February 1, 2006 (Vol. 26, No. 3)
An Uptapped Seam of Outsourcing Opportunities
Outsourcing part of a drug discovery program from a U.S. pharmaceutical company to an Indian company can save up to $200 million on development costs, claimed David Hawkins, Ph.D., a consultant at U.K. Trade and Investment (www.uktradeinvest.gov.uk), the U.K. governments inward investment and trade agency.
Dr. Hawkins remark, made during ERBIs recent Doing Business and Research in India meeting in Cambridge, U.K., was corroborated by Harald Mottl, Ph.D., of 3A Strategy Consulting (www.3a-strategy.com), a company that supports European enterprises entering new international markets.
Savings are amazing using Indian companies, with the cost of producing each NCE reduced by as much as eight-fold, Dr. Mottl commented. This is due mainly to cheaper labor. A trained Indian scientist earns around one tenth of the salary of a European or U.S. counterpart. This is not all India has to offer as it has strengths in the four Cs as wellcost, capacity, capability, and communication.
Chemists, Doctors, People
India has a lot to recommend in terms of capacity. With a population of 1.1 billion people there is no shortage of potential workers or patients. Many reports estimate that there will soon be an insufficient number of trained chemists in the U.K. and Germany to meet the burgeoning demands of their biotech and pharma industries. This makes India, with its developing capabilities in process chemistry and large number of FDA-approved pharmaceutical manufacturing plantsthe highest outside the U.S.an attractive prospect for outsourcing some types of chemistry research and scale-up.
Astex Therapeutics (www.astex-therapeutics.com) has been using Indian partners as a method of flexibly increasing its headcount for three years. India has a long history of producing well-trained organic chemists so we outplace 10 percent of our chemical synthesis, or three full-time chemists per year, to Indian companies, such as Biocon and Avra Labs, explained David Rees, Ph.D., director of medicinal chemistry.
The work is mostly repeat literature chemistry or synthesis of low molecular weight screening libraries. We have been happy with the quality of the results so we will continue to use Indian companies for this type of research, because it allows us quick access to chemistry expertise as and when we need it.
At the clinical end of the drug development cycle, India offers untapped capacity too, according to Nermeen Varawalla, M.D., Ph.D., vp, business development at PRA International (www.prainternational.com).
India has a large population of treatment-nave patients suffering from diseases of the tropical and industrialized world. There are few competing pharma company trials in India, which means many Indian clinical studies recruit patients 10 times faster than they do in the U.S., Dr. Varawalla said. Also, it takes, on average, 14 weeks to set up a trial, so even large trials can be up and running quite quickly.
A Different Offering
Companies such as PolyTherics (www.polytherics.co.uk), a University of London biotech spin-off, and AstraZeneca (www. astrazeneca.com) have also turned to India because it is offering technology and expertise that is difficult to find elsewhere.
Indian biotech and pharma companies are being encouraged to develop solutions for the diseases that directly affect their people and therefore firms, such as Shantha Biotechnics (www. shantabiotech.com) are producing drugs and drug candidates for hepatitis.
Professor Sunil Shaunak, M.D., Ph.D., founder of PolyTherics, explained that Shantha is producing an interferon alpha from yeast, which if used in conjunction with ribavirin can cure hepatitis C infection.
Shantha needs to manufacture a pegylated version of this therapeutic protein cheaply and also ensure that it is stable in a tropical climate. The best way to achieve both these aims is to add a polyethylene glycol molecule to the protein. The pegylation technology available currently is so heavily patented that Shantha can not afford to use it in their manufacturing process, as it would then make the drug too expensive.
At PolyTherics, we have developed a novel protein pegylation method, which is currently outside of the patent monopoly. So it makes sense for us to team up with Shantha to provide the missing piece.
AstraZeneca has made a much larger commitment to research in India. In 2001 it created a wholly owned drug discovery facility in Bangalore, currently employing 85 scientists. When we set up in India we failed to realize the full potential Indian science could offer us. Over time, we have recognized that there is exceptional expertise here in diseases that are largely ignored in the West, and our Bangalore facility is now strongly focused on tuberculosis research, said Barry Furr, Ph.D., chief scientist and head of the project evaluation group at AstraZeneca.
Right for Everyone?
India does have some gaps in its drug discovery and development offering. The perception is that medicinal chemistry is well established, while preclinical research is still being developed, and Phase I studies are beginning to be set up. Relatively straightforward repeat organic synthesis works well, but we have not tried larger-scale medicinal chemistry projects, Dr. Rees commented, Also, we have found with organic synthesis, the timelines are sometimes longer than in-house, mainly because deliveries from chemical suppliers are sometimes slower in India and can hinder the progress of work.
According to Dr. Furr, areas, such as drug safety, are also limited, as there are not enough facilities offering primate studies and DMPK analysis. However, with a large preclinical testing center at Hyderabad planned, this could all change. Additionally, Phase I studies are currently only allowed for drugs of Indian origin.
At the ERBI meeting many speakers agreed that for those companies looking for opportunities to outsource chemistry, produce drugs for diseases of developing countries, or set up later-stage clinical trials, India offers much more than just cost savings.
Large companies never have an even workflow, so it is essential to outsource some peaks of activity, while still maintaining the knowledge base in your company to resource for the troughs, Dr. Furr explained. In this respect, India offers great value as it has well-trained and committed researchers.
Some Western companies have regarded India as a no-go area because of problems with protecting their intellectual property, Jeanette Walker concluded. But with the signing of the World Trade Organization Trade-Related Aspects of Intellectual Property Rights agreement, India is really committed to removing that last stumbling block.
This will, I believe, encourage European companies to consider dealing with Indian biotechs on a much deeper level. Because of the skills of its scientists coupled with a strong desire to develop its own pharma industry, India is becoming more than just a place to offshore your chemistry. As Dr. Shaunaks collaboration with Shantha shows, it can offer an excellent opportunity to out-license technology, and I would encourage European companies to consider this avenue more actively.