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Dec 01, 2009, 05.59 PM IST
Integrated pharmaceutical industry player Jubilant Organosys, through its Bangalore-based subsidiary Jubilant Biosys Ltd, has extended drug discovery pact with Eli Lilly for five years.
On the back of this news, the stock touched an intra day high of Rs 317.45 and an intra day low of Rs 298.30. At 14:57 pm the share was quoting at Rs 310.50, up Rs 9.70, or 3.22%.
In an interview with CNBC-TV18, Hari S Bhartia, Co-Chairman and Managing Director of Jubilant Organosys, spoke about the latest happenings in the company and his outlook for the sector.
Here is a verbatim transcript.
Q: Could you tell us if amongst the 15 odd steps in drug discovery, where does this falls—are you doing lead optimisation, are you doing some other part of the process and could you quantify it in dollar terms—do you have any risk of the amount is it fixed and you get 10-15 million every year for the next five years?
A: In Jubilant Biosys we take, from a very early stage, a target and take it to the preclinical stage. This follows all the steps, from structure base, drug design to target validation sometimes, from target to hit, hit to lead, lead to optimisation and then converting that into candidate. So before it goes into human, Biosys can do almost all the work that is required to take it to the candidate stage. So it’s an integrated drug discovery platform that we run for our clients. If the clients would need to take it to the clinical stage then we have a development company which can take it from preclinical stage, to proof of concept, to phase three clinical trials. As you are aware with Eli Lilly we also have a joint venture which specially does the early stage development work which is to take from preclinical to phase two proof of concept.
Q: Give us some numbers; what kind of inflows are you expecting from this deal. The release speaks about milestone payments. When are you expecting and how much, if you can put some kind of numbers to this deal?
A: It’s very difficult to put the numbers on this and we do not want to put the number because we are not disclosing it separately. But what you can see is that in the last four years we have delivered almost two preclinical candidates and we are moving from a project based to a portfolio based deal for the next five years. What it only goes to show—earlier on if you see people thought India is very early on drug discovery and that cannot be done here. So I think the pioneering effort that we did, which we started almost five years back is to prove that in the drug discovery in India you can run large portfolios and you can deliver candidates at different levels. So the next five year collaboration would be on multiple therapeutic areas. It is very difficult for me to put the numbers. But a large part of it forms research funding and we also get milestone payments which are risk based.
Q: In the drug discovery system a lot of the clinical trials that have been setup by some of the pharma companies are reverse engineering of a lead compound that’s already been optimise. What exactly are you doing for Eli Lilly that’s different at the moment and some number would be important because at the end of day shareholders need to figure out whether this is a lot of money or this looks nice esoterically but it doesn’t translate into any commercials?
A: We are not doing a repositioning work. What you said just now means that you are trying to take an existing drug and trying to reposition it. We are actually discovering new drug. Its cutting edge work could be done anywhere else in the world. We are discovering new drug which then get patented, goes to clinical then passes through clinical and then it will be launched in the market. So in reality it’s like anywhere, any large pharma would do, we are doing the same thing. I am not putting numbers right now because we run many collaborations across the board. I think the press release points out is a success of our programme that means what we started four years back has given good results to our clients and they are now extending collaborations and we have done this with many other.
Q: In the last four years how much has your collaboration made for you Rs 50-100-150 crore perhaps it will give an indication of the next four years?
A: At this time I am not giving numbers because this includes both research funding and milestone and we are not separately disclosing our research funding numbers or milestones from each and every client because we run it for Lilly, we run it for AstraZeneca, so we are really not allowed to disclose separate numbers.
Q: Can you tell us if research unit is positive or profitable at EBITDA level or when will it be?
A: This year you will see our research units are positive EBITDA level and we are starting to get returns on whatever investment that we made and starting to prove a point that we can deal with multiple clients and we can do cutting edge drug discovery. The development of drug discovery takes time but I think in five-year’s time, we have put a very large platform; actually India’s largest platform for drug discovery. So the point is going forward this can only expand and it can only grow and probably lead to bigger collaborations.
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