Monday, October 27, 2008

 

Biocon losses due to exchange rate

A weak rupee has dragged down the consolidated net profit of biotech major Biocon by 54% in the September quarter to Rs 25.02 crore from Rs 53.97 crore a year ago. M B Chinappa, head (finance) of Biocon’s subsidiary Syngene, said the company’s forex losses were due to the currency hedge that it has taken at the exchange rate of Rs 41.50 per dollar.....which has now dropped to 50.

Without the forex losses, Biocon’s net profit for the quarter slipped by only 5%.

Kiran Mazumdar Shaw, chairman, Biocon Ltd, said, "Biocon’s H1 F09 performance has shown resilience despite being impacted by rupee volatility, which has seen us make mark-to-market provision of Rs 60 crore." The company’s net sales for the first half of this fiscal stood at Rs 703.23 crore, up from last year’s Rs 517.66 crore.

Biocon defers plans to list Syngene


Biocon said it had deferred plans to list its subsidiary Syngene International Ltd, a custom research firm, in the market in view of the current economic scenario.

"The market is bearish," said Kiran Mazumdar Shaw, CMD of Biocon. Syngene, established in 1994, provides customised R&D services to pharmaceutical and biotechnology companies. It is remarkable then that another biotech company, Avesthagen is going ahead with its own listing.

Biocon was focussing on emerging markets like Brazil, CIS, Russia, South East Asian Countries, Middle East, North Africa, Far East countries and neighbouring countries. Biocon's Joint Venture in Abu Dhabi announced the launch of Abraxane in UAE for treatment of cancer, said Shaw.

Monday, October 20, 2008

 

Avesthagen



Dr. Villoo Morawala-Patell is the founder of Avestha Gengraine Technologies, based in Bangalore. She belongs to the Parsi community, and the name "Avestha" in her company, is the precursor of the Persian language and also means knowledge in the Zoroastrian faith of the Parsis. The biotechnology and bioinformatics company aims to determine linkages between genes, disease and environmental factors, through the Rs. 120 crore AvesthaGenome project. This project will genotype the country’s entire Parsi population -- about 69,000 people. The Parsis, thought to be genetically homogenous, are feared to be at risk owing to their religious prohibition of marriage outside of the community.

Dr. Villoo Morawala-Patell is also a plant biologist and PhD from the University of Louis Pasteur; the name Gengraine combines gene with grain and as Villoo Morawala says, "The ultimate goal of our two main projects [Biopharma and Bionutrition] is to integrate agriculture with health."

The company, which officially became Avesthagen this January, recently launched an eco-friendly and biodegradable plastic for the Indian market. It is singly or jointly developing unique, scientifically proven, plant products for modern malaises: cancer and metabolic disorders; crackers and bars to ward off diabetes, heart diseases and obesity; TB-detecting biochips. Its first medicinal product will come out towards the end of 2009, with two more to follow the next year.

Dr. Villoo Morawala-Patell says, "We are partnering with French company ShigaMediX on TB and the human papilloma virus. We have positioned ourselves for the global biosimilars markets by buying a German company [contract manufacturer Siegfried Biologics] and by building a 200-litre cGMP facility here. We will make the manufacturing happen in areas where we will buy out or lease out. Except for the biopharma facility which we are building, because there aren’t such facilities in the world. If I brand and market them properly, each of my ingredients will potentially become a $200-300-million product in the next five years."

Avesthagen IPO


Money for these ambitious plans has so far come from private investors like Daninvest, BioMirieux of France, Groupe Limagrain also of France, Fidelity International, New York Life Investment Management India, ICICI Ventures, Tata Industries, Godrej Industries, Cipla, and Bennett, Coleman Co. ICICI Ventures and Tata have been investors since 2001...although the former has since sold its stake. Cipla and Godrej came on board in 2004 while the alliance with Groupe Limagrain took place in 2006.

Avesthagen has acquired seed companies and has also partnered with Nestle and Danone. Villoo Morawala says, "With Danone, we are doing two products including R&D, clinicals and co-branding; and in yoghurt. We delivered eight molecules for diabetes to Nestle."

As infrastructure, production and market demands soar, the 600-people-strong Avesthagen has felt the need for fresh capital. Avesthagen has appointed five banks, namely DSP Merrill Lynch, Deutsche Bank, Morgan Stanley, UBS and ICICI Securities, as advisors to its upcoming initial public offering (IPO). ICICI Venture may either exit through this proposed IPO or by selling its stake to another strategic or financial investor, whoever offers a better price.

Despite the falling markets, the Avesthagen IPO will be launched anytime in the next two months.

