BIORx in the news
Linking Patented Drug Price to Per Capita Income May Hit Generic Drug Makers
Panacea Biotec in pact with Osmotica Pharmaceutical to develop generic drugs
Government Proposes Free Supply of Essential Drugs
Moolchand seeks pan-India presence
October 2012
DEAL DYNAMICSZydus inks pact with Canada’s Microbix Ahmedabad based drug major Cadila Healthcare (Zydus Cadila) announced the closing of a definitive agreement regarding the re-launch of Kinlytic (urokinase) in North American markets with Canada based biotechnology player Microbix Biosystems Inc. The market size for urokinase in the US is estimated to be around $ 400 million (around Rs 2213 crore). Zydus signed a letter of intent with Mircrobix in January this year to market the thrombolytic drug, urokinase in North America. Under the agreement, Microbix has licensed to Zydus Cadila all its rights and expertise relating to urokinase. Zydus Cadila will make all further investments related to regulatory approvals, product development, manufacturing as well as marketing the drug. Zydus will be manufacturing the drug at its own biologics facility. This will help Microbix avoid any major manufacturing scale up and validation steps.
Panacea Biotec in pact with Osmotica Pharmaceutical to develop generic drugsDelhi-based vaccine maker, Panacea Biotec, has entered into a strategic alliance with US-based Osmotica Pharmaceutical to develop and market niche generic medicines for several markets, including the US. The company said that under the collaboration it would lead product identification, research and development, and manufacturing of generic versions
of complex original drugs, while its American partner would spearhead product registration, legal matters, marketing, sales and distribution.
The company said the products commercialized from the collaboration would be sold under Osmotica and Panacea Biotec labels.
Panacea will receive funding from privately-held Osmotica Pharmaceutical and milestone linked payments upon achieving targets.
Fairplay, CCI must scrutinize M&As in all sectors and coordinate with sectoral regulatorsThe government has reportedly decided to bring bank mergers under the scrutiny of the Competition Commission of India (CCI). This is welcome.
Matters on competition should not be left to sectoral regulators, many of whom are keen to enlarge their turf. These should be decided by the CCI that is empowered to oversee competition, curb unfair trade practices and check the abuse of monopoly power. The RBI sought an exemption, saying it has the expertise to deal with cartelization, monopolistic behavior or unfair competition. Such expertise is not reason enough to keep CCI away.
Matters on competition should not be left to sectoral regulators, many of whom are keen to enlarge their turf.
NEW PRODUCT LAUNCHES AND REGULATORY APPROVALSMost diabetes patients find it tedious to have to closely monitor the multiple drugs they take to control their condition every day. The introduction of an oral, once a day tablet to treat type-2 diabetes in adults was a welcome alternative for the 50.8 million diabetics in India. Now, a study suggests that this new drug, Linagliptin, has additional advantages over older drugs. Baptist Gallwitz, who authored the study published last week in The Lancet, told DNA it was based on the tracking of around 1,500 patients worldwide over a span of 2 years.
Cipla launches four in one drug for HIV patients India’s second largest drug company Cipla has launched Qvir, a combination of four HIV drugs in one single strip intended for daily treatment. The four drug kit contains Tenofovir, Emtricitabine, Atazanavir and Ritonavir. These drugs will be used for both first and second line treatment of HIV AIDS.
Cipla said by the end of 2010 close to 34 million people were living with HIV and that same year saw 2.7 million patients infected with the disease. “Every year about 5-10% of patients fail their first line treatment for various reasons such as missing doses and the virus developing resistance”, said Cipla.
Indian Pharma Companies Must Innovate For New Markets Before China Steals ShowGraham Lewis, Vice-President Europe, global pharma strategy, IMS Health, in an interview with Soma Das, underlines the changing global dynamics of pharma business and discusses the need to tap new frontiers of growth before China steals the show.
Government Proposes Free Supply of Essential DrugsTo make health care more affordable, the government proposes to launch an initiative for free supply of essential medicines in public health facilities. Health and Family Welfare Minister Ghulam Nabi Azad informed that the government proposes to start an initiative for free supply of essential medicines in public health facilities, aiming to provide affordable health care by reducing out of pocket expenses on medicines. In a written reply, he said the drugs would be supplied by district warehouses through an IT-enabled supply chain management system. “The initiative will be part of the 12th Plan Proposal. There is an initial provision of Rs 100 crore in the budget of 2012-13,” Azad said.
