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Bridging chemistry and biology
Dr K R Mahadik | Thursday, December 11, 2008, 08:00 Hrs  [IST]

Medicinal chemistry is a science by itself and yet it is the bridge between organic chemistry and biological sciences. It includes the design and synthesis of new biologically active molecules, development of new concepts for the design of selectively acting ligands, improvement of biological activity by molecular modification, physicochemical and theoretical studies, molecular modeling on bioactive molecules, investigation of molecular structure on the pharmacokinetics, metabolism and toxicity of active chemical entities (ACEs) and several other activities.

Medicinal chemistry synthesizes compounds by means of highly advanced organic technologies according to the requirements of the research centre. Efficient methodologies are developed in the research field and emerging diversity oriented synthesis (DOS) make natural products, the main sources for lead molecules fascinating for new drug discovery.

The important tools in medicinal chemistry are synthesis, drug design, computational chemistry, combinatorial chemistry, microwave assisted synthesis and eco-friendly green chemistry. The role of the synthetic and medicinal chemists has changed considerably from a highly autonomous, independent inventor to a significant player in a large interdisciplinary team increasingly influenced by the business units. The team with good skilled chemists with high qualification from different disciplines uses technologies and sophisticated analytical instruments for designing and synthesizing new products.

India's pharma sector
India magnetises the multinational companies through its high quality of activities in the pharma business - the cost effectiveness, quality of products and price competitiveness with high skilled professionals and medicinal chemists.

The participation of India in General Agreement on Tariffs and Trade (GATT) and World Trade Organisation (WTO) agreements for the globalisation influenced an altered status for medicinal chemists in India. As a consequence of Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), India has promulgated the Indian Patents (Amendments) Act 2005, which permits that product patents are grantable for foods, drugs and medicines. Post 2005, major Indian pharmaceutical companies are experiencing a paradigm shift from business-driven research to research-driven business, with an increased research and development (R&D) thrust focused on the new drug discovery. Several Indian companies are utilising the new environment by extending their services in many areas of research. All these new initiatives augur well for drug discovery programmes in India.

Challenges
Lack of manpower and early stage funding are the major predicaments facing the industry. According to industry sources, pharma companies find a huge dearth of skilled resources in the critical areas of early stage drug discovery as compared to chemistry or analytical chemistry where the talent is easily available. The only solution is recruiting fresh graduates and training them on the job. Such a situation leads to rampant poaching of trained people from other companies.

A considerable challenge faced by the industry is venture capital (VC) funding, which in India is severely limited. Funding pertains to private equity (PE) players that invest when the candidate reaches the development phase. The focus is more towards the 'D' rather the 'R' in R&D. Most venture capitalists want to fund companies whose products and markets are clearly identified or commercialisation of technologies already developed.

R&D investments
Nowadays the process of drug discovery and development in the US, on average, takes 12-15 years and costs about $1 billion to $1.5 billion. Clinical trials are the most significant direct cost related to drug development. The initial sound investment - knowledge and resources of discovery research, where medicinal chemists play a pivotal role - is essential to the successful launch and sustainability of a new drug.

The R&D expenditure in the Indian industry is projected to reach Rs 1,500 crore by 2010 and several companies in India are spending over 8 per cent of their revenues in R&D, in which medicinal chemistry remains one of the primary focus. The pharma industry has witnessed substantial inflow of foreign direct investment (FDI) amounting to US $1 billion between August 1991 and April 2006.

The government of India contributes 65 per cent of the total R&D spend in India. Some Indian companies such as Ranbaxy, Dr Reddy's and others have established state-of-the-art multi disciplinary R&D facilities. They are the largest investors in R&D in the Indian pharmaceutical industry with R&D spend ranging between 7 and 12 per cent of their sales during 2003-2004 alone. In addition, Glenmark, Torrent, Lupin, Zydus Cadila, Wockhardt, Orchid, Sun Pharma, Nicholas Piramal and Suven are the other Indian companies having significant new chemical entity (NCE) research and development programmes.

Government funding
The government grants tend to be small and typically targeted to government institutions or research bodies. There is little government support for private sector R&D outside of that available from the Technology Development Fund, which finances Council of Scientific and Industrial Research (CSIR) approved projects. However, many state governments are setting up biotech development funds of their own to invest in companies located within their boundaries. An example is Gujarat Biotech Venture Fund (GVFL), whose first investment of Rs 2 crore was provided to the Ahmedabad-based Celestial Biologicals.

The Small Business Innovation Research Initiative (SBIRI) set up in 2005 is the new scheme launched by the Department of Biotechnology (DBT) to boost public-private-partnership effort in the country. The New Millennium Indian Technology Leadership Initiative (NMITLI) is the largest public-private-partnership effort undertaken by the government of India. In the six years of its existence, the programme has evolved 42 R&D projects covering diverse areas and involving 287 partners (222 in the public sector and 65 in the private sector) with an estimated outlay of Rs 300 crore. The role played by NMITLI is best illustrated by Bigtec. In March 2008, the Rs 6 crore NMITLI grant helped the Bangalore-based Bigtec to miniaturise advanced medical technologies that can diagnose a pathogen in a fraction of the time taken by a conventional system.

