Necessity is the mother of invention. India’s pill pushers show this better than most. With a new drug patent law in place, some of India’s pharma companies, hitherto only copycats, are now discovering and developing their own formulations. “The Indian pharma industry has risen above the generics (copycat) label,” says a survey on Asia’s pharma industry conducted by PricewaterhouseCoopers. Several members of this $7.3-billion (Rs 29,930-crore) industry appear on BW’s list of smart innovators for increasingly investing in R&D. While it is too early to label these efforts a success, some Indian pharma companies have already begun monetising their investments.

Take the Rs 1,206-crore, Mumbai-based Glenmark. In September 2004, CEO and managing director Glenn Saldanha struck the largest pharma licensing deal in Indian history with New York’s Forest Laboratories. Forest agreed to pay up to $190 million (Rs 875 crore then) in milestone payments to Glenmark for an untested asthma and Smoker’s Lung drug. It would also pay for the human testing phase and would get marketing rights in North America if the drug got to the market (see ‘Beginner’s Luck’, BW, 14 November 2005).

The compound they licensed, oglemilast, is called a PDE-4 inhibitor, which blocks the PDE-4 enzyme in lungs that causes inflammation. However, with nausea being a known side-effect, no company has been able to show that it can balance safety and efficacy in human testing to get marketing approval. According to Glenmark, animal tests show that it has cracked this problem. The potential market for such drugs is roughly $10 billion-12 billion (Rs 41,000 crore-49,200 crore). Milestone payments from the deal already equal twice the amount Glenmark spent on R&D until the deal was struck.

Forest is one of several western pharma companies whose patents are expiring. New drugs from their labs are not being commercialised fast enough. Increasingly, they are looking at research happening in labs like Glenmark’s. Saldanha has not stopped with oglemilast (which is moving far slower than expected). Earlier this year, it licensed a novel diabetes compound to German drug company Merck for up to E190 million (Rs 1,083 crore). This compound is from a new drug class known as dpp-4 inhibitors, which enhance the ability to lower blood sugar levels. Glenmark will earn royalties if these drugs hit the market. “If you have an asset that’s worth something, companies will chase you no matter where,” says Saldanha.