With one developed molecule ready for the proof of concept stage (a demonstration of in-principle validity) and three more set to move into Phase-I of clinical trials, Suven Life Sciences is in a sweet spot.
However, raising $20 million (Rs 90 crore) by the year-end is a priority for the company to take forward the research and development of these four molecules.
The Hyderabad-based bio-pharmaceutical company, with a focus on central nervous system disorders, is open to diluting stake for raising funds. “We are not averse to a 10 to 15 per cent stake dilution. But valuation will be a key to decide on this,” said Venkat Jasti, chief executive officer.
According to him, Suvn-502, the company’s candidate for treatment of cognitive impairment, is entering the development stage of clinical trial. It offers symptomatic treatment for cognitive deficits — Alzheimer's disease and schizophrenia — and could also be used as a disease-modifying drug in future. The three other molecules — Suvn-504 (for obesity), Suvn-507 (schizophrenia) and Suvn-911 (major depressive disorders) — are likely to be moved into Phase-I clinical trials by next year.
“Success in drug discovery is not always guaranteed. But whenever it comes, it will transform the company into a global player in the CNS disorders arena,” he said.
The funding for these four would be spread over 18 months. The drug discovery so far has been self-funded by the company, which informally sought funding from potential investors in India and abroad. “We will now take a structured approach to seek funding partners,” said the CEO. The shareholders had given their nod in July.
Bigger spend later
After proof of concept, the company will need about $150 million Rs675 crore) for marketing and development of Suvn-502. This would come from big players, Jasti said, adding the company was ready to outlicense for milestone payments and royalties on global sales, if the product goes to the market. On an average, the R&D cost of each new molecular entity is about $1.8 billion (Rs 8,000 crore) and takes eight to 10 years.
The company is building a big pipeline instead of relying on one molecule. Suven has nine more internally-discovered therapeutic drug candidates, targeting ADHD (attention deficit hyperactivity disorder), dementia, depression, Huntington's disease, Parkinson's disease and obesity.”These are in the pre-clinical stage of development,” he said.
The world market for CNS is estimated to be over $100 billion and of cognitive disorders alone over $20 billion. It is estimated that 180 million people worldwide suffer from CNS disorders, with significant impairment of memory and other cognitive functions.
The company expects some milestone payments in six months of the order of Rs 20 crore from drug major Eli Lilly, with which it has had a collaboration for more than three years in the CNS area. Suven benefited by passive funding from Eli Lilly. "Two more collaborations are in the offing. This will give us some cushion for reducing the risk,” Jasti said.
The company last year spent Rs 35 crore on research and plans to increase this by 10 per cent during the current financial year. The contribution from Crams (contract research and manufacturing services), which now account for 75 per cent (about Rs 100 crore) of the total Rs133.88 crore as of March 2010, is expected to rise 10 per cent. Suven is working on 85 molecules on contract from 30 companies under the Crams segment.
