Rajesh Jain, joint managing director of Panacea Biotec, the second-largest vaccine maker in the country, talks about the company?s plans to diversify into hospital business in an interview with Soma Das. He also talks about the significance of the Indian drug regulatory system passing the World Health Organisation audit. Edited excerpts:
The Indian drug regulator has just passed the WHO audit. What does this mean for the R19,000-crore domestic vaccine industry?
It is a great development for the drug regulator as well as the industry. It demonstrates the commitment of India to produce drugs of high quality at affordable prices. It marks a radical turning point. It was only a few years back that the drug regulator had failed the WHO inspection. It was unfortunate and actually threatened the vaccine exports from the country, which were on the verge of being banned on the pretext of our regulations being weak. So it comes as a reassurance to the global community on the quality of drugs being produced in India. This is particularly significant as India is already source to around 70% of vaccines in the developing countries (in volume terms). The Drug Controller General of India can now guide many of the regulators in other developing markets, specially neighbouring countries that have embarked on the path of strengthening their drug regulatory frameworks.
Could you give the specifics of the latest polio vaccine order that you bagged from the government?
Our company has got government orders for supply of 345 million doses of Trivalent oral polio vaccines and bivalent oral polio vaccine of over R187 crore to be supplied during the period December 2012 till May 2013 to meet the requirements of national immunisation days and supplementary national immunisation days. Of this, 80% would be shipped over next three months and orders worth R167 crore should be supplied by February.
Could you map the scope of deals that you signed with Osmotica Pharma and Kremers Urban in quick succession? And are you considering more such alliances?
We would be considering more of such alliances and these would be largely technology-driven, for instance, in the area of liposome and depot injections. Therapy areas could cover upper gastrointestinal or anti-cancer or diabetes or hormone therapy. Basically, we are targeting complex products that have limited competition due to high entry barrier. As far as the scope of existing tie-ups is concerned, while the deal with Kremers Urban is more of a marketing and distribution tie-up, the partnership with Osmotica is much deeper and involves development of products. This partnership is based on a 50:50 risk, investment and profit sharing by both companies. It has kick-started with a portfolio of 18 products across a broad range of therapeutic categories, with a scope to add new products by an executive committee represented by both Osmotica and Panacea Biotec. Panacea will receive funding from Osmotica and milestone linked payments upon achieving targets. For each product and for each new market, Panacea shall receive a fixed research fee, besides receiving 50% share of development costs.
Panacea has plans to diversify into hospital business?
Yes, and for that purpose we have already floated a subsidiary named Panacea New Rise. And the first hospital under the New Rise brand would become operational by March 2013 in Gurgaon. It would be a super-specialty facility and straddles across therapies such as orthopaedics, aesthetics, organ transplant, cancer among others. Once this facility is up and running we plan a hospital chain in other smaller cities in Northern India under a hub-and-spoke model.
