Normally, it doesnt make a great business case, especially between two outbreaks," Vasant Narasimhan, global CEO of Swiss pharmaceutical multinational Novartis AG, said in an exclusive interview to BT in February 2020. He was reacting to why leading global drug discovery firms were least interested in developing vaccines against viral infections such as Covid-19.
At that point, the novel coronavirus infection that would swamp the world in the following months and drag down the global economy on a scale never seen in a century was still a curious virus surfacing in Far East Asia. India barely had three cases of Covid-19 even though the virus had surfaced in Wuhan three months earlier in mid-November 2019. And the World Health Organization (WHO) was yet to declare the outbreak a pandemic.
Within weeks, though, conventional logic that shunned vaccine development was getting re-written as nationwide lockdowns to check Covid-19 pandemic were costing the global economy $375 billion every month, besides lakhs of deaths and crumbling healthcare infrastructure in large parts of the world. Countries and philanthropies began to pledge unprecedented sums to fund research for vaccines. The WHO Access to Covid-19 Tools Accelerator to fight the disease mobilised over $5 billion, the US set aside $9.5 billion and a European Commission-led initiative announced plans to raise $4 billion.
The biggest-ever hunt for a drug in human history started with over 320 Covid-19 vaccines under development globally. Narasimhan himself became the co-chair of a consortium of leading global life sciences companies to develop and supply vaccines, drugs, diagnostics and treatments for Covid-19. With billions of dollars up for grabs, vaccines are finally making a business case.
With that, India is emerging as the world's vaccine factory. Nearly 25 per cent of the world's Covid-19 vaccines will be produced in India. Three of its own vaccines are in advanced stages of development and minimum 16 more are in the works. However, it may be time to think beyond vaccines, as therein lies an opportunity of a lifetime for the country to reverse past setbacks in drug development and leverage the opportunity to script a new chapter in new drug discovery, research and development. These are areas where Indian pharma companies' past is riddled with failure.
But work on the vaccine provides a window to dust off those failures and start afresh. After all, the world of drug development is being reset through rapid approvals and large scale digitisation. That will alter pharmaceutical development forever. It will also create new geo-pharma equations. "Our vaccine production and logistics capacities are going to benefit all of mankind," Prime Minister Narendra Modi told heads of Brazil, Russia, China and South Africa at the recent BRICS Summit.
India will need to leverage its newly-formed global relationships and soft power (Indian vaccines will be supplied to 100-plus countries); new experience of collaborations between research labs, pharma firms and marketers; and all the learnings of accelerated development (efforts are on to cut development time from 10 to 12 years to one to two years without compromising on safety) to emerge as the destination for not just vaccine making but drug development as well.
The Great Vaccine Opportunity
WHO has estimated that the world will need 3.6 billion doses of Covid-19 vaccine by 2021. That means administering two doses to 20 per cent of the population. However, unlike medicine R&D, where innovative first-in-class, patent protected drug development has always remained the exclusive domain of global pharma MNCs and Indian manufacturers are seen as second tier developing low cost generic versions of those medicines (AIDS drugs is a classic example where foreign pharmaceutical majors invented the drugs, and Indian generics made it affordable to masses) at a much later stage, the race to find a preventive drug for Covid-19 is open to all.
Along with multinationals, and a clutch of Indias globally reputed pure play vaccine makers like Serum Institute of India and Bharat Biotech, Indian generic companies have also jumped into the fray. A leading pharmaceutical firm like Zydus Cadila is in a neck-and-neck race with Bharat Biotech in developing an indigenous Covid-19 vaccine. If Serum Institute has readied massive production capacities for global supplies of 'Covishield', being developed through a collaboration between Oxford University and UK pharma major AstraZeneca, pharma major Dr Reddys has firmed up a supply agreement for Russia's Sputnik V. Home grown Aurobindo Pharma is leveraging its acquired asset - US-based Auro Vaccines - to develop a Covid-19 vaccine.
Unlike India's dismal performance in new chemical entity (NCE) drug development in the past, India's pure play vaccine makers have solid credentials as global producers and suppliers, some of which are even first in the world. Bharat Biotech, for instance, has launched the world's most affordable rotavirus vaccine and the world's first clinically proven and WHO pre-qualified Typhoid Conjugate Vaccine, besides being the first in the world to file global patents for Chikungunya and Zika virus vaccines. Indian vaccine manufacturers account for about 60 per cent of vaccine supplies to UNICEF. A quarter of Covid-19 vaccine supply to developing world and poor nations is expected to come from India. Serum alone is readying five Covid-19 vaccines. Zydus and Bharat Biotech are working on more vaccines for Covid-19. At least 20 Covid-19 vaccine projects are on from Indian companies. The size of the global vaccine market could double to $93 billion by 2020 due to the Covid-19 pandemic, a Fortune Business Insights report said in August. It estimated a compounded annual growth rate of 10.7 per cent for vaccines between 2019 and 2026, a huge jump from $41.61 billion in 2018.
