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Biocon's Eureka Moment - Mint Asia

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Biocon's Eureka Moment - Mint Asia

  1. 1. For subscription and customer support, e­mail: subscribe.mintasia@livemint.com Or call: Eva at +65 91082343 Bala at +65 98175928 The worst is over for India HDFC chairman Deepak Parekh on the change in the investment climate and the govt’s resolve to stick to the fiscal deficit target. > Page 8 INTERVIEW First­time voters of 2014 check in The final outcome of the 2014 general election rests on a host of imponderables, including the first­time voter, writes Anil Padmanabhan > Page 23 VIEWS The running special Fromacoupleofmarathonsin2004tomore than 100 now,long­distancerunningisquicklycoming ofage. > Page 36 LEISURE BIOCON’S EUREKA MOMENTAlzumab, which has the potential to be applied to over 100 different types of auto­immune diseases, may be just the breakthrough Biocon has been seeking for the past decade. >Pages 19­21 www.mintasia.com SINGAPORE WEEKLY ANALYSIS OF THE INDIAN ECONOMY AND MARKETS September 13 ­ September.19, 2013(Weekly) Vol.1 No.24 PRICE: SGD 6MCI (P) 060/04/2013
  2. 2. mintasia www.mintasia.com September 13 ­ September.19, 2013, SINGAPORE19 Cover BY VIDYA KRISHNAN vidya.k@livemint.com ········································· BANGALORE In early 2010, a 35-year-old woman suffering from psoriasis volunteered for clinical trials of Alzumab, an antibody then under development by Banga- lore-based Biocon Ltd to treat the chronic skin condi- tion. Having spent 11 years trying various treatment regi- mens unsuccessfully, the patient found to her surprise that the new drug produced results within eight weeks of starting to use it, with a 97% recovery rate, measured against a score called the psoriasis area severity index that’s compiled before the drug testing starts. A further 28 weeks later, the patient, who didn’t want to be named, had hope of relief and a better quality of life with use of Alzumab and Biocon realized it had struck a potential jackpot. Psoriasis is a lifelong, auto-immune disease, which occurs when the immune system sends out faulty sig- nals that speed up the growth cycle of skin cells. The disease is caused by abnormal lymphocytes (a type of white blood cells) which result in overproduction of new skin cells that merge together into plaques of thickened, scaling skin. There is no known cure for the ailment at present. Psoriasis can occur on any part of the body and is as- sociated with other serious health conditions, such as diabetes, heart disease and depression, according to the US National Foundation of Psoriasis. The disease affects 2-3% of the world’s population and 1-2% of Indian people, and the global market for TURN TO PAGE 20® Alzumab, which has the potential to be applied to over 100 different types of auto­immune diseases, may be just the breakthrough Biocon has been seeking for the past decade BIOCON’S EUREKA MOMENT DRUG DISCOVERY Funding innovation: Kiran Mazumdar­Shaw (left) with researchers at Biocon Research Centre in Bangalore. PHOTOGRAPHS: ANIRUDDHA CHOWDHURY/MINT
  3. 3. mintasiaSeptember 13 ­ September.19, 2013, SINGAPORE ° WWW.MINTASIA.COM September 13 ­ September.19, 2013, SINGAPORE ° WWW.MINTASIA.COM COVER62120 mintasiaSeptember 13 ­ September.19, 2013, SINGAPORE ° WWW.MINTASIA.COM September 13 ­ September.19, 2013, SINGAPORE ° WWW.MINTASIA.COM COVER62120 BY VIDYA KRISHNAN vidya.k@livemint.com ·············································· BANGALORE Kiran Mazumdar-Shaw founded Biocon Ltd in 1978 with an initial investment of `10,000 in a rented car garage. She went on to build the company into India’s biggest biotechnology firm with revenue of `2,538 crore in the year ended 31 March. In an interview, chair- person and managing director Mazumdar-Shaw, 60, who trained as a master brewer in Australia before becoming an entrepreneur, spoke about the Indian model of inno- vation, the development of the Alzumab treatment for psoriasis patients and the nation’s compulsory licensing policy. Edited excerpts: How challenging is it to be an innovator in India? Innovation environment in India is still very difficult. It is so tough to get regulatory approvals. We have lever- aged India’s cost and talent base—the India innovation model—to do our research. If we have to do this develop- ment in any other part of the world, it would have cost us 5-10 times (more). We are a company that has some excitement in transla- tional clinical research. All doctors in our country are much more focused on clinical practice than research. So