Hyderabad: The Indian drug candidate considered closest to launch, Dr Reddy’s Laboratories Ltd’s locally developed diabetes drug Balaglitazone, could be substantially delayed because Rheoscience A/S, the Danish firm conducting phase III clinical trials on it, has run into a financial crisis.
The parent company of Rheoscience, Nordic Bioscience, is likely to take over the trials if Rheoscience ends up being liquidated, according to Hans Perrild, the principal investigator for Balaglitazone trials. Dr Perrild, an associate professor of endocrinology and gastroentrology at Bispebjerg Hospital in Denmark, is in charge of the Balaglitazone trials and is responsible for reporting the trial updates to the Danish drug regulator.
Thomas Nielsen, chief executive of Rheoscience, would only say that “certain operations of the company will be closed down”. He declined to elaborate.
Balaglitazone, intended for use in the treatment of type 2 diabetes, is the drug candidate that was considered closest to being launched—sometime in 2011—by any Indian pharmaceutical company.
Phase III clinical trials are primarily a means of establishing the advantages of a new drug over existing drugs and to ensure its safety. The delay and uncertainty won’t have any immediate impact on Dr Reddy’s revenues or profits but is nonetheless a setback for the drug company.
On Friday, Dr Reddy’s head of the discovery research division, Rajinder Kumar, told Mint that the company has received no formal communication regarding Rheoscience’s liquidation or financial troubles and declined to comment on the status of the trials.
On Sunday, Dr Reddy’s chief executive, G.V. Prasad, said: “We have been working closely with the parent company Nordic Bioscience, as well as the principal shareholders of Rheoscience and Nordic Bioscience on the conduct of the Balaglitazone phase III studies. While Rheoscience has undergone some restructuring, it is Nordic Bioscience that is now primarily driving the execution of the phase III studies. Nordic is a company with extensive experience with large, multinational registration studies, and we are confident in their abilities to complete the ongoing studies.”
Mint could not independently ascertain any Danish regulatory implications of changes in the primary company that is conducting phase III clinical trials.
Danish newspaper Ingeniøren reported on 23 September that Rheoscience is being liquidated and the company is scheduled to shut down on 1 November. Previous newspaper reports in Denmark have focused on job cuts as well as the pulling of Rheoscience’s proposed initial public offering of shares.
Dr Reddy’s had entered into an agreement with Rheoscience in September 2005 for the joint development and commercialization of Balaglitazone. As per the agreement, Rheoscience was to fund all costs associated with phase III clinical trials while Dr Reddy’s was to pay Rheoscience a pre-determined amount towards its share of the development costs.
Under the agreement, the Danish company is also required to bear all the expenses towards getting appropriate regulatory approvals from US drug regulator Food and Drug Administration (FDA) on behalf of Dr Reddy’s. In return, Rheoscience will have marketing rights to the drug in the European Union and China while Dr Reddy’s will retain the marketing rights in the US and the rest of the world.
Even as Dr Reddy’s said it was not in a position to provide details about the trials, including the recruitment status or the principal investigator’s identity, the official database of clinical trials maintained by the US National Institute of Health (NIH) showed that the recruitment stood at 400.
A pharma analyst with a Mumbai-based consulting firm, who didn’t want to be identified for business reasons, said 400 is an extremely small patient pool for a type 2 diabetes drug in phase III clinical trials. “As it is, phase III clinical trials are already getting delayed significantly because of the extremely cautious stance that FDA has adopted of late. A development like this will definitely have a significant impact on expected date of results from the trials,” said the analyst. “Patient pool of anything less than few thousands in phase III is unlikely to make the cut with FDA, especially in a therapeutic category like diabetes that is already crowded by drugs from several innovators.”
Takeda Pharmaceutical Co. Ltd’s Actos and GlaxoSmithKline’s Avandia are two other major drugs in the same class as Balaglitazone. With an estimated diabetic population of 40 million, the annual Indian diabetes drug market is valued at Rs1,250 crore.
This isn’t the first time that Balaglitazone has run into problems.
Dr Reddy’s had earlier licensed Balaglitazone to Danish pharmaceutical firm Novo Nordisk A/S in 1997 for co-development in an effort to share risks and costs associated with new drug development. However, Novo Nordisk terminated further clinical development of Balaglitazone in October 2004 as the preclinical results did not suggest a sufficient competitive advantage for Balaglitazone compared with existing drugs.