With experts projecting chances of rise in viral infections and need for quick development of newer vaccines and therapies in future, Indian vaccine makers are in a sweet spot. Indian generic medicine makers are also gearing up. This may not only provide them an additional opportunity to add newer poducts to their portfolio but also help them ride the global goodwill generated as vaccine makers. The changing regulatory systems and protocols, research, production and supply chain partnerships with governments, research institutions and companies globally may help them drive their pharmaceutical business also in a new direction. Will vaccines help Indian generic pharmaceutical industry build their research skills for new chemical entities (NCEs) too?
Business Of Vaccine
The belief that global pharmaceutical majors are not interested in vaccine business is not entirely true. GSKs vaccine business generated $9.1 billion in 2019; Merck $8.4 billion; Pfizer $6.5 billion and Sanofi $6.2 billion in 2019. But it is a small pie compared to their overall revenues and business opportunities in new pharmaceutical and biotech drugs, the global market for which was $1.25 trillion in 2019.
In fact, globally, about 80 per cent of vaccine sales by value are from five large multinationals which make new, advanced vaccines. Pfizer's Prevnar vaccine for protection from meningitis and pneumonia had sales of $5.95 billion in 2019. Merck's Gardasil against human papillomavirus, which causes cervical cancer, had sales of over $3 billion last year. Sanofi's influenza vaccines, Fluzone and Flublock, had sales of ?1.9 billion in 2019. Influenza vaccines are among the most sought after in the west, mostly cold countries. Their market was worth $3.96 billion in 2018 and is projected to reach $6.2 billion by 2026, says an Allied Market Research report.
However, such vaccines account for only 20 per cent of doses sold globally, estimates WHO. In other words, while multinationals have been present in the high value vaccine business, they are not into vaccines that are used for large scale immunisation programmes largely dependent on public purchasers and donor policies. Agencies like WHO, Unicef, Pan American Health Organization, GAVI (Vaccine Alliance funded by Bill and Melinda Gates Foundation), etc, purchase such vaccines through pooled procurement mechanism at reduced prices. This is where Indian manufacturers have thrived. The Indian imprint on viral, bacterial and combination vaccines like MMR (Measles, Mumps and Rubella), Hepatitis B, Oral Polio Vaccine, Pertussis (a whooping cough), Diphtheria and Tetanus and Bacillus Calmette Guerin is quite strong. More than two-third vaccines (by volume) manufactured in India are exported. WHO says global demand for the vaccines they address was 3.5 billion doses, valued at $26 billion, in 2018 (excluding vaccines used for oral polio, seasonal influenza, travel and military markets). That was 25 per cent higher than a year ago, indicating a source of strong revenue flow for Indian players.
The advantage for Indian firms is that not all these diseases are of interest to global biggies. "Right now, typhoid is a pandemic in Pakistan. Children are dying in Karachi because they're not responding to antibiotics (resistance), including ciprofloxacin. Gates Foundation has funded Pakistan to vaccinate its 20 million children. I am the only one with a typhoid conjugate vaccine, and we are supplying it to Pakistan," says Krishna Ella, Chairman and Managing Director of Bharat Biotech.
What Ella is hinting at is that for an illness that affects the developing world, Indian companies tend to have a higher interest than global firms. An industry veteran, who headed a multinational pharma company in India, agrees. "It is a fact. Most multinational vaccines address only health issues of the developed world. They acquire small vaccine makers with promising candidates rather than investing in basic research. They are not ready to invest in research on viruses that cause outbreaks in hot and humid geographies of Africa or Asia," the executive, who did not wish to be named, says.
If Indian pure play vaccine makers used the opportunity well, the Indian pharmaceutical industry has had a bitter experience of finding new pharmaceutical drugs.
A Failed Dream
A decade ago, gazing into the sunset from the balcony of a Mumbai hotel suite, with tears rolling down his cheeks, Dr Kallam Anji Reddy said, "That day I got a call from Novo saying the rats have died. That was the end of my Bala". Bala refers to anti-diabetes molecule Balaglitazone that his company was developing.
