Vol. 5, No. 1 January, 2001

Ranbaxy’s US arm Ranbaxy Pharmaceuticals Inc has bagged ANDA (abbreviated new drug application) approvals for four key generic anti-infective drugs. With this the number of ANDA approval with Ranbaxy goes up to nine. Approvals were received for doxycline monohydrate (50 mg and 100 mg capsules), amoxicillin (500 mg and 875 mg tablets), minocycline (50 mg, 75 mg and 100 mg capsules). It has also got approval for the twice a day amoxicillin chewable tablets (200 mg and 400 mg) which makes it the first generic manufacturer to be granted this approval. Doxycline monohydrate corresponds to the registered brand Monodox, the original innovator being Oclassen Pharmaceutical, which generated sales of $ 38 million last year.

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Cipla has shown interest in manufacturing and distributing anti-AIDS drugs to countries in Africa and rest of the world. These drugs will be manufactured under licence from pharmaceutical multinationals and a royalty on sales will be shared with the original manufacturers. It has written to Glaxo Wellcome, Pfizer, Bristol Myers Squibb and Boerhringer Ingelheim in this regard. These multinationals are concerned that low-cost generic drugs maybe exported to AIDS affected countries in Africa and have been exporting their drugs at a discount to these countries.

Glaxo Wellcome recent took action against Cipla for exporting two anti-AIDS drugs to Ghana claiming they had the patent rights over lamivudine and zidovudine in the Ghanian market. While the discovery of these drugs cost their majors a lot of money, Cipla has been able to produce these drugs using a different process at a fraction of the cost since India only recognises process patents and not product patents. However, industry analysts feels that the multinationals may not accept Cipla’s offer as the royalty offered is negligible considering that Cipla is offering the products at a fraction of the international price.

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After the expiry of the patent of Roxithromycin in the European Union, Alembic Chemicals will market the generic version of this bulk drug in the EU. The drug’s original patent was held by Roussel and now rests with Hoechst Marion Roussel (after merger with Hoechst Marion). Germany is the first country in which the patent will expire and Alembic will start exporting to this country around January. Alembic will sell the bulk drug to companies manufacturing formulations using this drug. The company expects to sell around 8 tonnes in the EU countries in the first year. Currently Alembic sells over 35 tonnes of the drug in India and China. Roxithromycin is a macrolide antibiotic used in the treatment of parasitic and bacterial infections.

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With Cipla’s collaborator Andrx reaching an understanding with American generics company Genpharma, Cipla is one step closer to marketing generic omeprazole in the US. The patent for this drug, now owned by AstraZeneca, expires in April 2001. Andrx is the first generic applicant for the drug with the US FDA. Andrx will also get a six-month exclusivity to market the drug once the patent expires. Cipla will export key ingredients of the drug to Andrx Corporation.

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Indian pharmaceutical companies like Cipla, Sun, Ranbaxy, Zydus and Alkem are ahead of its multinationals contemporaries as far as introduction of new drugs in the market is concerned. Cipla stands in number one place with 86 new products for the period from January to October 2000. Earning from these new brands was also the highest at Rs 20.2 crore. Meanwhile Sun introduced 30 new products in the same period and earned Rs 18.8 crore in this category. Sun has introduced more high value drugs into the market like Celact and Oleanz. Celact is used to treat arthritis and Oleanz is used to treat schizophrenia. Celact has earned the company Rs 4 crore and Oleanz has earned it Rs 3.7 crore.

Cipla’s new anti-AIDS product Duovir containing lamivudine and zidovudine has sales of Rs 3 crore and costs Rs 650 for 10 tablets. Its other product Torlip (atorvastatin calcium) to treat high cholesterol levels has sales of Rs 2.6 crore. Cadila’s Zycel (celecoxib) netted sales of Rs 6 crore. A total of 932 products were launched from January 2000 to October 2000 compared to 692 products in the previous year.

