 "Our strategy was to discover and own the drug and not license out: Pankaj R Patel")
While most domestic as well as multinational companies shy away from making investments in drug discovery because of high financial risks and regulatory hurdles, Cadila Healthcare says it is the first Indian pharmaceutical company to develop a drug from its own discovery pipeline. The research-based firm now plans to partner MNCs for marketing its new drug, Lipaglyn, in developed markets such as the US, Europe and Japan, Cadila Healthcare's Chairman and Managing Director Pankaj R Patel told Sushmi Dey. Patel also said that current challenges will help Indian pharma industry evolve to become better. Excerpts:
How is the discovery of Lipaglyn a breakthrough for Cadila Healthcare?
This is a unique achievement by any Indian pharmaceutical company. For the first time, a lot of firsts have happened. It is a first Indian NCE (new chemical entity), it is also the first drug to treat diabetic dyslipidemia and this is the first drug which has appeared in the glitazar class across the world. It gives us the confidence India and Indian scientists can do it. Our basic objective is once we launch in India, we will take it to global markets. So, we will launch in India in the third quarter of this year and then take this to the global market. We are registering into some emerging markets.
Which are the markets?
What will be your strategy?
The first approved indication for this drug is diabetic dyslipidemia but we also have plans and studies undergoing, which have completed phase-II and are moving to phase-III, for some additional indications. Some of these indications are unique. Then, we want to take this drug to developed markets with additional indications, which can hasten the process of approval. This is a patented product.
How many patents do you have for it and in which countries?
Our chemical structure is patented. Once this is patented, you do clinical studies. Based on that, we have received approval for one indication and then we might get approval for additional indications. So, we will get multiple use patents for different indications. Currently, we have one product patent. We have patents in the world wherever we have approval. For additional indications, we have filed additional patent applications.
What are the additional indications under evaluation?
We would not like to disclose these now. We would do that at an appropriate time.
What is unique about this drug?
We have done studies of this drug with pioglitazone, fenofibrate and atorvastatin and we have seen it is comparable to pioglitazone with its anti-diabetic effect without the usual side-effect of pioglitazone such as weight gain. Similarly, it does not have the side-effect of fenofibrate. Third, when it is administered along with atorvastatin, additional reduction in cholesterol level happens to the extent of around 20 per cent. All these things make the drug different.
When other companies shy away from research due to financial risk and regulatory hurdles, how did you manage such a discovery?
I want to go back to my strategy. When we decided we wanted to be a research-based pharmaceutical company, we evaluated how we can do research within our resources.
What you read and hear is that one requires a billion dollar-plus to discover a molecule. The obvious question to my mind was, where do we get a billion dollars to do so? We decided we do not want to get disheartened by this number.
So, we decided to do it in a cost-optimised way. We focused our energy in developing inhouse capability. We are the only company with a dedicated research centre only focused on doing discovery research. We are the only company with capacity to do large animal studies, including on primates. From concept to pre-clinical studies, we have complete capacity to do it.
What are the investments made by Cadila on this drug?
This drug discovery took us a total of 12 years, commissioned in 2000-01. The first five years were spent on discovery and pre-clinical studies and the next seven years on clinical studies. Our strategy was very clear that we want to discover and own the drug and not license out. Till now, we have spent around $250 million. We plan to spend another $150-200 million for additional indications and also approvals in other markets.
Do you plan to market the drug on your own or join hands with other players?
We have no marketing capabilities in some developed markets. So, ultimately, we will need marketing partners in those countries. (We have) not yet started talking to prospective partners as we are waiting for the launch in India. We are expecting approvals in various countries in three to five years. In India and some emerging markets, we will market on our own.
Are you looking for multinationals to partner in developed markets?
We will be looking for somebody who has the capability to market this product. None of the Indian companies has the capability to market products in the US or Europe.
Apart from this product, which are the other areas where Cadila is doing research?