The founder of Dr Reddys Laboratories in 1979 was elaborating how his new drug discovery dreams had failed forever. He died in March 2013, at the age of 74. Like Ranbaxys late Dr Parvinder Singh and Lupins founder, late Dr Deshbandhu Gupta, Dr Reddys dream was to invent NCEs that would convert their generic drug-making firms into original innovator companies like Pfizer, Novartis or GlaxoSmithKline selling blockbuster drugs, each with over $1 billion sales. In 1997, scientists at Dr Reddys Laboratories in Hyderabad discovered a molecule to treat Type-2 diabetes. They named it Balaglitazone and licensed the NCE candidate to Novo Nordisk for clinical trials. Novo discontinued the trials after the drug failed.
Ranbaxy's plan to develop a new drug for malaria, Arterolane, also got dropped after its sponsor, Medicines for Malaria Venture, backed out in 2007 while last stage trials were on, ending the new drug dream. Indian companies like Sun Pharma, Piramal Life Sciences and Glenmark also tried to develop NCEs but could not make anything for global markets. Tata funded Advinus Therapeutics since 2005 and wanted to be big in drug research, but it was sold off in 2017 to Eurofin, a European laboratory chain . It remains to be seen if the global goodwill pharma companies are expected to generate as vaccine suppliers and the soft power it provides can be leveraged for a comeback in new drug research.
In his opening remarks at the 12th BRICS Virtual Summit on November 17, Prime Minister Narendra Modi made a reference to only one industry, the pharmaceutical industry. "India can be a force multiplier for the post-Covid economy. And can contribute strongly to global value chains. We proved this during Covid, when we were able to deliver essential medicines to over 150 countries due to the capability of the Indian pharma industry," Modi told the heads of Brazil, Russia, China and South Africa at the Summit.
With none other than the prime minister its ambassador, the goodwill that is being generated for the Indian pharmaceutical industry is formidable. Further, most companies pursuing vaccine dreams other than leading pure play vaccine makers are established pharmaceutical companies like Zydus Cadila, Dr Reddys, Aurobindo, etc. The demand for Indian medicines and vaccines during the pandemic has again increased the demand for Indian products in most parts of the developing world. Bangladesh has already made a formal request for Covid-19 vaccine supplies, and the Central government has already said that their preference will be to supply to other neighbouring countries like Bhutan and Nepal.
Pharma companies can even leverage the vaccine opportunity to get back into big game of drug development and research as managing Covid-19 in future will require new treatment protocols and new drugs. That also may spur the boat that India has missed so far - the world of NCE research. As of now, it may seem a distant prospect, as the world is now concentrating on vaccines and repurposed drugs, but that is also going to be a big opportunity.
Experts say the next big leap for pharmaceutical companies could come from drugs that are developed using new, quicker ways that medical research sector has learnt to adopt while attempting to find a cure for Covid-19 and give protection from Covid-19. Global advisory Boston Consulting Group (BCG) lists three elements that will redefine global clinical development which Indian pharmaceutical firms can adopt. The first is virtual first approaches, the second is real world evidence and the third is new ways of working. Virtual first is about conducting virtual clinical trials, including remote physician consultations, secure drop-shipping and medication tracking and wearable patient devices and apps to track clinical changes. US and European drug regulators have even issued guidance on such trials. The real world evidence is a way to test new treatments in weeks or months rather than multiyear timelines of traditional observational studies. The new ways of working include agile principles, regulatory flexibility, new trial designs, integrated evidence generation strategies, BCG experts say in an online blog. Covid-19 has given an opportunity to the Indian pharmaceutical industry to align itself with global clinical developments. With help from the government, it is for the Indian pharmaceutical industry to take learnings from vaccines to NCEs.
The vaccine presence will definitely help Zydus Cadila. The company already has to its credit Indias first new chemical drug Lipaglyn (Saroglitazar) that can simultaneously control cholesterol and glucose levels. It is from the same first in class drugs that Dr Reddy was trying to develop. But that is yet to sell in big markets like the US and Europe, though trials are on in the US for fatty liver and Hypertriglyceridemia. The Zydus Research Centre in Ahmedabad is a 4,75,000-square feet facility that employs 400-500 scientists. Zydus has about 10 NCEs and new biological entities in different stages of development. Its decade-long investment in vaccine research has also started bearing fruit. With over 300-500 dedicated scientists, the vaccine team of Zydus has developed India's first vaccine for H1N1, besides multiple vaccines for infectious diseases like rabies, Hepatitis B, measles, mumps, rubella, varicella, influenza and typhoid fever.