Demerging of R&D units
A recent trend of de-risking the business model along with unlocking value from the drug discovery programme has started making headlines. Drug majors, including Ranbaxy Laboratories (now Daiichi Ranbaxy), Sun Pharmaceuticals and Piramal Healthcare Limited have already hived off their R&D divisions into separate entities. Even Dr Reddy's Laboratories (DRL) has followed the same path, but in a slightly different manner. The drug maker has floated Perlecan Pharma in collaboration with ICICI Venture and CVC to take care of its novel drug business. The reasons for this strategy are many and interlinked.

The benefits that research driven companies are seeking by de-merging their R&D arm are:
● Through the current de-merger initiatives, pharma companies can reduce R&D costs and improve margins of their standalone business
● Generic and innovation are two totally different businesses, with different time frames, certainty profiles and investments. The approach to the projects that scientists need to take is also entirely different. De-mergers will provide greater flexibility and impetus to the drug discovery research programme, while unlocking significant value for the company and its shareholders
● Furthermore, costs escalate as new drug candidates mature (proceed to advanced stages of clinical trials) and hence, funding becomes an important issue. New drug research activity does not form part of the core operations of pharma companies
● A significant advantage is that promoters of these firms can sell either part or whole of their stakes in the demerged entities to raise funds for new R&D ventures or simply to even recover their capital. Of the demergers that have happened so far, DRL has kept Perlecan Pharma unlisted and has licensed out four products to a company for clinical development. SPARC, is a full-fledged research company of Sun Pharmaceuticals, that discovers and develops new drugs/delivery systems
● And last, creation of a separate company is an innovative way to mitigate risks involved in the drug discovery business where, despite years of expensive research, the success ratio is still small


Several leading Indian pharma companies like Zydus Cadila, DRL, Ranbaxy, NPIL and Biocon have partnered for R&D. Most companies have tied up with other specialist research companies for development of new drugs on disease areas like cancer, diabetes, malaria and nervous system disorders.

Similarly, DRL has partnered with ClinTec International for clinical trials and co-development of its anti-cancer drug. ClinTec International will possess the marketing rights for European markets, while the rest of the world and US markets would be retained by DRL. It has also tied up with Torrent Pharma for the exclusive marketing rights of its two hypertension drugs in Russia.

Business strategies comprising collaborative approach for drug discovery, strategic sourcing and divesting of manufacturing assets with a buyback business are some of the strategies increasingly used to work along with Indian multinational companies (MNCs). To cite an example, GSK and Ranbaxy have set up an early-stage partnership in drug research, under which GSK will provide the Indian firm with leads, while Ranbaxy will conduct lead optimisation and animal trials. Besides, GSK will take the drug through human trials and will have exclusive rights to sell any resulting product in developed world markets, and the two firms will co-promote it in India.

The western and Indian companies have tied-up for research activities. Eli Lilly & Co has tied-up with Piramal Healthcare, Tata Consultancy services and Suven Life Sciences. The other major tie-ups are, Merck-Advinus Therapeutics, Galapagos NV-Indus Biosciences, Wyeth Pharmaceuticals-GVK Biosciences, Thrombogenics NV- Bharat Biotech, Astra Zeneca-Torrent Pharma and GlaxoSmithKline-Ranbaxy Laboratories.

NCE - India's accomplishment
Indian companies have accomplished many NCEs, among which the contribution of Central Drug Research Institute (CDRI) is of great importance. Some of them are:
● Centchroman, a non-steroidal oral contraceptive, is the first nonsteroidal oral contraceptive to have been developed anywhere in the world
● Centbucridine, a local anaesthetic
● Arteether, a blood schizontocidal antimalarial, from the plant Artemisia annua
● Elubaquin, an anti-relapse antimalarial
● Gugulipid, a hypolipidaemic, is a standardized fraction of the plant Commiphora mukul
● Isaptent, a cervical dilator for medical termination of pregnancy, from the plant Plantago ovata

Centpropazine, an
antidepressant
● Consap, (spermicidal cream) derived from soapnut
● Sudoterb, an antitubercular drug

Future ahead
As per Ernst & Young's report, India has been identified as an emerging hub for collaborative and outsourced R&D. According to the report, many global companies are confronted by a value crisis as they try to sustain a business model based on high costs of manufacturing, R&D, marketing and sales, increasing regulatory scrutiny and reimbursement pressures. Countries that can combine lower cost manufacturing with adequate regulatory protection of intellectual property are well positioned to attract large pharma companies, India being a prime example.

Industry insiders consider a negation of the cost advantage within the next 10-15 years and they are preparing for the next logical step in the evolutionary ladder - progressions up the value curve. The enabling environment for innovation and a proactive government (doing its utmost to promote this sector) have formed a unique spiralling effect.

To thrive in the long term, Indian companies will need to make the transition towards innovative R&D driven enterprises and will need to find creative solutions around challenges such as insufficient VC and indifferent PE markets. Indian companies would need to find ways to strike a balance between making high investments in innovation to help drive future growth, while still generating short term revenue growths, in order to partake the high risk drug development market. This would result in more collaborative drug discovery and development deals with innovator companies across the value chain.

(The author is Dean of Faculty of Pharmaceutical Sciences, Bharati Vidyapeeth University, Pune)

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