Banking on Research

Healthcare & Pharma

Manipal Group and Cipla owned Stempeutics is developing stem cells-based medicinal products with a goal of addressing major unmet medical needs in both Indian and global markets

B. N Manohar, Managing Director, Stempeutics Research Pvt. Ltd.

“Until now, the Pharmaceutical industry world over has been based on chemistry. However, there is a shift happening wherein this industry is now moving from chemistry to biology,” states B. N Manohar, Managing Director, Stempeutics Research Pvt. Ltd. Incorporated in 2006, Stempeutics Research is a stem cell company developing stem cell based medicinal products, with facilities in Bengaluru and Manipal as well as in Kuala Lumpur (Malaysia). While there are multiple segments in the biotech space, Stempeutics focuses on niche area called regenerative medicine, based on stem cells. Its strength lies in developing innovative stem cell products through research and clinical applications. It is currently developing three products – stempeucel, stempeutron and stempeucare.

“This segment is still very small today and we hope that the stem cells can repair and regenerate human tissues and organs,” says he. While the company was set up as a part of the research institute in Manipal University, it was hived off as a separate company, and eventually decided to focus on a particularly new biological entity, MSC (Mesenchymal Stem Cells), where there is potential to go to market much faster. “We wanted to focus on this compound and take this new entity from bench to bed side,” states Manohar. The source for MSC is the bone marrow, which is the input for the drug. The company selects healthy donors who voluntarily donate the bone marrow. “From this we have a unique novel patented technology to isolate this compound and use the MSC in the drug for major unmet medical needs,” says he.


Stempeutics’ flagship product, Stempeucel, has gone through the development lifecycle from R&D to preclinical model, and the company has come up with a drug to treat Critical Limb Ischemia (CLI), a progressive form of peripheral arterial disease, which blocks the arteries in the lower extremities, resulting into reduction of blood flow.


Tie up with CIPLA

The Manipal Group was investing money into the company for the first three to four years. However, to make technology commercial, the company needed a go-to-market partner, preferably a pharma company. “We also wanted to understand if our research has a commercial market and hence, were looking for a strategic partner,” says he. In 2009, with an initial investment of Rs. 50 crore, which the company used for R&D and organisational development, it brought Cipla on board. Currently, 51 per cent of the company’s stake is owned by the Manipal Group while 49 per cent is by Cipla Group.

Journey so far

In the last ten years, between Manipal and Cipla, Rs. 200 crore has been invested in the company to build the product pipeline. The flagship product, Stempeucel, has gone through the development lifecycle from R&D to preclinical model, and the company has come up with a drug to treat Critical Limb Ischemia (CLI), a progressive form of peripheral arterial disease, which blocks the arteries in the lower extremities, resulting into reduction of blood flow.

The technology to produce Stempeucel has been patented and will initially be used for the treatment of CLI. It is considered a breakthrough treatment option which directly addresses the root cause of the disease, unlike other drugs which typically treat the symptoms and not the disease itself. Once the company starts marketing Stempeucel, it will start generating revenues. “Hopefully it should start this year and our goal is to reach US $100 million in the next five years by riding on the Indian and European markets,” says Manohar.

Challenges

“The company needs to have sufficient capital and ensure that there is enough cash for research and development,” says Manohar.  The company also faces regulatory challenges as there is no well-defined framework. The guidelines in terms of how to develop product and what needs to be done is a big challenge.  “Another challenge is that since MSC is already present in our body, we have to show what it is that we are doing,” says he.

To meet its funds requirements, the company is considering out-licensing its product, which has gone through a development lifecycle. “We may talk to big pharmas in the US and Europe to see if they can take the product. Any further product development can be taken care of by them,” he notes. The company may also approach PE players who play a big role in the life science segment and are ready to wait for longer period and get someone from there.  “In the next six months to one year we should have a partner,” says he.

Growth Path

While Stempeucel is the company’s flagship product, which is illness-based, the company also plans to enter the beauty and wellness space as stem cells are multi-potent (same drug can be used for multiple indications). Recently, the company launched a biotech cream which contains bio active factors – protein segregated for these stem cells which can be helpful for anti-aging and wrinkles, and skin rejuvenation. It has sold about 5,000 units two months ago and has a target revenue of US $2 million by FY17.  “We also want to expand our pipeline and move towards diabetic food ulcer and any other opportunities,” states Manohar.

That being said, he clarifies that a majority of the company’s revenues will come from Stempeucel. ”Once we have the drug ready, we will start marketing for CLI, diabetic foot ulcer and so on,” says Manohar. Its drug has been designated as an advanced therapy medicinal product by European Medicines Agency. This has also been granted Orphan Drug Designation for the treatment of Thromboangiitis Obliterans, which is a rare and severe disease affecting the blood vessels of the legs.  “Once our drug is marketed, we will have market exclusivity for seven years,” says Manohar. The company will know the kind of trial it can conduct based on the data it has from India, to market the drug in Europe. “The goal is to cross the milestones with FDA so that it becomes easier to approach pharma companies for a strategic alliance and also in the process achieve revenues of US $100 million in the next five years,” says Manohar, articulately.


Snapshot

Stempeutics Research Pvt. Ltd.

Head: B. N Manohar

Year: 2006

Field: Develops stem-calls based medicinal products

Investors: Cipla, Manipal Group

Research Units: Bengaluru, Manipal, Kuala Lumpur (Malaysia)


In Numbers

US $100 million

Estimated revenues in India & Europe from flagship product, Stempeucel

US $2 million

Estimated revenue from its beauty and wellness creams by FY17

Poornima Kavlekar has been associated with The Smart CEO since the time of launch and is the Consulting Editor of the magazine. She has been writing for almost 20 years on a cross section of topics including stocks and personal finance and now, on entrepreneurship and growth enterprises. She is a trained Yoga Teacher, an avid endurance Cyclist and a Veena player.

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