Pharma News & Analysis: June 2011

Monday, June 27, 2011

Meeting highlights from the Committee for Medicinal Products for Human Use (CHMP) 20-23 June 2011

Positive opinions for new medicines adopted

The Committee adopted positive opinions recommending the granting of marketing authorisations for the following new medicines:

Buccolam (midazolam), from ViroPharma SPRL, intended for the treatment of prolonged, acute, convulsive seizures in paediatric patients from the age of 3 months to 18 years. The review for Buccolam began on 22 September 2010 with an active review time of 210 days. This is the first CHMP recommendation for a paediatric-use marketing authorisation (PUMA).Eurartesim (dihydroartemisinin/piperaquine phosphate), from Sigma-tau Industrie Farmaceutiche Riunite S.p.A., intended for the treatment of uncomplicated Plasmodium falciparum malaria. The review for Eurartesim began on 22 July 2009 with an active review time of 210 days. This is the first CHMP recommendation for an anti-malaria medicine.

Trajenta (linagliptin), from Boehringer Ingelheim International GmbH, intended for the treatment of type 2 diabetes mellitus to improve glycaemic control in adults. The review for Trajenta began on 21 July 2010 with an active review time of 210 days.

Votubia (everolimus), an orphan medicine from Novartis Europharm Ltd, intended for the treatment of patients aged 3 years and older with subependymal giant-cell astrocytoma (SEGA) associated with tuberous sclerosis complex. The review of Votubia began on 18 August 2010 with an active time of 210 days.
The CHMP recommended the granting of a conditional marketing authorisation for Votubia, which means that further evidence on the medicinal product is awaited. In the case of Votubia this relates to the submission of the final results from pivotal phase III study and the long-term follow-up on the efficacy and safety in SEGA patients. The European Medicines Agency will review new information within one year and update the product information as necessary.

Negative opinions for new medicines adopted

The Committee adopted negative opinions recommending that marketing authorisations should not be granted for the following orphan medicines:

Bronchitol (mannitol), from Pharmaxis Pharmaceuticals Ltd, intended for the treatment of adult patients with cystic fibrosis.
Luveniq (voclosporin), from Lux Biosciences GmbH, intended for the treatment of chronic non-infectious uveitis.

DoP reconstitutes Board of Governors for NIPER after long gap

The Department of Pharmaceuticals (DoP) has reconstituted the Board of Governors for the premier National Institute of Pharmaceutical Education and Research (NIPER), Mohali, after it remained without a board for a long time.

The Department has constituted the 20-member Board with Dr V M Katoch, the Secretary of the Department of Health Research, as the chairperson. Director of the NIPER, Joint Secretary in-charge of Pharmaceutical Industry in the DoP, Secretary, Technical Education in the Government of Punjab, Financial Advisor to the DoP, Drug Controller General of India (DCGI), and Member-secretary of the All India Council for Technical Education (AICTE) will be ex-officio members.

President of the Organisation of Pharmaceutical Producers of India (OPPI) and President of Indian Drug Manufacturers Association (IDMA) will be the two other ex-officio members, according to a notification by the DoP. Lalit Kumar Jain (Pharmachem, New Delhi) and Ajay Piramal (CEO, Piramal Health Care) will represent the industry as members of the Board.

Experts like Dr Tushar K Chakraborty (director, Central Drug Research Institute, Lucknow), Dr R C Deka (director, AIIMS, Delhi), Prof. N Rajendran (director and Professor at Madras Medical College), Prof T Alesan (Associate Professor at Kamraj College, Thoothukudi), Dr Nagarajan Venkataraman (Professor Emeritus in Neurosciences, Tamil Nadu), Prof. Vinod Kumar Dixit (Dept of Pharmaceutical Sciences), Dr Hari Singh Gaur University, Sagar), Dr N J Gaikward (Professor at Dept of Pharmaceutical Sciences, Rashtrasant Tukadoji Maharaj Nagpur University), Prof. D Acharya (director, IIT Kharagpur) and Prof. B Suresh (vice-chancellor, JSS University, Mysore and the president of the Pharmacy Council of India) will be the other members.

“In terms of Section 4(4) of the NIPER Act, 1998, the term of office of chairperson and members of the Board of Governors, other than ex-officio members, shall be three years,” the notification said.

