MNCs scout for alliances with small R&D cos

The Financial Express - June 30, 2009

Reghu Balakrishnan

Mumbai: The search for innovative drug molecules and better technologies by pharmaceutical MNCs is expected to offer a windfall for the smaller research-oriented Indian firms.

MNCs, whose drug pipelines are drying up and more blockbuster drugs going off-patent, are desperately looking for alliances for drug co-development, buying or licensing out innovative molecules which can further be developed into finished drugs. Smaller Indian firms such as Indus Biotech and Rubicon Research are set to sign multiple deals with MNCs for molecules as well as technology out-licensing.

Pune-based Indus Biotech is in talks with companies based in the US, Europe and Japan for co-development agreement for its molecules for HIV, arthritis and Parkinson’s diseases. Indus Biotech’s 10 herbal molecules in various therapaeutical areas such as respiratory disease, obesity and diabetes are under pre-clinical stages.

Sunil Bhaskaran, CEO, Indus Biotech said, “Modern drugs meant for acute indications are not suitable for life-long term due to high toxicity. We need new generation drugs with lesser toxicity. MNCs are showing more interest in herbal molecules due to these reasons.”

Last month, Indus tied up with General Nutrition Corporation, operator of the largest health food store chain in the US, for launching products such as testosterone booster and muscle growth promoter. In February, Extreme Physical Performance (EP2), a sport supplement firm, partnered with Indus for bringing innovative new products to the US market for bodybuilders and serious gym goers.

Nitin Deshmukh, head, private equity, Kotak Investment Advisors Ltd, said, “The drying pipeline of molecules compels global players to look for various options. They are keen on the potential molecules developed by smaller R&D firms in India.” Kotak PE has investments in both Indus Biotech and Rubicon Research.

Mumbai-based Rubicon Research is in advanced discussions for licensing out a natural based excipient with two US based specialty chemical companies. Rubicon has a product pipeline of 10 niche molecules that it can supply commercially for an appropriate marketing partner. Last year, Rubicon had teamed up with US-based Mallinckrodt Baker to develop the PanExcea excipient range.

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