The Directors take pleasure in presenting the 22nd Annual Report on
the business & operations of the company and Audited Statement of
Accounts for the year ended 31st March, 2012 along with the Auditor''s
Rs. in Lakhs
Particulars 2011-2012 2010-2011
Net Sales / Income 2915.29 1001.21
Total Expenditure 2513.56 761.74
Gross Operating Profit 401.73 239.47
Interest and 61.87 71.47
Forex Gain/Loss 1417.24 116.05
Depreciation 37.73 35.16
Profit before Tax 1719.36 16.79
Provision for Tax 557.85 3.11
Net Profit 1161.51 13.68
The Directors report that during the year under review the total income
was Rs.2915.29 Lakhs as against Rs.1001.21 Lakhs in the previous year
and the Net Profit for the year was Rs.1161.51 Lakhs as against
Rs.13.68 Lakhs for the previous year. There was a forex gain of
Rs.1417.24 lakhs due to which the profit had gone up. During the year,
the company has incurred an amount of Rs.260.35 lakhs on ongoing
product development and Rs. 135.57 Lakhs on Fixed Assets as against
Rs.286.01 lakhs and Rs. 64.33 Lakhs respectively in 2010-11.
It has been a year of significant innovation and product development.
It has been a year where the value of innovation is sadly not
recognized in due terms and we believe that this lack of acknowledged
value being unfairly reflected in the stock price of your company. We
site an example of our oral insulin technology which has immense value,
among few others, such lack of recognition.
TrabOrln - An innovative formulation for oral delivery of Insulin
We have been able to unravel the mysteries surrounding the successful
delivery of insulin by oral route which has been eluding several
companies across the world. Transgene has developed an oral insulin
formulation with a goal to provide the most preferable method to
control diabetes in the type 2 and segments of the type 1 populations.
TrabOrln eliminates the need for painful injections and expensive
healthcare professionals for insulin administration, improves patient
compliance (through greater convenience of administration), offers a
sustained release of insulin over a prolonged period, and also
eliminates the ''peaks-and-troughs'' in serum profiles observed in both
type 1 and 2 diabetic patients (which often leads to a number of other
Diabetes and the problems of Sub- Cutaneous Delivery
Diabetes is the world''s fastest growing chronic disease and currently
affects over 250 million people worldwide, a number expected to rise to
380 million by 2025. According to the World Health Organization, type 2
diabetes accounts for 85-95% of all diabetes worldwide. Global Data
analysis shows that the global type 2 diabetes therapeutics market was
worth .7 billion in 2011. By 2020, the market is expected to be
worth .1 billion, indicating a Compound Annual Growth Rate (CAGR) of
7.4% between 2011 and 2020.
Insulin therapy has evolved in the last century from using bovine (or
porcine) insulin to recombinant human insulin and more recently
recombinant insulin analogues, which represent the 3rd generation of
human insulin. Treatment of diabetes generally involves thrice daily
monitoring of blood glucose levels and injection of insulin, sometimes
four times per day, for the rest of the patient''s life. With factors
including needle- phobia, there is a relatively high rate of non-
compliance in diabetic patients, in-turn leading to improper treatment
and the development of undesirable sequelae. Even for ''compliant''
patients, strict glycaemic control is often difficult to achieve
because of variable release from the site of injection which also
depends upon the adiposity of the injection site - again leading to a
high variability between and within individuals.
Insulin therapy commonly results in weight gain in both type 1 and type
2 diabetes. This weight gain can be excessive, adversely affecting the
patient''s cardiovascular risk profile. This is often attributed to the
''non-physiological'' pharmacokinetic and metabolic profile following
sub-cutaneous administration. Thus, injected insulin avoids the
first-pass metabolism, wherein large quantities of insulin are
available to stimulate adipocytes and increase glucose and lipid uptake
into these cells. High local concentrations of insulin result in
lipodystrophy, due to areas of local down- regulation of insulin
receptors in adjacent adipocytes.
