Saturday, September 30, 2006

 

New cancer drug

BIOMAB-EGFR is the first new drug in the world which was at least partly developed by an Indian company. Last week, Biocon, the company that developed it, launched the drug in Bangalore and Mumbai with the minimum of fuss. Cancer, in seemed, was too grave a disease.
Biocon describes the drug as the first humanised anti-EGFR monoclonal antibody in the world. In commercial terms, this description may not mean much: pharmaceutical history is replete with examples of drugs which swept away their predecessors in no time. But in scientific terms, it could be termed a significant landmark, particularly for an Indian company, although Biocon was not part of the original discovery. BIOMAb-EGFR was discovered by the Cuban Institute CIMAB and then developed in India by Biocon, which, at the moment, holds rights of the product in the Saarc countries.

Let us decode the nomenclature first. EGFR is an acronym for Epidermal Growth Factor Receptor. A receptor is, as the name implies, a part of the cell that receives another molecule, usually something that gives a signal to start a series of events in the cell. When a molecule binds to EGFR, it starts a chain of events that finally result in cell division. Since cancer is uncontrolled cell division, we could argue that EGFR can be part of a strategy to stop cell division.

A monoclonal antibody is, as the name suggests, derived from a single clone of cells. Our bodies produce antibodies all the time, but in nature even antibodies against the same antigen — an invading molecule — look different, except for the part that can recognise the intruder. When produced artificially, antibodies are exactly alike because they are made from a single source. Monoab-EGFR is a monoclonal antibody that can bind to EGFR and shut it off. The cell cannot divide again.

This description makes it all seem simple, but it is not. The drug has to go and bind to the receptors only on the cancer cells. Shutting off cell division in normal cells can be disastrous. Fortunately, this problem is reduced somewhat because cancer cells have a preponderance of EGFRs. Monoab-EGFR seems to go and bind to cancer cells preferentially because they have an excessive number of EGFRs. The drug appears to be good at treating cancers that have a large number of EGFRs, like in head and neck cancer and glioma, a type of brain cancer.

At the moment, Monoab-EGFR is given to patients who have undergone surgery or radiation therapy. Clinical trials show that this improves the life of patients. The drug also does not show too much toxicity. CIMAB has licensed the molecule all over the world, except in small countries and Latin America. Yet Biocon treats this product as a beginning. The next product, anti-CD6, is just finishing Phase I clinical trials. This drug works on a novel target that has been patented by CIMAB, but Biocon jointly owns the marketing rights to the entire world. The target CD6 is involved in inflammation, a disorder that is intimately connected to cancer.Observers will be watching this product closely. Biocon, meanwhile, has mastered the technology to develop and manufacture monoclonal antibodies. Since this $15-billion market segment is expected to double in value in a few years, everyone will be watching Biocon also closely.

P Hari in Businessworld

Monday, September 18, 2006

 

children's vaccine for fatal diarrhoea

A breakthrough in preventing the most common cause of childhood gastroenteritis — that kills over 100,000 children in the country alone every year — will soon be available in India with doctors and healthcare providers. GlaxoSmithKline is planning to introduce the Rotarix vaccine by the middle of next year.
rotarix

Rotavirus is the leading cause for diarrhoea hospitalisation, and kills over 600,000 children a year in developing countries. Most infections occur in children under two, and 95% of children worldwide experience an episode of rotavirus disease by the time they reach three-five years of age, irrespective of race or economic status.

Sources said the company is expected to file for registration of the vaccine by the end of 2006, or the first quarter of 2007 with the authorities. GSK has already conducted clinical studies in Europe, the US, Latin America, Africa and Asia. Rotarix is an oral vaccine and is given in the first six months of life, with the first dose between six and 14 weeks of age, followed by a second dose between 14 and 24 weeks of age.

It is understood that Rotarix has an efficacy of up to 73% protection against any rotavirus diarrhoea, and up to 90% against severe rotavirus diarrhoea. Global prices are still being negotiated. It is learnt that Brazil offers it free to all children, while Glaxo sells it to the Brazilian government at $15 for two doses.

"If we get an effective vaccine at a reasonable price, it can also be included in the government's immunisation programme, especially in places where access to medical help is difficult," says Dr Nitin Verma, senior consultant pediatrics at Max Healthcare. Around 30% of the cases in the summer and monsoon months are related to rotarix-related diarrhoea and is very common in the first two years, he added.

At present, there is no effective vaccine available to treat rotavirus infections, which occurs in 80-90% of gastroenterology cases. Worldwide, Merck and GSK have been working on launching a vaccine to treat it. The disease is more devastating for children in the developing world due to lack of prompt access to treatment and hospital care.

The severity of infection ranges from symptoms of vomiting, fever and watery diarrhoea to dehydrating gastroenteritis, which can be fatal in some cases.
If untreated, the virus can kill, as the sickest children become dehydrated from 10 to 20 episodes of diarrhoea in a single day, experts say.

