Indian Companies Are Finding Drug R&D Pitfalls
A brief article in The Economic Times (January 2, 2012) entitled “Zydus, Eli Lilly drug discovery deal off” got very little notice, but may represent a new trend. Three years ago, the Indian company Zydus Cadila signed a research pact with Lilly to collaborate on novel drugs to treat cardiometabolic disorders. The deal had the potential to be worth up to $300 million if Zydus Cadila achieved specific milestones and compounds passed key steps in clinical development. While not a lot of information was given for the dissolution of this collaboration, I found the following comment interesting:
“Developing a new drug from scratch is getting more expensive due to increased regulatory scrutiny and high costs of clinical trials. Lowering costs through a partnership with an Indian drug firm was one way of speeding up the process, but the success rate has not been very high.”
Much has been made of the growing investment in R&D being made by Western pharmaceutical companies in places like China and India. Initially, this work was meant as a way to get laboratory work done more cheaply. However, about a decade ago, Western companies turned to their outsourcing partners to tap into their scientific talent and to broaden their search for new medicines. This blended well with the ambitions of these countries to become bigger players in the lucrative global pharmaceutical market. A few years ago, this trend was discussed by Pete Engardio and Ben Rissing in a Business Week story entitled “Big Pharma’s R&D Booster Shot” (June 11, 2008) which focused on India and highlighted the proliferation of deals, such as India’s Glenmark Pharmaceuticals liaison with Lilly and Ranbaxy’s drug-discovery alliance with Merck. The authors acknowledged that, while Indian firms were unlikely to compete in the development of new medicines overnight due to the long drug discovery-development timeline, they were clearly on the path to be eventual competitors.
But the Indian firms are now discovering how difficult this business is. The Zydus Cadila – Lilly example is not unique. Similar disappointing stories can be told for the early diabetes drugs that Dr. Reddy’s Laboratories licensed to Novo Nordisk and Novartis, or Glenmark’s anti-asthmatic compound that was licensed to Forest Laboratories. However, these setbacks shouldn’t be thought of as a failing of India’s nascent pharmaceutical efforts. They just provide further evidence of how challenging drug discovery is, no matter where it is done.
However, there could be at least one concern with India’s emerging drug pipeline. In his article “India Perseveres as Drug Discoverer” (Chemical & Engineering News, October 31st, 2011), Amruthanand Nair shows a table listing the drug candidates in advanced development from several major Indian firms, including Dr. Reddy’s, Glenmark, Piramal Life Sciences and Sun Pharma. Of the 10 compounds listed, many are mechanistically related to agents that are already on the market or they are in classes where previous compounds have had little or no success. It is hard to imagine that any of these agents will be blockbusters without long-term and expensive clinical studies that would differentiate them from current therapies. Do these small companies have the internal resources to carry out such studies? If not, they will need a major pharma partner to do this. And this comes back to the “developing a new drug from scratch” quote above. It is entirely possible that, as happened with the Zydus Cadila – Lilly deal, Western partners will be dissolving these deals unless there is compelling evidence that the compounds generated will meet not just regulatory scrutiny but also the very high hurdle that now exists for compound differentiation.
When it comes to drug discovery, the Indian pharmaceutical industry is still in its infancy. It will be awhile before the “eventual competitor” status will be realized.