We have around 20 different projects at different stages of development. Our focus is on metabolic disorder, pain and inflammation and cancer. Our goal is to have at least two more new products coming out of our research pipeline by 2020. We spend about 7 per cent of our turnover on research. Besides, we are looking at biologics and vaccines. We recently commissioned a facility in Ahmedabad to develop monoclonal antibodies. Vaccine research is located in India and Italy.
What are your plans for the US, which is your second largest market after India?
We continue to file 30 ANDAs (abbreviated new drug applications) every year in different areas, not only orals but injectibles and transdermal, too. We are entering into transdermal products, which are high-priced products and are difficult to make. We are also getting into areas where there are intellectual property challenges. So, several litigations are around. Currently, we have around 10-12 para IV application pending. Of this, about 6-7 are likely first-to-file with 180 days of sales exclusivity.
There is a sense that approvals from the US for Cadila has slackened in the past few years with almost no major approval coming your way. What is the reason?
We have received approvals and we are expecting more approvals. It depends which approval happens first and which comes later, but we are receiving approvals. People ask me which are the big products being approved and I tell them currently there are no big products approved. This is understandable because not all products are big. There are no issues at all.
Has the US Food and Drug Administration (FDA) become stricter and, therefore, have approvals slowed down?
The rate of approvals has slowed down for the overall industry, but that is because of change in regulation. I do not think the US FDA has become stricter. Rather, science is always developing and as you understand science more, you go deeper into it. What we knew 10 years ago and what we know today, there is a huge difference.
You think Ranbaxy episode and increasing recalls from Indian market along with import alerts would impact the domestic industry or its reputation?
I do not think so. I have not seen that as yet. I do not want to talk in specific to Ranbaxy, but overall what is happening is good because it is going to actually help people to get assured quality of drugs. So, there is nothing wrong in what is happening. Indian pharma industry has always reacted to any challenge very positively. The industry has evolved and I am sure if there are new challenges, the industry will evolve through them. There is technical talent available in the country to make that happen.
Are there any plans to expand R&D capacities in India or abroad?
Currently, we are evaluating. We have a small vaccine R&D facility in Europe and our experience has been very positive. We are evaluating and studying the feasibility of setting up another facility in the US.
How much do you plan to invest in India?
We will invest Rs 500 crore this year.
How is the discovery of Lipaglyn a breakthrough for Cadila Healthcare?
This is a unique achievement by any Indian pharmaceutical company. For the first time, a lot of firsts have happened. It is a first Indian NCE (new chemical entity), it is also the first drug to treat diabetic dyslipidemia and this is the first drug which has appeared in the glitazar class across the world. It gives us the confidence India and Indian scientists can do it. Our basic objective is once we launch in India, we will take it to global markets. So, we will launch in India in the third quarter of this year and then take this to the global market. We are registering into some emerging markets.
Which are the markets?
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About 15 emerging markets and, among developed markets, we are taking it to the US, Europe and Japan.
What will be your strategy?
The first approved indication for this drug is diabetic dyslipidemia but we also have plans and studies undergoing, which have completed phase-II and are moving to phase-III, for some additional indications. Some of these indications are unique. Then, we want to take this drug to developed markets with additional indications, which can hasten the process of approval. This is a patented product.
How many patents do you have for it and in which countries?
Our chemical structure is patented. Once this is patented, you do clinical studies. Based on that, we have received approval for one indication and then we might get approval for additional indications. So, we will get multiple use patents for different indications. Currently, we have one product patent. We have patents in the world wherever we have approval. For additional indications, we have filed additional patent applications.
What are the additional indications under evaluation?
We would not like to disclose these now. We would do that at an appropriate time.
What is unique about this drug?
We have done studies of this drug with pioglitazone, fenofibrate and atorvastatin and we have seen it is comparable to pioglitazone with its anti-diabetic effect without the usual side-effect of pioglitazone such as weight gain. Similarly, it does not have the side-effect of fenofibrate. Third, when it is administered along with atorvastatin, additional reduction in cholesterol level happens to the extent of around 20 per cent. All these things make the drug different.
