SUN PHARMA ADVANCED RESEARCH COMPANY LIMITED
ANNUAL REPORT 2011-2012
Your Directors take pleasure in presenting the Seventh Annual Report and
Audited Accounts for the year ended 31st March, 2012.
(Rs. in Thousand)
Particulars Year ended 31st Year ended 31st
March, 2012 March, 2011
Total Revenue 3,01,222 5,95,872
Loss before Depreciation and Tax 6,90,698 55,217
Depreciation 31,623 29,859
Loss before Tax 7,22,321 85,076
Prior Year Fringe Benefit Tax
Provision written back - (69)
Loss after Tax 7,22,321 85,007
Balance brought forward
from Previous Year 4,90,647 4,05,640
Balance carried to Next Year 12,12,968 4,90,647
In view of loss incurred during the year under review, your Directors do
not recommend any dividend for the year.
The Members of the Company attheSixth Annual General Meeting had passed the
special resolution to offer, issue and allot equity shares not exceeding
Rs. 200 crores by way of the Rights Issue or by way of a qualified
institutions placement or offer or otherwise. The Fund Mobilising Committee
of the Company had approved offering equity shares of the Company on Rights
basis for amount not exceeding Rs. 200 crores. The Company had fled the
Draft Letter of Offer with Securities and Exchange Board of India (SEBI) on
January 31, 2012, and with the Stock Exchanges where it is listed.
Subsequently, the Company received the in-principle approval approval from
The National Stock Exchange of India Ltd., and BSE Limited in respect of
the Rights Issue of the Company.
The Company has further received the observation letter from SEBI. The
Company has made necessary applications to the Foreign Investment Promotion
Board (FIPB) and to the Reserve Bank of India (RBI) for issue of partly
paid shares to the non resident shareholders and to allow renunciation of
partly paid shares. The Company is awaiting the approval from FIPB and RBI,
upon receipt of which the Company shall finalise and file the Letter of
Offer with SEBI. Thereafter the Funds Mobilising Committee of the Company
would finalise the Rights Issue price, ratio of the Rights Issue shares and
the record date and file the final Letter of Offer with Stock Exchanges and
open the Rights Issue.
Mr. Dilip S. Shanghvi and Mr. Sudhir V. Valia, Directors of the Company,
retire by rotation at the ensuing Annual General Meeting and being eligible
offer themselves for reappointment.
The terms of appointment of Dr. T. Rajamannar as Whole-time Director will
expire on 3rd June, 2013, Your Directors recommend the re-appointment of
Dr. T. Rajamannar as Whole-time Director for a further period of 3 years.
MANAGEMENT DISCUSSION AND ANALYSIS
The management discussion and analysis on the operations of the Company is
provided in a separate section and forms part of this report.
CORPORATE GOVERNANCE REPORT
Report on Corporate Governance and Certificate of the Auditors of your
Company regarding compliance of the conditions of Corporate Governance as
stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges,
Sun Pharma Advanced Research Company Ltd., (SPARC), which is committed to
do quality research work, has a dedicated team of around 250 employees.
This team consists of 214 scientists who are highly knowledgeable and
veterans in their field of work. We understand and value the contribution
of our employees and take great pride in the commitment, competence and
vigor shown by them which has helped SPARC to outshine its competitors. We
strive to give our employees an environment which is conducive for their
professional and personal growth and empowers them to inculcate
discretionary behavior in the day-to-day functioning which leads to
collective organizational success.
Your Directors truly appreciate the efforts and contribution by Team SPARC
for maintaining and further accelerating the growth pace.
Information as per Section 217(2A) of the Companies Act, 1956, read with
the Companies (Particulars of Employees) Rules, 1975 as amended, is
available at the registered office of your Company. However, as per the
provisions of Section 219(1)(b)(iv) of the said Act, the Report and
Accounts are being sent to all shareholders of the Company and others
entitled thereto excluding the aforesaid information. Any shareholder
interested in obtaining a copy of this statement may write to the Company
Secretary at Mumbai office or Registered office address of the Company.
The Company has not accepted any deposits from the Public during the year
under review, under the provisions of the Companies Act, 1956 and the rules
INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNINGS AND OUTGO:
The additional information relating to energy conservation, technology
absorption, foreign exchange earnings and outgo, pursuant to Section 217(1)
(e) of the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988, is given
in Annexure and forms part of this Report.
