Glenmark has been following this strategy to keep their innovation quotient up, and at the same time fund the company's research expenses. Two drugs developed by Glenmark for chronic pain and ulcerative colitis were out-licensed to Sanofi in mid 2011. They are currently in phase II trials. One of them, a biologic is a first-in-class therapeutic monoclonal antibody for chronic autoimmune disorders. Sanofi has licensed the rights to all therapeutic indications and is conducting the clinical development program including this trial.

"This model allows innovative research to be awarded and presents a niche opportunity to Indian companies as big pharma is looking for cheaper solutions," adds Dr Neelima Joshi-Khairatkar, senior vice president at Glenmark Pharmaceuticals.

The road to developing an Indian origin New Chemical Entity (NCE) with a foreign collaborator has however, hitherto been lined by a number of disappointments. None of the molecules developed as a part of licensing deals conducted over the past years, have been successful in clinical trials, yet. Drug discovery programs involving Glenmark, Dr Reddys, Merck, Eli Lilly and more have had not yielded positive results. Other deals such as Merck-Ranbaxy, Jubilant -Eli Lilly were called off a few years after they were started. Despite these setbacks, India's capabilities of providing a low cost alternative for drug discovery continue to be explored. The drug discovery expertise being sought is also evolving. Dr Sharma says, " This deal is a good start as largely the Indian CRO's were considered for their costs for chemistry process involving drug manufacturing. The pre-discovery or the biology processing was largely absent in outsourcing deals."

It remains to be seen if recent positive decisions such as allowing FDI in pharma would send out the right message to big pharma about investing in India's potential, both in terms of cash inflow and creating intellectual property. Inspite of the challenges, the future beckons, as Dr Rashmi says, "Drug discovery is in its infancy in India and we have a long way to go; especially in the area of early drug discovery. However, we have made a good beginning and there is a promising future."