Glaxo India's move, if successful, will not only strengthen the multinational's anti-TB portfolio but also open a new window of opportunity on the R&D front given India's commitment on the patents front.

Glaxo India's technical director, Gopal K Nair, told The Financial Express that the molecule is currently undergoing phase I trials, while toxicology studies had already been completed with the assistance of the Central Drug Research Institute (CDRI), Lucknow. The new drug may also offer a better side effect profile vis-a-vis existing anti-TB therapies.

Nair also said that if Glaxo India is successful in taking the drug to the market, pricing would ensure ``affordability to the masses.'' The identity of the Italian firm and details on patentrights of the product could, however, not be ascertained.

Analysts say that Glaxo's move is significant given the intent of German multinational Hoechst Marion Roussel to bring into India its latest long-acting anti-TB drug, rifapentine.

``Given that India is one of the biggest anti-TB drug markets (and one of the world's seven TB hot zones), there is always room for more competition provided the pricing is right.

``If Glaxo succeeds in taking the product to the market, it will also give an indication of development capability of the Indian subsidiary,'' an analyst added.

The Rs 206- crore Indian anti-TB market is currently dominated by Mumbai-based Lupin Laboratories with a share of over 40 per cent.

On other emerging R&D opportunities, Nair said that Glaxo India could capitalise on its process strengths by assisting the parent company to develop and improve such processes before the British parent seeks a patent for the drug.

``Glaxo India could help improve the process for the parent companybefore it files for patents, making it difficult for pirating,'' he said.

Glaxo India's R&D effort (concentrated at Thane) essentially comprises two streams -- pharmacy and chemistry development and employs a scientific manpower of 29. The Indian arm has successfully undertaken custom synthesis of target molecules and side chains on a contract basis for group companies in France and the United Kingdom.

Glaxo Wellcome Plc, with an R&D spend of 1.15 billion or roughly Rs 7,500 crore (which near equals the size of the entire Indian pharma market), has ``in-principle accepted that a R&D centre can be located with advantage in India.'' The Indian subsidiary also owns a 10-acre site at Mulund in Mumbai, identified as a potential Glaxo Wellcome regional R&D centre by former chairman, T Thomas.

Ranitidine exports may rise to 80 tonnes

Glaxo India expects to export approximately 80 tonnes of ranitidine base, an advanced intermediate used in the manufacture of off-patent anti-ulcer drug Zantac, to itsSingapore-based sister concern.

This, analysts say, is a 20 tonne increase over earlier export projections made by the Indian subsidiary after the shipment of its first consignment last year. ``This obviously indicates the increasing business opportunities and cost competitiveness of the Indian subsidiary's products,'' an analyst said.

Glaxo currently makes ranitidine at its Ankleshwar facility in Gujarat and has an installed capacity of around 120 tonnes per annum. Analysts expect ranitidine exports to scale to Rs 18 crore in the near future though this figure could improve if final phase conversion is completed in India.

INSIGHT
Hoechst may not be affected

The introduction of the new molecule by Glaxo might not have an adverse effect on Hoechst's product Rifapentine as it is only a modification of the Rifampicin molecule. But this could force Hoechst to introduce Rifapentine earlier in the local market. Moreover, the anti-TB segment has been under the DPCO price control forsometime. The introduction of the new molecule might lower prices and add to the woes of the existing players. Glaxo's foray into the anti-TB segment would definitely eat into the margins of the Lupin group, Gujarat Themis Biocin and Ciba CKD.