"Since infants have smaller body reserves and lose fluids and salts rapidly, the problem can push the child to dehydration and low salt. The vaccine should, however, be made optional as the disease is self-limiting and preventable in most cases", says Dr S Bagai, head pediatrics Rockland Hospital.

Friday, September 08, 2006

 

Indian generics companies

Businessworld

Gina S Krishnan

Some months ago it was rumoured that Ranbaxy Laboratories and Cipla were in talks about a merger. Both sides strenuously denied that discussions were on. But not before the virtues of such an alliance, if it ever happened, became evident.

The therapeutic strengths of Ranbaxy and Cipla (oncology, cardio-vascular diseases, vaccines, etc.) are similar. Both companies are present in the US generics market — Cipla as supplier of active pharmaceutical ingredients (API) and Ranbaxy in branded generics. In that sense, their business lines are complementary. A merger of the two would create a Rs 7510.59-crore player, which would be among the world’s top five generic players. There would be considerable efficiencies derived by streamlining a sales force that currently overlaps, pooling together of R&D resources and so on. That is not to be so.

However, the big question in the current global pharma environment is: how long can Indian companies turn their backs on consolidation?

With the Matrix-Mylan deal, the obvious answer is, not very long.
There are 3,000-odd pharma companies in India. Barely 50 of them are of a size that counts. All these companies were born in an era where process patents were recognised. Over the years, thanks to their mastery over biochemistry and reverse engineering, these companies have prospered. A few have also made a name for themselves globally. (see patents story)

Unfortunately, this ‘golden’ era is about to end. From 1 January, India has ushered in a product patent regime and, therefore, it is only a matter of time before multinational drug companies start targeting the country aggressively.

More significantly, the nature of the generics game and the API game is also changing rapidly. Innovator companies are fighting back by entering into sweetheart deals with challengers going for out of court settlements and launching authorised generics. Generic companies are seeing multiple day one launches leading to price erosion of up to 90 per cent in the first week of the launch, something unheard of even two years ago.

Meanwhile, hitherto unknown Chinese companies have entered the API space, considered to be the completely low-end, commodity aspect of the pharma industry. As a result, both margins and prices have crashed. Yet, Indian companies, with their small, fragmented capacities are continuing to compete against one another. “They are killing each other,” says an observer. Consider that India has one of the world’s largest capacities for cardio vascular diseases; but the capacity is fragmented across the top 50 companies.

The global generics industry has already seen a round of consolidation with the total number of significant players down to six from 14. Teva has bought Ivax, Watson Andrx, Sandoz Hexal, etc. As the previous article argues, the reason why Matrix’s N. Prasad decided to ally with Mylan was that he believed Matrix needed scale to survive, something that could come only through an alliance.

Pharma sector observers like Vijay P. Karwal, executive director (healthcare investment services), ABN AMRO, advisors to Matrix on this deal, say that so far Indian companies have shied away from buying each other out because they are almost always family-run. Emotional attachment to the family-run business is more significant than a dispassionate business decision,” he says.

Adds Puneet Bhatia, managing director, Newbridge India: “For many companies in India, the world is still the same. They have to look at the world and take cues from that market. That is the only way forward.”

While Karwal and Bhatia may not be overly optimistic about consolidation in the sector, there are a few pointers that indicate that that may not be the case.

The first reality for Indian pharma companies is that to survive, they can either add scale or move up the value chain (primarily, more R&D). Now, as the experience of big players like Sun Pharma, Ranbaxy and Dr. Reddy’s Laboratories has shown, the latter path is fraught with risks and uncertainties, which smaller players may not have the ability to stomach. That pretty much leaves them with option number one.

In this context, the Matrix-Mylan deal will act as a trigger for other deals. Usually, all it takes is one deal.

(Remember the telecom consolidation that followed Bharti Tele-Ventures acquiring the Karnataka and AP licences of JT Mobile in December 1999. The 42 telecom service providers were soon whittled down to six.)

While telecom and pharma may not strictly be comparable, many of the telecom companies that sold off were owned by entrepreneurs. And there is no reason to believe that India’s pharma entrepreneurs think any differently.

Especially when there are enough buyers hovering around. Most observers concur that Teva has been looking at an acquisition to enter India. It has recently also been rumoured that others like Pliva have begun scouting around for targets here.

Also, though corrections have taken place in valuation of generic companies, by historic levels, they are still high. So, this may just be a good time to sell.

Globally, pharma companies are either strong in research or if in the generics space, have scale. Indian companies, save a few, are a bit of an aberration, having neither R&D capabilities nor scale. And if the R&D route is most likely closed for most, then they are really left with no other choice — scale up through consolidation or perish.

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