India’s growing drug research industry could turn out to be a boon for U.S. companies.
Two local companies that could benefit are Irvine-based Allergan Inc. and Advanced Medical Optics Inc., the Santa Ana-based medical device maker and contact lens care company that spun out of Allergan in 2002. Both companies have relationships with an Indian drug maker.
BusinessWeek magazine recently highlighted India’s drug industry in a report on Asian business, pointing out that a new, tougher patent protection law was spurring a run in drug research there.
India’s new patent protection law, which took effect in March, is designed to bring that country’s legislation in line with World Trade Organization rules.
The article said that the law is aimed at getting India drug makers to end their 30-year practice of making unlicensed generics by ignoring Big Pharma’s patents.
The law is credited for triggering the creation of four drug research centers in India.
In December, Allergan inked a deal with Nicholas Piramal India Ltd., a Bombay drug maker with annual sales of $350 million, for a trio of anti-glaucoma treatments.
As part of the deal, Nicholas Piramal will provide bulk raw drugs that go into making Betagan, Alphagan and Alphagan-P, three of Allergan’s glaucoma medications.
Nicholas Piramal paid 133 million Indian rupees, or some $2.9 million, to buy out a contract and assets related to the Allergan deal from Alpex International, a Pakistan company that previously had the development rights.
At the time of that deal, Nicholas Piramal said it was increasing its contract work for what it called “innovator” companies. The Indian company said it hoped that collaborations with Allergan and others would increase its export sales to half of overall sales in five years from less than 10% today.
A year before the Allergan pact, Advanced Medical signed a five-year contract with Nicholas Piramal. That deal called for the Indian company to supply neutralizing tablets and other components for Advanced Medical’s eye care products.
One risk for India, according to BusinessWeek: the difficulty in going from what the magazine called “a renegade drug producer” to a competitor for big drug makers such as Pfizer Inc. and GlaxoSmithKline PLC.
Big Things Seen for Alliance
The Business Journal recently ran a column item about Alliance Imaging Inc.’s strategy.
Paul Viviano, chief executive of the Anaheim-based diagnostic image provider, called us after to share more information on the company’s strategy.
For one, “my guess is that we’re going to be a lot more active in (the acquisition market),” Viviano said. “We’re likely to have some pretty significant changes this year in terms of growth opportunities.”
Viviano also wanted to point out that Alliance’s 2004 year-end financial numbers were affected by a $44.4 million charge related to an early retirement of debt. Factoring out that charge and others, Alliance earned about $168 million on revenue of $432 million.
“We took a huge finance charge that was a pre-payment penalty,” he said.
Also, Viviano said that Alliance’s stock price rose to about $11.5 at the end of 2004 from $3.75 earlier. Shares recently traded at $10.
“We have a lot of hard work ahead of us,by no means are we congratulating ourselves. But the stock market kind of recognized our turnaround with those new businesses,” Viviano said.
The new business focus includes fixed-site centers and positron emission tomography scanning, or PET, to detect cancer, Viviano said.
Mixed Decision
Cross Medical Products Inc., an Irvine-based medical device maker, won one and lost two in U.S. District Court earlier this month.
The company was caught up in an intellectual property battle against Medtronic Inc., the Minneapolis-based device maker that employs more than 500 people at a Santa Ana heart valve plant.
Cross and its parent, Warsaw, Ind.-based Biomet Inc., prevailed in a dispute over the design of spinal implant polyaxial screws, which are used to stabilize the spine and correct back disorders.
The court said that a redesigned screw from Medtronic infringes on a Cross patent. An earlier court decision found that Medtronic’s original design violated the Cross patent.
On the other hand, Medtronic won a couple of the patent infringement claims, which cover technology used in spinal fusion surgery.
The court said that the C-Tek anterior cervical plate made by Cross violated two Medtronic patents. C-Tek is used to increase a patient’s neck stability following cervical surgery.
Both Biomet and Medtronic said they planned to appeal the rulings against them.
Bits and Pieces:
Orange County Supervisor Lou Correa recently held a community forum on improving healthcare access to the county’s children. Speakers included Dr. Mark Horton, the county’s health officer, Mike Ruane, executive director of the Children and Families Commission, and Susan Zepeda, chief executive of the HealthCare Foundation for Orange County Anaheim Memorial Medical Center said it met with Assemblyman Thomas Umberg, D-Anaheim, and plans to serve as a health issues resource to the assemblyman.
