NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, December 14, 2005

Andrew Jack And Khozem Merchant / Mumbai

One of India’s leading pharmaceutical groups is set to sign a series of pioneering research and development agreements with large western groups, say executives.

Swati Piramal, director of strategic alliances at Mumbai-based Nicholas Piramal, said senior delegations from leading multinational drugs companies had visited India in the past half-year, and some were set to announce collaborations with the company in a range of therapeutic areas in the next few months.

However, she stressed the deals would only be agreed on condition that her company shared the intellectual property and profits on any discoveries as partners, rather than as a sub-contractor as has happened before.

The talks mark a sharp evolution for the company, India’s fourth largest drugs group by domestic sales, with revenues of Rs14 bn ($304 m) in the last financial year, and some of its Indian peers.

They are shifting from manufacture and contract chemistry to cost-effective innovation, while western drug groups seek to cut spiralling development costs.

Piramal caused a stir recently, claiming a new cancer drug could be developed in India for as little as $50 m, compared with the $800m-plus western drug groups say it would cost them.

She said the difference included the low cost of clinical trials in India, the country?s biodiversity as a source of compounds with potential medicinal use, and the competitive salaries for highly qualified scientists, allowing 100 or more to work on research for a single drug.

India’s tactic has been to choose diseases such as lesser-known cancers with few medicines where the number and types of people enrolled in clinical trials can be reduced and regulators are willing to offer fast-track approval and exclusive market access for a period.

Piramal emphasised that even if the ultimate cost of drug development for the company was $100m, that should still allow it to sell medicines more cheaply than its western peers.

“If you can sell to people including the 5bn at the bottom of the pyramid and not just the billion at the top, why shouldn’t you?” she said.

In Canada, Nicholas Piramal is launching Phase I clinical testing in humans of its first drug developed in-house, for colon cancer, which it hopes will be launched by 2008.

It has another three medicines entering clinical trials shortly, in therapeutic areas such as inflammation and infections. Last year, the group became the first Indian company to win UK regulatory approval for its clinical research unit.

In a sign of its growing international ambitions, Nicholas Piramal last week finalised the Rs9.5m ($16.7m) absorption of Avecia Pharmaceuticals of the UK, a deal that doubles its sales outside In