Dr Reddy's extols benefit of shift to drug discovery

The Hyderabad-based firm is already a leader in reverse engineering generic versions of other companies' products, but in 1993 became the first Indian pharma company to invest in its own R&D programmes. 10 years on, Dr Reddy's scientists have advanced seven novel compounds into development.

Central to the shift in strategy at Dr Reddy's has been an ambition to develop the fully-integrated company structure that could in time elevate it into the ranks of the pharmaceutical multinationals. But there are also more pragmatic reasons.

The pharmaceutical industry has been hit by a decline in R&D productivity since the mid 1990s, witnessed by a reduction in the number of new chemical entities (NCEs) launched onto the market each year. In time, this will have a knock-on effect on the generics players, who will see a reduction in new product opportunities.

Meanwhile, the opportunities for Indian companies - and those in other countries - to rapidly develop copycat versions of products still under patent elsewhere in the world is slipping away. In 2005, India will recognise international patents under its World Trade Organisation obligations, which will have a dramatic impact on the reverse engineering trade.

In 2002, India's top 10 pharmaceutical companies spent only 3.3 per cent of their revenues on research into new products, compared with the average 10 to 15 per cent spent buy their Western peers. Once the new patent laws are enforced, local drugmakers that want to stay in the game will have no choice but to compete internationally and make original medicines in-house.

Dr Reddy's had early success in adopting this approach. The first fruit of its research was balaglitazone, one of the most potent drugs in the glitazone class used in the treatment of diabetes. In 1997, Dr Reddy's licensed the molecule to Denmark's Novo, and it is due to enter Phase III testing later this year.

The two glitazones now on the market - GlaxoSmithKline's Avandia (rosiglitazone) and Takeda/Eli Lilly's Actos (pioglitazone) have combined sales of nearly $3 billion (€2.43bn) and growing at more than 25 per cent annually, said Anji Reddy, the company's chairman.

Both these glitazones are potent PPAR gamma agonists and have the problem of weight gain and oedema. Balaglitazone is a partial PPAR (peroxisome proliferator-activated receptor) gamma agonist and Phase II results indicate that it has a better side-effect profile than the existing glitazones, he said.

A second diabetes drug - ragaglitazar - was licensed to Novo in 1998. This targets both PPAR gamma and alpha and has a much superior effect on blood lipids compared to marketed glitazones.

Shortly afterwards, Novo said that, if the animal data with the drug could be reproduced in humans, "it will increase the life expectancy of diabetic patients by 10-12 years."​ Unfortunately, the equivalent dose in humans caused unacceptable side effects and the drug was discontinued in December 2002.

HDL is the key​

One good thing to come out of the project, however, was a greater understanding of the importance high-density lipoprotein or HDL cholesterol - which is often referred to as 'good' cholesterol - on arterial health. Most treatments have been developed to reduce the 'bad', low-density lipoprotein form of cholesterol, and HDL has been largely overlooked, despite the dramatic improvements in outcome associated with higher levels of HDL particles in the blood.

Dr Reddy's has developed a pure PPAR alpha agonist that boosts HDL, called DRF 10495, and will file for approval to start clinical trials of this drug in Canada next month.

But these efforts have been merely extensions of prior work achieved by developing analogues of existing compounds, according to Reddy. The real novelty - and blockbuster sales potential - lies in Dr Reddy's shift to target-based discovery.

Specifically, the company found that targetting a protein called perlecan can have an impact on atherosclerosis by three routes - blocking inflammation, cell proliferation and blood clotting. This has shown impressive activity in animal experiments and will shortly enter toxicology testing, said Reddy.

"More than the molecules that we discovered, the big difference we made is that we have gained recognition from the world that we are the front-runners in the field that we have chosen," said Reddy.

And this reflects something of a new trend for the Indian pharmaceutical industry. A recent report from Frost & Sullivan predicted that Indian companies stand to benefit from the need of pharmaceutical multinationals to boost R&D productivity by providing drug discovery platforms and licensing out development candidates.

Reddy said his company's experience answers critics of the Indian pharma industry, who have said that it lacks the wherewithal to handle the $500 million or so it takes to bring a novel product to market. He believes that in India the costs can be reduced to just 100 million rupees (€1.7m) a year, something that could be undertaken by at least a dozen Indian companies at present.

Other companies, including Ranbaxy and Orchid Chemicals & Pharmaceuticals have recently joined Dr Reddy's in starting in-house drug discovery.