Deal with Eli Lilly, Merck on track: Piramal Healthcare

Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See latest News about Piramal Health See previous management interviews See what other Experts & Brokerages are saying about Piramal Health Piramal Health BSE | NSE 30/05/12 Are Mutual Funds betting on Piramal Health?

Swati Piramal, director of Piramal Healthcare tells CNBC-TV18 that it is one of the few pharma companies which are pushing for drug discovery. "We are convinced that it will be Indian companies which will bring new drugs to the global market at an affordable cost to help reduce the burden of disease."

The pharma company's focus is now on diabetes, on infectious diseases and cancer. At resent, Piramal Healthcare is working on molecules within diabetes and cancer.

She confirms that the cancer molecule P276 is performing exceptionally well during clinical tests. "That's our lead compound. Our diabetes compound has finished phase two, from there we will go into phase three and so on."

Piramal has in-licensing agreements with global innovator companies like Eli Lilly and Merck & Co. She confirmed that milestone payments are on track.

Below is an edited transcript. Watch the accompanying video for more.

Q: What was the mood in Davos? Are you getting a sense that Europe's troubles will continue for long? Considering that the pharmaceutical industry buzzes a lot with Europe, what is the key takeaway you got?

A: What I noticed at Davos that the governments around the world are recognising the need for better public health intervention. Angela Merkel mentioned it, David Cameron mentioned it and the President of Switzerland mentioned it. People are talking about the common need for better healthcare globally. India has miles to go to get basic healthcare needs to its people and many more things need to be done for healthcare. That was my most important takeaway - understanding that the world needs better healthcare.

Q: Tell us what the R&D pipeline is looking like? What are the molecules that you are extremely bullish on?

A: We are the one company where for the last decade have been working in drug discovery and we are convinced that it will be Indian companies which will bring new drugs to the global market at an affordable cost to help reduce the burden of disease. We know this is going to change the way the world pharmaceutical industry functions because India and China will suddenly become the places where innovation is taking place the most. We are glad to be a part of that.

We are working on diabetes, we are working on infectious diseases and we are working on cancer. The global cancer load is rising dramatically, especially in India where head and neck cancer is the number one cancer amongst people. We need to do much more - one to prevent it and second to treat it with safe, effective and affordable drugs. We hope to be part of that revolution. Our lead cancer molecule P276 is doing quite well in the clinical trials.

Q: Give us an update on how many compounds you are looking at? How many are on your radar? How many have entered clinical trials and are in which phase?

A: We have 14 new chemical entities which are globally patented and our lead cancer molecule P276. In cancer you have to do trials in different diseases. We know our compound is quite safe and works quite well. Now we have to figure out in which disease it is most effective. At the moment we are trying trials in head and neck cancer, pancreatic cancer, triple-negative breast cancer which is a very rare kind of cancer where no drug seems to work.

These are life threatening diseases with big unmet needs and our drug is going in that direction. That's our lead compound. Our diabetes compound has finished phase two, we will go into phase three and so on. So each compound is moving quite well down the track into different areas.

Q: Can we expect any milestone payments from Eli Lilly or your collaboration with Merck as well perhaps in the next few months?

A: The way it is going it is on track. I don't remember exactly the time that the milestone events are supposed to be but so far everything is on track.

Q: What may be the investments you will need for R&D in FY13? What kind of capex plans do you have?

A: Our chairman had promised an annual budget of Rs 100 crore, but as the molecules move down into later phases it does become more expensive and depends on the success of each compound. It's hard to say exactly what our budgets will be but our chairman has said that we now have a treasury which will fund very good clinical research globally.

Q: Piramal Healthcare bought 5.5% stake in Vodafone Essar. Are there any other interests that we will hear from the Piramal house itself?

A: It's a very interesting time for us where we are looking at the most important new businesses which are going to do well in the future. Financial services are very important part of our strategy. Of course, our biggest bet is still pharma and people sometimes forget that and especially it's in pharma to do with those compounds which have intellectual properties. So it's a very exciting time for the future.

Q: Will you look for more joint ventures in the R&D space?

A: We already have very interesting partnerships. They may not exactly be joint ventures but maybe acquisitions of very good technologies in pharma. It could be partnerships like drug discovery we have with Eli Lilly and Merck. So it's a wide range of different types of partnerships that we are looking forward too.

Q: What is the plan with respect to Piramal Life Sciences because the revenue is just about Rs 3-4 crore odd annually? How do you plan to work on Piramal Life Sciences going forward?

A: Piramal Life Sciences works in herbal compounds which is a slightly different kind of business. It works more on online pharmacies and has more to do with herbal compounds. In different countries the laws are different. Those products already been sold in many countries around the world including the UK, USA, Russia, so maybe 50 or so countries are already buying those drugs because they are online. They are smaller but they will grow well in the future.