DIRECTORS` RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2AA) of the Companies Act,
1956, with respect to Directors` Responsibility Statement, it is hereby
(i) that in the preparation of the annual accounts for the financial year
ended 31st March, 2012, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
(ii) that the Directors have selected appropriate accounting policies and
applied them consistently and made judgements and estimates that were
reasonable and prudent so as to give a true and fair view of the state of
affairs of the Company at the end of the financial year and on the loss of
the Company for the year under review;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;
(iv) that the Directors have prepared the annual accounts for the financial
year ended 31st March, 2012 on a `going concern` basis.
Your Company`s auditors, M/s. Deloitte Haskins & Sells, Chartered
Accountants, Mumbai, retire at the conclusion of the forthcoming Annual
General Meeting. Your Company has received a letter from them to the effect
that their re-appointment, if made, will be in accordance with the
provisions of Section 224(1-B) of the Companies Act, 1956.
Your Directors wish to thank all stakeholders and business partners-your
Company`s bankers, the medical profession and business associates for their
continued support and valuable co-operation. The Directors also wish to
express their gratitude to investors for the faith that they continue to
repose in the Company.
For and on behalf of the Board of Directors
Place: Mumbai Dilip S. Shanghvi
Date : 2nd May, 2012 Chairman & Managing Director
ANNEXURE TO DIRECTORS` REPORT
CONSERVATION OF ENERGY Power and Fuel Consumption
Our operations are not energy intensive. However the Company endeavors to
optimize the use of energy and has taken adequate steps to avoid wastage
and use the latest technology & equipment, wherever feasible, to reduce
A. Research and Development
1. SPECIFIC AREAS IN WHICH R&D IS CARRIED OUT BY THE COMPANY
Sun Pharma Advanced Research Company Ltd (SPARC Ltd) works on innovation
and new product development for global markets. It undertakes projects in
innovative research and technology for new chemical entities (NCE`s) or new
molecules, and novel drug delivery systems (NDDS).
New Chemical Entities (NCE`s)
The thrust areas of research programs for new molecules or new chemical
entities (NCE`s) are:
* Design and development of therapies for
* Design and development of pro-drugs (chemical delivery systems) for
currently marketed drugs that have poor oral absorption profile.
SUN-1334H is a novel selective histamine H1 receptor antagonist for the
therapy of allergic disorders such as seasonal and perennial allergic
rhinitis, urticaria, etc. This molecule has finished phase II clinical
studies in USA and in India, chronic toxicity studies are ongoing, Phase
III studies of the oral Sun1334H will commence once the data from the TQT
studies is completely analyzed and found acceptable. It has also been
developed as an eye-drop for ophthalmic indications. IND filed in the US,
phase II clinical trials by ocular administration has been completed.
However, considering the results from clinical phase 2 POC study in the US,
we are evaluating further clinical development of 1334H ophthalmic solution
SUN-597 is a locally acting anti-inflammatory glucocorticoid replicator
agonist, belonging to the category called "soft steroids". Preclinical
development has been completed for SUN-597 for use in the treatment of
allergic rhinitis and asthma, administered as nasal spray and as a inhaled
product. For nasal spray, Phase I studies (dose escalation, both single
dose and repeat dose) in healthy human subjects for assessing the safety of
Sun 0597 nasal formulation have been completed in India. IND application
for phase 2 studies in patients with allergic rhinitis has been filed in
Germany. For the inhaled product, preclinical toxicity is ongoing and IND
filing is likely in FY13. A topical cream and ophthalmic formulations are
also under development, with IND filings planned for both in FY13.
Anticonvulsant/ Modification of absorption
Our lead molecule, SUN-44 is a pro-drug of the currently marketed drug
gabapentin which is used for the treatment of neuropathy and seizures.
Investigational new drug application (IND) has been approved in India for
conducting clinical trials,and Phase I is planned in FY13.
Muscle relaxant/ Modification of absorption
Our lead SUN-09 is a pro-drug of a currently marketed drug used as a
skeletal muscle relaxant for the treatment of spasticity related to CNS
disorders. Phase I studies have now been completed satisfactorily with the
IR tablet, where no dose limiting toxicity was observed. Phase I studies of
the slow release formulation of Sun-09 have been completed in Ql FY13.
