M&As dawn Indian biotech industry in July
Consolidation of the biotech industry is on the cards.
Novozymes acquires Biocon's enzyme business
First, one of India's leading biotech companies, Biocon Ltd has sold its enzymes activity to Novozymes, which has signed a definitive agreement under which it will acquire the enzyme activities of Biocon for a total consideration of $115 million (approximately Rs 470 crore). The purchase price has been agreed to $102 million, of which $97 million will be paid up front, and $5 million when certain business targets have been met. In addition, $13 million is related to committed service fees and lease payments to be paid over a period of upto ten years.
"The acquisition of Biocon's enzyme activities provides an important step for Novozymes in strengthening our position in the Indian market, which we believe has an attractive growth potential. The activities of Biocon have a good strategic fit to our existing enzyme business," said Steen Riisgaard, CEO, Novozymes.
"We are pleased with the sale of our enzyme business to Novozymes. Novozymes has the strength and focus to continue expanding the business, providing high quality enzymes for the Indian market," said Kiran Mazumdar-Shaw, Biocon's CMD. Biocon can now continue its strategic focus within the biopharmaceutical business.
The transaction is a purchase of the enzyme activities of Biocon, including the transfer of related tangible and intangible assets, liabilities and employees. Biocon's enzyme activities will be acquired by Novozymes South Asia, a fully owned subsidiary of Novozymes, where as the activities as such will be integrated into Novozymes' global enzyme organization. The continued production and formulation will happen at the Biocon site under lease and service agreements with Novozymes. Novozymes' existing establishment of R&D facilities in Bangalore will not be affected. While Biocon's enzyme's business in 2006-07 stood at Rs 95 crore, Novozyme's business in India was estimated at Rs 100 crore.
RFCL acquires Wipro BioMed
In another development, RFCL has announced that it has signed a definitive agreement to acquire Wipro BioMed, a leading provider of biomedical solutions. Wipro Ltd has reached an understanding with RFCL to transfer its biomed business which includes employees, assets, liabilities, operations, customers and partnerships.
The acquisition of Wipro BioMed is a part of RFCL's multi-pronged inorganic growth strategy to emerge as a globally respected company in the field of life sciences solutions.
The business operations of Wipro BioMed will be integrated with RFCL's diagnostics division - Diagnova. Wipro BioMed has 20 alliance partners in diagnostics, life sciences and medical systems businesses either as an OEM or as a distributor. "Looking at the promising growth opportunities which Wipro BioMed offers, we found this acquisition to be a great strategic fit for RFCL. This acquisition will enable RFCL to enter into the high growing segments of in-vivo diagnostics, fully automated clinical chemistry and hematology, and research solutions. Together with BioMed, RFCL will be able to achieve critical mass and emerge as key player in the $375 million market which is growing at a rate of 15 percent per annum," said Sushil Mehta, managing director of RFCL.
Avesthagen acquires Renaissance Herbs
Avesthagen has also announced its acquisition of 100 percent of the US dietary supplement company, Renaissance Herbs Inc. (RHI). The transaction is expected to be completed by the end of July. RHI is a fully-integrated supplier of proprietary nutritional products that are marketed on a global basis through multiple sales channels. The company sources its raw materials in India and South East Asia for processing in its facilities outside of Bangalore. The acquisition supports Avesthagen's bio-nutritional business strategy through vertical integration and access to key markets. Dr Villoo Morawala Patell, founder and managing director of Avesthagen, said, "We believe that this acquisition is highly synergistic for both companies."
The trend in the industry is clearly to consolidate core businesses and grow. One is likely to see further more deals during the year.
Biocon to develop biosimilar G-CSF for Abraxis
After selling its enzyme business to Novozymes, Biocon is strengthening its presence in the oncology segment. The company has signed an agreement with US-based Abraxis BioScience, wherein Abraxis will license the right to develop a biosimilar version of granulocyte-colony stimulating factor (G-CSF) in North America and the European Union.
Under the terms of the agreement, Biocon will receive an upfront licensing fee and following approval in the licensed territories, royalties from Abraxis BioScience. Detailed financial terms of the agreement were not disclosed.
"Abraxis Bioscience is an ideal partner for Biocon as we increase our focus on oncology. We are confident that both partners will realize success in attaining market leadership for G-CSF in their respective markets," said Kiran Mazumdar Shaw, CMD, Biocon Ltd. "The present licensing arrangements will certainly pave the way to other opportunities in the foreseeable future."