Aurobindo Pharma rises on regulatory nod for anti-hypertension drugAurobindo Pharma has moved up by 3% at Rs 127, extending its previous two day rally after the company said it had received final approvals from the US drug regulator -- US Food & Drug Administration (USFDA) – to manufacture and market the anti-hypertension drugs Amlodipine Besylate and Benazepril Hydrochloride capsules in various strengths. “The annual sales of Amlodipine Besylate and Benazepril Hydrochloride capsules is approximately $500 million for the twelve months ending March 2012, according to IMS Data,” Aurobindo Pharma said in a filing. With the latest approval, Aurobindo now has a total of 158 ANDA approvals from the US drug regulator, of which 133 are final approvals, including one from Aurolife Pharma LLC, and 25 tentative approvals, it added.
The stock opened at Rs 124 on the National Stock Exchange and has seen a combined 532,436 shares changing hands on the counter so far on both the exchanges.
The introduction of an oral, once a day tablet to treat type-2 diabetes in adults was a welcome alternative for the 50.8 million diabetics in India.
INDUSTRY NEWSMoolchand seeks pan-India presence A landmark destination in Delhi — Moolchand Hospital — is now set to go places. Moolchand Healthcare Pvt Ltd, the corporate entity formed in 2006 and with expansion in mind, is on an acquisition spree for hospital chains, IVF (in vitro fertilisation) clinics and pathological laboratories. The company plans to spend Rs 500 crore over the next five years in expansion and acquisitions. It has also roped in private equity player Sequoia Capital to fund the expansion. “We have private-equity funding and are looking for growth in newer assets through a for-profit company delinked from the trust,” Moolchand Chief Executive Shravan Talwar told Business Standard. The healthcare company is in advanced talks with many hospitals in the northern and eastern parts of India, where it may kickstart the first phase of expansion.
“Discussions are underway across the country for acquiring IVF clinics and pathological labs,” Talwar said. The company plans to invest around Rs 200 crore on the buyout of IVF clinics, mainly spread across the national capital region and the second-tier cities, whereas it has earmarked Rs 50 crore for the acquisition of labs with a strong hold in the market. Talwar is talking of striking a couple of deals in each of these segments by the end of this year.
Moolchand Healthcare is looking at hospitals with an average of 400 beds in cities like Rajasthan, Uttar Pradesh, Bihar, Madhya Pradesh and Chattisgarh. Similarly, for fertility-assistance services, for which the market is estimated to be around Rs 1,700 crore currently, Moolchand is eyeing around 15-bed hospitals and regional chains. For diagnostic centres, the company plans to broaden its geographic
footprint with a smaller investment. It is looking at acquiring pathological labs in cities like Mumbai, Rajasthan, Uttar Pradesh and Delhi.
‘Financial inclusion will help tackle manpower shortage’India needs to adopt a model like the ‘financial inclusion’ drive, to tackle the shortage of skilled and employable manpower in the healthcare sector.
Just like the country has initiated the ‘financial inclusion’, which focuses on banking for everyone, we should find sustainable models to create more healthcare professionals and to provide basic health services in remote villages,” said Vikas Singh, president, Crux Management Systems Private Limited, speaking at a seminar on ‘Healthcare skills and employability’ organized by the CII-Andhra Pradesh in association with the UK India Business Council.
DM Health lines up new projects in KeralaDubai-headquartered DM Healthcare has announced an investment of over Rs 2,150 crore in various proposals. Most of these are expected to be operational in 5 years.
Addressing a press conference here on Tuesday, Azad Moopen, chairman, DM Healthcare, said the first phase of Aster Medcity in Kochi , under development at an outlay of Rs 500 crore, was on track for commissioning during the second half of 2013. The project includes a 540-bed hospital with nine centres of excellence in various super-specialties such as cardiology, ortho and oncology.
The Medcity campus will also boast a 500-seat medical convention centre, a 4-5 star hotel and serviced apartment complex, staff accommodation including a high-end residential facility with integrated township.
The company will invest Rs 300 crore in the Malabar Institute of Medical Sciences over the next 3 years to develop a 150-bed block in Kozhikode and an additional 150 beds at Kottakkal.
IPRLinking Patented Drug Price to Per Capita Income May Hit Generic Drug Makers A government panel’s proposal to link the price of patented drugs to per capita income is likely to shut out the option of compulsory licensing for generic drug makers, experts and industry executives warn. Experts say that if the proposed pricing mechanism is implemented, it will make a strong case for big pharma companies to oppose applications for compulsory licensing on the ground that the prevailing price in India has been fixed by the government. “It will be rather paradoxical for the patent office to grant a compulsory licence on the grounds that the patented drug is excessively priced, when the price has been fixed by the government,” said Shamnad Basheer, a Kolkata-based patent expert.
