The company has redefined drug
discovery by coming up with a model that is cost-effective, without
compromising the quality of drug discovery
Founders of Indus Biotech
The life sciences industry today faces a paradoxical situation. While
on the one hand, there is a growing need for novel drugs across
different geographies, specially for diseases like malaria, dengue and
Parkinson's disease; on the other hand, companies are going through the
most tumultuous period in history, with drug pipelines drying up, due
to poor R&D productivity.
Adding to the sitaution is the sky rocketing increase of drug discovery
costs, presently at over
crore-a cost that is nearly impossible
for small- and mid-sized biotechnology companies. Most importantly, the
number of candidates failing phase III clinical trials have been
growing by the day.
This is, when an innovative drug discovery model that is
cost-effective, mitigates risks, yields high return on investments
(RoIs) becomes a pre-requisite and Pune-based, Indus Biotech devised
one such business model. The company, rather than looking at deriving
molecules from synthetic-based compounds, extracts compounds from the
plant kingdom, whose safety has already been proven, and which can have
physiological effects on living organisms like the human body.
In 1997, Sunil Bhaskaran teamed up with IIT-batch mate, Rajan R
Srinivasan (presently Executive Director of Indus Biotech) and (Late)
Dr Kris Venkat (who was then on the Supervisory Board of Strand Life
Sciences). The trio put on their thinking caps to come up with a model
that focused on the discovery of novel molecules for chronic diseases,
and at the same time, one that would be cost- effective. Thus
germinated the idea to set up a company, Indus Biotech. Recalls Sunil
Bhaskaran, managing director, Indus Biotech, “Dr Venkat believed that
many interesting molecules can come in from the plant kingdom. Drug
discovery costs at that time were becoming huge. When we started this
business, the drug discovery costs were close to
crore. We then
started thinking of finding a model that is cost-effective and requires
less capital-to discover drugs for chronic diseases. That was the
business thought behind setting up Indus Biotech.”
“Our business model is basically
to develop an NCE, and then license it
to a Big Pharma but half way through, we will be able to sell some of
-Sunil Bhaskaran, managing
director, Indus Biotech
The compounds in this case, are extracted from raw materials in the
food chain. From here, the company has a three-way approach to keep the
revenue streams flowing. The first approach is taking the molecule up
to the level of a novel chemical entity (NCE), where it will be further
licensed out to a big pharmaceutical company. Half way through the
product development, it can be sold as a consumer healthcare product.
The third option is to obtain approval from FDA as a Botanical
Prescription Drug. “There are always chances that during the course of
the discovery and development process, the candidate might exhibit some
additional useful physiological effects. So, we have developed an
option where we can use it for other applications also. Our business
model is basically to develop an NCE, and then license it to a Big
Pharma but half way through, we will be able to sell some of these
products as consumer health products,” adds Bhaskaran.
Like all business ventures, the promoters were faced with myriad
challenges in the beginning, with funding topping the list. The
promoters of Indus Biotech and angel investors together brought in
crore to the company. Kotak India Private Equity Advisory
headed by Nitin Deshmukh invested
crore about two-and-a-half years
“Very few venture capitalists at that time were ready to back a
start-up with a fundamentally new business concept like ours,” adds
Bhaskaran. This apart, the class of drugs Indus Biotech dealt with was
often confused with that of Ayurvedic medicines. Says Madhu Kode,
Technical Analyst, Indus Biotech, “The biggest task was to make people
understand the kind of model we follow. An ayurvedic medicine may
constitute many compounds, but we will not be able to pinpoint the
active compound within the medicine which will act against the disease.
This is not the case for the class of drugs which we deal in.”
The third challenge was that a regulatory pathway for botanical drugs
were not present anywhere in the world except in the US (which came out
in 2004). While the European medicines agency (EMEA) is presently still
in the process of coming up with guidelines for botanical drugs, India
is yet to come out with a regulatory pathway.