TrabOrln is a proprietary nano-encapsulated formulation that
effectively and efficiently delivers the required dosage of insulin
into the bloodstream, in a sustained release that avoids the crests and
troughs of blood glucose levels that many diabetes patients suffer from
via subcutaneous insulin injections. TrabOrln , which has the capacity
to deliver far greater quantities (dosages) of insulin has demonstrated
a remarkable reduction in the blood-glucose levels in studies conducted
at two different centers in 2012. The TrabOrln formulation utilizes
naturally occurring ''molecule-specific pathways'' to pass through the Gl
and deliver its payload of insulin.
It is with a sense of pride and satisfaction we submit to you the
highly exciting results on this novel formulation conducted at two
different centers. This enables us to file USFDA''s fast track
(505(b)(2)) application and aim for clinical development and
commercialization within 3 years.
TBL-0306 is a monoclonal antibody drug effective against three
different targets - Colon cancer, Non- Hodgkins Lymphoma and Multiple
TBL-0306 has been developed to target a sub- family of TNFRSF that is
expressed on the cell surface of Multiple Myeloma, Colon Cancer and
NHL, but has no expression on normal cells.
Target was identified and validated over a period of 3 years by
studying patient databases from numerous cancer hospitals in the USA,
ensuring a high success rate.
An immunogenic peptide epitope was then engineered from the specific
TNFRS antigen. Finally, Transgene generated mAbs specifically targeted
at the above engineered peptide.
Binding assays confirmed attack of TBL-0306 on Non-Hodgkin''s Lymphoma,
Multiple Myeloma, and Colon cancer cells. ADCC, CDC and Apoptosis
assays confirmed cancer cell killing by the chimerized TBL-0306.
TBL-0306 is now progressing towards INDA enabling studies following the
completion of humanization.
TBL-0404 Liver Cancer Drug
Hepatocellular carcinoma (HCC) is a primary malignancy of the
hepatocyte, generally leading to death within 6-20 months.
Hepatocellular carcinoma frequently arises in the setting of cirrhosis,
appearing 20-30 years following the initial insult to the liver.
However, 25% of patients have no history or risk factors for the
development of cirrhosis. The extent of hepatic dysfunction limits
treatment options, and as many patients die of liver failure as from
Hepatocellular carcinoma is the fifth most common cancer in men and the
eighth most common cancer in women worldwide. An estimated 560,000 new
cases are diagnosed annually. The incidence of hepatocellular carcinoma
worldwide varies according to the prevalence of hepatitis B and C
infections. Areas such as Asia and sub-Saharan Africa with high rates
of infectious hepatitis have incidences as high as 120 cases per
Emerging evidence strongly suggests a critical role played by
miRNA-mRNA interaction in the initiation and progression of human
cancers. It is even possible to categorize tumor types and their origin
by virtue of their miRNA profiles. The role of miRNAs in human cancer
is further supported by the fact that over 50% of miRNA genes are
located at fragile genomic loci that are frequently altered by
deletions and amplifications.
In Hepatocellular Cancer (HCC), the most common form of Liver Cancer,
it is estimated that roughly 37% of miRNA genes have alterations in the
DNA copy number at genomic loci. Several studies identified
abnormalities in miRNA expression due to either gain or loss of gene
copy number that were unique to HCC. Over-expression or under
expression of certain miRNAs have been shown to be specific for HCC.
TBL-0404 is an miRNA identified by Transgene whose expression is
down-regulated in liver cancer, that is delivered by TRABI-AAV.
TBL-0404 has been shown to negatively regulate the cancer epigenome by
directly targeting a metastasis specific gene in liver cancer. TBL-0404
represents the forced expression of the specific miRNA by our
proprietary AAV vector.
Investigations by TBL have shown that TBL-0404 suppresses HCC cell
growth, proliferation and invasion in-vitro and tumor forming ability
TBL-0905 Breast Cancer Drug
Breast cancer is by far the most frequent cancer among women with an
estimated 1.38 million new cancer cases diagnosed in 2008 (23% of all
cancers), and ranks second overall (10.9% of all cancers). 1 in 10 of
all new cancers diagnosed worldwide each year is breast cancer and is
the most common cancer in women in both developing and developed areas.