DoP reconstitutes Board of Governors for NIPER after long gap

Operating profit of 100 Indian pharma cos jumps by 22%, net sales up by 13% in 2010-11

Indian pharmaceutical industry reported a satisfactory performance during 2010-11 with only marginal growth in sales and operating profits. This is despite stiff competition, challenging economic conditions, cost cutting measures in the US and Europe and government intervention in highly regulated markets. The earnings before depreciation, interest, tax and adjustments (EBDITA) of Pharmabiz sample of 100 listed pharma entities increased by 21.9 per cent to Rs.23,317 crore from Rs.19,133 crore in the previous year. The EBDITA margins improved to 22.5 per cent from 20.9 per cent. These companies recommended handsome dividend to shareholders and created healthy reserve position during 2010-11.

The net sales increased by 13.1 per cent to Rs.1,03,500 crore (US$ 22.8 billion) during 2010-11 from Rs.91,518 crore ($ 20.3 billion) in 2009-10. The net sales growth of almost similar set of companies was only 11.6 per cent in 2009-10 over the previous year. Out of 100 companies, 26 companies recorded net sales of over Rs.1,000 crore during 2010-11. Ranbaxy Laboratories remained on top with consolidated net sales of Rs.8,535 crore followed by Dr Reddy's Laboratories at Rs.7,469 crore and Cipla at Rs.6,123 crore. With acquisition of Taro Pharmaceutical Industries, Sun Pharmaceutical has climbed to fourth place from sixth in the previous year with net sales of Rs.5,721 crore and it has overtaken Lupin and Wockhardt in ranking. Lupin went to fifth position from fourth with net sales of Rs.5,707 crore and Wockhardt went down to eight spot from fifth in the preceding year.

The sales of 26 companies, with sales volume of over Rs.1000 core, improved by 14 per cent to Rs.78,580 crore from Rs.68,939 crore in the 2009-10. This worked out to almost 76 per cent of net sales of 100 companies as against 75.3 per cent in the previous year. The EBDITA of these 26 companies moved up by 25.8 per cent to Rs.18,896 crore from Rs.15,018 crore. EBDITA of 26 companies worked out to 81 per cent and 78.1 per cent of aggregate EBDITA of 100 companies. Pfizer's sales crossed Rs.1000 crore mainly due to 16 months period in 2010-11.

There were several adjustments done by Pharmabiz in respect of restructuring of operations including selling of part of business, demerger of business operations, mergers & acquisitions, change in financial period, foreign exchange gains/losses and one time adjustment regarding income/cost. We have arrived at aggregate profit figures by taking these adjustment after profit after tax to get true picture of financial working. We have taken consolidated figures where ever available which includes working of subsidiaries and joint ventures. While taking aggregate figures we have not annualised figures for change in accounting period.

The net profit after tax but before adjustments (NPBA) of 25 companies with sales above Rs.1,000 crore, excluding Piramal Healthcare, jumped by 51.3 per cent to Rs.11,762 crore from Rs.7,772 crore in the previous year. Ranbaxy earned NPBA of Rs.1,100 crore as against a loss before adjustment of Rs.213 crore. Similarly, Orchid Chemical's NPBA worked out to Rs.154 crore as against a loss of Rs.554 crore. The NPBA of Cipla and Aventis was under pressure during 2010-11 and declined by 2 per cent and 1.5 per cent respectively. The NPBA of Jubilant Life Sciences declined due to demerger of its agri and polymer product division and that of Piramal Healthcare due to hefty tax provision. The NPBA of Strides Arcolab, Panacea Biotec, Ind-Swift Laboratories, Wockhardt, and Arch Pharmalabs moved up by over 50 per cent during 2010-11.

The NPBA of Dishman Pharma, Abbott India, Unichem Laboratories, Hikal, Aarti Drugs, Parenteral Drugs, Anu's Laboratories, Themis Medicare, Bliss GVS Pharma, Fulford (India) and Jagsonpal Pharmaceuticals, etc., was under pressure during 2010-11 and declined. The net loss before adjustment of Wanbury, and Morepen Laboratories increased and a few companies like Ankur Drugs, Alembic, Marksans Pharma and Vimta Labs incurred losses as against profit in the previous year.

The Indian companies are entering aggressively into the highly regulated market with investments in research and development. Further, investments in expansion and up-gradation of facilities as per international standards helped them to generate higher revenues from CRAMS, clinical trials, in-licensing and product launches. The relatively small and medium size companies are focusing more on emerging markets.

The Pharmabiz study shows that the profit before tax provisions and adjustments relating to foreign exchange gains/loss, profit on sale of assets and mergers & acquisitions worked out to Rs.16,939 crore during 2010-11 as compared to Rs.13,183 crore, a strong growth of 28.5 per cent. However, the net profit after tax but before adjustments remained flat with small growth of 0.2 per cent to Rs.10,136 crore from Rs.10,120 crore as the aggregate tax provision jumped by over 120 per cent to Rs.6,803 crore from Rs.3,063 crore in the previous year.

