PHARMA’S NEXT GEN

New in­her­i­tors take charge with fresh ideas and strate­gies

Business Today - - CONTENTS - BY RA­JEEV DUBEY

In­dia’s ven­er­ated $37 bil­lion pharma in­dus­try is at the cross­roads. The road to new drug dis­cov­ery – af­ter decades of dis­ap­point­ing re­sults – is fa­mously pot-holed and, with half-dis­cov­er­ies be­ing touted as new drugs, ap­pears to be lead­ing nowhere; The road to money-spin­ners such as Para-IV ex­clu­siv­ity, generic-gener­ics and branded gener­ics is fac­ing rapid speed-break­ers of com­pe­ti­tion, com­modi­ti­sa­tion and price ero­sion. In the in­terim, do­mes­tic pharma ma­jors went on the road to tac­ti­cal M&As to fos­ter growth. But the most promis­ing road is the way to com­plex gener­ics, spe­cialty drugs and bio-sim­i­lars. It is also the most ar­du­ous, re­quir­ing a de­coc­tion of cutting-edge sci­ence, speed and agility and out­stand­ing selling prow­ess – nei­ther of which is In­dian pharma ma­jors’ strength.

That calls for re­assess­ing the ground re­al­i­ties and im­ple­men­ta­tion of new strate­gies, fresh think­ing and, most im­por­tantly, fresh blood. Just as the doc­tor or­dered, the scions – some sec­ond gen­er­a­tion and some third – of In­dian pharma ma­jors are ready­ing to take on this oner­ous re­spon­si­bil­ity.

This is a wa­ter­shed mo­ment. If they suc­ceed, In­dia will still have a home-grown phar­ma­ceu­ti­cal in­dus­try. If they don’t, the do­mes­tic pharma land­scape will be pep­pered with for­eign-owned In­dian pharma com­pa­nies, a trend that has ac­cel­er­ated since the be­gin­ning of this decade.

That was cer­tainly not how the fore­fa­thers of In­dia’s generic in­dus­try en­vis­aged it. They dreamt of cre­at­ing orig­i­nal drugs—or New Chem­i­cal En­tity (NCE)— and rul­ing the global pharma in­dus­try with their low cost sci­ence. Vet­eran com­pa­nies like Alem­bic (founded in 1907) and Ci­pla (1935) were joined by new­com­ers like Ran­baxy Lab­o­ra­to­ries, Sun Pharma, Dr Reddy’s Lab­o­ra­to­ries, Lupin, Wock­hardt, Zy­dus Cadila and more, most of them set up by sci­en­tist-chemists in­clined to­wards en­trepreneur­ship. Pharma en­trepreneurs Ran­baxy’s Parvin­der Singh, Dr Reddy’s’ Anji Reddy, Lupin’s DB Gupta, Ci­pla’s Y.K. Hamied, Wock­hardt’s Ha­bil Kho­raki­wala—among oth­ers—as­pired to de­velop NCEs of their own. They set up world class lab­o­ra­to­ries and hired hun­dreds of sci­en­tists in their quest for a new drug. They were con­vinced that if In­dian sci­en­tists could lead new drug de­vel­op­ment in multi­na­tional lab­o­ra­to­ries, they could surely pro­duce NCES in their labs at a frac­tion of the $1-1.5 bil­lion that MNCs spent in de­vel­op­ing a new drug. When these sci­en­tist-en­trepreneurs were in their prime in the late 1990s and early 2000s, it was the most ex­hil­i­rat­ing pe­riod and In­dia ap­peared on the verge of dis­cov­er­ing a new drug and thereby be­com­ing the world’s pharma lab. At its peak, Ran­baxy and Dr Reddy’s had nearly a dozen promis­ing mol­e­cules in ei­ther late Phase I or early Phase II tri­als—the do­mes­tic in­dus­try had over 50 promis­ing mol­e­cules un­der var­i­ous stages of clin­i­cal tri­als. But de­spite re­peated at­tempts right till the early 2000s, all mol­e­cules failed Phase II or early Phase III tri­als. As com­pa­nies ran out of pa­tience – and cash – they be­gan out-li­cens­ing (leas­ing mol­e­cules) to MNCs for tri­als. But that didn’t de­liver any re­sults ei­ther. By 2005, it was clear that the in­dus­try had flat­tered to de­ceive and the doyens of the in­dus­try such as Parvin­der Singh, Anji Reddy and oth­ers had ei­ther lost or were los­ing their bat­tle with age. The at­tempt at drug dis­cov­ery had failed mis­er­ably (By some es­ti­mates, even to­day about 120 mol­e­cules are in var­i­ous stages of clin­i­cal tri­als, but his­tory is against In­dian pharma).

