Biotech companies like Avesthagen and Biocon are in talks with global players to out-license various projects in their R&D pipeline, industry officials said.

These initiatives are happening at a time when pharmaceutical companies, too, seem unable to find takers for their molecules in a challenging business environment.

Avesthagen is currently in talks with several companies for partnerships in the nutrition space. Villoo Morawala Patell, chairperson and managing director of Avesthagen, told ET: "Our first molecule in nutrition has also finished clinical trials while others are in the pipeline. But instead of retailing it directly, we will be licensing them out to other retail companies." The company's partnership with Danone in metabolic disorders is through with its pre-clinical testing. As part of the agreement between the two companies, Danone will start clinical trials of the molecules and later into the market.

In the biopharma space, Avesthagen has four molecules in the pre-clinical stage and is looking at partnering them for further development. With its IPO currently on hold, Avesthagen is counting on strategic partnerships and milestone payments from its out-licensed molecules to tide over shortage of funds.

Biocon is also looking at partnering with MNCs for its insulin molecule. The company's oral insulin molecule is entering phase three clinical trials, and Kiran Mazumdar Shaw, chairman and managing director of Biocon, says the company should have some indication about the data by the end of the year. "Following this, Biocon will be looking for partners to out-license this molecule to unlock good value. The company will mainly look at partnering with MNCs. But from the marketing point of view, we are open to partnering with Indian companies just to make it into a big product," Ms Shaw said.

Biocon is developing both biosimilars and novel products. The insulin space, where the company is developing an oral insulin, is an important play for it globally. AntiCD 6 and BVX20 are other areas where the company is doing its research. The company has strategically focused on insulin and glargine which it sees as big-ticket items. "We expect that the insulin space alone will become a $100-million business for us in the rest of the world (ROW) markets within the next few years," Ms Shaw said.

Ironically, biotech companies are in talks for possible partnerships at a time when pharmaceutical companies are finding it difficult to find takers for their molecules. Sarabjit Kour Nangra, vice-president (research) at Angel Broking, said, "This is an effect of the financial crunch. Even innovator companies are being selective with their R&D and most talks that Indian pharma companies have for out-licensing their molecules are on hold. Biotech companies are still going ahead with their talks since there is potential there and even traditional innovator companies are interested in it." The valuations offered by global players, however, may fall short of expectations.

Since biotech companies, like many others, are facing a cash crunch, MNCs are likely to use this as a leveraging tool to get a better deal. Cecil Nick, vice-president (biotechnology), Parexel Consulting, said, "Biotech companies globally are facing a cash crunch and bigger companies would likely try and use this to their advantage. India, however, has a lot of expertise in biosimilars and that puts them in a strong position. It's not the same in the case of novel products."

Source: The Economic Times
Date: 06 March 2009