Unique drug discovery model
The distinctiveness of the model is that it starts with in vivo studies
at an early stage, that evaluates target activities of the drug, and
assesses the failure and side effects of the drug. This drastically
reduces the costs of development. Another advantage of the model is
that it also looks at early stage proof-of-concept studies that
evaluate human safety and efficacy of the drug. Thus, the risk of
failure during the later stages of development is mitigated because,
before reaching an Investigational New Drug (IND) approval, the safety
and efficacy of the drug has already been established. The traditional
drug discovery model cost costs about
3500 crore, and takes around
six-and-a-half years for the molecule to reach regulatory IND approval.
The drug discovery cost within the canvas of the Indus Biotech model is
a fraction of
crore - spanning a time period of four years -
before it reaches the stage for IND approval.
The regulatory pathway for botanical drugs opening up in the US opens
up a world of opportunities for Indus Biotech who can further work on
drugs with proven therapeutic efficacy. The FDA guidelines permits
poly-molecular assays with benign impurity profile, thus further
reducing development costs. Indus Biotech is majorly targeting the US
market for its consumer healthcare products due to the growing size of
segments like the nutraceuticals. This will bring in quick revenues to
the company, that can further be used to sustain their research work.
The star products
The company presently has seven NCEs in its pipeline, focusing on 13
therapeutic areas with the lead molecule being a HIV/AIDS drug
Last year, this lead candidate got the IND approval from the FDA. IND02
converts a HIV patient into what is called in scientific circles, a
“HIV Controller”, and people can well live out their normal life span
with the disease - without the concerns of the high cost of treatment,
or the dramatic shortening of their life span. IND02 is a drug
candidate that is an “enabler”, that converts the HIV patient to a HIV
Interestingly, the molecule has also shown new indications for H1N1
strain as well as H3N2 strain (avian flu). Also, it has shown to be
effective on Tamiflu-resistant strains. “We have independently verified
the studies in Japan and biosafety tests were conducted in the National
Taiwan University Hospital in a P3P4 lab,” said Bhaskaran.
The company has not yet moved forward with clinical trials in the US
for this candidate. “We did some additional bioavailability (BA)
studies of the candidate in India. We are now ready to start clinical
trials in the US”, adds Kode.
Other candidates include diabetes (completed proof of concept studies
and ready for phase III), rheumatoid arthritis (RA) (completed proof of
concept), Parkinson's disease (completed proof of concept, and will
move onto human trials), Huntington's disease (preclinical), kidney
disease and depression. The company is also looking at other segments
like dengue and malaria.
The major hitch for the company has been the absence of a regulatory
pathway in India for these class of drugs. This, Bhaskaran believes,
can cost dear to the company. “Since India does not have a regulatory
pathway for botanical drugs, the drugs have to be approved in the US,
and hence the costs will rise because of the process of the application
protocols, and then go through the clinical trials protocol in the US.”
Post the IND approval by the FDA for IND02, the company also put
forward a dossier before the DCGI for IND approval in India. But the
dossier was withdrawn due to a lack of guidelines. “We have an active
molecule presently, which we believe, will be a solution for dengue.
But in India, there is no regulatory pathway for our kind of molecules.
We will have to take it to the NCE level and then license it out to the
big pharma, which is a prolonged process. On the other hand, dengue as
a disease profile has a minor market share, resulting in less interest
among the big pharmaceuticals,” opines Bhaskaran.
Presently, Indus Biotech has 35 patents already granted in different
countries; and 25 patents awaiting approval. “We have a total of 60
patents. A patent takes around four years to get approval, and the cost
for one patent is about `6 lakh. So, we have invested a lot of money in
Intellectual Property (IP) generation,” says Bhaskaran.
Looking to the future
To sustain their business model, Indus Biotech is now actively looking
for partners that include both big- and mid-size pharmaceutical
companies. Presently, the company is in talks with big pharmaceutical
companies for licensing its NCEs, while for consumer healthcare
products, Indus Biotech will first tap the US markets, and gradually
move to Europe. The company's molecules for RA and Parkinson's disease,
are in late stage development, with the Parkinson's one completing
human data and proof-of-concept studies.
“We also have a study on the side effects of oncology, for which we are
creating human data. All our IND approvals, will be filed strategically
when some funding is available,” says Bhaskaran.
The company is also looking at setting up a marketing subsidiary in the
US, but not in the near future, as it presently has advisors in the US
and in Europe.