to get doctors to do this (Alzumab) trial was very chal- lenging. We had a handful of doctors who acted as if they were doing us a favour during phase 2 trials. The moment we had results, people started enrolling for phase 3. The credibility of Indian innovation is so poor, doctors don’t want to risk original innovation. If the same trial is offered by a multi-national pharmaceutical company, doctors will happily participate. Biocon struggled be- cause it was a lone player but if an ecosystem starts evolving where more companies are involved in original research, it will be easier to get a buy-in from stakehold- ers. You think the government fosters innovation? I am very concerned about the wrong signals we are sending to the world. We have not done anything sub- stantial to build India as a strong global economy. We have wasted a lot of opportunities. We behave like the world needs us and our policy needs to be accepted by the global community. Over the years, we have sent all the wrong signals for investment in the country with the General Anti-Avoidance Rules (GAAR), retrospective tax- ation in Vodafone case and taxation anomalies in special economic zones (SEZs) which took a long time to be set right. The government has created a business-unfriendly climate. They have systematically destroyed investor cli- mate in the country. Whatever measures are good for the elections are bad for the economy and vice- versa. In the past couple of years, some high­profile patent litigations have gone against the innovator company. You think government policies concerning the pharma sector need to be revisited? We have lost sight of practical reality. We are only talk- ing about how the poor man is suffering and how any- thing to do with wealth creation is bad. We have gone back to the old era of socialistic values where anyone wealthy should feel guilty about it. This business of redis- tributing wealth rather than creating new wealth is a huge step backwards. Healthcare is the softest target for any economic poli- cy. Today, the government has abdicated its responsibili- ty to provide basic healthcare to its people but it’s point- ing a gun at the industry and saying “you provide it”. The industry has worked very hard to create a cost-effective and competitive sector. It is actually producing the cheapest drugs in the world, but on top of that the gov- ernment is saying they don’t want the industry to make that much profit either. Which industry has this sort of draconian regulation that tells you how much profit you are allowed to make? What is your take on using compulsory licensing (CL) as a way of making drugs affordable? India is respecting IPR (intellectual property rights). I don’t think there is any getting away from that, but this whole notion of compulsory licensing based on afforda- bility has to be booted out. I think CL based on drug shortage or public health emergency or pandemic is fine. But you can’t be issuing CL because of the affordabili- ty...if you really want compulsory licensing, then one must be fair to the innovator. Are you willing to give the innovator a hefty license fee as an annual recurring fee? Then let’s see if Indian companies are willing to make that payment and still willing to work in this area. Why can’t the government subsidize it through bulk procure- ment?. This sort of a draconian drug policy will see a lot of Indian companies simply stop manufacturing essen- tial drugs. And ultimately the government will import them at a higher cost so it defeats the whole purpose. All this is electioneering jargon and (it is) very difficult to make sense of it. We are being ruled by activists, PILs (public interest litigations) and courts with regulators having no role to play today in any issue. All sectors have to be led by sci- ence, data and evidence. Pharmaceutical sector is the only industry where IPR is so critical. And our domestic companies don’t innovate so they would rather not have patent restrictions. Going forward, what are the challenges facing Biocon as far as de­ velopment of this molecule (Alzumab) is concerned? The biggest challenge we have today is to build up the credibility of Indian innovation and we are trying to do that. If you find a partner who is credible he might be able to get this product in the market sooner. As we move forward, we are trying to be as thorough as possible... We are not very fussed about the trials for oth- er diseases. All of that will happen in due course. We don’t need to rush into it but we need more credibility to combat a lack of credibility Indian innovators have. psoriasis