US Doublespeak on Patent Waiver BaredThe United States, which is crying foul over a patent waiver for a cancer drug in India, has itself resorted to similar steps to “reduce disruptions” in supply of two medicines - and that too through an executive order. In addition, the order’s mandate may not be limited to these drugs alone but could extend to several others. While the government has decided to take up the issue with the US through diplomatic channels, officials said India - which has for the first time invoked the compulsory licensing provisions by allowing Natco Pharma to sell a generic version of Bayer’s cancer treatment drug Nexavar - has followed a judicial process that is open to further review.
Patent expiries: Dr Reddy’s, Lupin to foray into specialty pharma, Aurobindo Pharma to focus on servicesIndia’s top pharmaceutical companies are preparing in light of falling revenues from expiring patents at the end of this year. While some drug makers are taking to specialty pharma products that have little competition, others are hoping that services will help sustain revenue flow from the United States, a key market. At present, Indian companies account for over half the applications seeking permission to manufacture a ‘me-too’ drug; a significant chunk of them are the first to obtain the exclusive 180-day right to sell the drug whose patent has expired.
According to IMS Health, a provider of information, services and technology for healthcare firms, 2012 will have patent expiries worth $44 billion (Rs 2.4 lakh crore) of sales in the US market, more than double that of last year. Next year the figure will only be about $15 billion, but subsequently will rise to a maximum of $22 billion in 2015. “The pharma companies are looking at niche segments to mitigate the risk in the generics business,” said Ranjit Kapadia, vice-president for institutional research at HDFC Securities. “With an increasing number of players, a great price war is waiting to break out.” India hopes to double its pharma exports in the next two years. The Pharmaceutical Export Promotion Council expects overseas sales to touch Rs 1.2 lakh crore, or $25 billion, by end 2013-14, from around $13.2 billion in 2010-11.
At present, Indian companies account for over half the applications seeking permission to manufacture a ‘me-too’ drug
INTERVIEWSMeet the Risk Mitigator Vishal Gandhi, Managing Partner and CEO, BIORx Venture Advisors Pvt Ltd, shared his thoughts on the investment scenario for the Indian healthcare sector. While speaking to ENN he opined
healthcare as a sector attracting private investment. Healthcare was regarded as a charity field wherein no profitable venture could be anticipated. But thanks to healthcare enterprise chains like Fortis/Apollo, the scenario has changed. In these past few years, the industry has witnessed more and more private investment, and merger and acquisitions. Underlining the importance of more hospitals considering we are a country where the bed to patient ratio stands at one bed for a thousand patients, Vishal Gandhi emphasized on increased involvement of private equity and venture capitalists firm. The healthcare sector has huge potential to attract investment given we are a country of more than 1.2 billion people with 75% rural population which has to travel a few hundred kilometres for decent treatment for even the most common diseases. Excerpts from the interview:
What criteria does an investor look for in a healthcare company before investing?First and foremost, a start-up or a company should only approach the angel investors/ VC/PE once they have established a proof of concept from their own equity or money raised from family/friends.
The investors look into the robustness of the business plan.
They also observe the following areas:
a) How scalable is the business in terms of entry barriers?
b) How well networked the promoters are
c) Management team and the retention policies the company has for their employees.
What are the steps a healthcare company opts before finalising a VC or PE funding?Before finalising a VC make sure you have all the elements needed to make your venture attractive in the eyes of the investors. Right from a sound business plan to a well-planned out revenue model everything has to be in sync with the nature of the business so that investors do not turn down the proposal. Investors should be from the same domain and have domain expertise that would give value in addition to the funding.
What is the role of BIO Rx?We play the role of risk-mitigators. Because of my professional experience I can provide novel solutions to companies. Sitting in a cabin you would assume you are the best, but we as an experienced party who habe learned the tricks of the trade by working for similar companies across the value chain and life cycle of company, BioRx can guide the way to avoid risks when choosing investment partners. Because companies require funding we can advise whether to go for a debt or private equity investment, depending upon the best capital structure.