The higher tax provision is mainly due to significant higher amount of tax paid by Piramal Healthcare on selling of its domestic formulation business to Abbott Healthcare Pvt Ltd and diagnostic business to Super Religare Ltd. Piriamal shown an exceptional income of Rs.16,221 crore in 2010-11 and provided Rs.3,680 crore for taxation as against Rs.18.03 crore in the previous year. Excluding Piramal's tax provision the net profit before adjustments shown a stronger growth of 36.3 per cent to Rs.13,816 crore from Rs.10,138 crore.

The cost of raw materials, including increase/decrease in stocks and purchases, went up by 10.4 per cent to Rs.45,525 crore from Rs.41,255 crore and staff cost by 14.8 per cent to Rs.14,522 crore from Rs.12,647 crore. The other expenditure including other administrative expenses and research & development, increased by 12.1 per cent to Rs.23,616 crore from Rs.21,069 crore. Thus the Indian companies managed to keep manufacturing cost at reasonable level and performance at operating level has shown satisfactory growth.

The depreciation provision of 100 companies moved up by 14 per cent to Rs.3,889 crore from Rs.3,412 crore. However, with low interest rate regime in 2010-11, the interest cost of these companies declined by 1.9 per cent to Rs.2,489 crore from Rs.2,538 crore in the previous year. Due to lower interest burden, the profit before tax and adjustments has taken a quantum jump of 28.5 per cent and reached at Rs.16,939 crore from Rs.13,183 crore in the previous year.

At present there are 12 listed multinational companies in India viz Ranbaxy Laboratories, GlaxoSmithKline Pharma, Aventis Pharma, Pfizer, Novartis India, Abbott India, AstraZeneca Pharma, Merck, Fresenius Kabi Oncology, Solvay Pharma, Fulford (India) and Wyeth, and these companies achieved net sales growth of over 20 per cent to Rs.17,362 crore during 2010-11 from Rs.14,419 crore. EBDITA of these MNCs went up smartly by 66.7 per cent to Rs.4,525 crore from Rs.2,715 crore in the previous year. Pfizer, Wyeth and AstraZeneca Pharma changed their financial year during 2010-11 and announced results for 16 months or 15 months. Solvay Pharma is now merging with Abbott India with a swap ratio for the merger of 2:3. Matrix Laboratories, now a wholly owned subsidiary of of Mylan Inc., was delisted from BSE and NSE.

With overall better growth in profit before tax and adjustments, several companies rewarded their shareholders and announced higher dividend for the year 2010-11. Merck declared equity dividend of 950 per cent followed by Piramal Healthcare (600 per cent), Aventis (550), Divi's Laboratories (500), AstraZeneca (500), GSK (400) and Torrent Pharma (400). Sun Pharmaceutical announced equity dividend of 350 per cent, Solvay Pharma 255 per cent and Dr Reddy's Laboratories 225 per cent.

DBT completes draft guidelines on preclinical trial data for similar biologics

The Department of Biotechnology (DBT) has drafted a set of guidelines for conducting pre-clinical trials of biosimilars in the country. The Department is now waiting for draft notes on clinical trials for biosimilars from the Drug Controller General of India (DCGI) to complete this work on guidelines.

Manufacture and marketing of biosimilars in India are currently governed by the Environment Protection Act of 1970 and the Drugs and Cosmetic Act. Even though biosimilars is regulated under these provisions of these acts, there is no specific set of rules this sector in the country today.

Emphasising on the need to have proper guidelines to regulate the growing biosimilar market, Dr K K Tripathi, advisor, DBT said that his office has been working for some time to provide industry with a unique set of rules that will help them in their growth.

“Through this guideline, we aim to address the seething problem of lack of regulation in biosimilars in the country. The biggest benefactor of this will be the industry as it will give them more credibility in the market. The guidelines on pre-clinical trials have been completed after taking into consideration the recommendations and comments from all stakeholders and associations from the industry.”

It is believed that the market for biosimilars will change significantly by 2015, as many well known biologic drugs are on the verge of patent expiration.

“We are constantly working for the betterment of the industry and that is why we are keen to complete the guidelines on biosimilars fast. However, to complete the work on guidelines we need data on clinical trials from the DCGI, only after that can we proceed further in this,” Dr Tripathi informed.

DBT have been working on the pre clinical guideline from last one and half year. Biosimilars enter the markets when a biodrug patent expires. Unlike generics, biosimilars are not produced chemically but biologically, taking a biotech drug as a reference.

