Out-licensing, Is it growth or survival strategy

Indian majors are exploring out-licensing deals for lower risks and bigger profits. The strategy of the fittest is finally coming into play in the Indian pharma market. Some of the strongest pharma companies are flexing their muscles across Europe and announcing their arrival on the global platform in the process.

As in-licensing deals become a norm, out-licensing deals are the latest to catch the fancy of Indian pharma majors. Out-licensing deals are deals wherein an Indian pharma company licences a foreign pharma company for the development of a particular molecule into a drug. Dr Reddy’s Laboratories, for instance, entered into an agreement with ClinTec International in 2006 for the development of an anti-cancer compound. Having completed the first phase of clinical trials for the compound, Dr Reddy’s has allowed ClinTec to carry out phase II and III of the trials. Once the product is commercialised, Dr Reddy’s will receive royalty on sales by ClinTec International in its designated territories and ClinTec International will receive royalty on sales by Dr Reddy’s in the US. The trend of out-licensing deals has recently picked up in India because Indians have now started working on basic research and discovery of molecules. If the international companies see value in the molecule, they pick it up. But what is really taking Indian companies to foreign shores is the unavailability of expertise or resources to take a molecule through its various stages in the drug development cycle. Such deals usually spell a win-win situation for an Indian company, which is investing only half the capital, bringing down cost and risk factors. The royalty acquired from the deal is often much more than the investment.
By out-licensing, the new innovator, with a high potential molecule in early stages of development, has an opportunity to take it through the expensive stages of development and a share in the risk and reward. Glenmark Pharma was an early bird to join the out-licensing bandwagon. In 2004, the company entered into a collaboration agreement with Forest Laboratories for the development, registration and commercialisation of a compound for North America. Experts, however, don’t see the trend trickling down to smaller pharma companies in the country any time soon. “Even though this would be an ideal route for any new entrant in the field. Out-licensing requires a lot of investment, and for a small company, this might not be possible. Breaking even also takes a long time, and smaller companies may not have the staying power to wait that long. Big and small pharma companies can, however, look forward to more and more in-licensing deals, raking in more investment than ever before. And the benefits are passed on to the consumer, who get new products at lower costs. In-licensing in the post-patents regime has enabled us to have a stronger product pipeline and provided Indian physicians and patients with novel products meeting their unmet needs.
But despite the piling up of in-licensing deals, the involvement of the Indian pharma in the deal is still restricted only to the packaging and marketing of the drug and not its manufacture. Foreign companies don’t want to out-licence to India for manufacture because the market here is still very small, thus increasing the risk factor.

BS

Tamiflu Vs Bird Flu, who cld be the major threat

The cure may, at times, be worse than the disease. That would now seem to be the case with tamiflu, the drug used more than any other for treating and preventing the dreaded bird flu — caused by the pathogenic H5N1 virus. Going by the findings of a study by researchers of the Oxford-based Centre for Ecology and Hydrology, the consequences of large-scale consumption of tamiflu can be scarier than even those of a bird flu outbreak. The main fear is that the many tonnes of this drug that are in stock in various countries for combating a possible pandemic would, on consumption, play havoc with wildlife besides increasing human health hazards. Specifically, the scientists have warned that the bulk of this drug would get excreted through urine and flushed down sewers into natural water bodies and rivers, devastating aquatic bio-life. The worst hit would most likely be micro-organisms, including all manner of useful bacteria, present in these waters. This is because oseltamivir carboxylate, the active anti-viral ingredient of tamiflu that also kills bacteria, is resistant to bio-degradation and cannot be eliminated through normal sewer water treatment. Its toxicity can, therefore, persist in water bodies for weeks, even if only treated water is released in them. As a result, fish, birds and other creatures that dwell in these tanks and rivers or feed on them could face ruin. Man, too, needs certain kinds of bacteria in the gut for the digestion of food. All these systems could go haywire if the need should arise to use tamiflu on a mass scale. As if this scenario were not alarming enough, the scientists have also pointed out that widespread consumption of this drug can create conditions in which the H5N1 virus, which normally infects only birds and some animals and does not get transmitted to humans, can mutate into forms capable of being passed on to humans. Another likely fall-out could be the development of immunity against oseltamivir carboxylate in H5N1 virus itself, rendering tamiflu ineffective. This would further heighten the risk of a flu pandemic. And, what is worse, should this happen, mankind would find itself fighting a losing battle till an alternative vaccine targeted specifically at the new form of virus is developed, which might take months. Of course, it can be argued that these dreadful implications are hypothetical even though they emanate from a scientific study carried out on rivers in the US and UK. In any case, the possible hazards are far too serious and indeed unnerving to be disregarded. The bird flu has not yet been eradicated and its incidence continues to be reported from the south-east Asian region. What needs to be remembered is that the flu outbreak of 1918, albeit of a different virus strain, had killed nearly 50 million people. Equally essential to bear in mind is the alarming decline in the population of vultures, which are nature’s scavengers, owing to the indiscriminate use of diclofenac, an anti-inflammatory drug, for the treatment of animals. Its residual toxicity in animal carcasses is killing the vultures who feed on them. It is, therefore, imperative to revisit the strategies devised to cope with the bird flu menace and to look for safer drugs. An anti-influenza vaccine developed at the Bhopal-based high security laboratory of the Indian Council of Agricultural Research is believed to be a less harmful alternative to tamiflu. If that is indeed the case, enough stocks of this vaccine, as also adequate production capacity, need to be built up. Simultaneously, research needs to be initiated to evolve suitable biological and chemical treatments for sewer water to minimise its residual toxicity before the discharge is put out into natural water bodies.