Incidence rates vary from 19.3 per 100,000 women in Eastern Africa to
89.7 per 100,000 women in Western Europe, and are high (greater than 80
per 100,000) in developed regions of the world (except Japan) and low
(less than 40 per 100,000) in most of the developing regions. It is
also the principle cause of death from cancer among women globally.
TBL-0905 is a novel shRNA that targets a gene critical for the
progression and metastasis of Breast Cancer. The target gene is
abnormally over- expressed in Breast Cancer cells and absent in normal
TBL-0905 is targeted at metastatic Breast Cancer, and delivered by
TRABI-AAV. Transgene has cloned the required Adenoviral genes in a
plasmid, and hence no adenoviral contaminations in the purified AAV.
Our work has shown that TBL-0905 promotes apoptosis and inhibits
motility of breast cancer cells In Vitro.
In in-vivo animal studies, the drug demonstrated remarkable tumour
regression (>75%) at the end of 8 weeks.
CoBenCo-TD is a blend of derivatives / analogues of Vitamin B12,
Vitamin D and Curcumin, delivered via Transgene''s unique patented
technology called TrabiDerm , which transforms the formulation into a
micro-emulsion that is designed to be applied topically. It is a
water-in-oil microemulsion technology that is novel and innovative, a
new concept in getting water soluble molecules through the skin.
CoBenCo-TD is a unique non-steroidal anti- inflammatory drug, a
patented micro-emulsion consisting of derivatives / analogues of
Vitamin B12, Vitamin D and Curcumin.
CoBenCo-TD has demonstrated in carrageenan mouse models a reduction of
inflammation by >70% within 72 hrs.
CoBenCo-TD has already passed toxicology test on rats.
CoBenCo-TD has 100% drug incorporation with >60% bioavailability.
CoBenCo-TD is targeted against inflammatory conditions such as
arthritis and skin conditions such as Allergy, Psoriasis, Eczema and
also in other inflammatory conditions such as Alveolitis and Pulmonary
fibrosis and Diabetic neuropathy.
CoBenCo-TD has application in individuals with deficient in vitamin
B12, or vitamin D both increasing in epidemic proportions.
CoBenCo-TD can be administered to animals too
- dogs, cats etc devoid of any side effects, as generally seen with
standard anti-inflammatory drugs.
CoBenCo-TD ''s unique platform is employed in developing another
exciting drug against neuro- degenerative diseases such as Multiple
Sclerosis (MS) & Parkinson''s.
TBL-1203 AIDS (Therapeutic) Vaccine
Since the first report in 1981, more than 67 million persons have been
infected with HIV, and more than 27 million have died of AIDS. More
than 40% of new infections worldwide occur among adults in the age
range of 15-24 years. In fact, AIDS is now the leading cause of
premature death among people 15 to 59 years of age.
While the research for an effective HIV vaccine continues, which might
take few years to completely realize, there is immediate need for an
efficient alternative treatment besides the present antiretroviral drug
therapies for treatment of HIV infected persons. Though the current
antiviral drug treatments are effective in controlling the HIV
replication to a large extent, are ineffective in mounting the HIV
specific, especially envelop specific (gpl20) CD4 Thl responses, which
are proven to be essential for complete viral clearance.
HIV/AIDS remains both a medical and economic challenge in developing
countries especially in Sub-Saharan Africa. Unfortunately, after nearly
30 years of research there are still three compelling facts driving the
development of new anti-AIDS drugs and delivery systems:
i) there is a lack of an effective vaccine or prophylactic agent that
would provide protection for the foreseeable future,
ii) there is a constant need for both less expensive and more tolerable
drug therapies, and
iii) the development of resistant viral strains in
treatment-experienced patients continue. The late Dr. Paul Janssen
described four ideal characteristics of a novel anti-HIV drug.
The drug must possess:
i) high antiviral activity against both wild- type and mutant virus,
thus a drug must be effective despite the genetic flexibility of the
virus and it must anticipate resistant strains that may develop once
therapy is initiated,
ii) high oral bioavailability and a long elimination half-life to allow
for once daily dosing, which is considered the gold standard of any
iii) have minimal adverse effects, which will ultimately impact patient
iv) be easy to synthesize and formulate into dosage forms, which
ultimately impact the cost of the drug for both the manufacturer and
the patient. However, the development of drugs that meet these criteria
is an arduous task.
