1 to Phase 3 at Manipal and non-Manipal sites.

The third area of activity is a clinical reference lab with advanced molecular diagnostics lab. This is coming up in Bangalore.The fourth division is into clinical data management.

Clinical research requires knowledge of three fields - pharmaceutics, disease, and medicine. Today there is a fourth dimension, that of biotech. Knowledge of these four dimensions is the foundation of today's discovery research and development of drugs.

Manipal has the advantage of having this knowledge available in one campus. We are the largest healthcare delivery organization in the western coast.

We have a pharmacy school and over 10,000 students have graduated from this school. We own and operate teaching hospitals. We have a medical biotechnology program running for the last five years, which is among the top ranked programs.

Our Institute of Technology runs biomedical engineering and medical software departments. That is the uniqueness of the environment in which we conduct clinical research.

Why did you establish Manipal AcuNova as a corporate entity?

In the services business, clients are more comfortable in dealing with a corporate entity. Second, we wanted to invite our big sponsors to be co-investors in the venture if required. It is a norm in the industry that a client takes 4-5 percent holding when its product is under development. Third, this is an IP-driven industry and we must allow some of the top scientists, doctors, and leaders to have some ownership.

Manipal AcuNova's second clinical research center

Manipal AcuNova has launched its second clinical research center. This center, called Manipal AcuNova KH Clinical Research Centre, was inaugurated at Manipal in Udupi district by Kiran Mazumdar-Shaw, chairman and managing director, Biocon Ltd in August. She hoped that the center would emerge as a world-class research center. This center would undertake research on generic drugs, new drug delivery systems and new chemical entities. The clinical research services in the centre include pre-clinical studies, bioavailability, bio-equivalence, pharmacokinetics and data management.

So to provide this opportunity, we organized Manipal AcuNova as a corporate entity. It was not difficult for this entity to be 100 percent funded by Manipal Group. But we gave it a different character. It was organized in such a way that Manipal Group contributes 30 percent of the equity, another 30 percent of the equity is available to the leadership, doctors and scientists (which is what AcuNova is) and the balance 40 percent is for strategic investors and one venture capital fund. The venture capital fund will make this announcement in a month's time.

What is the amount of funds that you have mobilized?

We set about mobilizing Rs 50 crore-Rs 40 crore in equity and Rs 10 crore in debt. The State Bank of India has given us Rs 10 crore in debt. We have completed raising the money.

You already have a headstart being associated with Manipal group. Why did you want to mobilize such a huge amount?

No doubt, Manipal provides us with tremendous context for this industry, besides infrastructure. We do not have to invest in brick and mortar. In fact, the University has gone beyond that. It has converted its infrastructure ready for research. But we did not want to start very small and struggle for 10 years to go to some critical mass. We thought we must give a reasonable funding.

Each of our clinical research center calls for Rs 6-7 crore of investment. The clinical reference lab and the clinical data management center will each cost another Rs 6-7 crore. This would mean that each of our lines of business will need Rs 10-15 crore of investment.

Do you also plan to invest in stem cell research?

Stem cell activity was conceived as part of Manipal AcuNova. We decided in favor of getting the stem cell research in a university type of structure rather than a corporate structure. This is because stem cell activity is still somewhere between basic and applied research. In terms of maturity of science, it is still basic research. However, like the KMC life sciences center labs, we also have a stem cell lab for promoting discovery research and we intend doing that when our stem cell lab is ready. This lab is undergoing stabilization and is in Bangalore (Manipal Hospital) because this lab requires to work closely with specialized doctors and in a cluster like environment. We work close with NCBS and JNC. This unit is funded by DBT and other agencies.

Ch. Srinivas Rao

Russian CRO to set up office in India

ClinStar, an American CRO that manages Phase II, III and IV clinical trials in Russia and Eastern Europe, is now looking at expanding its operations to India by setting up its branch. Operating from Moscow, St. Petersburg, Russia and San Francisco, USA, ClinStar has conducted many pivotal studies. It provides data management and statistical services through a partner.

According to sources in almost every one of ClinStar's international studies, it has recruited Russian patients 3 to 10 times faster than those responsible for recruiting patients in the USA or in any West European country in the same study. The report further noted that it has been the top enroller in almost every clinical research study in which it has participated. ClinStar - monitored data from Russia has been part of the basis for FDA approvals.