Interviewed by Sharmila Das, Elets News Network (ENN)
BIORx in NEWSOpportunities between Georgia-India biotech, pharma and healthcare www.expresspharmaonline.com/latest-updates/1116-opportunities-between-georgia-india-biotech-pharma-and-healthcare-explored-at-recent-webinar
Expert Opinion: The Financing Ecosystem for SMEs in the Life Sciences Spacewww.yesbank.in/index.jsp?navigationUrl=%2FYES+Bank+Repository%2Fen%2FKnowledge+Banking%2FYES+SME%2FPoint+Of+View
Domestic drug sales growth lags importswww.financialexpress.com/news/domestic-drug-sales-growth-lags-imports/978028/0
Meet The Risk Mitigatorhttp://ehealth.eletsonline.com/2012/09/the-funding-mantra/
How affordable healthcare relies on R&Dwww.financialexpress.com/news/how-affordable-healthcare-relies-on-r-amp-d/651479
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AND FINALLY...Pfizer loses Sutent patent battle in IndiaPharmaceutical giant, Pfizer, has lost patent protection for its kidney cancer drug Sutent (sunitinib malate) in India. The country’s Patent Office revoked the basic patent following a legal challenge from local drug makers Cipla and Natco Pharma, who claimed that Pfizer’s patent was compromised because it did not include an inventive step. Cipla believes that the structure of Sutent could be deduced from similar drugs covered by earlier patents.
Pfizer looks set to appeal this decision, “We believe the decision undermines intellectual property rights in India and we will vigorously defend our basic Sutent patent,” Managing Director Jazz Tobaccowalla said in a statement.
This decision follows a number of controversial patent cases in India involving large multinational pharmaceutical companies. Last month Bayer failed to overturn a compulsory license that removed patent protection from its cancer drug Nexavar (soarfenib), allowing a lower priced competitor product from Natco to enter the market. Roche also recently lost an ongoing dispute with Cipla, lasting 4 years, concerning the rights to Tarceva (erlotinib) for advanced stage non-small cell lung cancer. Novartis has been defending the Indian patent for its blockbuster cancer drug Gilvec (imatinib) since 2005. The verdict of this long-running case is expected before the end of this year.
Cutting the cost of medicines in IndiaThe cost of medicines in India may be set to fall dramatically if a proposal submitted by government ministers is accepted. The Indian Cabinet will vote this week on recommendations that the price of 348 medicines on the country’s National List of Essential Medicines (NLEM), accounting for nearly a third of all medicines sold in India, should be cut by up to 75%. The price cuts are planned to cover a broad range of products including antibiotics, painkillers, and drugs for diabetes and cancer. Combination products and patented drugs are not included in the proposal.
Instead of the currently used cost-based model, under the 1995 Drug Price Control Order (DPCO), the maximum selling price for each of the 348 drugs on the list would be calculated via a “weighted average price formula”, which takes the weighted
average of prices of brands with a market share greater than 1%. Supporters highlight that although drug prices in India rose by 40% over 1996–2006, the price of 74 drugs already controlled under the DPCO rose by just 0.02% over this time-period.
Observers are of the opinion that multinational companies will be hit more than generic makers should this proposal go ahead. The earnings of major Indian companies such as Cadila, Cipla, Lupin and Ranbaxy may be cut by 5–10%, according to research from UR Associates. The Department of Pharmaceuticals is debating a requirement for drug manufacturers to provide data on the production of drugs that would fall under the new legislation, in order to ensure there is no drop in supply of these essential medicines.
The government has also pledged to make medicines free to 52% of its population by 2017.
Takeda to buy LigoCyteUSA’s LigoCyte Pharmaceuticals is due to receive an upfront payment of $60 million in a move which will expand Takeda’s recently launched vaccines business. LigoCyte’s lead product, a vaccine to prevent norovirus gastroenteritis, is currently in Phase I/II, and is the only norovirus vaccine in clinical trials today. Gastroenteritis resulting from norovirus infection results in 200,000 deaths worldwide, mainly In developing countries.
LigoCyte are set to gain further payments from Takeda based on the future progress of their projects and, in addition to the norovirus vaccine, preclinical development of vaccines for respiratory syncytial virus, influenza and rotavirus are underway. Takeda has said that in order to preserve continuity and build on LigoCyte’s success, the business will remain based in Montana for the foreseeable future, with the retention of the management team and its employees.
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About BioRxBIORx Venture Advisors Private Limited (BIORx) is committed to providing life science-focused specialized financial and strategic advisory services to the third party business. With headquarters in Delhi (India), BIORx has a wide clientele, ranging from companies at incubation stage to large well- established players.
BIORx has a proven track record in the field of transitional closure for supporting superior investment opportunity. This would enable clients to attain long-term growth and enhance shareholder value and business. We specialize in devising comprehensive solutions to financial issues/ technical issues/project development and business development issues.
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Meet the TeamVishal Gandhi Managing Director, CEO [email protected] +91 9810702334, +91 8130155022
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