The Telegraph
Since 1st March, 1999
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Anti-diabetes drugs to test DRL prowess

Mumbai, Sept. 29: Dr Reddy’s Laboratories Ltd (DRL) faces a formidable threat to its market-share in anti-diabetic medicines from a slew of alliances that its rivals have cobbled up to sell substitutes.

Diabetes-curing drugs is one area the company believes will account for a large chunk of future revenues, but its expectations are being tempered with the realism that other firms are teaming up for competition.

One of the challenges will come from Eli Lilly, a global leader in anti-diabetes treatment that has forged a tie-up with a US firm to develop and market a new-generation anti-diabetes molecule that could rival other medicines, including those produced by Dr. Reddy’s.

The Hyderabad-based pharmaceutical major now has three anti-diabetes drugs in various stages of development. Among them is the dual-acting insulin sensitiser Ragaglitazar (DRF 2725), which was licensed to Novo Nordisk but whose trials have been suspended.

Only last week, Eli Lilly signed an agreement under which it would develop and market Amylin Pharmaceuticals’ AC2993, a drug to treat type-two diabetes.

According to C. Srihari, an analyst at Khandwala Securities, success of this molecule will represent a significant advance in curing this form of the disease. The drug, which will help patients control blood-glucose levels effectively, will bite into the shares of competing brands, possibly squeezing sales of the two anti-diabetes molecules licensed by DRL to Novo Nordisk.

Srihari believes the elaborate marketing strategy worked out by the two companies would ensure a high success rate for the molecule. The alliance will start co-marketing Eli Lilly’s Humatroph, which might be followed by Amylin’s Simylin. Later, for AC2993, both firms are expected to marshal a strong sales force of 2,500.

The agreement requires Eli Lilly to make initial non-refundable payments to Amylin of close to $ 80 million, apart from purchasing $ 30 million of its stock. In addition, it will pay up to $ 85 million after the achievement of certain development and product profile milestones of AC2993. Both companies will share the development and commercialisation costs equally, and co-promote the product in the US; Eli Lilly will market the product in countries outside the US.

Apart from the two anti-diabetes molecules of DRL that have been licensed to Novo Nordisk, pre-clinical trials have been completed for the third one, called DRF-NPPC.

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