The Hyderabad-based Dr Reddy's has initiated restructuring its drug discovery activities by expanding operations of its wholly owned independent subsidiary, Aurigene. As part of the reorganization, the company will close the Atlanta Research facility in the US, announced the company.

The drug discovery operations of Dr Reddy's in its Hyderabad facility will be absorbed into Aurigene, a wholly owned independent subsidiary of the company, by July 1, 2009. The discovery research resources of the company - employees, facility and infrastructure will be passed over into Aurigene and the latter, which is currently operating in Bangalore, in effect will have one more site at Hyderabad, announced Dr Reddy's.

Further, Dr Reddy's will be creating a new group to focus on proprietary products development, which will be responsible for building the proprietary, branded R&D portfolio in collaboration with various partners and service providers. This organization will work with Aurigene and other Discovery Biotechs to ensure effective management of the ongoing and future drug discovery programmes.

All the existing Intellectual Property will be owned and managed by the new unit. The group will also have responsibility for the development portfolio and the company's differentiated formulations efforts.

The discovery research unit, which will be rechristened as Aurigene - Hyderabad, will report into CSN Murthy, CEO - Aurigene. Dr Rajinder Kumar, president - R&D and commercialization will step down to pursue interests beyond Dr Reddy's once the transition is completed, but will continue to advise the proprietary products group on various matters even after July 1, 2009, informed Dr Reddy's. Dr Raghav Chari, senior vice president will head the Proprietary Products Group.

Explaining the reorganization, G V Prasad, vice chairman & CEO, said, "We have been working at delivering sustained growth with profitability to significantly improve shareholder returns. As we prioritize our company-wide research and development spending, we will now be placing greatest emphasis on R&D activities that can have a significant impact on near-term earnings, while not losing focus on long-term interests of the company."

The company has also announced that it has received approval for three INDs. The first human subjects were successfully dosed in a phase I study with DRL 17822, a selective inhibitor of CETP, for the treatment of dyslipidemia, atherosclerosis and associated cardiovascular diseases. The compound shows potent elevation in HDL-C and reduction of atherosclerotic plaques in animals, and has a clean safety profile in preclinical studies. The two other IND's are for the treatment of COPD and dyslipidemia.

Aurigene, established in Bangalore in 2002, is a drug discovery biotech with a proven track record of successful partnerships with 10 collaborators globally. The company currently has a pipeline of 15 discovery programmes, at various stages from Hit Generation to late-stage Pre-Clinical Optimization, and has filed multiple patents in these Discovery Programmes. With proprietary structural biology and fragment-based drug design technology platforms, and experienced scientific leadership, Aurigene is a fully integrated operation with expertise in target validation biology and Hit Generation to IND nomination. Oncology, metabolic disorders and autoimmune/ inflammatory diseases are the focus therapeutic areas.