In 2013, Zy­dus Cadila in­tro­duced Li­paglyn – a novel drug dis­cov­ered to treat di­a­betic dys­lipi­de­meia – but it hasn’t yet been ap­proved by global drug reg­u­la­tors, in­clud­ing USFDA. And Ran­baxy in­tro­duced an anti-malar­ial drug af­ter the In­dian drug reg­u­la­tor’s ap­proval for the Bill Gates Foun­da­tion.

Hav­ing strug­gled to make any head­way, do­mes­tic pharma ma­jors be­gan fo­cus­ing their at­ten­tion on ge­o­graph­i­cal ex­pan­sion of their gener­ics em­pire by es­tab­lish­ing of­fices in other coun­tries or by ac­quir­ing for­eign com­pa­nies, drug port­fo­lios and re­search fa­cil­i­ties to plug the gaps in their armoury. But there are chal­lenges ga­lore: Branded gener­ics as a growth en­gine in emerg­ing mar­kets is fac­ing chal­lenges of gov­ern­ment price con­trol. To top it all, In­dia is gear­ing up to in­tro­duce the new norm of mak­ing it manda­tory for doc­tors to pre­scribe generic-generic drugs, in­stead of branded gener­ics; Fi­nally, there are bio-sim­i­lars but, here again, the ex­pe­ri­ence has been mixed as there is less cer­tainty on the re­quire­ments for ap­provals as the drug char­ac­ter is dif­fer­ent and more com­plex than syn­thetic drugs.

Just as that phase is start­ing, In­dian pharma’s GenNext is ready to take on the man­tle. That in­cludes Sam­ina Vazi­ralli, daugh­ter of Ci­pla’s non-ex­ec­u­tive Vice Chair­man M.K. Hamied; Mur­taza Kho­raki­wala, son of Wock­hardt founder Ha­bil Kho­raki­wala; Sharvil Pa­tel, son of Zy­lus Cadila’s chair­man Pankaj Pa­tel; Nilesh Gupta and Vinita Gupta, chil­dren of Lupin founder Desh Bandhu Gupta; Ki­ran S. Divi and Nil­ima Mo­ta­parti, chil­dren of Divi’s Lab­o­ra­to­ries founder Mu­rali K. Divi; and, Arvind Juneja, son of Mankind Pharma founder R.C. Juneja, among oth­ers.

We doc­u­ment their ex­cit­ing jour­ney. Their strate­gies may dif­fer but their goals are iden­ti­cal—to cap­ture as much busi­ness as pos­si­ble in the world’s big­gest pharma mar­ket—the US.

If Ci­pla’s Vazi­ralli is chan­nel­ing the com­pany’s en­er­gies into fewer but cho­sen global mar­kets while re­dou­bling the fo­cus on the US, Wock­hardt’s Mur­taza is fo­cus­ing on the vast do­mes­tic mar­ket while re­duc­ing de­pen­dence on the US (he is bet­ting on an­tibi­otics with five mol­e­cules un­der de­vel­op­ment). Zy­dus Cadila’s Sharvil is driv­ing renewed in­vest­ments into re­search, Divi’s Ki­ran and Nil­ima re­main fo­cused on driv­ing the founder’s dream of be­com­ing one of the world’s big­gest man­u­fac­tur­ers of ac­tive phar­ma­ceu­ti­cal in­gre­di­ents.~

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