Saturday, June 25, 2011

India attracting more investments in BioPharma R&D

More than 70 per cent of the 40 global BioPharma executives in a recent survey are satisfied with their R&D alliances in India, and three out of four expect to increase their R&D activities in India. Despite such positive appraisals, India continues to play a relatively small role in BioPharma innovation, according to a new report by The Boston Consulting Group (BCG).

The report, which was commissioned by the USA-India Chamber of Commerce (USAIC) and based on in-depth research, interviews, and a quantitative survey with over 40 R&D decision makers, released on June 23 at the annual USA-India BioPharma & Healthcare Summit in Cambridge, Massachusetts.

Over the past 10 years, India has made a concerted effort to capitalize on the globalization of R&D investments. US BioPharma companies spent 24 per cent of their R&D budgets in foreign countries in 2009, up from 17 per cent in 2002. Over the same period, India’s share of these foreign expenditures increased tenfold to about $500 million.

Emerging markets have benefited from the growth of overseas investments, while the share of US-funded BioPharma R&D conducted in Western Europe, Canada, and Japan declined from 2002 to 2009. “We expect this trend to continue,” said Simon Goodall, a BCG partner and a co-author of the report. “Global BioPharma companies are intent on finding more efficient ways to develop new drugs, and emerging markets hold a distinct cost advantage.”

Despite this trend, India still accounts for only about 1 per cent of the overseas R&D investments made by US BioPharma companies - similar to China’s share (also about 1 per cent), but much smaller than the share of Eastern Europe (about 8 per cent) and Latin America (about 4 per cent). “We feel that India’s research sector still has tremendous opportunities for growth, particularly with BioPharma companies struggling to resolve the crisis in R&D productivity,” said Bart Janssens, a BCG partner and a co-author of the report.

R&D productivity, the report explains, is a function of “value generated” (the number of new drugs launched) divided by “value invested” (the resources required to bring a single drug to market). Over the past ten years, the global BioPharma industry has seen a steady decline in value generated, along with a steady rise in R&D costs - and hence value invested.

India can help companies improve both parts of this equation - but only if BioPharma companies and Indian stakeholders move beyond the prevailing model, which revolves around low-cost sourcing. “Costs are critical, and India can play a significant role in increasing R&D efficiency over the short to medium term,” said Kim Wagner, a BCG senior partner and a co-author of the report. “But collaborative partnerships, compared to traditional vendor relationships, can have a much more substantial impact on a company’s ability to create new and innovative products.”

To lower the cost element of the equation—value invested—BioPharma companies should work with India’s research sector on several fronts:

Generate greater value from collaborations: There is growing recognition that the transactional R&D sourcing model, while often effective in lowering costs, is wholly inadequate for spurring innovation. Strategic partnerships are gaining traction, both globally and in India. In these relationships, the partners exchange knowledge and work toward shared goals, which sometimes include building or enhancing capabilities.

Expand the scope of sourcing: Indian research companies have invested heavily in broadening their services, giving multinationals an opportunity to increase both the depth and breadth of activities sourced from India. Several BioPharma companies in the survey had sourced early discovery activities from India and were satisfied with the results.

Establish clinical hubs - Approximately 1,300 clinical trials have been conducted in India since 2005. The cost per patient is half of what it is in Western countries, and the process of recruiting patients is four times faster. Companies can conduct twice as many proof-of-concept trials in India as they could for the same cost in Western countries.

Develop niche-busters - The current R&D model makes it uneconomical for companies to pursue niche-busters—drugs designed to combat diseases that affect a relatively small population. India, with its 60 percent cost advantage relative to the traditional R&D model, can allow global BioPharma companies to develop such drugs cost-effectively.

Leverage research capabilities in emerging technologies - BioPharma companies should look for opportunities to capitalize on India’s growing interest and expertise in specific research areas. India was one of the first countries in the world to establish a nationwide bioinformatics network. Its Biotechnology Information System Network (BTIS) now connects 57 key research centres, covering the entire country. In addition, the Indian government is fostering a research ecosystem to support the development of nano biotechnology. It is also coordinating its own efforts to advance stem cell research.

To realize the full potential of R&D in India, a range of stakeholders - including global BioPharma companies, local biotech and pharma firms, and academia- will all need to be involved and willing to make a long-term commitment. “Successful relationships are ones in which the partners invest in building capabilities and trust,” Janssens said. “Such partnerships have been able to move beyond low-cost sourcing to deliver fundamental improvements in productivity.”

