The Hindu : Business : Sun Pharma's focus on new chemical entities

Online edition of India's National Newspaper
Thursday, Dec 16, 2004

Business

Business

Sun Pharma's focus on new chemical entities

By Ramnath Subbu

VADODARA, DEC. 15. Sun Pharmaceuticals' new research and development (R&D) centre, SPARC (Sun Pharmaceuticals Advanced Research Centre) in Vadodara was inaugurated<243>on Tuesday by the President, <243>A. P. J. Abdul Kalam.

While speaking on the occasion, Dr. Kalam highlighted the need to be up-to-date with the latest technological advancements globally, saying the onset of nanotechnology had helped in administering the right treatment to patients. "It is time to develop molecules within the country. The Indian pharmaceutical industry must produce value-added drugs and be internationally competitive."

The President also re-iterated that to be a developed country, the common factor is competitiveness. "For this, there are three dimensions — affordable cost, assured quality and timely delivery."

Sun Pharma is among the top pharmaceutical companies in India and has nine facilities. Its R&D centre SPARC was set up in 1993 in Baroda for reverse engineering but this plant has been converted into a facility now entirely for innovation-based products. It has incurred a capital expenditure of Rs. 60 crores on setting up the new centre and has moved Rs. 54 crores worth of equipment from the older facility.

Dilip Shanghvi, Chairman and Managing Director, Sun Pharma, said "We want to bring a new drug to the market at Rs. 300 crores against Rs. 4,000 crores internationally. The focus at SPARC will be New Chemical Entities (NCEs) and Novel Drug Delivery Systems (NDDS)." While Phase I trials for an NCE cost around Rs. 25 crores, in the second phase it will be around $5 million, but the third phase may go up to $40 million. For this, the company may have to consider licensing opportunities overseas. To date, Sun has filed 30 patents. At present, one of its products is in the first phase of trials and Mr. Shanghvi said that the drug discovery initiative was on three key areas without giving details. The company is now working on several products which are in fairly early stages of trials. This year could also see some new drugs introduced in allergy and asthma. As regards NDDS, the company is working on four replicable platforms including biodegradable membranes, oral release, dry powder inhalers and targeted drug delivery systems for cancer.

On the change in the patent regime from January 2005, Mr. Shanghvi said, "Once the law changes, we will look at products that are free to market in India. We should be able to grow our business at the rate of 15 per cent per annum over the next two years."

The company is looking at opportunities overseas and has a capital of $350 million raised over two tranches of foreign currency convertible bonds (FCCBs). "We are looking for one or more manufacturing or distribution outfits in the U.S. of the same size of larger than Caraco Pharmaceuticals," said Mr. Shanghvi. Sun Pharma has now a 63 per cent stake in Caraco and plans to increase it to 75 per cent. In the domestic market, Sun Pharma is considering an entry in the fermentation business at about Rs. 250 crores.

Mr. Shanghvi ruled out the high value fermentation business such as statins as there had been too much of price erosion in the last six months.

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