It was 10 years ago that Somesh Sharma decided to leave the entrepreneurial haven of California and relocate to Mumbai. He’d had an eclectic career in academics and as an entrepreneur, with stints at medical schools at Harvard and Stanford, and three entrepreneurial ventures behind him. But he had one ambition left: To develop a new drug at a fraction of the cost that big pharma incurs. A headhunter had tracked him down for an interview at Piramal Healthcare. Sharma, who is now chief executive of drug discovery and development at the company, recalls that he went through more interview sessions here than he had in his entire 30-year career in the US.
Chairman Ajay G Piramal and director Swati Piramal may have grilled him over numerous rounds but in the end both sides wanted shots at the same goal. “I told them it’d be 10 years before they’d see any fruits of their labour, and to their credit, they stuck to their guns,” says Sharma.
“They should get very high marks for their commitment to R&D. This business requires a lot of investment and even more time to market; the beauty for Piramal Healthcare is that Ajay is willing to employ some patient capital here,” says Jasmin Patel, venture partner at Aarin Capital and former managing director at Fidelity Growth Partners India.
Swati Piramal, a doctor by training, began building the R&D team in the early 2000s, with Sharma at the head. Then, in 2010, came the killer deal: Abbott Laboratories bought Piramal’s domestic formulations business for $3.8 billion. With coffers full, the promoters’ drug development ambition got a booster shot. (Some of that money is temporarily parked—$1.2 billion in Vodafone—and some will find its way into new ventures in financial services, real estate and defence technologies.)
Results are beginning to show now.
In April, the company got European regulatory approval to sell BST-CarGel, a drug for treating patients with cartilage injuries of the knee. The drug came into its portfolio when it acquired Canadian startup BioSyntech in 2010. The potential market is $200 million in the EU alone.
In April, Piramal Healthcare also acquired the molecular imaging unit of German pharma Bayer, which comes with a portfolio of imaging tracers. (Molecular imaging measures biological processes at the molecular and cellular levels.) One molecule that’s closest to the market is florbetaben for diagnosing Alzheimer’s. The market for florbetaben is estimated to be $1.5 billion. The company will apply for regulatory approval later this year. In May, it acquired Decision Resources Group (DRG), a US-based healthcare data services company for $635 million.
These are calibrated steps in transforming Piramal Healthare into an integrated pharmaceutical company with branded products. Molecular imaging is complementing standard treatment and its market is expected to cross $6 billion by 2015; DRG has an addressable market of $5.7 billion.
Inside the company, excitement and tension is building up as one of the flagship anti-cancer molecules, P276, which is being tested for multiple cancers in three countries, enters phase III trial in India—a first from any Indian company. It has a market potential of $10 billion and the outcome may prove to be the wind beneath the company’s wings—or it could just as well take some out of its sails.
Swati Piramal is aware of what’s riding on it. A New Chemical Entity (NCE) business today is counter intuitive. Almost everyone is running away from it. Big pharma is investing less in drug discovery because it is consistently hammered by the capital market due to reduced R&D productivity (very few blockbuster drugs are hitting the market); Indian companies lack experience and deep pockets. One exception is Glenmark, but it follows an out-licensing model (where it gives bigger pharma companies licence to its molecules once they reach a certain stage).
“Everybody in India is out of it. Either we are fools or we know something that nobody else knows,” says Sharma.
Globally, oncology is the fastest growing segment, and according to IMS Health, it will continue to be until 2020. The market is estimated to reach $75 billion by 2013. With six anti-cancer molecules in clinical trials and more in other therapeutic areas joining the pipeline, Sharma says one or two molecules will enter late stage studies every year.
(This story appears in the 08 June, 2012 issue of Forbes India. To visit our Archives, click here.)
under corporate social responsibility bill which is passed recently. under this would you provide infrastructure for remote village govt schools like toilets, drinking water, reading room with continuous power(there is no power to study) in medak district. Am from a village of this district, last few years i prepared civil services exam, but am not cleared, i want work in developing remote govt schools. if there is any chance give me an opportunity . thank you
on Sep 14, 2013Since the company is looking at many more trials in India, does that mean they are going to work closely with Indian hospitals and have some sort of multiplier effect on the clinicians\' community? Many MNCs have expressed frustration at the regulatory delays and other inadequacies in conducting such studies here.
on May 31, 2012Piramal is truly Indian Global Company. Going by the pipeline analysis of the piramal the future of the company seem to be marching northwards and it is right time to invest in the company for the big returns in the future.
on May 31, 2012It\'s a very significant development. Life sciences work in this country never took off in any real sense because Indian pharma companies couldn\'t replicate (or even tried seriously) the magic of generics in new molecule drugs. Result: the eco-system never developed. If you go back a few decades, you\'d see how closely big pharma grew with national institutes in the West. Given how broken the healthcare model today is, maybe it\'s time Indian companies, which are inherently cost conscious, can show the way. Thank you for digging out this story.
on May 28, 2012