When other companies shy away from research due to financial risk and regulatory hurdles, how did you manage such a discovery?
I want to go back to my strategy. When we decided we wanted to be a research-based pharmaceutical company, we evaluated how we can do research within our resources.
What you read and hear is that one requires a billion dollar-plus to discover a molecule. The obvious question to my mind was, where do we get a billion dollars to do so? We decided we do not want to get disheartened by this number.
So, we decided to do it in a cost-optimised way. We focused our energy in developing inhouse capability. We are the only company with a dedicated research centre only focused on doing discovery research. We are the only company with capacity to do large animal studies, including on primates. From concept to pre-clinical studies, we have complete capacity to do it.
What are the investments made by Cadila on this drug?
This drug discovery took us a total of 12 years, commissioned in 2000-01. The first five years were spent on discovery and pre-clinical studies and the next seven years on clinical studies. Our strategy was very clear that we want to discover and own the drug and not license out. Till now, we have spent around $250 million. We plan to spend another $150-200 million for additional indications and also approvals in other markets.
Do you plan to market the drug on your own or join hands with other players?
We have no marketing capabilities in some developed markets. So, ultimately, we will need marketing partners in those countries. (We have) not yet started talking to prospective partners as we are waiting for the launch in India. We are expecting approvals in various countries in three to five years. In India and some emerging markets, we will market on our own.
Are you looking for multinationals to partner in developed markets?
We will be looking for somebody who has the capability to market this product. None of the Indian companies has the capability to market products in the US or Europe.
Apart from this product, which are the other areas where Cadila is doing research?
We have around 20 different projects at different stages of development. Our focus is on metabolic disorder, pain and inflammation and cancer. Our goal is to have at least two more new products coming out of our research pipeline by 2020. We spend about 7 per cent of our turnover on research. Besides, we are looking at biologics and vaccines. We recently commissioned a facility in Ahmedabad to develop monoclonal antibodies. Vaccine research is located in India and Italy.
What are your plans for the US, which is your second largest market after India?
We continue to file 30 ANDAs (abbreviated new drug applications) every year in different areas, not only orals but injectibles and transdermal, too. We are entering into transdermal products, which are high-priced products and are difficult to make. We are also getting into areas where there are intellectual property challenges. So, several litigations are around. Currently, we have around 10-12 para IV application pending. Of this, about 6-7 are likely first-to-file with 180 days of sales exclusivity.
There is a sense that approvals from the US for Cadila has slackened in the past few years with almost no major approval coming your way. What is the reason?
We have received approvals and we are expecting more approvals. It depends which approval happens first and which comes later, but we are receiving approvals. People ask me which are the big products being approved and I tell them currently there are no big products approved. This is understandable because not all products are big. There are no issues at all.
Has the US Food and Drug Administration (FDA) become stricter and, therefore, have approvals slowed down?
The rate of approvals has slowed down for the overall industry, but that is because of change in regulation. I do not think the US FDA has become stricter. Rather, science is always developing and as you understand science more, you go deeper into it. What we knew 10 years ago and what we know today, there is a huge difference.
You think Ranbaxy episode and increasing recalls from Indian market along with import alerts would impact the domestic industry or its reputation?
I do not think so. I have not seen that as yet. I do not want to talk in specific to Ranbaxy, but overall what is happening is good because it is going to actually help people to get assured quality of drugs. So, there is nothing wrong in what is happening. Indian pharma industry has always reacted to any challenge very positively. The industry has evolved and I am sure if there are new challenges, the industry will evolve through them. There is technical talent available in the country to make that happen.
Are there any plans to expand R&D capacities in India or abroad?
Currently, we are evaluating. We have a small vaccine R&D facility in Europe and our experience has been very positive. We are evaluating and studying the feasibility of setting up another facility in the US.
How much do you plan to invest in India?
We will invest Rs 500 crore this year.