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Telangana Today: GVK BIO Ramping up OperationsTo invest Rs 200-250 crore in two years; integrate US operations

November 01, 2017


Hyderabad — Over the last 15-20 years, the pharmaceutical industry has seen radical changes. There is a growth in externalisation and outsourcing of drug discovery globally as the big pharmaceutical companies are increasingly downsizing their internal discovery both due to patent expiration as well as their shift towards biologics. Hyderabad-based Contract Research and Development company, GVK Biosciences is working closely with large pharmaceutical firms for both drug discovery & development programs. The company is also conducting significant business with small and medium pharma and biotech companies that are engaged in innovation and research and development of new molecules. To tap the opportunities both in drug discovery and development, the company is gearing up with an aggressive growth strategy.

The global pharma industry is valued at $1 trillion. And the outsourcing market is estimated at $115.7 billion last year of which 49 per cent is accounted for through contract research organisations (CROs). Of the $55.7 billion CRO market, $17.4 billion accounts for discovery-based services while the remaining is pre-clinical and clinical services. Realising the potential ahead, GVK Biosciences had been offering discovery, chemical development and manufacturing, formulation and analytical solutions.

Manni Kantipudi, CEO, GVK Biosciences, told Telangana Today, “A lot of R&D (over $80 billion) goes into innovator companies while the remaining goes into generics. The largest market in the world is the US and the healthcare cost is almost 20 per cent of the nation’s GDP (while India’s healthcare cost is only about 1-1.5 per cent of the GDP) here. In the last several years, the US has implemented several mechanisms to bring down the costs of healthcare. However, cost of medicines is increasing in the US. An innovator drug costs almost $2 billion dollar to develop it. Pharma companies have to recover their innovation costs and that’s why they have to charge high for their drugs.”

In such a scenario, companies such as GVK Biosciences are offering these pharma companies an ability to bring down the cost of innovation by doing R&D in India using the talent pool for drug discovery, he added.

Growth path

In the next three years, GVK Biosciences intends to move its drug discovery programmes to development and maximise returns. The company wants to focus on ramping up development, retain leadership in discovery, continue to work with small and medium companies in the US and integrate their US operations with India.

GVK Biosciences, which operates six production blocks in Hyderabad with global regulatory approvals (including USFDA) is going to commission its new unit at Pharma SEZ in Visakhapatnam with two production blocks, by January 2018. The unit will carry out process R&D and manufacturing. The company, which has recently set up an analytical facility, plans to add new buildings in Hyderabad and Bengaluru campus. It plans to invest Rs 200-250 crore in the next two years including the facility in Vizag.

The company had been operating two subsidiaries, Aragen Bioscience Inc. (based in San Francisco) and Inogent Laboratories, which were brought into the fold of GVK Biosciences through acquisitions. “GVK Biosciences and Inogent Laboratories are going to merge soon. The Board has decided to merge the entities. We are going through a legal process. Court orders are expected around March 2018,” Kantipudi informed.

Many companies are coming out with biologics. Many new drugs that are being developed today globally are in this segment. These include cell therapy, gene therapy and monoclonal antibodies. Almost half the portfolio of drugs that are in pipeline of pharma majors are biologics. To cater to this segment, Aragen was acquired, which had the credibility, experience & location advantages to meet the global expectations.

He said, there is a huge potential in this space and Aragen which operates in the Bay area could attract best talent to serve the potential markets. Going forward, GVK Biosciences is keen to look at ways to integrate Aragen’s services with Indian operations to leverage the strengths it has here. Biologics research accounts for about 10-12 per cent of the overall activity for GVK Bioscience at present.

The 2,300-people (with 2,000 scientists) company promoted by DS Brar (former managing director of Ranbaxy) and Sanjay Reddy, is carrying out drug discovery from pre-hit to candidate selection with expertise spanning multiple therapeutic areas with a focus on oncology, pain/inflammation and metabolic diseases, serving about 400 pharma companies worldwide.

Globally, use of Machine Learning & Artificial Intelligence for Drug Discovery services is fast catching up – helps reduce cost and fasten up process. GVK BIO is also ahead of the curve of Contract Research firms in India with the recent launch of India’s first mobile app – eCule for Drug Discovery service.