Piramal Exits Early-Stage R&D In Mumbai

Piramal announced plans to shut down its early-stage drug research in Mumbai, shifting willing personnel to other facilities and focusing the company’s research on late-stage drug development and moving some of their research abroad.

The company has offered the 200 scientists at the Mumbai facility the option of early-retirement or relocation to one of the company’s other smaller facilities in Hyderabad, Pithampur, Ahmedabad, and Chennai. 

Early-stage drug development is a high risks business which requires high investment with a relatively low success rate. LiveMint reports that eight out of 10 discovered molecules in India fail to reach late-stage clinical trials.

Swati Piramal, Vice-Chairperson at Piramal, told LiveMint, that the decision was an economic one, and that Piramal’s review board decided that the high risk business of drug discovery in Mumbai was not worth continued investment.

According to Piramal, “I am basically a scientist and I love the business of science, but as vice-chairman of a larger business group, I am also answerable to the investors. So I had to take a decision, which is most strategic (from) the investor point of view.”

Nevertheless, Piramal was quick to emphasize that the company was not removing itself from R&D entirely. The Times of India (TOI) reports that research on Piramal’s existing portfolio of eight molecules will continue as planned.

The Economic Times reports that difficulties with the clinical trial process in India are shifting many Indian pharma companies’ attention abroad to countries with quicker and more efficient regulatory processes and stronger infrastructure.

For example, a drug which may take a year to be approved in India will pass through the process in approximately 28 days in the United States.

Piramal as well as Lupin and Sun Pharma are all making R&D investments abroad, says Reuters.

Even though the Central Drug Standard Control Organization (CDSCO) requires that all drugs sold in India be tested locally, quick foreign regulation and high yield markets offer Indian companies the revenue to endure the longer Indian regulation process.

Swati Piramal explained to Reuters that India had lost what she described as “the India advantage,” the conventional wisdom that clinical trials would recruit faster and  cost a fraction of what they would in the west.

Kavita Patel, a fellow in Washington-based Brookings Institution, said that, “For Indian companies to set up R&D abroad is expensive, but it is necessary, because otherwise their ability to grow within the country is going to be limited.”