Suven Life Sciences plans to raise funds for clinical trials

18 Nov 2009 Evaluate

Suven Life Sciences Ltd, the Hyderabad-based biopharmaceutical company is working on 10 new molecules for central nervous system (CNS) disorders or ailments, plans to raise funds for further trials on one of these, SUVN-502 that is intended for the symptomatic treatment of Alzheimer’s disease, schizophrenia and other disorders of memory and cognition such as attention deficiency and hyperactivity disorder and Parkinson’s disease. CNS disorders account for around 35% of the total disease burden in the world’s seven largest pharmaceutical markets with sales estimated at over $100 billion (Rs4.63 trillion) out of the total global pharmaceutical market sales of $780 billion. The molecule, first-in-class, has successfully completed phase-I studies in Switzerland with promising results. It is now undergoing bridge toxicological studies prior to the initiation of proof of concept or phase-IIa trials on patients.

 

Suven is targeting a commercial launch of the drug in late 2013 or early 2014 for this the company needs around $20 million to fund the phase-IIa studies. The company has initiated talks with some global pharmaceutical firms to out-license the molecule. However, it is not confident of attractive upfront or milestone payments when the drug candidate is out-licensed before the tier-IIa studies. For this it plans to raise the required funds for taking up phase-IIa studies by going in for equity dilution. The valuations and milestone payments will be highly attractive if the results in phase-IIa studies are promising. If SUVN-502 is out-licensed now, it may get an upfront payment of some $30 million and if it out-licenses it after successful phase-IIa studies, it may get $130 million or so as upfront payment, (and) some $300 million over the period of trials and royalties in double-digit percentages once the drug hits the market.

 

This achievement is indeed commendable for a company the size of Suven especially since it is quite rare for even the biggest of pharma companies to discover a new chemical entity and that too for a difficult to treat disease like Alzheimer’s. It has already secured patents in nine countries including India for SUVN-502.

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