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Chembiotek and Proctor & Gamble are collaborating to work in drug discovery on shared intellectual investment by both companies. The exact areas of collaboration are yet to be worked out. The broad areas will be combinatorial chemistry, IT-based drug discovery, genetics and target medication. Chembiotek is a contract research organisation, which does research on behalf of leading pharmaceutical companies. Proctor and Gamble is looking at similar collaboration in China, UK and France and is keen on outsourcing part of its research for speed and scalability. P & G’s pharmaceutical division was started in 1982 with the acquisition of Norwich Eaton, a formulations company.

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The desi version of Viagra is expected to be launched in 2001 and Indian men with sexual dysfunction can breath easy! The Drug Controller General of India is expected to sanction manufacture of this drug shortly. The low-cost version of the drug is being manufactured by Ranbaxy (Caverta) and Zydus (Penegra) among others and will cost around Rs 20 per dose. Pfizer the orginal manufacturer has sales of $ 1 billion for this drug and prices its dose at an exorbitant Rs 400 for the original Viagra. However, there is a hitch. The drug will not be sold over the counter but will need a prescription! Sorry, Indian men, you will have to prove dysfunction to your family physician first!

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A drug to treat rheumatoid arthritis is being developed by BASF and Abbott which will reduce levels of tumor necrosis factor (TNF) and thereby reduces inflammation. TNF accumulates disproportionally in the joints and cause inflammatory response that cause swelling, pain and joint damage thereby handicapping the patient. The drug is in the first phase of clinical testing.

Rheumatoid arthritis affects more than six million people in the world and can result in disability and mortality and two-thirds are know to be women.

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Ranbaxy is considering exiting from its 50:50 joint venture partnership with Eli Lilly in Eli Lilly Ranbaxy Ltd. It has kept its options open to either exit fully or hold a minor stake in the joint venture. Its board is to consider these options and arrive at a decision. The company has already informed the stock exchanges about the possible restructuring.

Meanwhile Ranbaxy is setting up a greenfield manufacturing plant in Vietnam to manufacture cardiovascular, antibiotics, cough and cold products. The company will sign a memorandum of understanding with a local company for this joint venture.

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After privately placing a million shares with FIIs and having raised Rs 50 crore, Shantha Biotechnics is now all set to tap the US market. The company has acquired a majority stake in a California-based company, and is also considering a Nasdaq issue. The US company is named Shantha West and will specialise in developing therapeutic human monoclonals. It has also acquired the Chennai-based ABL Technologies to venture into marine biotechnology. On the cards is the manufacture of pharma products from aquatic organisms.

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DSP Merril Lych has brokered the largest deal in the Indian pharmaceutical industry with the acquisition of Rhone Poulenc India by Nicholas Piramal. Nicholas has acquired a 40 per cent stake in Rhone Poulenc India for Rs 157.5 crore at Rs 875 a share. Nicholas will soon make an open offer to minority shareholders for 20 per cent more stake at Rs 875 per share. Rhone has presence in cough and cold, anti-emetic, anti-epileptic, anti-diarrhoea and anti-histamine segments. With this acquisition Nicholas has become the second largest pharmaceutical group in India with 16 products among the top 300 products and a market share of 5 per cent. There are also considerable synergies between the two companies’ products.

Reportedly, ICICI has given Rs 200 crore at an interest rate of 12.75 per cent to Nicholas for the acquisition of Aventis Pharma’s 40 per cent stake in Rhone. The total cost to Nicholas including the 20 per cent yet to be acquired will work out to Rs 235 crore. The balance 35 crore will be financed by internal accruals.

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After its failed bid to buy a 40 per cent stake in Rhone Poulenc, Wockhardt is setting aside $ 100 million for strategic investments in the fast consolidating Indian pharmaceutical industry. Reportedly, the company is also considering acquisition of a stake in German Remedies. A member of the German Remedies’ consortium of German multinationals wants to exit the drugs business and concentrate on chemical business. The company has earlier bought Wallis Laboratory of the UK and turned it around in a year.

