Japanese drug maker Takeda has come to the rescue of the beleaguered Advinus Therapeutics, a Tata group company, according to two persons familiar with the development. Takeda has advanced in the region of $5mn (Rs 28 crore) to Advinus’ drug discovery unit in Pune and will get the ‘right of first look’ at any resulting R&D asset, one of these persons said. “This advance is to be offset against any payment or milestones for discovery assets of Advinus (that Takeda might be interested in) or against (discovery) services,” said this person.
This person added that the development could be seen as “an interim arrangement helping to sustain Advinus’ loss-making discovery operations for the next six months.” However, for the time being, it is unlikely to rekindle the Tata group’s interest in holding on to its investment in the company or ponying up more funds for its running, this person said.
Apothecurry had reported in April that the Tatas were reviewing their investment in the company and looking to partially or fully exit in favour of a strategic or financial investor. See back story with Advinus FY11 numbers here.
E-mails to Advinus CEO Rashmi Barbhaiya and spokespersons for Takeda and the Tata group’s holding company Tata Sons remained unanswered at the time of writing.
Scientists at Advinus’ Pune laboratories undertake proprietary drug research as also render discovery services for a fee to foreign drug makers. The unit’s most talked-about asset is a novel molecule for type 2 diabetes which is currently in trials. Advinus has said that studies, up until now, demonstrate its potential to be a “first-in-class” compound with a better safety profile than similar drugs being researched by rivals.
Since 2010, it has been scouting for licensing partners among pharmaceutical companies with deep pockets to fund this molecule’s development, an expensive proposition. It has yet to strike such a deal.
Advinus was founded seven years ago by Barbhaiya, a former head of R&D at generics producer Ranbaxy Laboratories and a clutch of ex-Ranbaxy scientists and professionals. They secured funding from the Tata group which became the start-up’s promoter with a majority stake of over 70 per cent.
Advinus sought to find new cures for diabetes, obesity and infectious diseases, among others. Since this is an uncertain and costly pursuit with no immediate gains, it began, in parallel, to render development services for a fee to life sciences companies from a facility in Bangalore that earlier belonged to Rallis India, a Tata group company. A discovery unit in Pune began proprietary research and also partnered other companies in theirs, in exchange for payment.
However, a high burn rate in discovery and a slowdown in development services following the 2008 economic crisis took their toll on projections and performance. Advinus’ challenging times have also coincided with a change of guard at the Tata group as chairman Ratan Tata steps down this year to make way for Cyrus Mistry. This has brought with it a relook at the Tata group’s life sciences investments, the persons said.
Advinus’ troubles and the group’s second-thoughts have been greeted with dismay in some quarters of the drug industry. Efforts by Indian generics producers to give the world a completely new drug began nearly two decades ago. But in the face of reversals, most have scaled back their plans to focus on what they know best – making off-patent drugs.
It has been hoped that start-ups such as Advinus with a focus on novel R&D will break the jinx. Prospects had looked particularly sanguine for Advinus as it had the backing of one of India’s best-known conglomerates with financial heft and scientists who had worked previously in Big Pharma labs.
There are those who still hope that the Takeda cash injection could potentially allow Advinus to further its most promising asset. “The pressure is off for now,” said the other person, not directly quoted above.
Advinus’ troubles seem to have led to exits of key managers such as senior vice-president and operations head Rajiv Malik, head of human resources Thomas Putti, and head of discovery biology N Hariharan in recent months. However, the company has not publicly announced their departure.
Pic sourced from http://www.advinus.com