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C.R. Sukumar

To de-risk co from uncertainties of new molecules

Hyderabad , Oct. 2

Natco Pharma Ltd is on its way to entering the dedicated research and development company bandwagon soon.

The Rs 207-crore active pharma ingredients (APIs) and formulations company is contemplating hiving off its R&D division into a separate outfit.

"Natco, which has already found promising results from two of its new chemical entities (NCEs), has decided to take up the entire R&D activities by a separate corporate entity," its Director and Chief Financial Officer, Mr P. Bhaskara Narayana, said.

According to him, the key idea is to de-risk the company from the uncertainties of the success of these molecules, apart from the high costs associated with filing of investigative new drug application (IND) for these molecules.

The two NCEs, used for combating chronic myeloid leukaemia, have successfully passed the in vivo and in vitro studies as well as animal testing and are now ready for further tests, he said.

The company proposes to rope in leading venture capital funds and private equity players to pump in substantial funds for taking forward the R&D activities on the promising molecules and support filing of INDs.

"We have already initiated talks with a couple of leading venture capital and international funding agencies to ensure financial support to the proposed new research entity.

"In the initial round of discussions, they have shown interest in partnering with us and we expect to firm up deal before the fiscal-end," he told Business Line.

Further, according to Mr Bhaskara Narayana, the company is also actively pursuing the de-risking strategy with regards to the costs of filing abbreviated new drug applications for both APIs and finished dosages. Stating that negotiations with couple of leading global players for entering into agreements, similar to that recently inked with the US-based Akorn Inc, were on, he said the company expects to firm up two more pacts before the calendar year.

Natco has already entered into a definitive supply agreement with Akorn Inc for the supply of two APIs on a margin-sharing basis.

Under this, Natco would supply APIs for both drug products, while the US company would focus on manufacturing the finished product, regulatory submissions, marketing and distribution in the hospital, clinical and home healthcare markets in the US and Canada, he said.

According to Mr Bhaskara Narayana, Natco, which had acquired controlling stake in a US-based retail pharmacy stores last year, is currently in the process of acquiring more such stores.

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