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Ranbaxy plans JV for new molecule - Views on News from Equitymaster
 
 
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  • Mar 17, 2000

    Ranbaxy plans JV for new molecule

    Ranbaxy is considering the setting up of a joint venture with a foreign partner for development and commercialisation of its new asthma molecule. The company has is conducting phase I and phase II of the clinical trials in India while the third phase of the clinical trials would be undertaken by the joint venture.

    Ranbaxy is among the top Indian pharmaceutical companies ranks second in terms of domestic sales. It has interests in anti–infectives, respiratory and cardiovascular. It possesses 12 brands among the top 250 brands in the country and in terms of its therapeutic dosage offerings covers around 77% of the market.

    The pharma research is initiated with the conceptualization, experimentation and early discovery of screening over 100,000 compounds. These are screened down to 1,000 by the pre–clinical stage. The next stage involves the three phases of clinical trials where the new drug is tested on animal and human volunteers. The compounds get screened down to 2 or 5 by the end of clinical trials and around 1 or 2 by the time they get through the regulatory review.

    It is in the process of clinical trials that India offers a real cost advantage. However, the results of the trials conducted in India are not accepted by regulatory authorities worldwide. Many countries require a part of the trials to be conducted again in their respective countries before they allow the drug to be sold.

    Ranbaxy, by tying up with the foreign partner is entering the second stage of R & D. In the first instance, it discovered a new dosage form for ciprofloxacin and sold it to Bayer. In the present case the company is conducting the first and second phase of the clinical trials while the third phase will be conducted jointly with the foreign partner. This would not only enable Ranbaxy to gain experience in the development of the drug but also give legitimacy to the results of the clinical trials and share the costs of the development apart from being a partner as and when the drug is commericalised.

    The transfer of the molecule also makes sense since it could take another three to four years for the molecule to be developed into a new drug and the company is transferring the risk to the JV. What is not clear so far, is whether Ranbaxy would be selling the molecule to the joint venture or would be entitled to royalty from the JV or only the transfer of the molecule as well as the availability off the company research laboratories would be Ranbaxy’s contribution to the joint venture.

     

     

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