G-CSF is an haematopoietic growth factor that works by encouraging the bone marrow to produce more white blood cells. Therapeutic G-CSF is primarily used for the treatment of neutropenia, the lowering of the white blood cells that fight infections. Biocon has received regulatory approval from the Indian DCGI for the treatment of neutropenia in cancer patients and intends to launch the product in India through its oncotherapeutics division. "We are very excited to enter into this collaboration with Biocon. We believe that this partnership allows us to participate in the emerging biosimilars market and build a new platform for growth," said Patrick Soon-Shiong, chairman and CEO of Abraxis BioScience.
The biological activity of Biocon's G-CSF used in clinical trials was evaluated by NIBSC (National Institute of Biological Standards and Control), UK, which provides independent testing of biological medicines. The NIBSC found that the potency of Biocon's drug met the necessary requirements of a biosimilar G-CSF.
Biocon Q1 net at Rs 53 cr
Biocon has reported a net profit of Rs 52.8 crore for the first quarter ended June 2007 as compared to Rs 38.9 crore in the corresponding period last fiscal. Sales during the recently concluded quarter (on a consolidated basis) stood at Rs 270.8 crore compared to Rs 211.5 crore in Q1FY07. All business segments delivered robust growth. Biopharma performed particularly strongly. Margins in services were restrained by currency appreciation. Its branded products for nephrology, oncology and cardio diabetes performed strongly.
The company has licensed G-CSF to a global biopharmaceutical company for North America and the European Union. It also entered into exclusive agreement with Invitrogen to market insulin to the global cell culture market.
Biocon's discovery led research programs in particular Oral Insulin (IN105) and Anti-CD6 monoclonal antibody (T1h) continued to make good progress. IN105 completed Phase IC Human Clinical "Proof of Concept" trials. T1h will commence Phase II human clinical trials during Q2 FY08. In another development, Biocon received regulatory approval from DCGI for bio-similar Streptokinase and GCSF. Further, Biocon's subsidiary Clinigene moved its operations to a new, state-of-the-art, dedicated facility and Syngene commenced construction of the dedicated facility for Bristol Myers Squibb.
NASSCOM to fund biotech companies
NASSCOM, the trade body of the IT software and services industry, has mooted an India Innovation Fund to provide angel stage funding to start-ups to drive innovation in emerging technologies in the areas of IT and biotechnology. The fund will have a corpus of Rs 100 crore, which could be increased to Rs 150-200 crore in the next two years. The fund will be set up through a public-private partnership, where the government role will be limited. The investment decisions will be taken up by professional fund managers. The fund will allow private investors to acquire stakes in the professionally-managed PPP fund, Nasscom said.
Biovel to produce HGH
Biovel Life Sciences, an integrated biotechnology firm, has inked a licensing agreement with US-based Dowpharma to produce Human Growth Hormone (HGH) using Pfenex Expression Technology, for the first time globally.
Announcing the completion of the first phase of its 10-acre facility at Hoskote near Bangalore, Biovel chairman and managing director, P Sudhakera Naidu said HGH accounted for a $3 billion regulated market and the firm was optimistic about its huge potential in India.
Using the Pfenex Expression technology, Biovel is looking at developing a cost-effective process for commercial-scale production of HGH, he said. Dowpharma has already developed a high-yield production strain and bench scale process for production of HGH. Dowpharma will prepare and transfer to Biovel a Research Cell Bank and bench scale process, Naidu said.
This technology is based on specially modified strains of Pseudomonas fluorenscens bacteria and consistently outperforms other microbial systems.
maxEEma to invest Rs 250 crore
Ahmedabad-based biotechnology firm maxEEma Biotech has chalked out plans to scale up its production capacity of organic pesticides as well as its ayurvedic pharmaceutical division. It plans to invest nearly Rs 250 crore. It will be investing Rs 50 crore for scaling up its production capacity of organic pesticides and Rs 200 crore on augmenting its R&D centre and setting up a separate entity for ayurvedic CRO.
The company will be augmenting its R&D centre for ayurvedic formulations and will set up a CRO for the clinical trials for ayurvedic molecules. The ayurvedic CRO will be a separate entity and conduct clinical trials of its in-house ayurvedic formulation as well it will be open to other ayurvedic companies for clinical trials. maxEEma had developed an ayurvedic formulation for disease of oral submucous fibrosis (lockjaw - a pre-cancer stage) and snoring disorder.
Currently, the company is working on diabetes, cholesterol and arthritis which are under R&D stage. The company is not into manufacturing of ayurvedic medicine and would like to limit itself only to the R&D and F&D (formulation and development) stage.
