Drugmaker Cipla on Monday said it will acquire 14.6% stake in US-based Chase Pharmaceuticals Corporation Inc for $1.5 million through its wholly owned subsidiary Cipla (EU), UK.
Chase, based in Washington DC, is an early-stage drug development company focused on developing new approaches for treating Alzheimer's disease.
The Indian drug maker's investment, through Cipla New Ventures, is part of a syndicate that consists of Edmond de Rothschild Investment Partners and New Rhein Healthcare LLC, the company said in a statement to the Bombay Stock Exchange.
The two-phase financing will support Phase 2a and Phase 2b clinical trials for Chase's lead drug CPC 201. The original venture funding for Chase was provided by the Brain Trust Accelerator Fund in 2010.
Chandru Chawla, who is heading Cipla New Ventures, told dna, "To acquire 14.6% stake in Chase, we will invest $1.5 million at present and as and when we achieve certain milestones, Cipla will make an additional $4.5 million investment."
Cipla New Ventures was set up to chart a trajectory in innovation around biologicals, repurposing existing safe drugs and leveraging Cipla's delivery technologies through disruptive innovation around access and affordability, the company said in a statement.
Subhanu Saxena, MD & Global CEO, Cipla, said, "This investment is consistent with Cipla New Ventures's mission to build more innovation-led business streams for Cipla in the future. We want to bring affordable medicines, where we identify an unmet patient need, in a way that leverages Cipla's formidable technology, device and development capabilities."
In addition to financing Chase, Cipla will collaborate with the company to develop the drug.
If successful, Cipla may provide low-cost access to Chase's lead drug in India and South Africa, where the Indian company has achieved affordable access to essential and life-saving medications.
"There's a rising ageing population with high incidences of age-related diseases. However, this kind of products take upwards of five years to be developed, so it is currently not possible to say how long it might take it for us to launch in India," Chawla said.
In India, over five million patients suffer from dementia, most of whom are afflicted with Alzheimer's. These numbers are expected to double by 2030. In North America, Alzheimer's disease affects more than over seven million patients and its impact is growing as the population ages. The disease costs the US alone $203 billion annually, with projections that it will reach $1.2 trillion by 2050.
Ranjit Kapadia, a pharma sector analyst with Centrum Broking, said, "If successfully developed, the product will be launched in India and South Africa at affordable rates. It is yet to see how things shape up since this kind of products involves long-drawn process, and a result can only be visible after 3-5 years. There are other players as well who are trying to develop similar products."