Its recombinant Hepatitis-B vaccine, Biovac-B was launched in March last year and has captured a 15 per cent share of the market. Also in the process is a deal with Rhein Biotech of Germany for bulk insulin production by the second quarter of 2001. Also on the cards is the hiving off of its profitable biotechnology division into a separate entity. It is also planning to launch its anti-cancer recombinant erythoropoietin within two months. Wockhardt has also signed a marketing agreement with Bayer for its anti-diabetic drug Acrbose. It will market the drug in India under the brand name Ascarose (generic name: Acarbose). This is the company’s entry into the 400-crore anti-diabetic market.

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ICI India which has several technical collaborations with AstraZeneca may block the latter’s acquisition of the Hindujas’ stake in Astra IDL. According to the FDI policy the foreign company has to seek a no objection certificate from its local partner before enhancing or acquiring stake in another company. AstraZeneca wanted to buy out the Hindujas’ 25.75 per cent stake (at Rs 670 a share) in Astra IDL and once it does, the latter may become its wholly owned subsidiary thus disadvantaging its collaboration with ICI.

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The 120-crore RPG Life Sciences implored the ministry of chemicals and fertilisers not to reduce the 15 per cent import duty on cyclosporin. Cyclosporin is a drug that acts on the immune stystem and helps prevent rejection of transplanted organs. RPG Life Sciences is the only Indian company manufacturing this bulk drug and was instrumental in bringing down its price by 30 per cent. The company feels that if the import duty is reduced it will lead to more imports and that when they export they are liable for import duty at their destination. The cyclosporin formulation market in the country is placed at Rs 60 crore with Novartis holding a market share of 75 per cent and Panacea, Cipla and Zydus sharing the rest of the market. Novartis, the world’s largest manufacturer of cyclosporin, which has been adversely affected by the import duty, is pursuing the matter with the government.

Meanwhile RPG Life Sciences has launched Arpimune ME its brand of immuno-suppressant cyclosporin. The product has been the result of vigorous research and development and use of fermentation technology. Arpimune ME is available in strengths of 25 mg, 50 mg and 100 mg. RPG also intends to establish a toll free number for the benefit of patients who wish to procure prescription drugs.

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The National Pharmaceutical Pricing Authority (NPPA) has revised the prices of 124 formulations packs from December 23, 2000. Prices of aspirin and cefadroxil suspension syrup has also been revised. Ceiling prices have ben fixed for 77 packs, while non-ceiling prices (inclusive of excise duty and exclusive of local taxes) have been fixed for the remaining 47 packs. This has led to a total decrease of 2.74 per cent in the prices of about 100 drugs.

The revision has affected aspirin-based formulations used as analgesic and cardiovascular drugs, cefadroxyl-based antibiotics and tonics containing liver extracts and vitamins. Other drugs include pseudoephedrine-based formulations used as anti-tussive, cefadroxyl, cefazolin, cefatoxime, clocillin-based formulations used as a broad spectrum antibiotic, chloroquine phosphate-based injection used to treat malaria, pentazocine-based formulations used as analgesics, etc. Manufacturers have to provide the revised price list to the government, NPPA, state drug control authorities and distributors, wholesalers and retailers.

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Learning a lesson from information technology companies that have successfully lobbied the government for research incentives, the pharmaceutical industry has now stepped up its efforts to convince the government to give incentives for research and development. The pharmaceutical industry want the government to modify income tax provisions for research and development as also the excise duty on pharmaceutical products. At present a ten year tax holiday is applicable to information technology and pharmaceutical companies undertaking research. However, a provision states that the company’s main activity should be research, a clause pharmaceutical companies find hard to prove. Therefore pharmaceutical companies have requested the government for a ten-year tax holiday for research-related income. Also, expenses incurred on land, building, clinical trials and regulatory approvals should also be clubbed with research expenditure. These expenses comprise 60 per cent of the drug development process according to the American Chemical Society.

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Other News

Cipla has cut the price of the anti-AIDS drug Nevimune (nevirapine) by 34 per cent from Rs 985 to Rs 650 for a strip of ten. The price when the drug was launched was Rs 1,350 for a strip of ten. The drug is administered to mothers to prevent transfer of the virus to children. This drug forms a triple drug regimen with zidovudine and lamivudine. Cipla manufactures all three drugs. However, these price cuts are applicable to the local market and not for exports.

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