Consider this. In end September, Swiss drug major Roche acquired a small UK biotech, 'Inflazome', for an upfront payment of ?380 million, with promise of more money as and when it is able to develop new drugs. The company researches on a niche science, development of 'inflammasome inhibitors' or 'NLRP3 inhibitors'. Activation of NLRP3 inflammasome in the body is implicated in many diseases caused by chronic and uncontrolled inflammation. That is what pharmaceutical scientists are now pursuing globally to contain Covid-19. But even before Inflazome can bring a drug candidate into the trial stage, Indias Zydus Cadila has done it, as one among the first in the world to develop a drug candidate with NLRP3 inhibitors.
A couple of weeks ago, Zydus filed an Investigational New Drug application requesting permission for human trials with the Indian drug controller for ZYIL1, an oral drug candidate that proved to be effective in pre-clinic studies in controlling inflammation in Covid-19 related diseases. Zydus has filed global patents and is planning big trials abroad. "Inflammation is one of the main areas of our NCE research," says Pankaj Patel, Chairman, Zydus Cadila. Besides, Zydus is also one the largest global manufacturers of Hydroxychloroquine and Dexamethasone, two re-purposed low-cost drugs currently being used globally to manage Covid-19. It is also developing a repurposed biotech drug, interferon alfa, for Covid-19, which is currently undergoing trials, besides making India's first indigenously developed antigen test for Covid-19, 'Covid Kavach Elisa', developed by ICMR-NIV, Pune.
Many others Indian companies are also trying, but are yet to divulge details. Sun Pharma's SPARC is working on two repurposed new drugs, say sources. It is conducting clinical trials of AQCH, a plant-derived drug for treatment of Covid-19 with ICGEB, Italy. This was actually developed for dengue fever. Another is Nafamostat mesylate, which was used to treat acute pancreatitis. Mankind Pharma is conducting clinical trials of a novel formulation, 'Niclosamide', for treatment of Covid-19 patients in partnership with South Korean firm Daewoong Pharmaceutical Co. Biocons psoriasis drug Itolizumab was the first new biologic therapy approved (in India) for treatment of moderate to severe Covid-19 complications.
With all its capabilities, Indian drug and vaccine manufacturing industry can be the most trustworthy partner of governments across the world. The same partnerships can work for discovering drugs for infectious diseases and future pandemics too as vaccines can help, but ultimately effective drugs are the ones that take away the fear of the illness. Indian pharmaceutical industry will find their vaccine exposure extremely helpful here.
India is already a key supplier in the global institutional sales market for vaccines. Domestic vaccine makers are now eyeing the 80 per cent high value market share currently enjoyed by MNCs, mainly the private market in developed countries and a booming health conscious middle class population in developing countries like India. "We can manufacture vaccine at much cheaper prices than any country and supply enough quantities to the world," says Adar Poonawala, CEO of Serum Institute. But he is concerned that a robust regulatory mechanism and funding support are yet to evolve in India.
"The government should sit with the manufacturers. Scientists who have never done work in vaccines should not be the ones advising policymakers," says Krishna Ella of Bharat Biotech. According to Ella, a supportive government strategy can help India reach leadership position on the global stage. "Everybody (every regulator) says they will solve the regulatory problem, but everybody is working independently. Had we sat together instead of CDSCO as one committee, RCGM as another, subject expert committee as a third committee, if all these committees had got together, and taken decisions together, we could have moved much faster," says Ella. "Since the pandemic, India has created a robust regulatory and collaborative ecosystem, and partnerships between various stakeholders under the National Biopharma Mission to speed up vaccine development. We are also supporting academic and institutional research on vaccines, making 60-65 clinical trial centers in the country on a par with any top clinical trial centres across the globe," says Renu Swarup, Secretary, Department of Biotechnology (DBT), Government of India. India is also going to help and train partner neighbouring countries to be part of that eco-system and clinical trials, she said at a virtual seminar on vaccine distribution.
Challenges will continue, Covid-19 has been a great learning curve for Indian companies. Right from day one, the government has proactively worked at ease of approvals for Indian companies to carry out clinical trials, enroll volunteers and get regulatory feedback. The results so far do not hint at any compromise on quality. The eagerness of India's neighbours is proving to be a great diplomatic tool too. The goodwill generated through India's soft power should help the country break new grounds in nearly all of Africa, parts of Asia, South America and even developed nations.
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