SIRO Clinpharm, one India's oldest clinical research organisation (CRO) promoted by Daftary family that also owns Bharat Serums & Vaccines, is eyeing a comeback on rising offshoring of clinical trials in India by global drug makers.
Founded in 1996 by Gautam Daftary, SIRO conducts clinical trials from Phase II to Phase IV on Indian patients for various multinational and domestic drug makers.
CRO’s like SIRO are on a recovery path after clinical trial approvals by the Drug Controller General of India (DCGI) hit a bottom of 17 in 2013 from over 500 in 2010, following a public interest litigation (PIL) filed by Swasthya Adhikar Manch in Supreme Court and subsequent findings by a Parliamentary Committee about many irregularities in clinical trials, including lack of consent and compensation mechanism to the clinical trial subjects, falsification of data and alleged government failure to monitor clinical trials.
All this forced the government to come-out with stringent laws, which stifled the industry. In 2012, over 115 clinical trial and contract research companies were operating in India based out of cities like Mumbai, Hyderabad, Bengaluru and Ahmedabad.
That disruption had caused many CROs to wind-up their operations and remaining others had to relocate their trials to other countries.Revival mode
SIRO survived by focusing on providing offshore medical writing services, which now constitutes about two-third of its revenue. SIRO declined to provide financial details.
"We did fall during that phase, but have steadied the ship since then. Now, we are looking at exponential growth," Akshay Daftary, son of Gautam Daftary, who heads business development at SIRO told Moneycontrol in an exclusive interview.
Akshay along with his younger brother Karan Daftary joined the business in the last couple years and are trying to chart a new direction for SIRO.
"Our focus had shifted back to SIRO. As a family we took a bigger interest in SIRO. Two years ago, we bought back the stake held by private equity investors," Akshay said. Kotak Private Equity Group held 70 percent stake in SIRO.
In the past two years, Akshay said they have concentrated their energies on building capabilities and expanding human resources.
"We have two pronged focus. In India, we are focusing on clinical operations. Our current attention is on undertaking phase-2 to phase-4 clinical trials on Indians for MNCs and FMCG companies and alsoinching towards the space of real world evidence (RWE). In US and Europe, we are looking mainly at medical writing, which is offshored into India. We are also looking to open-up an office in the US for an operational presence there," Akshay said.
He added that the company is seeing a big uptrend of MNCs trying to come back to India, with all of them approaching it for undertaking new trials.
Offshoring of clinical trials to India is once again gaining traction as companies in the US and Europe are looking to cut costs. It is also becoming harder for companies to recruit patients, get qualified investigators and sites due to competition and limited number of these resources.
With government approvals now hovering close to 100, Indian CRO sector is now seeing growth rates of around 12 percent.
Karan Daftary attributes the rekindling of interest of global companies to government's efforts to streamline and speed-up the clinical trial approval process.
Recently, the government unveiled Clinical Trial Rules, reducing the time taken for approving applications to 30 days for drugs discovered, developed and proposed to be manufactured in India. For drugs developed outside the country, the approval time has been fixed at 90 days. If approval doesn't come in this stipulated time period, the clinical trial is deemed approved.
Currently, it takes around six to 12 months to secure approval for a clinical trial. The Ethics Committee can now be located within the same city or within a radius of 50 km of the clinical trial site. This helps to expand trial to more centres. The ethics committee reviews ethical standards and scientific merit of research involving human subjects.
The Daftary's also came out with a refreshed logo and streamlined their brand architecture to convey the continuing evolution and growth of the company.Poster boy among CROs
SIRO was born when my father (Gautam Daftary) was in Germany making a pitch to a top executive of Mucos Pharma to distribute their enzyme-based therapeutic products in India over a mug of beer.
The executive in turn asked my father whether he can help his firm to undertake clinical trials of the product in India. Thus, was born SIRO and there was no looking back.
In its hey days, SIRO witnessed a revenue growth rate of 40-50 percent, which was an eye candy for PE investors who wanted a slice of the action in the sunshine sector. At one time, even Biocon was in news to acquire SIRO.
In FY12, SIRO was running strong with a revenue of Rs 283 crore, expanded its clinical trial capabilities in Asia and Europe and started alliances with other partners in South Korea and Taiwan.
But unanticipated regulatory changes saw the company crash landing. From then onwards, it went into a shell. With more favourable conditions now, SIRO is trying to regain back its lost glory.