In October, Takeda Pharma of Japan entered into an alliance with Advinus Therapeutics, a drug discovery research service provider from Bangalore. The multi-year outsourcing deal is focused on developing new drug candidates for various therapeutic areas including inflammation, CNS and metabolic diseases.

Advinus is expected to lead programs for creating IND-ready compounds for a novel set of targets belonging to those therapeutic groups. Takeda will reserve all commercialization rights for successful drug candidates. Advinus will receive research funding of $36 million over the term of the collaboration, and is eligible for another $9 million in milestones leading to candidate selection, as well as future clinical and regulatory milestone payments of as much as $45 million per product and royalties on product sales worldwide. It is the biggest research tie-up that Advinus has ever made.

Takeda said that Advinus’ innovative approaches to efficiently generate INDs will bolster the company’s discovery pipeline.

The Ever-Growing Crowd
Earlier in the year, TCG Lifesciences Limited announced the delivery of a preclinical development candidate for Pfizer. The small molecule candidate was developed and delivered in less than two years. As per the R&D collaboration deal the company signed in the year 2009, the U.S. drugmaker retains the ownership of the molecules and TCG will receive payouts for development milestones.

This Mumbai-based CRO and laboratory informatics company also delivered the first of two molecules to Endo Pharma around the same time. TCG Life achieved a discovery milestone in the second fully integrated discovery programs with Endo as well. Started in 2011, the Endo-TCG collaboration is a three-stage project to identify potent in vivo active novel blockers of an undisclosed target.

The Advinus-Takeda deal proved to be a shot in the arm for the sector. It helped bring the spotlight back to Indian drug discovery research outsourcing arena after a brief lull.

Reports say that companies are offshoring core drug discovery functions more frequently these days. Reasons are many. The process of drug discovery has become more complex with the advent of newer and sophisticated disciplines and applications like molecular biology and high throughput screening. Despite helping make the usually long-drawn process of drug discovery less risky and more accurate, new technologies have driven up the costs significantly. 

In the meantime, innovator companies are trimming the R&D budgets, marking a detour from the practice of steadily hiking discovery research spending. Members of the Pharmaceutical Research and Manufacturers of America (PhRMA) spent 2% less on R&D in 2011 than a year ago, owing to stalling sales in major markets, reports show.

Mounting cost pressure and drying pipelines compel drugmakers to look outside of their spheres. Adding to the growing bandwagon of offshorers are the smaller ones that are lacking in the infrastructure to carry out the complex drug discovery operations.

Upbeat Market
The global market for outsourced drug discovery services is catching up fast. It touched $9.4 billion in 2011, growing 15% more than the previous year. This market is expected to more than double, exceeding $21 billion by 2016, growing at a compound annual rate of 16% during the next five years, forecasts Kalorama Information, a market research report firm.

Such a fast-paced marketplace could offer the multinationals more options than ever before. Despite this fact, India figures prominently on the radar of R&D outsourcers. CROs from this fledgling drug discovery outsourcing market have already made a dent providing expert services in complex chemistry, biology and lead-optimization. Syngene, Jubilant Biosys, Indus BioSciences, Suven Lifesciences are the examples among the operational CROs, alongside Advinus and TCG Lifesciences.

More and more Indian generic leaders are now started making drug discovery research a focus. A few of them already have sizeable pipelines of NCEs, even though their R&D expenditure has been traditionally low. They also made strategic partnerships with large MNCs on various aspects of drug discovery. Another attraction for looking at India could be its rapidly expanding internal pharmaceutical marketplace.   

Notwithstanding the good quality of work, India still has a long way to go in terms of perfecting its creative skills in original drug discovery, thanks to its long-standing generic dominance. There are quite a few drugmakers that are still worried about the level of intellectual property protection offered by the country for new molecules. India opened its markets and started recognizing IP since 2005. Yet, the generic champions continue to fight in Indian courts and render patents for drugs practically ineffective arguing on the grounds of ill-affordability by Indian patients. Drug makers fear that certain legislations, presently in the pipeline, to make lifesaving medicines cheaper, would further threaten the IP safeguards currently in force, in the days to come.