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BL Research Bureau

The Suven Life Sciences stock has surged 19 per cent on the grant of its very first product patent in the US, but the stock reaction appears to be premature. The patent issuance only covers drug candidates currently developed for Central Nervous System (CNS) disorders.

The company may not have the financial wherewithal to take a new drug from the lab to market and hence out-licensing may be the only viable way to translate such patents into actual revenues. Suven posted a 50 per cent dip in net profits in September quarter,

Since 2003, more than 20 per cent of Suven’s revenues have been spent on the drug discovery programme, though it derives 90 per cent revenues from Contract Research and Manufacturing Services. The company’s drug discovery efforts have now begun to bear fruit.

Suven has filed its first Investigational New Drug application with Drug Controller General of India to conduct the clinical Phase-I study on their developmental candidate SUVN-502. It is also conducting Phase-I studies outside India.

Phase-I data for SUVN-502, which would help validate the drug for out-licensing, will come out only in the latter half of 2008. Reports indicate that Suven may want to go all the way up to the proof-of-concept stage in the trials, that includes Phase-IIA in some cases.

Though upfront payment could also be bigger at this stage, this may be time consuming, apart from adding to uncertainty.

Although the market potential for CNS disorders is estimated to be around $18 billion, drug discovery in this area is fraught with major technical issues like blood-brain barrier, apart from others such as regulatory clearances and huge expenses, which existing therapeutics find difficult to surmount.

As a target area, drugs for CNS disorders take a longer duration to get to market. As opposed to 12 years for other therapeutic areas, CNS drugs can take a maximum of 15 years to come into the market.

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