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12:00 AM
 | 
Feb 25, 2008
 |  BioCentury  |  Strategy

Offloading R&D in India

Ranbaxy Laboratories Ltd. last week became the latest Indian pharmaceutical company to demerge its drug discovery activities into a standalone subsidiary. While the company, like others that have taken a similar route, claims that the demerger will create a unit that will be able to leverage and focus the financial resources to accelerate the company's drug discovery ambitions, it is apparent that it is also a short term fix to boost the parent's profitability by hiving off the R&D expense.

Ranbaxy's New Drug Discovery Research unit will be moved into a new subsidiary called Ranbaxy Life Science Research Ltd. (RLSRL). The scheme is expected to result in cost savings of Rs100 crore ($25 million) for the parent company in 2008, a number that is expected to increase significantly in the coming years.

RLSRL will get Arterolane, a synthetic form of the naturally occurring anti-malarial compound artemisinin, which is in Phase IIb dose-ranging studies in Africa, Thailand and India. The second most developed RLSRL compound is RBx 9841, a muscarinic receptor antagonist for urinary incontinence that has completed Phase I studies.

Also included are up to 10 preclinical research programs from Ranbaxy's pipeline, focusing on anti-infectives, asthma, urology and metabolic diseases.

RLSRL, which will be headed by Pradip Bhatnagar, formerly Ranbaxy's SVP of new drug discovery research, also inherits the multi-year R&D tie-up with GlaxoSmithKline plc, which focuses on respiratory and infectious diseases.

Under the 2003 agreement, RLSRL conducts optimization chemistry on drug leads through to...

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