It is also increasing its organic pesticide division's production capacity. Presently, its capacity is 5 lakh liters per annum for liquid and 5 lakh tons for granules. Post-expansion, the production capacity will be scaled up to 250 lakh liters annually for liquid and 250 lakh tons for granules.
Zenotech bets big on NBEs
Zenotech Laboratories Ltd (ZLL), the specialty generic injectables company, is betting big on new biological entities (NBEs), especially in cancer treatment, to propel its growth in the near future.
The Hyderabad-based company, which recently tied up with Ranbaxy Laboratories for its first biosimilar product, G-CSF (Filgrastim), has also won the country's first CRAM (contract research and manufacturing) project in biotech from the New York University for a wound healing product.
According to Dr Jayaram Chigurupati, CEO of ZLL, the contract involves developing cost-effective process and toxicity studies for the patented recombinant protein (an NBE). The final product ready for clinical trials would be given back to the New York University.
The one-year contract would lead to the development of the E. coli (bacteria) based wound healing product. Once, the clinical trials are through and the product ready for commercial launch, ZLL would also have the worldwide manufacturing rights.
ZLL has set a target of filing a total of 40 ANDAs by 2009, including with Ranbaxy. The alliance with Ranbaxy has helped in terms of documenting, filing and development of ANDAs for regulatory markets. The company has invested over Rs 100 crore in creating R&D and manufacturing facilities, compliant to USFDA standards on a 50-acre plot near the Biotech Park on the outskirts of Hyderabad.
Panacea Biotec reports consistent financial results
Panacea Biotec has announced its unaudited financial results for the quarter ended June 30, 2007. Commenting on the company's performance, Rajesh Jain, joint managing director, said, "The current financial year is full of challenge for all those companies which are deriving major revenues in foreign currencies particularly in US Dollar, as the domestic currency has appreciated significantly against the US Dollar. Panacea Biotec has registered growth in its forex earnings as well as domestic business both pharma and vaccines, however the impact of growth was nullified by around 10 percent appreciation in the Rupee against the US Dollar during the quarter under review as compared to corresponding quarter of previous year. The current financial year continues to be important and promising for Panacea Biotec. During the current year, the focus would be on timely execution of key projects, initiation of clinical trials of our patented products for European markets, preparation and submission of dossiers for other products for filing in LATAM Markets, EU and the US; and further consolidation of our formulations segment."
The company has registered net turnover of Rs 233.4 crore during the quarter ending June 30, 2007 as compared to Rs 233.4 crore for the corresponding quarter of previous financial year. During the quarter under review, the company's turnover from pharma (formulations) segment grew by 27 percent at Rs 49.8 crore, with the domestic turnover registering 26 percent growth and export turnover growing by 36 percent as compared to corresponding quarter of previous financial year. The pharma turnover grew by 32 percent over the previous quarter as well.
The vaccine segment registered turnover of Rs 183.7 crore during the quarter ended June 30, 2007, as compared to Rs 194 crore during the quarter ended June 30, 2006. However, the same was partly compensated by way of the price increase considered by the company in various product segments. The vaccines sales to JV company for private Indian market registered 54 percent growth during the quarter under review compared to corresponding quarter of previous year and 21 percent growth over the previous quarter.
"Panacea Biotec is a fundamentally strong company and is poised to enter into the next big league in the coming years. Our investments in new R&D centers will yield result in years to come. The new production facilities will enable us to enter the regulated markets as per schedule. During the quarter under review the company's formulations facility at Baddi became operationally profitable." added Jain.
Panacea Biotec forays into cancer treatment
Panacea Biotec has plans to forays into oncology segment to provide treatment for breast cancer, brain tumor, ovarian cancer, pancreatic cancer, prostrate cancer andcolorectal cancer. The company plans to launch seven anti- cancer products in the next eight weeks. These drugs will be manufactured by a Mumbai-based company to be sold under the brand name of Panacea Biotec.
Oncotrust would be the new Strategic Business Unit (SBU) of Panacea Biotec with thetotal strength of 50 sales specialists on oncology who would be responsible for marketing the drugs. The aim is to register sales volumes of Rs 15-20 crore in oncology chemotherapy segment in the next three years. The company feels that it would be able to launch novel drug delivery based anti-cancer drug in next 2-3 year period.
"We plan to develop novel and innovative drug delivery systems (NDDS) of the existing anti-cancer molecule. The new research based drug development will take 2-3 years as we need to develop an effective distribution chain and occupy a significant market share in oncology drugs," said Rajesh Jain, joint managing director, Panacea Biotec.
