The Hyderabad- based bio-pharma company, Zenotech Laboratories is setting up a Rs 20 crore facility in the Shapoorji Pallonji Biotech Park, Turkapally, near Hyderabad. The facility to be commissioned by January 2005 is to manufacture biotech products in the oncology and neurology segments. The project is likely to be funded with a combination of equity and debt.

Some of the oncology products that the company is working on include granulocyte-macrophage colony-stimulating factor (GM-CSF) and interleukin-2 (IL2). The company plans to set up the cGMP manufacturing facility, which will house multiple fermentors, bioreactors and chromatography systems, to meet the demand in the emerging markets.

The company is currently conducting toxicology studies at the Indian Institute of Toxicological Studies, Pune, which will be completed by the first week of May, 2004 and the clinical trials for the oncology products, which will start by June, 2004 are expected to be completed by the end of this year. The company has also plans to work on another 6 products in the future. The company is also in talks with a US company for offering contract research services, a highly placed source informed Pharmabiz.

Asked about the company's plans to foray into contract research, the source said, Biotechnology is in an infancy stage, and the world is not confident on the country's abilities yet, and it will take some time to build this confidence. Thus, companies looking at capturing opportunities in contract research need to prove their worth, as past record can make a big difference in clinching attractive deals, the source added.

The company is making serious efforts in the area of developing therapeutic proteins and also sees drug discovery as a key area. The company has capabilities in developing generic versions of biological molecules. The oncology drugs that are available in the market are very harsh on patients, and better drugs can be brought in India, which are also less expensive. There is scarcity of good drugs in the neurology segment, the source commented.

Zenotech, is promoted by Dr. Jayaram Chigurupati (Dr. Reddy's Laboratories' former vice-president, Biotechnology Division, who was instrumental in launching the company's first biotech product - Grastim). Dr. Chigurupati quit Dr. Reddy's in March last year and set up Zenotech. Seven other scientists from Dr. Reddy's too had joined Dr. Chigurupati later.

Zenotech has a research and development facility (set up in April 2003) for generating recombinant proteins for clinical development. The company's staff is well versed in gene cloning and expression, fermentation, process validation, and manufacture of recombinant DNA products from bacterial yeast.

The company is believed to emerge as a biopharmaceutical company involved in manufacturing and marketing of generic and patented biologics for human therapy. It will develop new biologics for human therapy, with prime focus on oncology and neurology. In a couple of years, the company will also evaluate options in foraying into contract manufacturing of biologicals.