Companies

Delays in clinical trials will deter innovation: Biocon’s Shaw

Nalinakanthi V BL Research Bureau | Updated on March 12, 2018

Kiran Mazumdar Shaw

The recent ruling by the Supreme Court halting clinical trials on new drugs until the Health Ministry is able to monitor the process will deter innovation, says Kiran Mazumdar Shaw, Chairman and Managing Director, Biocon.

“This may have an irretrievable impact on India's ability to partake in new drug development and will lead to an exodus of innovators from India.”

Biocon has two novel molecules under development in India. One is a new oral insulin drug, which the company believes will transform treatment for diabetes.

The development trials on this molecule have been delayed as the company awaits regulatory clearance to conduct additional tests.

The earlier trials faced a setback, says the company. Trial results were impacted by selection of patients and drug administration not being ‘optimal’.

In order to validate the efficacy of the drug, the company has been hoping to conduct another set of trails but clearances have not been forthcoming. “It is quite frustrating that despite the drug proving safety and efficacy, the approval for conducting additional trials has been held up for months now,” says Shaw.

The ruling by the apex court, however, may not result in a big adverse impact for Biocon.

The revenue contribution from Clinigene, the clinical-trial arm of Biocon, is not very significant to the company’s overall business. Further, the high growth potential in its research subsidiary Syngene may more than compensate for Clinigene’s revenue loss.

Syngene, which focuses on discovery and development research, enjoys gross profit margins as high as 30 per cent. Instead of providing mere fee-based research services to clients, the company has diversified into offering an end-to-end solution, which has helped margins.

Syngene has around six molecules in phase II and III of development, of which three are already in the final phase.

Once these molecules make it to the market, the company may commence commercial supplies of these products, which will mean million-dollar opportunities for Syngene. The company targets growth in excess of 20 per cent.

Syngene received a fund infusion of Rs 125 crore from GE Capital, valuing the company at Rs 1,625 crore last year.

Biocon hopes to list this company once market conditions improve.

>nalinakanthi.v@thehindu.co.in

Published on October 02, 2013

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