The company also plans to launch its Injectable Polio Vaccine (IPV) in next three months in the private market and would gradually increase the market share after postpolio eradication program of the Central government.
Goodwin Biotechnology doubles GMP manufacturing space
Goodwin Biotechnology Inc. (GBI) has announce that it will shortly be completing the expansion project it undertook in mid 2006, which nearly doubles the GMP manufacturing space and will include two new stir tank bioreactors sized at 250 Liters and 500 Liters. The expansion also includes relocation, upgrading, and tripling the size of the process development laboratory. This expansion is geared to serve GBI's current and future clients for Phase III and beyond.
GBI, one of the earliest established biological contract manufacturers, was acquired by Wallace Pharmaceuticals, based in Goa. Since that acquisition, GBI has achieved two unprecedented years of profitable growth in 2005 and 2006. For 2005, GBI was named the third fastest growing technology company in South Florida.
The need for expansion has been fueled by organic growth at GBI and by manufacturing partnerships with multiple clients. In 2005, GBI was chosen by multi-billion dollar Menarini Group, based in Italy, to manufacture its Phase III ovarian cancer antibody, a project, which is substantially completed. In October 2006, Caprion Pharmaceuticals of Montreal, Canada (now Thallion Pharmaceuticals) selected GBI as its partner for manufacturing two monoclonal antibodies against Shigatoxins produced by E. Coli infections. Other GBI clients include renowned cancer research institutions, such as Memorial Sloan Kettering Cancer Center. GBI serves numerous other small to mid-size biopharmaceutical companies with their process development and contract manufacturing requirements.
While achieving its second consecutive year of growth and best year ever in 2006, GBI also expanded beyond the shores of the US. GBI opened its Indian subsidiary, Goodwin Biotechnology India Private Ltd in Goa. The Indian subsidiary's prime objective is to bring years of GBI's process development and cGMP manufacturing expertise to the rapidly growing Indian biotechnology industry.
Stephanie Finnegan, CEO, GBI said, "Over the years, we have built a solid team of talented professionals who understand and value the importance of serving each client with excellence. Since the Wallace acquisition, we have been provided the capital for growth that we have sought for several years. Together with our operations in India, I can see no limit to the growth of our company and our ability to serve our clients as they scale up to commercial production."
GBI is a fully integrated contract manufacturing organization (CMO) specializing in the cGMP compliant mammalian cell culture of bio-therapeutics for pre-clinical through Phase III clinical trials. GBI offers services, which range from cell banking through cGMP manufacturing.
GBI has announced the successful completion of a strategic co-operation for the manufacturing of the monoclonal antibody Abagovomab with Menarini Group, of Florence, Italy. This antibody is the active principle of the Menarini Group's groundbreaking ovarian cancer vaccine, now in phase III clinical studies around the world.
GBI has also entered into an agreement with Neogenix Oncology Inc. for process development and manufacturing of Neogenix's first therapeutic product, NPC-1C, a novel monoclonal antibody intended for the treatment of advanced pancreatic cancer. On successful completion of this phase of development, and with FDA approval, Neogenix will begin Phase I and Phase II trials of the product, which are currently planned for the first half of 2008.
Avesthagen launches Avesta Good Earth
Avesta Good Earth, the consumer foods division of Avesthagen, displayed its new brand identity while launching a slew of consumer products in a completely new design and packaging.
The company has further strengthened its product portfolio by launching a complete new range of Muesli Bars. With this launch, the Avesta Good Earth product portfolio comprises the Muesli bars, Good Earth Muesli and Whole Wheat Crackers. The launch of Good Earth Muesli Bars is an attempt to raise familiarity of Muesli among consumers while encouraging healthy snacking habits.
Dr Villoo Morawala Patell, founder, vice chairperson and MD of Avesthagen, said, "Consumer health foods is an exciting and fast growing category with a big growth potential. We have extensively studied the market and our product development team has created products with variants that will hold tremendous appeal to the Indian consumer. It is also the beginning of a new chapter for Avesthagen which would be dedicated to solving the people-health-food imbalance in the society."
Sandip Dang, CEO, Avesta Good Earth, said, "The new brand will address the need to maintain healthy living through healthy food. Avesta Good Earth is committed to promoting good health by combining nutrition and taste in all its offerings".
