Elder in licensing pact with Spanish firms

Elder Pharmaceuticals has entered into licensing alliance with two Spanish companies "" Ferrer SA and Covex SA "" for marketing and manufacturing two products in the fast growing cerebro neuropsychiatry (CNS) segment.

Elder will enjoy the rights for entire South Asia. The company has already conducted clinical trials for the two molecules "" Citicholine and Vimpocetine and the products, catering to diseases such as impairment of cognitive functions (especially in the elderly population) and strokes, are ready to hit the market within a month.

While Citicholine is patented by Ferrer SA, Covex SA hold the patent rights for Vimpocetine. The Mumbai-based Rs 235 crore Elder Pharmaceuticals expects to generate a turnover of Rs 25-30 crore at the end of the third year of launch.

Alok Saxena, director, said: "This marks our foray into CNS segment. The alliances will give us a toe-hold in this category where margins are sufficiently higher compared with traditional pharmaceuticals formulations and the antibiotic segments."

The CNS segment, pegged at around Rs 1,100 crore, is growing at 15 per cent per annum against the domestic pharma growth of 8 per cent.

Over the last three years, the share of this category in the industry has climbed from 4 in 2000 to around 5.5 per cent and is currently dominated by Sun Pharma, Torrent & Abbot India.

In last 24 months, around 11 new molecules have been launched by various Indian companies in the CNS segment.

"The move is also in line with our strategy to establish a strong presence in niche segments and also manufacturing, keeping in mind the product patent regime post 2005," Saxena added.

Citicholine, according to the company, increases the amount of essential cell membrane components, known as phospholipid precursors, in the human brain.

It is found to protect the brain's cellular structures from free radical damage, possibly reducing the risk of neuronal membrane damage. It also reduces brain damage following stroke.

Vimpocitine dilates blood vessels, enhances circulation in the brain, improves oxygen utilisation, makes red blood cells more pliable and inhibits aggregation of platelets. Covex commands the largest market share across the European Union for this particular molecule.