TBL 1203 - a novel therapeutic vaccine against AIDS
TBL 1203 is conceptually designed to restore gpl20 specific Thl
responses (which have the potential to control HIV) in HIV infected
persons through selective abrogation of gpl20 antibody producing B
cells so that the immune responses will shift towards Thl type from
previously Th2 type.
TBL 1203 is an immune-toxin constructed by recombinant technology that
specifically targets and kills the gpl20 antibody producing B cells.
Removal of these B cells and hence the gpl20 specific antibodies
through this immune correction mechanism will have many positive
Retroviral drugs limit HIV replication but do not eliminate the virus
as they do not restore the cell mediated attack mechanism on the virus.
Hence, the virus bounces back once treatment is discontinued.
TBL 1203 focuses on the restoration of gpl20 specific Thl responses
(which have the potential to control HIV) in HIV infected persons.
TBL 1203 targets selective abrogation of gpl20 antibody producing B
cells, (that express anti- gpl20 Abs on their surface) so that the
immune responses shift towards Thl type from the previous Th2 type.
The cytotoxin (CTx) targets all APC that have anti- gpl20 Ab on their
surface which would include all those macrophages (which potentially
are the store of the latent HIV virions) actively involved in
processing antigen, plus DCs.
The vaccine has demonstrated exciting results during the pre-clinical
in-house studies by selective killing of only the HIV infected cells -
This sets it apart from any other existing drugs.
DHA, an Omega-3 fatty acid is the second biopharmaceutical product
developed by Transgene and started its commercial production offering
the product in oil, powder and formulated capsule forms. The marketing
efforts over the last 6-8 months have started to yield the expected
results from Q2 of 2012-13''onwards.
Tacrolimus is a powerful immune-suppressant drug, the technology for
the manufacture of this is being developed by the scientists of
Transgene. The technology is optimized and the management is looking
to commence the commercial operations soon.
We are happy to report that we are due to sign a collaborative
agreement very soon with one of the largest European pharmaceutical
companies for the manufacture and marketing of this drug throughout
Europe, USA and South American countries. The management is
simultaneously exploring the possibility for a similar tie-up with
another pharma company for manufacturing and marketing this drug in the
rest of the world.
Intellectual property and patents: We have been active in filing
several non-provisional patents in continuity and in addition to our
existing provisional patents based on the advances made in each drug
under development supported by the in-vitro and in-vivo data generated
during the year.
Expansion of scientific staff: In line with the expansion of
manufacturing operations and with advancing R&D milestones, several new
and experienced employees have been added while few others have been
replaced by qualified and experienced leaders.
In spite of increased profits keeping in mind of the fund requirement
for the advancement of product development which is at inflection point
for several projects your Directors are unable to recommend any
GROWTH PLANS AND OUTLOOK
A recent trend is seen in the pharma and biotech sector with a focus on
emerging markets. Companies like Mylan, Pfizer, Merck, Eli Lilly,
Glaxo and Sanofi are all looking to expand their presence in India,
China, Brazil and other emerging markets. Until recently, most of the
commercialization efforts were focused on the US — the largest
pharmaceutical market — along with Europe and Japan.
Emerging markets are slowly and steadily gaining more importance and
several companies are now shifting their focus to these areas.
According to the IMS Institute, spending on medicines in the emerging
markets will almost double to 5 billion - 5 billion in five years
from 4 billion in 2011.
As far as developed nations are concerned, the IMS Institute expects US
spending to go up by billion - billion (1-4%) in the next five
years. The introduction of medicines targeting unmet
needs and higher patient access resulting from Obamacare are expected
to drive growth.
However, growth in Europe will continue to be pressurized by austerity
and cost-containment measures. According to the IMS Institute, growth
in Europe will range from negative 1% to positive 2%. The Japanese
market is expected to grow at a slower pace annually (1-4%) through
2016 compared to the last five years.
