While the joint venture agreement named Shantha West has been signed with the US based East West Laboratories Inc for research on therapeutic monoclonal antibodies, the second JV agreement has entered into a 60:40 strategic Shantha Biotechnics with the Chennai based ABL Technologies to tap the potential of marine biotechnology. Shantha will hold a 51 per cent stake in East West Laboratories, which has so far developed four anti-cancer monoclonal antibodies.
The US based East West has a strong profile in biotech research and holds the product patent and an exclusive worldwide license agreement for TB 94, a complete human monoclonal antibody, for the treatment of lung cancer. TB94 is targeted at the 500 million global smoking population and its market value is pegged at close to US $ 1 billion. The company focuses on utilization of transgenic plant technology for cost effective bioproducttion of complex human proteins for pharmaceutical applications.
Shantha has entered into an Antibody Production Contract with CropTech In., USA, to yield large volumes of proteins at significantly lower costs. Shantha has world-class GMP Bioprocessing capabilities together with an established clinical trials program and would blend well with CropTech's transgenic plant technology. The formation of Shantha West will dramatically expand Shantha's product base and open new markets both in cancer diagnostics and therapeutics.
Monoclonal antibodies are powerful therapeutics against a wide range of human diseases and represent over 20% of biotechnology products in clinical trials. There exists vast potential for these molecules and the revenues from the therapeutic antibody market are expected to reach US$ 3 billion by the year 2002.
The acquisition of East West Laboratories is expected to significantly open up new visits for Shantha, in the local as well as in the international market. This is expected to give Shantha an opportunity to roll out one product every three years, which is a tremendous achievement for an Indian biotechnology company.
Announcing the company's future plans, Varaprasad Reddy, Managing Director, Shantha Biotechnics said, "We are putting out best foot forward entering into this field that has vast potential worldwide and are confident that we will be successful in this venture. With out solid base of self sustaining R&D, our future plans stem from the value created over the years."
Through its strategic joint venture with the Chennai based ABL technologies limited Shantha Biotech will now become a pioneer in indigenous manufacture of Beta Carotenoids, which until now was imported into India at high cost. The company is focused on the production of various pharmaceutical products from aquatic organisms. The company is currently undertaking production of beta-carotene from an indigenous strain of the marine algae Dunaliela, the only one of its kind in India. Shantha has purchased nearly 30 acres of land in Tamil Nadu for the purpose of cultivating Dunaliella.
The Carotenoids act as antioxidants, protecting cells from free radical attack. These molecules have wide ranging applications in enhancing immune responses, protecting the skin and retarding growth of cancer cells. Shantha is expected to have a first mover advantage in betacarotene production. Shantha Marine will utilize the abundant resources the oceans offer for R&D in order to produce various pharmaceutical products.
Khalil Ahmed, Director, Shantha Biotechnics said, "We will remain focused on developing customized solutions through biotech, thereby positioning ourselves at the high end of the development chain. With these strategic acquisitions and mergers, we are poised for exponential growth in the offshore markets especially US, Europe and Japan for generic products."
Shantha have been pioneers in developing India's first recombinant DNA Hepatitis B vaccine, brand named Shanvac B, which has a 46% market share in the segment in terms of volumes. Shantha's manufacturing unit has an installed production capacity of 50 million dosages of Shanvac-B. The market potential for Hepatitis B vaccine is estimated at US$ 3 billion and Shantha's co-marketing alliance with pharma major Pfizer will further boost the sales of the vaccine. With a current turnover of 34 crores, Shantha aims to touch a turnover of Rs. 50 crores from the sale of Hepatitis B vaccine in the financial year 2000-2001. Added to this, the much-awaited Selective Immunization Program by the Union Government and the proposed Bill Gates Foundation Program will increase the sales of the company this financial year.
Shantha's scientists have also developed interferon alpha - brand named Shanferon, which is currently undergoing clinical trials. Shanferon is expected to hit the market next year and the company expects to start commercial production of Shanferon by mid 2001. Interferon alpha has a vast potential in the Indian market since it is currently very expensive, with only three major players controlling the market.
Other Shantha products in the pipeline are Combination Vaccines (DTP & Hepatitis B), Insulin, Streptokinase, tTP, GM-CSF, Monoclonal Antibodies and New Generation Vaccines. Shantha has also entered into an agreement with Pfizer Overseas Inc, for marketing new products developed by Shantha worldwide. This tie-up will help Shantha to focus on its core strength, which is Research and Development and Manufacturing. It will also ensure strong institutional support to Shantha for commercializing its inventions. With a 34-crore turnover, 35% of which is invested back into research, Shantha is planning to go in for an IPO in early 2001.