Pravin Chaturvedi is the President and Chief Scientific Officer of Napo
Pharmaceuticals, which is headquartered in South San Francisco, CA.
Napo acquired his previous company (IndUS Pharmaceuticals of which he
was the Founder and CEO) and  remained  President and CSO of the
joint company after the M&A.  The company focuses on research and
development of new drugs for the treatment of gastrointestinal,
metabolic and cancer disorders.  It conducts most of its R&D through
outsourcing to various CROs - mostly in the US and some overseas.

Lokvani had an opportunity to talk to Pravin Chaturvedi during the TiECON conference followed by an interview later on the current news in the life sciences industry.

In the recent concluded Bio Pharma Conf and TiECON East, a question that came up was that most basic research is ailing from lack of funding. Is it because of the economic downturn or that the industry sees no profit in it ?

It is because of economic downturn as most companies are trying to
maintain healthy balance sheets to meet the market expectations of
performance.  In order to maintain such healthy balance sheets, the
companies have reduced or cut their R&D functions in the hope that
they will survive these economic climates and re-initiate their R&D in
the future.  Unfortunately, without R&D, these companies would make no
profit in the coming years, because the pharmaceutical and biotech
industry relies on investing approximately $1.5 billion over 12-15
years to obtain one product and the profitability and sustainability
of a biotech or pharmaceutical enterprise is entirely driven by their
product pipeline - which is the fruit of their R&D.

 How have the life sciences industry reacted to the economy in terms of jobs and cuts in research?

Pretty much the same as other industries.  Significant reductions have
been made in their manufacturing, sales and R&D work forces as the
companies try to show a healthy profitability in the coming years.
Unfortunately, their estimates of market recovery have been vastly
optimistic and many of the companies have failed to attract additional
investor money and have become either drastically non-productive or
worse, not survived the economic downturn.

If these trends continue, will there be a severe decline in the availability of new drug products.

 Absolutely.  The short sighted approach by the investors, management
and board members of the life science industry does not bode well for
the future of the life science industry anywhere in the world - which
will have a catastrophic reduction in its productivity, primarily due
to their perceived short term gains achieved by the life science
industry through M&A, reductions in R&D and shutting down of licensing
new and early stage technologies.

How can emerging economies like India, China and others use this as an opportunity?

Sadly, the economic outlook for India, China and for that matter, the
rest of the world, follows the economic outlook from the US.  The US,
through its sustained and long term investment in higher education
institutions and significant funding of R&D, has remained and will
remain the leader in the field of new product R&D and new technology
development.  China, in particular, has attempted to jump start its
biological technology development efforts and focused on trying to
develop new biological products such as vaccines and gene therapy, in
an attempt to bridge the R&D gap.  However, there is a limited
bandwidth to the R&D knowledge of countries like India and China, and
the gap is usually filled by alliances with the US.  So unless India
and China fund the R&D efforts of US institutions and US biotech
enterprises, it is unlikely that they can achieve significant
breakthroughs in life sciences through organic and indigenous efforts
within their respective countries.

In Massachusetts, the Governor mentioned that it will fund scientific
research with a $1 billion funding. What does it mean to companies such as yours?

It means that we may be eligible to apply for grants from such funds
as long as it meets the focus of the research goals laid out in the
funds allocated by the State of MA.  One needs to evaluate the exact
goals for which these funds are earmarked and the process of applying
for such funds.  For instance, small biotech companies and other
members of the life sciences research community, constantly apply for
NIH grants in an open and competitive environment.  Although the
funding success rate has declined due to limited availability of
funding and increased demands placed on such funds, it is the most
honest and open approach to seek the funding.  Should the same
procedure be followed for the funds available from the State, then
companies that have research and credibility in the areas of research
that the funds are earmarked for, should apply for such funding and
have an additional source of funding available to their enterprises to
help them survive and ultimately succeed in their R&D efforts.

What is your company doing differently to beat this downturn?

We have partnered with other companies for our late-stage assets and
also reduced our staff by 60% and we will depend on our royalty stream
to tide this period out. We have spun out some of our programs to
reduce our costs and have further streamlined the organization.

With all this are you still optimistic on the future of drug research ?

I believe that the US system is based on meritocracy and is the best
place in the world for life science R&D due to its good science,
technology, education and research. I think as long as the
Universities continue to remain at the forefront of science and
technology, opportunities for life science new product R&D will
continue to exist.  Furthermore, one has to consider the changing
health care paradigm, in which one has to think about the future needs
of an aging population and one has to remember that it is a long haul
since it takes more than 10 to 15 years to get a new drug. If the
investors and major biotech and pharmaceutical companies continue to
understand this, they will be successful in the long run.

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