Four years ago, Mumbai-based Glenmark Pharmaceuticals invested a mere $ 1 million (R4.5 crore) in a sclerosis drug molecule to which it added around R75 crore through its research.
Earlier this month, that turned a multi-bagger as the firm turned in a neat $613 million (around R2,750 crore) deal with Paris-based Sanofi. It showed the power of smartly executed Indian research.
Under the deal Glenmark, a R3,000-crore revenue company, licensed a drug molecule code named GBR 500 — targeted to cure sclerosis. The original molecule was bought for less than $1 million in 2007 from Canada’s Chromos.The deal reflects the increasing trust of global pharmaceutical giants on Indian innovation capabilities, going beyond known generic drugs to new cures.
Last year, Bangalore-based Biocon signed a deal with Pfizer, under which the US-based giant got worldwide exclusive rights to market Biocon’s “biosimilar” versions of top-selling insulins. Similarly, Ranbaxy inked a pact in 2008 with US-based Merck for discovery and clinical development of anti-infective drugs.
In such deals, Indian firms identify a drug molecule at very early stage, carry out the research and development (R&D) and on a certain maturity level, license it back (or “outlicense”) to a multinational that has the deep pockets to market it.
After acquiring GBR 500, Glenmark Pharmaceuticals (founded by Gracias Saldanha in 1977 and named after sons Glenn and Mark) did the R&D at its research centre in Switzerland and took it to phase-1 trial from pre-clinical trial in four years.
“It is a good strategy by Glenmark and other Indian pharma players as no Indian company has financial strength to conduct phase-2 and phase-3 trials on its own and also chances of failures make the process very risky,” said Sujay Shetty, director for pharmaceuticals practice at consulting firm PricewaterhouseCoopers (PwC).
To launch a molecule commercially, it needs to clear advanced trials for which it needs $200-$400 million in investments – a risk Indian firms can hardly afford.
“We were clear that if we are doing research in biologics then we need to be at the cutting edge and we also wanted to get a head-start,” said Glenn Saldanha, chief executive officer of Glenmark Pharma, explaining the decision to take up the challenge. Biologics are made from living cells and difficult to copy.