Mumbai-based drug major Cipla Limited has invested $1.5 million in US-based drug development company Chase Pharmaceuticals Inc to pick up 14.6 per cent, the company informed the stock exchange on Monday.
According to the announcement, the company will invest $4.5 million more in Chase Pharma after the completion of milestones. The total investment committed in the company is $21 million. Edmond de Rothschild Investment Partners and New Rhein Healthcare LLC are investing along with Cipla Pharma in the deal.
“We want to bring affordable medicines where we identify an unmet patient need, in a way that leverages Cipla’s formidable technology, device and development capabilities,” said Subhanu Saxena, MD & Global CEO, Cipla Ltd.
Cipla Pharma has made this investment through its investment arm Cipla New Ventures which is headed by Chandru Chawla. This investment will come in two phases which will support Phase 2a and Phase 2b clinical trials of Chase’s lead drug CPC 201 for treating Alzheimer’s disease.
For Chase Pharma, which raised its earlier round of funding from US-based Brain Trust Accelerator Fund, this is a series B round of investment.
Chase Pharma, which is headquartered in Washington DC, is focused on developing novel approaches to improve treatments for Alzheimer’s disease. At present, it looks at improving efficacy, safety and tolerability of existing Alzheimer medications. The company was founded in 2007 by Thomas Chase, former scientific director at National Institute of Neurological Disorders and Stroke (NINDS) and Kathleen Clarence-Smith, former head of CNS development at Sanofi.
Apart from this investment, Cipla will collaborate with Chase to develop this drug. If the drug is successful, the company will provide low-cost access to Chase’s lead drug in India and South Africa.
According to the release, India has over 5 million patients who suffer from dementia, most of who also suffer from Alzheimer’s. The numbers are expected to double by 2030. The disease currently costs $203 billion to the US with projections to reach $1.2 trillion by 2050.
The development comes in the wake of a trend of consolidation in domestic and international pharmaceutical space. The recent developments in this segment include Sun Pharma acquiring Ranbaxy in $3.2 billion deal and Ahmedabad-based Torrent Pharma acquiring domestic formulation business of Elder Pharma for Rs 2,004 crore.
YK Hamied promoted Cipla has been on a consolidation phase and made some key acquisitions, including that of South Africa-based Cipla Medpro Africa Ltd for $512 million last year and Mumbai-based Meditab Specialties for $28.45 million in 2010.
(Edited by Joby Puthuparampil Johnson)