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NCE Product Pipeline - Views on News from Equitymaster
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  • Jun 10, 2003

    NCE Product Pipeline

    In an earlier article, we had seen the different avenues open to Indian companies in the post – patent regime in 2005. We had stated that the most lucrative opportunity available to the Indian companies would from the development of a New Chemical Entity (NCE). (click here to know more on stages post NCE development).

    In this article, we shall see steps taken by various Indian companies towards strengthening the NCE portfolio through R&D and success achieved by them. To start with, consider Dr. Reddy’s Laboratory (DRL) NCE pipeline.

    Dr. Reddys Laboratory Ltd.
    Compound Therapeutic Area Development Status
    DRF 2725  Diabetes & Dyslipidemia Phase III (Clinical Trials
    DRF 2593  Diabetes Phase II Completed
    DRF 1042  Cancer Phase I Completed
    DRF 4158  Metabolic disorders Preclinical completed
    (Novartis discontinues
    further development)
    DRF 1644  Cancer Preclinical Completed 
    DRF 4832  Metabolic disorders Late Preclinical
    DRF 10945  Metabolic disorders/
    DRF 11057  Bacterial Infections Preclinical

    DRL has the largest number of NCEs in India, at various stages of clinical trials. The NCEs DRF-2725 and DRF-2593 have been licensed to Novo Nordisk and DRF-4158 to Novartis AG for carrying out clinical trials. In FY02, DRL received upfront and milestone payments (Rs 389 m) in respect of the DRF-2725 and DRF-4158, thereby contributing to the bottomline of the company. However, DRL’s research has had its share of failures as well. Clinical trials in respect of two of the three molecules licensed have been discontinued. Novo Nordisk terminated clinical trials for the NCE DRF-2725, while Novartis AG discontinued further development of DRF-4158. This has come as a major setback to DRL, as it would not be receiving any further milestone payments in respect of these two molecules.

    Ranbaxy Ltd.
    Compound Therapeutic Area Development Status
    RBx 2258 Benign Prostatic Hyperplasia (BPH) Phase I Completed
    RBx 7796 Bronchial Asthma Undergoing Phase I
    RBx 7644 Anti - Bacterial Undergoing Phase I
    RBx 6198 BPH Molecule Early Discovery Stage
    RBx 9611 Overactive Bladder Early Discovery Stage
    RBx 8700 Anti - Infective / Tuberculosis Early Discovery Stage

    Ranbaxy is also increasingly focusing on new drug discovery. The company has licensed its NCE RBx-2258 to Schwarz Pharma, which is currently undergoing Phase 2 clinical trials. Besides Ranbaxy has five more molecules in the Phase 1 of clinical trials and in early discovery stages. Among other companies, Wockhardt Ltd’s anti–infective molecule WCK-771 is undergoing Phase 1 clinical trial.

    Thus, from the above article we observe that India has been adopting the strategy of developing an NCE and licensing the same to foreign companies for further development. This is a step in the right direction, as Indian companies lack the resources to completely develop a new drug. However, going forward, once the Indian companies succeed in licensing few NCEs and develop critical mass, they will be in a position to develop the NCE on their own.

    Having said that we must also inform the reader that the drug discovery process is long drawn and expensive. It takes between 8 to 10 years and US$ 350 m to US$ 500 m for an NCE to reach the commercial stage. This apart, the likelihood of an NCE failing at any of the various stages of clinical trials is also high. For every 5 NCEs evaluated, only one receives final FDA approval. Hence, considering that the drug licensing process is not devoid of failures, we could expect negative news on this front as has been seen in the past (DRF-2725). But the important point is that Indian companies are gradually moving up the value chain despite the recent setbacks.



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