Outlook for future
The biotechnology industry has emerged as a major growth area in the
global healthcare industry. Since its emergence in the 1970s,
biotechnology industry has shown tremendous growth to reach
approximately billion in 2008.
According to Ernst and Young, the biotechnology industry in India stood
at billion for Financial Year 2010-11. Indian biopharmaceutical
industry constitutes 60% of the biotech industry and grew at 21% y-o-y
to reach .3 billion in 2010-11, which is approximately 15% of the
Indian pharmaceutical industry. Vaccines, insuJin, erythropoietin and
monoclonal antibodies have been the mainstay of the biopharma segment.
The key concerns that puts Indian biotech at '' critical juncture -
Indian companies are not able to launch new product at regular pace in
the domestic market, multiple regulatory bodies resulting delays,
companies facing funding constraints as investor community shied away
from early stage ventures, no optimal trained manpower to cater the
biotech industry demand and most of the biotech parks across the
country are not congenial for pure-play biotech manufacturing
India is already facing stiff competition from China, Korea,
Singapore, and more recently Malaysia, in terms of attracting
investments from MNCs. said Ajit Mahadevan, Partner, Ernst & Young
adding that this has been mainly due to the better technological and
scientific competence, better infrastructure, tax and duty exemptions,
and easier regulatory procedures of these countries compared to India.
Oncology and infectious diseases are the high growth therapeutic areas
that will drive the growth of the biotechnology industry. The
biotechnology industry pipeline mainly comprises of products for
oncology (35%), infectious diseases including HIV (28%) and others
(37%). Oncology constitutes a significant part of the pipeline
portfolio for most of the biotech companies. Other important focus
areas for the top biotechnology companies include, infectious diseases
and CNS disorders. According to GBI Research''s analysis, the oncology
based sales will potentially value approximately .8 billion in 2015.
At Transgene, we have always believed that innovation is the best way
to build a global organization that delivers outstanding results.
Today, Transgene has a pipeline of more than six molecules in
development - both novel bio- technology and bio-generic drugs, some of
them such TrabOrln and mAb and SiRNA drugs being first-in class
globally. At Transgene, innovation is the key word repeated often,
developing new processes, innovating new technology platforms that spin
out new and novel products.
The company''s strategy builds on evolving these candidates to a stage
of strategic partnerships or out-licensing them at ari appropriate
phase of the development. In the therapeutics area, commercialization
of some of these technologies combined with strategic partnerships for
manufacturing and marketing of bio-generic drugs provides secure cash
flows from long-term partnerships with large pharmaceutical companies.
Strategic partnerships with established CRO companies within and
outside India for advancing the novel drug pipeline accelerate the
process for regulatory approvals in India, Europe and North America.
We may need to raise significant amounts of additional capital that may
not be available to us.
We expect to make additional capital outlays and to increase operating
expenditures over the next several years as we hire additional
employees and support our preclinical development, manufacturing and
clinical trial activities, as well as commercialize TrabOrln '' TBL 0306
etc and position our other product candidates for potential regulatory
approval and commercial sale. Although some of these expenditures
related to TrabOrln and TBL 0306 are expected to be shared with our
potential partners, and we expect to offset some of these costs with
sales or out-licensing proceeds of TrabOrln , we may need to raise
significant amounts of additional capital. We may seek additional
funding through public or private financings, including equity
financings, and through other means, such as collaborations and license
If adequate funds are not available to us when we need them, we will be
required to delay, reduce the scope of or eliminate one or more of our
development programs, which may adversely affect our business and
operations. Our future capital requirements will depend upon a number
of factors, including:
the rate of progress and cost of the confirmatory studies that we are
required to conduct as a condition to the FDA''s accelerated approval of
TrabOrln the time and costs involved in obtaining regulatory approvals
of TrabOrln in other countries;
the size, complexity, timing, and number of our clinical programs
involving other drug candidates;
our receipt of milestone-based payments or other revenue from our
collaborations or license arrangements;
progress with clinical trials;
the costs associated with acquisitions or licenses of additional
products, including licenses we may need to commercialize our products;
the terms and timing of any future collaborative, licensing and other
arrangements that we may establish;
the costs involved in preparing, filing, prosecuting, maintaining and
enforcing patent claims;
the timing and cost of milestone payment obligations as our product
candidates progress towards commercialization; and
competing technological and market developments.
