Suven Lifesciences and Eli Lilly have got into an alliance for drug discovery. Eli and Suven will collaborate for pre-clinical development of the CNS molecule, reports CNBC-TV18.
As a part of this alliance, Suven will receive upfront and potential downstream payments. This tie-up is for 18 months. Suven will identify potent oral compounds to target CNS diseases. Suven has been investing 25% of sales in research and development.
Venkat Jasti, Chairman of Suven Life Sciences says that the company is looking at collaborative research partnerships only.
He further adds that more MNC pharma companies have been negotiating drug discovery deals with them. Excerpts of CNBC-TV18's exclusive interview with Venkat Jasti:
Because of the deal, which announced yesterday, is there any possibility that Eli Lilly may pick up a stake in Suven Life Sciences, the listed entity at any point?
Not at this time. We have never discussed about this. This is not what we are looking at this point in time. We are looking at a collaborative research partnership only.
Could you elaborate on the terms of this alliance then? Will some of the existing research work or research products that you are doing now, get transformed into this alliance or transferred?
No, this is a brand new alliance. Suven and Lilly are establishing the drug discovery collaboration. This is not based on our thought process. The concepts are from Eli Lilly and we are doing base drug discovery here on a joint venture basis.
The collaboration between Suven and Lilly with scientists from both parties, which is working together as a team, with a goal of identifying potent oral compound, which selectively modulate the specified G-Protein coupled receptors for the target CNS disease.
So this is our first research collaboration not only for Suven. But this is our first ever comprehensive research collaboration for an Indian company. And of course, this is helping us to realise our next step of strategic vision, which we had panned out way back in 1995 with CRAMS (Contract Research and Manufacturing Services) and later in 2005
What sort of upfront payment will you be getting from Eli Lilly and what sort of potential payment will you get in the next few quarters to come?
This is not mainly about the payment. I am not at liberty to disclose the payment terms at this point of time. We will be receiving research funding and if it becomes a drug, we will receive some kind of downstream payments. This will validate our model and will bring much more activity. A lot of other multinationals are negotiating with us for this kind of activity. We will align with one or two more companies in the next six months.
Will your R&D cost be going up?
No, because we will make money on this. In the worst-case scenario, it could be revenue neutral, if we do not get anything. But it is never going to go up because this is a separate deal. Our R&D for our in-house work will go up, which is on the CNS again but that has nothing to do with Lilly.
Would you do it like a contract research for drug discovery then, which is based on a fee or do you share some of the upside if the drug actually makes it to market?
Collaborative research has nothing to do with the contract. I am not in contract research for the drug discovery. I do not want to be in it because nobody can pay the opportunity cost.
Hence, we are talking about the downstream payments, as and when it becomes a fair drug. So that is our upside potential. It is not based on the FTE cost. It is comprised of both the teams. We will be doing all their third process converting, by designing molecules to meet mainly the receptors in the brain, which no other company in India is doing at this time.
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