RISE OF THE CHALLENGER
Forbes India|December 18,2020
Hyderabad’s Biological e has forged multiple deals to co-develop and manufacture covid-19 vaccines, and is prepared to take on the biggest in the business
MANU BALACHANDRAN & DIVYA J SHEKHAR

The turn of the century, Mahima Datla believes, changed her life and the fortunes of her family-owned business Biological E. It was then that, armed with an undergraduate degree in business administration from Webster University in the UK, Datla decided to join her family business, a Hyderabad-based pharmaceutical company. Founded in 1948 by her grandfathers as Biological Products Pvt Ltd, the company started out by manufacturing Heparin, a drug to prevent blood clots.

“I didn’t intend to work here,” says Datla, 43, managing director of Biological E. “I didn’t even have a clue about what our business was, because it wasn’t a preset idea that I would graduate and join it. I stayed back because it would look good on my resume.” The plan then, Datla says, was to eventually pursue an MBA before joining a private equity firm or a management consultancy.

But, fate, and perhaps management consultancy McKinsey, had other plans.

Around the time that she joined the business, her father Vijaykumar Datla had engaged McKinsey for a structural rejig of their business. The Datlas had just finished repurchasing a 25 percent stake held by global pharmaceutical major GlaxoSmithKline (GSK). At that time, Biological E made animal vaccines, a drug for tuberculosis, and was largely a contract manufacturing organisation (CMO) for GSK.

Witnessing the rejig from close quarters made Datla change her mind. “The restructuring was helpful for me because it gave me an insight into the different businesses we were in, why we needed to exit certain businesses and appreciate our business,” she says. “Around that time, I was extremely excited about vaccines because it had a profound impact on public health and it’s not very often in your life that you have an opportunity to do that.” Vaccines had then contributed to less than 10 percent of the company’s revenues.

As part of the restructuring, the company took a call to focus on vaccines, starting with a hepatitis B vaccine, as the Indian government embarked on a universal immunisation programme for hepatitis B in 2002. Today that gamble has paid off, with vaccines contributing more than 80 percent to the company’s revenues, and making Biological E a dark horse in India’s quest to find a vaccine for Covid-19.

The company is working on four Covid-19 vaccine candidates, three of which it is co-developing with pharma companies. This August, it tied up with New Jersey-based Johnson & Johnson (J&J) to manufacture JNJ-78436735—it is in phase 3 trials—at its production facility in Hyderabad, which was set up in 2017. Coincidentally, the foundation stone for the facility was laid by Paul Stoffels, vice chairman of the executive committee and chief scientific officer at J&J. “We never imagined that the facility would end up manufacturing the vaccine for J&J,” Datla says.

In August, Biological E signed a deal to co-develop a vaccine with pharmaceutical company Dynavax Technologies Corporation (in phase 1 trials), and Houston-based Baylor College of Medicine (in phase 2 trials). It has tied up with Ohio University, and is also in talks with an undisclosed partner to develop one more potential vaccine.

“I am convinced we will have a very big role to play in the solutions for Covid-19 and supply chain in some way or the other,” says Datla. “We have made multiple investments because science is science. And as passionate as I might be about it, at the end of the day, it has to prove itself.”

THE DARK HORSE

At the heart of Datla’s multipronged Covid-19 vaccine gambit is a firm belief in diversifying the technology platforms to develop a vaccine. “If a protein subunit doesn’t work, it is unlikely that a similar protein subunit belonging to someone else will work,” Datla says. “It’s important to de-risk.”

This means the company is working on a viral vector vaccine, similar to the one being developed by AstraZeneca and Pune-based Serum Institute of India (SII), an mRNA platform like the one developed by Moderna and Pfizer, and an antigen-based one.

While J&J’s vaccine is on a nonreplicating viral vector, like Russia’s Sputnik V, the one by Baylor College and Biological E uses an antigen (recombinant protein subunit of the coronavirus) along with an adjuvant called CpG 1018 from Dynavax that will boost immune response. Biological E is assessing four different formulations to determine safety and dosage requirements. Clinical trials for this are being conducted in India with close to 400 people and results are expected in February.

“The good part of this technology platform is that it is highly scalable,” says Datla, explaining that unlike Covaxin (being developed by Hyderabad-based Bharat Biotech) and AZD1222 (being developed by AstraZeneca), Biological E and Baylor College’s candidate does not need very high lab safety levels. It will, however, be a two-dose vaccine, similar to what numerous other manufacturers are planning. Of the ₹1,100 crore investments that Biological E has earmarked for Covid-19—including vaccine development, trials and manufacturing facilities—more than half will be for conducting phase 3 trials among 30,000 people for this vaccine candidate. Favourable results from its phase 1 and 2 trials will give Biological E enough confidence to start at-risk manufacturing early next year.

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