Reliance Life trims pharma plans to keep cash in hand3 min read . Updated: 17 Sep 2009, 11:52 PM IST
Reliance Life trims pharma plans to keep cash in hand
Mumbai: The Mukesh Ambani-led Reliance group has deferred an ambitious Rs1,400 crore plan to enter the generic medicines market as it tightens the purse strings to conserve cash and refocuses the scaled-down effort on niche drugs.
Reliance Pharmaceuticals Pvt. Ltd will become a manufacturer of specialty drugs within the group’s life sciences venture.
“At a time when the international markets are undergoing a recession and the liquidity position at several industry sectors were not very satisfactory, the group felt the need for capital conservation, and thereby some of the futuristic business plans were put on hold," said a senior executive of Reliance Life Sciences Pvt. Ltd, who didn’t want to be identified as he isn’t authorized to speak to the media.
In the new scheme of things, the unit will be a business division of Reliance Life Sciences, which is largely into biopharmaceuticals and industrial biotechnology such as biofuels and plant sciences. Reliance Life Sciences is owned by the promoters of Reliance Industries Ltd, and all the new initiatives in the life sciences and healthcare space, including pharmaceuticals, were planned as private ventures of the founders.
“In the specialty pharma business, our focus is going to be niche products sold to specialty hospitals, where we already reach out through the existing field force which markets Reliance Life’s biopharmaceuticals, cell-based therapy and diagnostic products," said the executive.
“We will also export ingredients (bulk drugs) of these specialty drugs to international markets. Later, it is also likely that the company may partner with drug marketing firms to cater to the foreign healthcare markets," he added.
A Reliance spokesperson confirmed the plan to restrict the pharmaceuticals project to a specialty drug unit under the life sciences umbrella.
The pharmaceuticals business will now focus on selected high-value, but low-volume speciality drugs on a pilot scale.
Reliance Life Sciences has set up small-capacity plants for active pharmaceutical ingredients (APIs), and formulations at its Navi Mumbai campus, the Dhirubhai Ambani Life Sciences Center. It has launched its first specialty drug formulation, a capsule for the treatment of brain cancer known as TemoRel, in the domestic market.
The drug, whose chemical name is temozolomide, is a chemotherapeutic agent indicated for the treatment of newly diagnosed glioblastoma multiforme and refractory anaplastic astrocytoma or high grades of brain tumours.
The group’s initial plan had been to set up a large-scale manufacturing hub close to its refinery complex at Jamnagar in Gujarat for APIs and formulations for the domestic and export markets. The plan came in the wake of the growing potential of the off-patent drug business worldwide. Some of the infrastructure work had even begun at the site.
As part of the generic plan, Reliance Pharmaceuticals had also set up a senior management team, including a new chief executive officer, Lalit Kumar, in 2007. Many of these executives, including the CEO who was with Wockhardt Ltd earlier, quit after the original plan was put on hold.
“Though the plan has been reconfigured, we will remain focused on generic drug markets both in India and abroad with quite a few speciality pharma ingredients and formulations. There are a few other specialty drugs targeting treatments for lung cancer, and breast and colorectal cancers are also in the launch pipeline," the executive said.
Reliance Life Sciences is engaged in biopharmaceuticals, clinical research services, regenerative medicines using stem cells as well as tissue engineering, cord blood stem cell repository, assisted reproduction, molecular medicines in the healthcare space, and biofuels and plant tissue culture among others in the industrial biotechnology area.
High-value, low-volume drugs are those that cater to tiny market segments because the diseases they treat are not common. The cost of such therapies is very high as they may deal with certain types of cancer or rare, drug-resistant infections. Drug companies opt to step up research costs by a small margin to discover drugs in this area. Once they are launched, marketing is normally direct to specialty hospitals with a lower field force than for more mainstream medications.