Suven gets milestone payment from Eli Lilly

Suven Life Sciences, the Hyderabad-based biopharmaceuticals manufacturer, has received the first milestone payment for its research in developing a new drug for Eli
Lilly.

Suven had entered into drug discovery collaboration with the US company in 2008 for developing a drug to treat central nervous system disorders. As part of this, Suven has announced the lead discovery leading to a milestone payment. However, the company refused to divulge the quantum of the payment.

“What we have received is not much in terms of dollars. But it is a milestone to prove that we are good at drug discovery and we are also good at collaborative research,” Venkat Jasti, managing director of Suven, told DNA Money.

However, Jasti said, the company would get its second milestone payment in the next nine months, which would be significant. “We hope to achieve our second milestone in the next nine months. We are working hard to achieve it before the end of this financial year though. This would be significantly higher than what we have received now,” he said.

The drug being developed is a combination medicine to treat two different disorders in the same segment and is expected to be ready for the market in 2015-16. Eli Lilly is funding the entire drug development programme while Suven has the mandate to develop it as per the mutually agreed timelines.

“More than the milestones, we are keen on complying with the timelines for launching the drug. Once it is launched, we will keep getting the royalty till the drug is covered by the patent,” he said.

According to Jasti, the model adopted for Eli Lilly is unique since Suven would not invest anything as long as it sticks to the timelines. “For instance, I have a specific task to do in the next three months with a specific budget. If I can’t do it, then I will have to invest for the period beyond the specified timeline,” he said.

On its own, Suven has been working on developing a molecule for treating Alzheimer’s, which has passed the Phase I trials. The company was also planning to raise about $20 million for taking the research on this molecule further. 

“We will plan for roadshows in the last quarter of this year or the first quarter of the next calendar year. Depending on the response from the market, we will finalise our funding strategy. In addition, about four pharma majors are also conducting due diligence on the Phase I data. They would also come back with their decision on buying it out in the next 3-4 months,” he said.

The molecule would now move to Phase II.  The proof of concept of the drug would be established after completing Phase 2a trials on humans by March 2010.