Eli Lilly, Strides Arcolab form partnership for cancer treatment drugs

 E Kumar Sharma        Last Updated: December 5, 2012  | 00:00 IST

E Kumar Sharma
On December 5, US pharmaceuticals company Eli Lilly and Co and Bangalore-headquartered Strides Arcolab announced a partnership to expand the marketing of generic cancer treatment drugs in emerging markets, including India.

As a part of this arrangement, Eli Lilly will in-license a portfolio of branded generic injectible and oral cancer medicines from Agila Specialties, the specialties division of Strides Arcolab Limited.

Agila Specialties will manufacture the cancer medicines, while Eli Lilly will register and market these medications in multiple geographies across emerging markets.

Agila Specialties focuses on key domains such as oncolytics, penicillins, ophthalmics and biosimilars. It operates nine global manufacturing facilities, including a steriles plant in India.

According to a Strides Arcolab official, the deal is likely to take effect in the market only in the second half of 2013. Though details are yet to emerge about the drugs involved or the cost at which they will be available, it is clear that the deal is of significance to both companies.

Eli Lilly will benefit by entering the lucrative generics market.

"The demand for high-quality cancer medicines is unmet in many markets around the world," says Eli Lilly Senior Vice President Jacques Tapiero, in a joint release by the two companies. Tapiero is also the president of the company's emerging markets division.

"...this agreement will help Eli Lilly expand its portfolio and deliver high-quality cancer medicines to patients across emerging markets."

Arcolab is not a very strong player in Indian market and has largely relied on exports. Through Eli Lilly India, it will be able to develop a broad-based oncology portfolio that will cater to the Indian and emerging markets.

In his comment, Arun Kumar, Founder & Group CEO of Strides Arcolab, says: "We are delighted to partner with Eli Lilly to expand its branded generics platform with high-quality oncology products..."

Arcolab was founded in 1990 as a finished-dosage formulations company focused on Africa. It develops and manufactures a wide range of niche pharmaceutical products with an emphasis on sterile injectibles. The company has 14 manufacturing facilities across six countries and a presence in more than 75 countries. It already has partnerships with other global pharmaceuticals companies such as Pfizer, GlaxoSmithKline, Aspen and Novartis.

While the details of the deal are not out yet, analysts believe it is an indicator of what is likely to happen to the global pharmaceuticals industry, which is staring at a patent cliff.

Many of the industry's brands are going off-patent in regulated markets, and in fact, patent expiry peaked this year. It would thus make good sense for global companies to add generic products to their portfolios in emerging markets, especially in cancer care, where the cost of treatment is very high.

The joint release quotes Melt Van Der Spuy, Managing Director of Eli Lilly and Company India, as saying: "This strategic partnership marks Eli Lilly India's entry into branded generics... We believe this partnership will help us build a larger and more meaningful presence in the Indian cancer segment..."

Analysts say the revenue flow will begin after the registration process, which typically could take a year or so.

"In addition to the initial 10 medicines included as part of the agreement, Eli Lilly has the right to add additional high-quality branded generic oncology products to the portfolio in the future," says the joint release.

During the day, Strides Arcolab's share price touched a new high of Rs 1,224.90 on the Bombay Stock Exchange before ending the day at Rs 1,155.75, down 3.27 per cent.

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