Small firms target drug discovery

A couple of years ago, an initial public offer (IPO) from a low-profile Rs 100 crore-plus company with no manufacturing capabilities, but just claims of possessing a drug discovery tool, may not have received as enthusiastic a response as the Hyderabad- based Celestial Labs witnessed recently.

A relatively unknown drug firm, Celestial, which tapped the capital market to generate Rs 300 crore for its expansion plans last month, found its IPO over subscribed four times in the retail segment and 1.5 times by the institutional investors "" thanks to its patented "cellsuite", a drug design tool, which facilitates technology driven, faster and cheaper drug development.

Celestial is not an exception. Small and medium scale knowledge-driven companies that are working on newer models of drug discovery are highly regarded, not just by the investors, but also by the global drug discovery companies.

For instance, Kolkata based TCG Life Sciences, known for its genome based drug research capabilities, recently inked a strategic collaboration with US drug major Forest Laboratories to discover small molecule drug candidates for inflammatory diseases.

The strategic Indian partner here was Chembiotek, the chemistry and biology arm of TCG Life Sciences.

With Indian clinical research industry estimated to grow from its current size of $800 million to $1.2 billion by 2010, new age companies like Celestial and TCG hope to make use of the emerging drug discovery and development models including the computer aided drug discovery processes to speed up the drug development process for the benefit of both the patient as well as the innovator company.

The pact between Advinus-Merck to develop drugs for metabolic disorders and GVK's collaboration with Wyeth to develop a full-fledged R&D team for the the same are all recent examples of such new approaches from Indian companies.

"Drug discovery is no longer confined to big pharma alone. Our cellsuite aids in clinical data management, gene sequence analysis, molecular modelling and design , and development of drug molecules. Drug companies will have to associate with us for faster and cheaper drug discovery," A N Singh, managing director, Celestial says.

Commenting on TCG-Forest tie-up, Swapan Bhattacharya, managing director, TCG said: "The partnership is a culmination of the skills, capabilities and scale of operations we have developed over past few years. We have developed the best biological and computational skills among Clinical Research Organisations (CROs) in India. It is the fourth integrated discovery project we have signed this year."

The new direction taken by such small entities are not just stray incidents, but are clear indications of how global drug R&D will take shape, says Pharma 2020 study carried out by global consultancy PricewaterhouseCoopers recently.

"Pharma will have to begin by expanding the pool in which it fishes for basic research....Much of the scientific research performed in the west is becoming prohibitively expensive, but the research base itself is also shifting east with most of the industry leaders trying to establish a foothold in Asia," the report points out.