Saturday, October 18, 2008

 

Biosimilars markets

Pharmaceutical Business Review
By Tijana Ignjatovic
As a part of their respective strategies to contain healthcare costs through the wider use of generic drugs, both Barack Obama and John McCain have pledged their support for shorter exclusivity periods for branded biologics. These announcements indicate that biosimilars are set to become a reality even in the US, placing additional pressure on biopharmaceutical revenues.

In an effort to contain healthcare costs both candidates intend to promote the creation of a pathway for approval of biosimilars or follow-on biologics, and both are said to be in favor of shorter exclusivity periods, a move that branded biologics manufacturers are vehemently opposing.

However, the growing use of biologics and their high price tag are putting pressure on US legislators to establish a pathway to allow the FDA to approve generic version of such drugs. It is now likely that the legislative pathway allowing approval of biosimilars will be in place by the end of 2010. Given the potential influence of a new president, the exclusivity period for biologics may be significantly short of the 14 years that the branded firms are hoping for.

See US biotech companies and biosimilars

Among Indian companies Dr. Reddy’s Laboratories has launched Grafeel in the Brazilian market in 2006. In the European market the original drug is known as Filgrastim, and the European Medicines Agency (EMEA) has already approved other biosimilarsfor this drug.....DRL will soon be launching its own biosimilar of Filgrastim here.

The need to constrain rising pharmaceutical expenditure is driving the growth of biosimilars in both the European and the US markets, according to a new report by Datamonitor. The complex development and manufacturing processes of biologics, combined with their market dominance, means they are priced considerably higher than small molecule drugs. Biosimilars thus offer a cheaper alternative.

The estimated potential cost savings of biosimilars varies widely from $14 billion to 108 billion (9.9 billion to 76.1 euro) during a 10 year period in the US, which is the major market even though it is Europe that has an approval process for biosimilars in place.

Wednesday, October 15, 2008

 

Ranbaxy: good news



After a steady stream of bad news last month, pharmaceutical major Ranbaxy Laboratories has reason for cheer. The US Food and Drug Administration (FDA), which had blocked the import of 30 generic medicines made in Ranbaxy's Dewas and Paonta Sahib factories, has now withdrawn that motion. The reason for the FDA's action against these factories was not due to any adulteration or faulty manufacturing practices, but a suspicion that Ranbaxy had destroyed some of its documents and submitted illegible or falsified data.

The motion filed in a US court has been withdrawn after Ranbaxy submitted the documents in question, and also agreed to replace the illegible documents promptly.

Ranbaxy stock price


Ranbaxy's stock price had been hit by this bad news, and almost as much by the general meltdown of the stock markets. Now Ranbaxy was sold by its promoters this June to the Japanese company Daiichi Sankyo, when its share price was Rs 560. Daiichi made its buy offer at Rs 737 per share.

As per law the price at which a block deal is executed has to be just 1 per cent less than the ruling market price, which had sunk to Rs 263 following the spate of bad news last month, and before the deal was officially approved in India. Meanwhile in Japan Daiichi's stock price had lost 15 per cent, the steepest decline since 2005. But despite the falling share price, Takashi Shoda, chief executive officer, Daiichi Sankyo, said "The price of Rs 737 is fixed."

Now the good news from the US has boosted Ranbaxy stock by 9 per cent to Rs 279.15. Though the two companies have till March 2009 to complete the formalities, Malvinder Singh, former CEO and now Managing Director of Ranbaxy said that he expects to close the deal by the end of December.

Ranbaxy drug development


While Ranbaxy is now a subsidiary of Daiichi, it continues with its independent drug development and global collaborations. Last year Ranbaxy and GSK began to develop a respiratory drug; now Ranbaxy Laboratories has sought permission from the Drug Controller General of India to initiate Phase-I human clinical trials on this drug.

Ranbaxy has completed all the required regulatory safety and toxicity studies on the drug candidate and also plans to seek regulatory approval in other countries outside India in order to initiate Phase-I human clinical trials at the earliest. Pradip Bhatnagar, senior vice president of new drug discovery research at Ranbaxy, said: "The long-standing vibrant collaboration between GlaxoSmithKline's (GSK's) Center of Excellence for External Drug Discovery and Ranbaxy has been the key for this success. This achievement also reflects the discovery and development capabilities of Ranbaxy's R&D team."

The research programme on the respiratory inflammation drug focuses on chronic obstructive pulmonary disease (COPD). The Ranbaxy-GSK alliance plans to conduct various researches in many therapeutic areas, including anti-infectives, metabolic disorders, respiratory and oncology. Ranbaxy could receive over $100 million in potential milestone payments for a product developed by Ranbaxy and subsequently launched by GSK in multiple indications and up to double digit royalties on worldwide net sales.

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