Posted by : Varun Doshi
On : 03 June 2014
Comments : 0
Views : 2776
Pharmaceutical company Cipla Ltd said on Monday that it plans to invest $1.5 million to buy a 14.6% stake in US-based drug research and development company Chase Pharmaceuticals Corp. The US company is developing drugs for the treatment of Alzheimer’s disease.
Cipla informed stock exchanges that it will invest another $4.5 million in the company upon achievement of a certain milestone in the drug’s development.
“This investment is consistent with Cipla New Ventures’ mission to build more innovation-led business streams for Cipla in the future,” said managing director and global chief executive officer Subhanu Saxena.
“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,” he added in a Monday statement.
In India, over 5 million people suffer from dementia; most of them are afflicted with Alzheimer’s. These numbers are expected to double by 2030. In North America, Alzheimer’s affects more than 7 million people and its impact is growing as the population ages. The disease costs the US alone $203 billion annually and, according to some estimates, the amount could reach $1.2 trillion by 2050.
In addition to financing Chase, Cipla will collaborate with the company to develop the drug. If successful, Cipla may provide low-cost access to Chase’s lead drug in India and South Africa where the Indian drug maker sells cheap versions of essential and life-saving medications.
Shares of Cipla fell 1.26% to Rs.387.60 apiece, while India’s benchmark S&P BSE Sensex Index rose 2.42% to a record 23,551. points.