Hester records Rs 21.83 crore turnover
Ahmedabad-based Hester Pharmaceuticals, an ISO 9001:2000 certified company manufacturing poultry vaccines, has registered a turnover of Rs 21.83 crore for the year ended March 31, 2007, as against Rs 20.14 crore for the previous year. It registered a growth of 16.17 percent in net profit on a 8.45 percent growth in sales over last year. The growth was restricted due to 100 percent utilization of production capacity during the financial year. The expanded capacity (increasing from 1.2 billion doses to 4.8 billion doses) which went onstream in March 2007 will show its effect in the current financial year. Hester will commence production for additional vaccines under various international licensing agreements. It foresees a sizeable growth in its sales of poultry vaccines too in the current financial year. The board of directors has recommended a dividend of Rs 2 per equity share of Rs 10 each (20 percent), for the financial year 2006-2007.
IFC to invest $67.2 m in Max Healthcare
IFC, the private sector arm of the World Bank Group, will invest $67.2 million in Max Healthcare Institute, one of the fastest-growing health care providers in India over a period of next four years. IFC's investment will help Max Healthcare Institute, a subsidiary of Max India to expand its operations. It will also enable enhanced access to high-quality health care to a larger number of people. IFC's investment in Max Healthcare Institute will include about $11.2 million of common equity and about $56 million of preferred, cumulative, and redeemable equity.
Analjit Singh, chairman, Max India Ltd, said, "This partnership recognizes our efforts to establish benchmarks of medical excellence and outstanding quality of service. IFC's investment will help us realize our vision of emerging as one of India's leading health care providers."
FCG acquires Zorch
First Consulting Group, the parent company of FCG Software Services India, has announced the acquisition of Zorch, a Salt Lake City, Utah based company that has built a proprietary enterprise software solution to provide regulated content management and collaboration for the life sciences industry. The products and solutions by Zorch are built entirely on the Microsoft Office Sharepoint Server platform, and are designed to allow life sciences organizations to leverage their existing Microsoft platform investments while capitalizing on FCG's product innovations and industry-leading best-practices. The new offering acquired by FCG will be named FirstPoint.
Vadeesh Budramane, vice president, technology and COO, FCG India, commented, "This acquisition demonstrates our commitment to life science market. It also strengthens our leadership position in the technology space".
FCG India receives ISO 27001 certification
FCG Software Services India has been awarded ISO/IEC 27001:2005 certification for all its operations. This internationally recognized information security certification recognizes FCG India for providing adequate security controls to protect global information assets.
"ISO 27001 certification is one of the most comprehensive, internationally accepted information security management certifications," said Vadeesh Budramane. Over the last eight years FCG India has created a niche position in IT and ITES-related activity for healthcare (health plan, health delivery, life sciences) and independent software vendors (ISVs).
Over 25,000 children vaccinated against pneumococcal disease
Over 25,000 children have been vaccinated against invasive pneumococcal disease in India.
Invasive pneumococcal disease is caused by a common bacterium, the pneumococcus, which can attack different parts of the body. In the lungs, it causes bacterial pneumonia while in the blood it causes bacteremia and in the brain it causes meningitis.
In the past, India had no vaccine against invasive pneumococcal disease for children. The bacteria Streptococcus pneumoniae is a major cause of pneumonia. Pneumonia kills more children than any other illness, accounting for 19 percent of all under-five deaths worldwide, according to the World Health Organization (WHO). India tops the list of 15 countries that account for three-quarters of childhood pneumonia cases worldwide.
"Reducing the burden of pneumococcal disease is a vital step toward achieving the United Nations' Millennium Development Goal of reducing child mortality by two-thirds by 2015," said Ranga Iyer, MD of Wyeth Ltd. "Broad adoption of the WHO position has the potential to save millions of children's lives around the world. Wyeth is dedicated to doing its part to create an awareness of pneumococcal disease and the need to protect children below two years of age, as they are most vulnerable."
New low-cost technology counters widespread Aflatoxin
African farmers and agriculture enterprises now have a fast and inexpensive way to detect and manage a costly, naturally occurring and potentially deadly poison (aflatoxin) that infects their crops via a common fungus that makes them unfit for consumption or export.
Scientists at the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), supported by the Consultative Group on International Agricultural Research (CGIAR), have devised a fast, simple and affordable test kit for detecting the poison, which is known as aflatoxin.
The new detection kit developed by ICRISAT has changed the situation by cutting the cost of testing crops from $25 to $1 per sample. It's available as a small, simple kit that can be used even for most remote rural farms to monitor grains and nuts and improve storage techniques to avoid serious contaminations. The end result is safer products for consumers and higher returns for African farmers.
"We have put another strong weapon in the hands of poor farmers to fight a problem that was making it particularly hard for African agricultural products to get fair treatment in international markets," said Dr William Dar, director general of ICRISAT.