Risks and rewards

AstraZeneca signs R&D deal worth up to $220 million with India’s Jubilant

Lori Lesko
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NOIDA, India—International pharma AstraZeneca is the latest company to enter into a research partnership with Bangalore, India-based Jubilant Biosys Ltd., according to an announcement last month.

Both companies declined to disclose specific financial terms of the agreement, but the shared risk-reward deal is reported to be worth up to $220 million. The collaboration, announced May 5, allows AstraZeneca, headquartered in London, to own the compounds developed under the collaboration, with worldwide development and commercialization rights. Jubilant will be eligible to receive research funding spanning five years. The collaboration will initially focus on neuroscience, but eventually, Jubilant will deliver novel drug candidates to AstraZeneca's preclinical pipeline in return for research funding, milestone payments and royalties.

AstraZeneca, which boasts healthcare sales of $31.6 billion in gastrointestinal, cardiovascular, neuroscience, respiratory, oncology and infectious disease medicines, has agreed to also pay Jubilant success-based development milestones, as well as royalties, based on successful global commercialization of any of the compounds.

Jubilant Biosys provides integrated drug discovery and development solutions with a facility in Bangalore, which houses more than 300 scientists specializing in disciplines ranging across discovery biology, toxicology, and information technology.

Parent company Jubilant Organosys Ltd. is an integrated pharmaceutical industry player, one of the largest custom research and manufacturing services (CRAMS) and drug discovery and development services companies in India, with diversified manufacturing facilities at 10 locations worldwide that cater to 150 customers across more than 50 countries around the world. Jubilant has entered into similar ventures with Eli Lilly, Amgen and Orion Corp.

Jan Lundberg, executive vice president of Global Discovery at AstraZeneca, says the partnership not only complements his company's internal capabilities, but also increases the capacity of the firm's preclinical programs.

Jit Patel, AstraZeneca director of Strategic Planning, Business and Development, refers to the agreement as a "concrete example of the innovative approaches we are taking to deliver a sustainable discovery pipeline with a lean and agile organization. Ultimately, this will provide us with more shots on goal as we look to sustain a competitive portfolio and provide meaningful medicines to patients."

"What we can say is that the deal terms include joint research funding, and that AstraZeneca will pay Jubilant success-based development milestones—as well as royalties based on successful commercialization of any of the compounds," Patel says.
While initial collaboration projects will be in the neuroscience area, future projects could be in any of AstraZeneca's strategic areas of research including cancer, cardiovascular, gastrointestinal, neuroscience, infection, respiratory and inflammation, Patel says.

The partnership works because of "a shared vision and common aspiration to deliver meaningful medicines to patients as quickly, safely and efficiently as possible," Patel says.

For Jubilant, the offer was too good to refuse.

"AstraZeneca approached us," says Sri Mosur, CEO and president of Global Drug Discovery and Development at Jubilant Biosys. "They wanted to increase their discovery capacity. To achieve this, they were seeking a risk-reward collaboration with a company who shared their vision of delivering meaningful medicines to patients as quickly, safely and efficiently as possible. After joint discussions, we are very pleased with the outcome that rewards us for delivering high quality compounds into AstraZeneca's preclinical portfolio. Through the experience of collaborating on number of projects on a CRO basis, AstraZeneca was clearly impressed with our ability to deliver a quality product. Once we had an agreed concept of the collaboration, it took less than six months … and frankly, was devoid of major obstacles."

The two companies have worked together on number of projects on a CRO basis, but nothing of this magnitude.

"For those projects selected for the collaboration, our aim is to pursue drug discovery with Jubilant collaboratively," Patel said. "Ongoing collaboration compounds will subsequently be developed and potentially commercialized by AstraZeneca exclusively."

Multinational pharmaceutical companies are increasingly looking at collaborating in drug research with Indian companies because a large pool of scientists, lower manufacturing costs and the presence of a large number of manufacturing facilities approved by the U.S. Food and Drug Administration make India an attractive destination, according to a recent Wall Street Journal report. Indian pharmaceutical companies develop experimental drugs for multinational drug makers, in exchange for which they get payments based on the drugs meeting various targets and royalties on sales when successfully launched, the news organization says.

The deal is beneficial in the long term for Jubilant when the milestone payments start coming in, said Bino Pathiparampil, pharma analyst with IIFL Capital, adding that in the short term, the revenue addition may not be significant.

"It is a high-end, high-tech research deal," Pathiparampil says. "It is a proof of the capabilities of the company, which means they can get more such deals."

Lori Lesko

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