RPG Life Sciences, the erstwhile Searle India, is likely to reorganise its pharmaceutical manufacturing operations in order to push exports of pharmaceutical intermediates, bulk drugs and high-value biotech products.
The Rs 252.57-crore pharma and agrochemical company runs three manufacturing units. The Thane unit, near Mumbai, which also houses an R&D centre, is dedicated to bulk drugs. Formulations are made at Ankleshwar in Gujarat, and agrochemicals at Panoli near Ankleshwar.
According to a senior company official, the Thane unit may eventually discontinue bulk drugs production and shift to drug intermediates. This is because RPG Life Sciences has recently signed a contract with Swiss multinational Lonza for manufacturing an intermediate. The company is in the process of finalising similar agreements with US-based Eastman Chemicals and UK-based Marvel Chemicals.
The Thane unit could be ideal for manufacturing drug intermediates since the facility may not be approved by the US Food and Drug Administration for manufacturing bulk drugs since it is 30 years old, feel company officials. On the other hand, intermediates do not require regulatory approvals for catering to Western European and American markets. The Thane unit currently produces bulk drugs such as diphenoxelate, azethioprine, haloperidol, quinfamide, disopyramide phosphate, and resperine.
RPG Life Sciences is negotiating with Eastman Chemicals for supplying two intermediates, of which one will form an input into a 'new chemical entity'. Similarly, the deal with Marvel Chemicals involves one intermediate, which again is for producing a new chemical entity.
For a contract manufacturing company, producing a new chemical entity or its intermediates can be fruitful if the approved drug becomes a hit, as earnings are proportional to drug sales. The deal with Eastman Chemicals and Marvel Chemicals holds much significance for RPG Life Sciences' future.
"To begin with, production of the two intermediates that are inputs into new chemical entities will be modest as the drugs are at their development stages," an RPG official says. "But such deals will bring recognition to the company in the world market, and will eventually open doors for similar deals in future," he adds.
Worldwide, research-based drug companies are increasingly farming out manufacturing and development functions to third parties and are concentrating on drug discovery and marketing. This is expected to open a huge market for contract manufacturing, and companies that offer low-cost alternatives without compromising on quality would benefit immensely.
India is looked upon as a potential manufacturing base. But, as industry consultants say, the existing patent laws dither research-based companies to transfer technology for new chemical entities and for drugs that are still covered by product patents.
"Till the time India adopts product patents, Indian pharmaceutical companies would not attract any major manufacturing deals where technology transfer is involved. To begin with, Indian companies will be offered contracts for manufacturing intermediates and drugs that are out of patent protection," says a Mumbai-based consultant. Click here for a separate report on contract manufacturing.
RPG Life Sciences has recently signed an agreement with UK-based generic company Norton Healthcare for development and production of two molecules for which product patents expire by the year 2004. The molecules will be marketed by Norton in the European markets and by Zenith Goldline in the US. Both companies are subsidiaries of IVAX Corporation. Click here for report on RPG-Norton deal.
RPG Life Sciences is expected to sign similar deals for generics development and exports in future, say company officials, and is on the look out for acquiring a bulk drug unit which can secure regulatory approvals from US FDA, UK Medical Control Agency, and TGA of Australia. The company had negotiated for acquiring American Remedies's Chennai-unit before it was eventually taken over by Dr Reddy's Laboratories. Following the acquisition, the present portfolio of bulk drugs will be shifted to the new unit, company officials say.
RPG Life Sciences is also expanding its Ankleshwar facility. It has set up a fermentation facility for manufacturing high value biotech products such as cyclosporin A, doxorubicin and lovastatin.
The company is expanding this facility to include three more products - vitamin B1, vitamin B12 and simvastatin. It is also utilising reactors leased from Hindustan Antibiotics Ltd. where it is manufacturing daunomycin through fermentation. Daunomycin forms input for high-priced doxorubicin (an anti-cancer molecule).
The company has already commenced production of doxorubicin and is currently exporting the drug to US markets at premium of $105,000 per kilo. The company is also planning to produce more potent forms of doxorubicn such as idarubicin and epirubicin. A sum of Rs 15-20 crore has been earmarked for expansion of fermentation facility, company officials say.