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| DRL chairman Anji Reddy in Mumbai on Wednesday. (Fotocorp) |
Mumbai, Sept. 28: Dr Reddy’s Laboratories Ltd (DRL) has teamed up with Citigroup Venture and ICICI Venture Capital to form the country’s first drug development company.
The company ? Perlecan Pharma Pvt Ltd ? will be set up to develop new chemical entities (NCE) with an equity capital commitment of $52.5 million. Of this, Citigroup Venture Capital International Mauritius and ICICI Venture will contribute $22.5 million each and DRL will put in $7.5 million.
Perlecan will provide a model or a platform for DRL to develop its existing and future NCE assets through phase II trials.
DRL, which has various NCEs in its portfolio, will transfer part of them to Perlecan, which will develop the molecule till its phase II clinical trials. After that, it will either go in for out-licensing, co-development or jointly commercialise the drug with another partner.
Pharma companies, after spending on research of their own, usually out-license a drug after it reaches a particular stage. In this case, a domestic pharma company is sharing the costs of research with venture capital firms for the first time.
To begin with, DRL will transfer four NCE assets to Perlecan Pharma. These include DRF 10945, used for treating metabolic disorders, RUS 3108, a cardiovascular compound, and DRL 11605 and DRF 16536, which are also used for metabolic disorders. Of these, the first two molecules have completed phase I clinical trials, while the others are undergoing pre-clinical trials.
While there is a possibility of more NCE assets of DRL being transferred to Perlecan, the new company will have the first right of refusal on the future pipeline of DRL.
As a compensation to DRL for its transfer of four molecules, Perlecan will immediately issue warrants to the company. These warrants will be exercised based on development milestones attained by the molecules.
DRL chairman Anji Reddy said the formation of Perlecan would be a precursor to many more exciting partnerships in the area of drug discovery and development.