therapies is estimated to cross $8 billion by 2016, according to Biocon. Lymphocytes are agents of the immune system that produce proteins called antibodies to defend the hu- man body when it is attacked by bacteria and viruses. Sometimes, instead of protecting the body from infec- tion or disease, the immune system attacks and de- stroys the body’s healthy tissues. This is called auto- immunity. The novel “mechanism of action” of Alzumab can be applied to a spectrum of auto-immune diseases, basi- cally changing the course of treatment of such ail- ments. On 10 August, Biocon announced the launch in In- dia of Alzumab for treatment of psoriasis, saying it would come with a less aggressive dosing regimen and a longer treatment-free period, promising a better quality of life to the patient. It claimed for the drug an “excellent safety and efficacy profile with very low op- portunistic infection rates and longer remission peri- od”. At `7,950 for a 24-week course, the drug will be 50% cheaper than similar drugs in the market. The biologic drug, which will soon be tested on pa- tients with rheumatoid arthritis, can be applied to over 100 different types of auto-immune diseases including Type 1 diabetes and multiple sclerosis. Biocon’s chair- person and managing director Kiran Mazumdar-Shaw calls this molecule a “pipeline in a product”. The beginnings Alzumab may just be the breakthrough Biocon has been seeking for the past decade. After decades of dabbling with enzymes and me-too drugs—which were low investment, low risk and also delivered very few returns for the company—Biocon started scouting for potential molecules in university laboratories that could be developed into novel drugs. Mazumdar-Shaw set up Biocon in 1978 when she was 25 years old and the biotechnology industry had just started in India. She started the company in a rent- ed garage in Bangalore with a seed capital of `10,000. “The first 20 years of my career were about enzyme innovation. Over the past decade, we have transformed our business from enzymes to biopharmaceuticals but the fundamental of focusing on innovation has re- mained. Now we are focusing on drug innovation,” she said in an interview on 23 August. “When I started Biocon, even though we focused on enzymes, we ensured some level of innovation went into the process. We developed novel application for enzymes. So, from the very beginning, Biocon had an innovative business approach. For me, it is about the business of science and not the other way,” she added. In the hour-long interview, Mazumdar-Shaw spoke at length about the decade-long process of innovation that led to this path-breaking Alzumab research. The word “serendipity”—which means happy accident— was used often, both by Mazumdar-Shaw and the sci- entists at Biocon who worked on the drug. In early 2001, Mazumdar-Shaw travelled to Havana, on the northeastern coast of Cuba, visiting university ® FROM PAGE 19 laboratories for possible drug candidates in early stage of development. At the Centre of Molecular Immunol- ogy (CIM), she got interested in a molecule which, at that time, was code named “Th1”. “It was an anti-CD6 antibody and I was told by Cu- ban researchers that the molecule had some potential in auto-immune diseases like RA (rheumatoid arthri- tis) and psoriasis,” she said. The CD6 is a gene attached to lymphocytes that fights chronic infection. Lasting effect In diseases where the immune system has launched an attack on the body, the Th17 pathway only attacks the rogue cells and not the healthy cells, leading to longer remission. Th17 pathway is a subset of a type of white blood cells discovered only in 2007 and is now understood to play a key role in auto-im- mune diseases. When someone has psoriasis, for example, an anti- gen (bacteria, virus, parasite, etc.,) is presented to a “T cell”. The principle function of the T cells (Th1, Th2, Th17) is to launch a response against this anti- gen or foreign body attacking the immune system. What ends up happening is that when the T cell is presented with this foreign threat, it releases cy- tokines (molecules that act as messengers between cells). The cytokines kill the infection using the Th1 pathway or Th17 pathway. The drug not only works, its effect lasts. “As we started developing this molecule, we real- ized that the Cubans had very little understanding of the molecule. They were going down the “Th1” path so our initial focus was along Cuban understanding. As we were developing the product, during Phase 1 and 2 studies (for RA and psoriasis), we got good in- dicative results,” Mazumdar-Shaw said. “We