The BCG report was based on proprietary research and in-depth discussions with over 40 key R&D decision makers in India, Europe, and the United States. It was complemented by a survey of Western BioPharma companies and Indian research companies. The survey focused on measures to enhance R&D activity in India and increase local innovation.

The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses.

DCGI withdraws approval given to Axis Clinicals for BE studies after probe confirms allegations

The Drugs Controller General of India (DCGI) has suspended the clearance given to Hyderabad-based Axis Clinicals for conducting bio-availability and bio-equivalence studies at their centres in Miyapur 'in public interest', in the wake of the recent controversies for allegedly using women in Piduguralla as trial subjects.

“The Drugs Controller General (India)’s South Zone Office, Chennai and Sub-zonal office, Hyderabad has conducted investigations in the matter of recent reports about certain irregularities in conduct of clinical study by Axis Clinicals Ltd., Hyderabad in violation of the norms specified in Schedule Y of the Drugs and Cosmetics Rules. The investigations have revealed various irregularities in conduct of the above said studies with respect to subject recruitment process, informed consent process, independence of the Ethics Committee and its review and decision making process. The investigations were conducted on 20th and 21st June 2011 at the bio-equivalence study centre of Axis Clinicals Ltd. situated at Serlingampally, Miyapur, Hyderabad,” according to official statement here.

The Drugs Controller General (India) has therefore suspended the approval of the said firm for conducting all bio-availability and bio-equivalence studies at their centres in Miyapur, Hyderabad in public interest, it said.

The office of the DCG(I) has further decided to investigate the working of all bio-availbility and bio-equivalence study centres in Andhra Pradesh within a period of two months to ensure that such studies are performed strictly in accordance with the applicable regulatory provisions and prescribed guidelines.

“Axis Clinicals Ltd., Hyderabad had conducted bio-equivalence studies on Exemestane tablets in its Serlingampally, Miyapur, Hyderabad centre during the period 27th January 2011 to 15th February 2011. It was alleged that the firm had conducted study by administering the anti-cancer drug to the poor women in Piduguralla town of Andhra Pradesh without securing their informed consent,” the statement added.

SALE OF BANNED DRUGS

Last week Pharmabiz reported about a series of raids conducted by the office of DCGI on pharmacy outlets in Delhi and Rajasthan for selling two of the banned drugs namely gatifloxacin and tegaserod. The officials stated to have seized huge stocks of the brands of these companies namely Lupin, Dr Reddy's, Sun Pharma, Cipla, Hetero Drugs, Torrent Pharma, Aristo Pharma, Intas and others. The inspectors of the Central Drug Standard Control Organization have conducted 135 raids in over 90 pharmacies in Delhi and Rajasthan. DCGI had banned gatifloxacin, an antibiotic and tegaserod, a chronic constipation drug for their adverse effects on last March 16. The order required the drug companies to withdraw their brands from the market with immediate effect. The decision to recall these drugs from the markets was on the basis of recommendations of the Drugs Technical Advisory Board. It is indeed surprising that these banned products continued to be sold in retail outlets even after three months of their ban. It is possible that the sales were taking place without the knowledge of the companies as most of the makers of these drugs are large and reputed companies. However, the manufacturers cannot pretend to be ignorant about such illegal sales of their products in the trade channels. Most of them have the monitoring system to track the sales of their products throughout the country.

Now, prior to the ban order of gatifloxacin and tegaserod in last March, DCGI had also banned drugs like nimesulide, cisapride, phenylpropanolamine and human placenta extracts for their adverse effects. These drugs have also been in the market for last many years and belonged again to large companies. The manufacturers, shortly after the ban, moved Madras High Court against the order and got an interim stay of the DCGI order and the case is pending in the court. CIPI, representing small drug units has, however, withdrawn its case against the ban from the Madras HC a few days ago. All these drugs have been already banned in developed nations, like the US, UK, Canada, Sweden, Denmark, Australia, New Zealand and Japan several years ago. What is being noticed in India for some time now is growing resistance from pharmaceutical companies to any withdrawal order from the regulatory authorities even if the drug is highly unsafe. One has to accept the fact that no drug is absolutely safe and all have side effects. Safety only means that the benefits of the drug outweigh the risks. Drug authorities worldwide grant marketing approval for drugs only after consideration of this principle of cost benefit. Continuation of marketing drugs with serious ADRs could be highly dangerous to the millions of patients who are taking them. Therefore, both the industry and trade have to cooperate with the regulatory authorities in withdrawing potentially harmful drugs from the market in public interest. And when the country’s most authoritative body recommends a ban on the basis of safety parameters, no pharmaceutical company has the moral ground to challenge such an action.