Exclusive: How did Hetero single-handedly pull off the Remdesivir challenge?

On June 21, Hetero said it had launched the generic version of antiviral Remdesivir, under the brand name COVIFOR.

The drug will be available in 100 mg vials (injectable) and is administered to moderate COVID-19 patients (on oxygen support).

Hetero said it will sell the drug for Rs 5,000- Rs 6,000 per vial.

Another Indian drug maker, Cipla, said it had launched the drug, but is yet to formally disclose the pricing. Cipla relies on its partner, BDR Pharmaceuticals, for the active pharmaceutical ingredient (API) and Sovereign Pharma for formulation.

Gilead also has a voluntary non-exclusive licence with Jubilant Life Sciences, Mylan, and a Pakistani company to manufacture and market Remdesivir in 127 countries, including India. Gilead later signed similar agreements with Zydus Cadila, Dr Reddy's and Syngene.

Hetero says that the product is entirely made in-house, giving it more control and possibly enabling it to take an early lead among Indian companies in the race to bring Remdesivir to the domestic market.

But how did Hetero, which, till now, was a near-unknown entity, get off the block first?

Bandi Vamsi Krishna, Managing Director of Hetero Group, explains the journey, in an exclusive interview to Moneycontrol.

Not new to pandemics

For Hetero, responding to pandemics with drugs isn’t new.

In 2009, during the peak of the H1N1 (Swine flu) pandemic, Hetero had pipped formidable domestic rivals in the manufacture and supply of Oseltamivir, the antiviral that was found effective in the treatment and prevention of the flu.

Gilead Sciences is the innovator of Oseltamivir, but it was Swiss firm Roche that had a license to distribute the drug in India. Roche had sub-licensed the manufacturing rights in India to Hetero.

That didn't give Hetero a huge advantage as Roche’s patent application for India was rejected, and it allowed other Indian manufacturers to come up with their generic versions.

Roche could have gone with any other company, but why Hetero?

The usually reticent Bandi Parthasaradhi Reddy, the Founder and Chairman of Hetero, in an interview to Pharmaboardroom some years ago, had said that when Roche was looking for a potential partner in India, it found Hetero ready with the process and technology to manufacture the drug, enabling it to strike a fast deal.

Reddy said Hetero never took any kind of technical support from Roche for the drug.

Hetero managed to edge out others on Oseltamivir, not because of the Roche license, but for its chemistry skills, agility, ability to backward-integrate and produce at scale. Hetero group makes a broad portfolio of cardiovascular, oncology and neurology drugs but antiviral is where its heart lies in.

Little is written about Hetero, as it privately held. But sources said that the group has a turnover of close to $2 billion, making it one of the largest privately held company in India.

Cracking Remdesivir

A similar story played out during the COVID-19 pandemic as well, albeit with a different, more complex drug.

By January, when reports about the use of Gilead’s experimental drug Remdesivir on COVID-19 patients in China started to surface, Hetero plunged into action to develop it. Those were still early days. Gilead signed voluntary licensing deal with Hetero and other companies only in the second week of May.

But Hetero's R&D machinery, back in Hyderabad, went on an overdrive in developing the process to make Remdesivir, piloting it before scaling it up commercially. There was a scramble for key starting materials or intermediates that are critical to the API of Remdesivir. Indian drug companies typically rely on Chinese key starting materials for drugs, but, in this case, they didn't have that luxury.

"This is a new product. We had difficulties in identifying raw materials; in most cases, we ended up making our own raw materials. We always see China being ahead of the game and start supplying key starting materials. In this case, the demand came quickly, and there was no time for anyone to quickly arrange for the product," said Bandi Vamsi Krishna, son of Parthasaradhi Reddy.

"Lot of time went into key starting material manufacturing," Vamsi Krishna said.

He explained that Remdesivir is complex drug, with about a 24-step process.

“This is completely indigenous. All the key starting materials are made in India. The API comes from a plant in Visakhapatnam, and the drug is formulated in Hyderabad. Other plants are also involved as it is a complex process," he added.

Will Hetero benefit?

He says the company's intention, more than profits, is to make the drug accessible and affordable to patients in India.

"Right now, we are thinking about pricing between Rs 5,000 and Rs 6,000. We have just set a price because we are the first to market. Right now, we are not sitting on demand. We have to put something on the market, as and when demand rises, volumes go up and competition hots up, prices will come down," he said.

But there is some money to be made on Remdesivir, and much of it in India, as Gilead's list of 127 countries has left out highly affected countries like Brazil, Russia, Peru, Chile, Turkey and others.

According to WHO, it is estimated that 20 per cent of COVID-19 patients will need oxygen, and a majority of them are probably fit cases for Remdesivir.

As per Worldometer’s COVID-19 tracker, India has so far reported 426,910 COVID-19 cases, of which 8,944 patients have died. Active COVID-19 cases are about 175,955. Even going by 20 per cent, India has around 30,000 patients who would need Remdesivir. That's a Rs 90 crore market, and it is expanding as COVID-19 cases in India are rising at 15,000 per day. If the drug could be used on mild and moderate patients, the market size may increase substantially.

"If you look at all other countries versus India, in all other countries, Remdesivir came after they hit the peak and a subsequent decline. So they really could not use this product, like in Italy and in China. In India, it is coming before the peak, so we can use it in our fight," Vamsi Krishna said.

He says Hetero expects no capacity constraint in India.

"The initial demand is from states like Maharashtra and Delhi. There are enquiries from other states. By July, we will work to get the product to all centres. With respect to global markets - there are many markets where the demand is still not mature. We are hearing bits and pieces of demand. We don't anticipate any issue with respect to supplies to these markets," Vamsi Krishna said.