Wockhardt receives US FDA approval for Cefuroxime Axetil

Wockhardt Ltd has received approval from the United States Food & Drug Administration (US FDA) for marketing cefuroxime axetil in the US market. Cefuroxime axetil, the generic version of Glaxo SmithKline's Ceftin, will be the sixth product to be marketed under the Wockhardt banner in the US.
Wockhardt's US subsidiary, Wockhardt USA, Inc., is expected to launch the broad-spectrum cephalosporin antibiotic tablets in three strengths – 125 mg, 250 mg and 500 mg. As per IMS data, the current market for this product in the US is $58 million." New product launches will drive business in the US, which is Wockhardt's fastest growing market," said Habil Khorakiwala, chairman, Wockhardt Ltd. "Our US formulation business grew by over 150 percent in the first half of 2005 and we have another 12 applications pending with
the US FDA."


"Developing stronger R&D capabilities is the key for growth"

Dr Anji Reddy

The opportunity of "reverse engineering" the drugs through process chemistry supported the Indian pharma companies to earn profits during the process patent regime.

What should we do? What should the Indian pharmaceutical industry do in the product patent regime? These and other related questions have been in the air for the last one decade or so. Similarly we have other questions such as where we will go and what we will do after this?

However a proverb goes like this. For every problem there is a solution. For the above, we have solutions from a graduate in technology of pharmaceuticals and fine chemicals from University of Bombay and PhD in Chemical Engineering from National Chemical Laboratories, Pune, who worked in process development and production of APIs before setting up his own enterprise in 1967. He is none other than Dr Anji Reddy, founder chairman, Dr Reddy's Laboratories Limited, an emerging global Indian pharmaceutical company.

Sharing his experience at a symposium on patents organized by the Goa Institute of Management (GIM) in Goa, on how he overcame the situations and continued to focus on discovery research, Dr Reddy said, "I have been telling Indians not to worry. The heaven isn't going to fall."

He continued, "We took a lot of steps in the last seven to eight years and entered the US generic market. A lot of opportunity exists for those who first file the patent and litigate against the defending patent holder. If he wins the case he will get the first chance to file the patent and will get the six-month exclusivity to market the drugs in the US. All he has to do is to reduce the drug price by 20 percent and make a lot of money there. Luckily we were the first one from India to file the patents. The result is that we earned a lot. One has to take such kind of risks when he has the chance to make a lot of money in a short span of just six months. We made about $100 million. So the patent amendment is not an end for the pharma industry."

Ranbaxy has earned $500 million from the US and European generic market. Similarly Dr Reddy's Labs has made $250-300 million from the US and European generic market. Wockhardt and others are following suit. The trends that the Indian pharmaceutical industry has obtained in the last 20 odd years in developing the process chemistry skills, had enabled companies to become competent players in the global generic market. Hence Dr Reddy said, "We have things that eventually helped us in making money. The world is not going to end. The opportunities are there."

In 1970 India did not realize that product patents present a great opportunity. But India didn't lose the opportunity in between. It had the necessary skills, and knowledge in process chemistry helped in setting up of pharmaceutical companies in the public sector. It is these public sector companies that really gave an absolute training to the Indian scientists to develop new process molecules and technology so that they can bring the new molecules which have been already discovered and developed by multinationals abroad by spending billion dollars, and produce the drugs at a price that is affordable to all Indians.

Again in January 2001 the patent issue came into the limelight and became a nightmare for many people in the country. That time the 1970 Patent Act was going to be changed. Lots of debated between government and industry organizations have taken place before it was finally amended.

"As the Indian government passed an amendment to the Product Patent Act, developing stronger R&D capabilities in the new product patent regime is very important and is key for growth of a company," said Dr Reddy.

The Indian pharmaceutical industry is very strong. At the same time India has several scientists who are talented and competent to develop new molecules. India was given an opportunity for 34 years to the copy the drugs, discovered and developed by multinationals after spending huge cost on research and development. Now the big pharmas are repenting on late catching up the research activities. Instead of looking back, they will now have to focus on drug discovery research so that they can develop affordable medicine and also take on competition from multinationals.


Strand bags Frost & Sullivan's award

Strand Genomics, a Bangalore-based life sciences informatics company has received Frost & Sullivan's Excellence in Technology award in the field of bioinformatics for the year 2005. The award is for the 'avadis' technology, which has already received the first BioSpectrum Biotech Product of the Year Award in 2003.

The avadis data-mining platform is widely deployed in verticals like gene expression, pre-clinical, chemistry, healthcare at various pharmaceuticals and biotechnology companies and research institutions. The avadis technology development has received research funding awarded by NMITLI and DBT programs of the Government of India.


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