decided on a Phase 3 study for psoriasis be- cause it was the easiest and had visible end points. When we looked at all things we were measuring, we realized that certain results were unexpected. That was our serendipity moment,” she added. The researchers soon realized that the molecule appeared to be treating cells that were not even being monitored. “We suddenly found that certain types of cytokines which were never even factored were being regulated by this anti-CD6. We realised that this actually works in the Th17 pathway.” Auto-immunity When the immunity works flawlessly, these cy- tokines kill the antigen and go back to a nascent stage until another threat is presented. But in auto-im- mune diseases, the body launches a response against its own healthy cells. “In auto-immune diseases, the cycle of attack does not stop and constantly the body is attacking itself. Earlier, the Th17 pathway was not unknown. Now, the scientific community knows that using the Th17 pathway, it can fix the immune system—stop the body from attacking itself—instead of treating or mopping up symptoms that are presented as the body constantly attacks itself,” said Abhijit Barve, head of research and development at Biocon. The Th17 pathway was discovered in 2007, but “clinical transformation” of this discovery was yet to be elucidated. Biocon’s Eureka moment coincided with a global movement in which the value of the new science in auto-immune diseases was being crystallized. The new approach has caused a shift in cell-mediated im- munity with increasing evidence suggesting that it may play an important role in the pathology of im- mune-mediated diseases. Only, unlike other researchers across the world, Biocon had data coming from Phase 3 of psoriasis tri- als to support an otherwise heavily theoretical re- search. According to experts, many companies are now looking to develop drugs using the Th17 pathway. “World over, a lot of work is being done to under- stand this pathway and its role in auto-immune dis- eases,” said S.P. Byotra, head of the department of in- ternal medicine at New Delhi’s Sir Ganga Ram Hos- pital. Unravelling the pathway “This new science is fascinating and gives hope in treating diseases like cancers and even HIV/AIDS if it is understood why the immune system acts the way it does,” Byotra said. “Earlier, diseases like tuberculosis and plague were also considered untreatable mass killers. the Th17 pathway will be crucial for over 200 auto-immune diseases so obviously all companies are looking at ways to develop drugs along this method. The proc- ess will be long-drawn but it could prevent a lot of diseases considered untreatable now,” he said. Unlike Alzumab, most drugs mop up nasty cy- tokines. Simply put, the older drugs addressed symp- toms of psoriasis such as dryness and red patches in- stead of tackling the cause of the disease. Prior to Al- zumab, patients were relapsing within 8-10 weeks. “Suddenly, we were the most advanced players in their field,” added Barve. “This pathway is still being unravelled. The disease quickly comes back with the older drugs whereas our drug actually starts regulat- ing the Th17 pathway and stops disease from devel- oping. This new pathway stops the nasty cells. Our drug basically fixes the problem with the immune system and not cleaning up skin, hence the long re- mission.” he said. As things stand now, Biocon is perhaps the only company in the world—certainly the only company in Asia—to have clinical data to support work in this area. Following the success in treatment of psoriasis, Biocon has already received approvals from the Drug Controller General of India to conduct trials on rheu- matoid arthritis. Animal model studies on multiple sclerosis have shown promising results. While the same “mechanism of action” could be applied to a spectrum of auto-immune diseases, the combined market for therapies to treat psoriasis, rheumatoid arthritis and multiple sclerosis is worth over $20 billion. Biocon will have patent coverage for the technolo- gy till 2030. The company is currently looking for partners to expand commercialization of the therapy around the globe. “It will depend on who we partner with and how we choose to commercialize this. One thing is cer- tain—we have a blockbuster on our hands,” said Ma- jumdar-Shaw. KIRAN MAZUMDAR­SHAW/ BIOCON INNOVATION ENVIRONMENT IN INDIA IS STILL VERY DIFFICULT INTERVIEW Seeking cure: Experiments underway at one of the labs at Biocon Research Centre in Bangalore. BIOCON’S EUREKA MOMENT PHOTOGRAPHS: ANIRUDDHA CHOWDHURY/MINT

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