EMPLOYEES STOCK OPTION SCHEME
The employee stock option scheme has not been implemented so far.
Sri P Narayana Murthy and Sri S S Marthi retire by rotation and being
eligible offer themselves for re-appointment.
ISSUE OF GDRs
The company was able to successfully issue further 2500000 GDRs @ USD 7
per GDR which were fully subscribed. The underlying shares of 25000000
Equity Shares of Rs.10/- each were listed on the Bombay Stock Exchange
Limited w.ef. 4th April, 2012. .
The company has not accepted any Fixed Deposits and the provisions of
section 58A of the Companies Act, 1956 are not applicable to the
M/s Sarath & Associates, Chartered Accountants, Statutory Auditors of
the Company retire at the ensuing Annual General Meeting and are
eligible for reappointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under the Companies Act, 1956, your Directors wish to
(a) That in the preparation of the Annual Accounts, the applicable
accounting standards have been followed.
(b) That the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent, so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for that period; ,
(c) That the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
(d) That the Directors had prepared the annual accounts for the year
ended 31st March 2011 on a going concern basis.
Pursuant to clause 49 of the listing agreement, your Company has taken
adequate steps to ensure that all mandatory provisions of corporate
Governance as prescribed under the listing agreement of the Stock
Exchange with due compliance of all the applicable laws, rules and
regulations. A separate report on Corporate Governance and the
Auditor''s certificate on its. compliance are annexed hereto and forms
part of this Annual report.
The key to our success is to develop core values within all of our
staff which lead to an environment where they believe that what they
are doing is making a difference. The core values with which we operate
are participation, achievement, trust and respect, innovation and
Transgene recognises that in an industry based on innovation and
research and development, its employees are some of its biggest assets
and it seeks to communicate and, where appropriate, consult with them
on matters affecting them as employees, in the correct manner.
Transgene provides training and development appropriate to individual
needs and offers remuneration packages (including pensions, permanent
health and life insurance) and a working environment that are designed
to be both fair and competitive with larger companies within the
There is no employee whose particulars are to be furnished pursuant to
the provisions under Section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975 as amended by
the Companies (Amendment) Act, 1988.
CONSERVATION OF ENERGY, ENVIRONMENT, TECHNOLOGY ABSORPTION AND FOREIGN
A. Conservation of Energy, Power and Environment:
We are committed to minimising the impact of our activities on the
environment and energy efficiency is the most important means of
climate protection currently available to the company. Efforts-for
conservation of energy and fuel consumption are ongoing processes in
the Company and every effort is made in that direction. .
B. Research & Development:
The Company''s R&D division continues to be recognized and certified
under DSIR guidelines. The company fosters the development of
molecules owned/ co-owned by Transgene Biotek Ltd, in terms of finding
right CROs in India, US and Europe based on their capabilities,
overseeing, analysis and monitoring of information on in-vivo efficacy/
toxicology studies being conducted within or outside India.
C. Foreign Exchange Earnings : Nil
D. Foreign Exchange Outgo : 3,30,57,704 ACKNOWLEDGEMENTS
Our employees remain crucial to the success of Transgene and it is
their skill and expertise that have enabled us to achieve our progress
to date. This has been recognised at various meetings where, over the
past twelve months, Transgene has made presentations on its drug
We are committed to the development of a motivated and professional
workforce in order to build a business that is constantly looking to
innovate and evolve. On behalf of the Board, we thank all our staff for
their hard work and continued support and commitment.
Your Directors wish to place on record their gratitude to the
Government authorities, for the support and co-operation received from
M/S Union Bank of India, Bankers of the company, Shareholders,
Auditors, Customers, vendors, business associates and Staff of the
Company for their valued support during the year under review.
By order of the Board
For TRANSGENE BIOTEK LIMITED
Dr. K. Koteswara Rao
Place: Hyderabad CHAIRMAN &
Date: 03-09-2012 MANAGING DIRECTOR