Drug Discovery: India’s Path to Vishwaguru?

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India has had a long history of studying natural products for use as remedies, producing systems such as Ayurveda, Siddha, and Unani alongside many tribal designs. Add to this India’s much shorter history (starting in the 80s) of mastering information science and technology to emerge as the global hub for IT services. India also had expertise in pharmaceutical manufacturing before the advantage was ceded to China (but which, with targeted investment, can be regained). Add a thriving start-up scenario, especially in the last two decades. All this adds to the perfect conditions for India to emerge as a major player in the drug discovery industry, hitherto dominated by ‘Big Pharma’ based in the West.

A little primer to drug discovery. It’s the process by which new drugs are created, tested, and brought to market. Usually, one sets out by identifying a target in the body that needs to be fixed. For example, the enzyme HMG-CoA reductase is the one that leads to the accumulation of low-density cholesterol (LDL), which causes arterial blockages and raises the risk of heart attacks. Inhibiting it causes blockages to build up a lot more slowly — so anything that will block this enzyme is a potential drug. In the past, one would have tested hundreds of chemicals for such activity (known as a screen) till something effective was found (called a hit). Or if you knew something that worked (like penicillin), you would make chemical derivatives of it and see if they work better — and that’s how we have second and third-generation antibiotics. There was also a reverse method, known as drug repurposing. You took an existing drug and found out what other ailments it cured. For example, aspirin, the fever medicine, became a cardiac medicine after trials in the 1960s-80s. Till about a decade back, this used to be a slow and expensive process that only gigantic pharma companies with billions of dollars to spare could afford. The flipside has been that many drugs take a long time to recover costs and are often unaffordable to those who need them unless covered by government subsidies or health insurance.

Several advances since 2000 have made this process faster and cheaper. Now the human genome sequence is known, and the molecular structures of thousands of proteins have been worked out. One can do such studies using virtual methods, especially with advances in artificial intelligence. The chemical interactions of targets in the body with potential drug molecules can be simulated on a computer through in silico drug discovery. This can be done in hours instead of months and save a huge sum on chemicals. Benevolent AI, a UK-based company, is one of the pioneers in this process. Indeed, the market for computer-aided drug discovery (CADD) reached USD 2.9 billion in 2021 and is expected to touch USD 7.5 billion by the end of this decade.

With a growing talent pool in biotechnology and artificial intelligence, there is clearly huge potential for India in CADD. The need is to have more colleges teaching tailored programs, selecting the best students, and giving them the mental space to experiment and innovate. This is something that unfortunately does not come easily to our education system, but hopefully, the NEP will change that.

However, in silico studies must be followed by in vitro studies to see whether the simulated drug-target interaction happens in real life. This process, too, has seen multiple advances and can now be done entirely robotically, rather than having an army of lab workers do it, which increases precision and repeatability while reducing time and costs. Again, India’s IT advantage can come into play in designing chemical tests. As of now, sadly, the prices of setting up such labs and obtaining chemicals in India are beset by exorbitant costs and bureaucratic red tape from high customs duties to an inane number of permissions.

Following this comes the in vivo testing — when the drug is tested for various parameters in cell cultures and animal models. Does the medication interact with the target in the same way inside a cell, where there are millions of other interfering molecules? Can the drug prove toxic to cells? How much of the drug is a safe dose? How much of the administered drug is absorbed by the body and distributed to the right place? Drugs are ultimately metabolized in the body, but does that produce any toxic byproduct? Finally, what are the side effects?

If the potential drug aces all these tests, it is ripe for clinical trials in humans; if not, it dies as a drug. However, India’s record in animal testing has been patchy at best. Many animal testing centers are coming up short or committing research fraud. Besides, this falls foul of many Indians’ religious sentiments against animal cruelty. Hence, this does not seem to be a promising field for India to have a giant market share.

But if the drug does show promise in animals, it must go through four stages of human trials before being approved for the market. Most countries follow the lead of the US Food and Drug Administration (FDA), which has some of the most stringent approval criteria. It has been estimated that developing a new drug costs USD 1.8 billion, and the process can take up to 18 years. A significant part of this cost is in the form of clinical trials — which can be pretty expensive in the West. And this is where India has great potential.

With new technologies in clinical research (especially digitalization), emerging diseases, and increased globalization, the Indian clinical trials market is upward. In 2021, it was valued at a mere USD 1.93 billion, but the growth is expected to skyrocket this decade. The Central government has also sponsored several policies to hasten drug innovation and smoothen trials.

Clinical trials follow a “randomized, double-blind” methodology. A ‘cohort’ of volunteers is assembled of similar age, nutrition, and health profile. They must also not be taking any medicines not complicating the trial results. These volunteers are paid to take the experimental drug and allow the researchers to observe them over a period. However, only half of them get the actual drug; the rest get a ‘placebo’ — and none know which they are getting (that’s why they are randomized). The lead researchers also do not know who got what — which is why they ‘double-blind. The drug must do substantially better than the placebo to pass the trial. Subsequently, it must pass through exponentially more extensive and diverse cohorts in phases II, III, and IV. The main stumbling block in drug trials is assembling the cohort in the later phases.

Apart from the clinical requirements, the cohort also needs to be educated enough to be able to give their consent, and ethico-legal practices must be followed. This can be done in India at half the cost compared to the West. Apart from that, many tropical diseases in India that are not prevalent in the West need new drugs and vaccines.

India’s advantages in the sector are manifold. For one, it has a younger, relatively healthy pool of volunteers who are not taking any medicines. Secondly, India has a talent pool of young doctors who can oversee the trials while gaining valuable research experience. Thirdly, India’s IT talent pool is adept at rapid digitalization of clinical trials, which can speed them up through automation of data entry, regulatory compliance, patient monitoring, and more. The COVID-19 pandemic turned a challenge into an opportunity, showing India’s strengths in the field. In 2020–21, a number of clinical trials were based in the country. In April 2021, a huge clinical trial of AYUSH-64 (a drug for mild COVID-19) was completed; Akston Biosciences started its trial of the second-generation COVID-19 vaccine in November of the same year in India. 50% of all trials in India were for Phase III of drugs in development, given the cohort size needed (in the thousands). The usual model is for a collaboration between a foreign drug discoverer (India still has much catching up to do) and an India-based trial-conducting company. For example, India’s Aurigene oversaw the Phase 2b/3 study for NASDAQ-listed Curis Inc’s CA-170 in patients with non-squamous non-small cell lung cancer (nsNSCLC).

Drugs and devices for cancer had the biggest share in the trials market, comprising one-fifth of the market. As the mortality (people dying) and morbidity (people falling sick) of infectious diseases continue to fall, cancer is becoming India’s most significant medical concern. This is followed by nervous system diseases like epilepsy, stroke, and Parkinson’s, and then lifestyle diseases like diabetes, hypertension, depression, and anxiety become essential in society. This creates a more significant demand for R&D, spurring investments.

Initiatives like the GOI’s Biotechnology Industry Research Assistance Council (BIRAC) are spurring drug discovery in the initial stages (especially CADD), while private players are coming forward to collaborate on trials. Three things can help India reach Vishwaguru status in the next decade: improving education at all levels and encouraging biotechnology entrepreneurship, improving the healthcare infrastructure for better trials, and creating balanced policies that protect the rights of patients as well as innovators.

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Sanjay Dangi - Authum Investment & Infrastructure

Value Investor-Director-Authum Investment & Infrastructure Ltd- Start Up Mentor- Financial Market Expert