Anticancer: For Sun-K706 preclinical studies to demonstrate safety and
efficacy are underway. Toxicity studies that are required for filing IND
application are expected to be completed by Q4 FY13. IND filing is expected
to be done in FY13.
Novel Drug Delivery Systems (NDDS)
In the drug delivery systems research (NDDS) platform technologies that are
being developed are:
* Oral Controlled release systems
Gastric retention systems (GRS)
Matrix system (wrap-matrix)
* Targeted drug delivery-injection
Nanoparticle based products (Nanotecton)
* Biodegradable injections/implants
* Topical drug delivery systems
Novel device for inhaled drugs
SMM technology for ophthalmic solution
GFR technology for ophthalmic solution
ORAL CONTROLLED RELEASE SYSTEMS
Gastro retentive innovative device (GRID)
An innovative gastro retentive system (GRS) has been devised that allows
longer retention in the stomach and improves gastrointestinal absorption of
drugs that have a narrow absorption window. The mechanism for
gastroretention is based on flotation, size expansion and mucoadhesion. SPA
for Baclofen GRS has been approved by the USFDA. Baclofen GRS has been
filed using the 505 B2 route, and will enter Phase III clinical trials for
spasticity Baclofen GRS has been launched in India.
This multi-layered matrix-based tablet offers controlled release with just
once a day dosing. Levetiracetam, an anti-epileptic will be filed as a
505b2 in the US.
For a skeletal muscle relaxant. Phase I has been completed in India.
Several other products including a cardiovascular, an anticancer and a CNS
agent are in development.
INJECTABLE TARGETED DRUG DELIVERY
Nanotechnology based delivery systems (Nanotecton) enables selective
delivery of cytotoxic drugs to cancerous tissues. In this technology, drugs
are encapsulated within nanoscale carriers derived from biocompatible/
biodegradable polymers and lipids. Two products, PICN and DICN are under
Depot formulations using biodegradable polymers obviate the requirement of
frequent injections of certain drugs in case of ailments such as hormone
dependant cancers. The depot technology developed by us uses long-acting
A peptide drug using this technology is in development. Our product is
manufactured in a proprietary, automated manufacturing unit. Our process of
manufacturing microspheres is cleaner compared to the other products
available in the market which uses class 2 solvents in large quantities.
Also, the manufacturing process is industry-scale.
Novel device for inhaled drugs
A newly engineered dry powder inhalation device which enables convenient
and uniform dose administration of drugs for asthma and COPD. The device is
small, convenient to carry and have a simple three step operating sequence
- "open-inhale-close". The device has being developed to comply with the US
and European FDA requirements. Phase III studies in India had been
successfully completed and the product was launched in the domestic market
in 2011. For the US, we are using the 505 (b)(2) route, and intend to file
SMM technology for ophthalmic formulations
After clinical trial, a BAK free latanoprost OD has been launched in India.
IND has been approved at the USFDA. The product is under clinical
development for the US.
GFR technology for once a day ophthalmic formulations
A significant advantage over currently available glaucoma therapy, Timolol
OD ophthalmic solution has been commercialized in the Indian Market. SPARC
is also pursuing the 505(b)(2) route for development of this technology for
combination of Timolol and Latanoprost for the US. This combination product
uses salient features of two technologies and is under clinical development
for India and the US.
BENEFITS DERIVED AS A RESULT OF THE ABOVE R&D
SPARC has been working on technology intensive, longer duration projects
with uncertain timeframes. NCE`s upon commercialization are expected to
provide patients with better treatment options or safer side effect profile
for the disorders for which these therapies are being developed.
2. The new drug delivery systems under development are platform
technologies that can be developed for several different drugs. The
eventual commercialization of such NDDS products would provide patients
with newer dosage forms that are safer, more effective in terms of
availability in the body, and easier for the patient to take or to nursing
staff to administer.
3. FUTURE PLAN OF ACTION
New Chemical Entities (NCE`s)
- Pilot TQT studies with the oral Sun 1334H formulation are ongoing
- For ophthalmic formulation, a Phase II study to assess efficacy of 1334H
in allergic conjunctivitis in conjunctival allergen challenge (CAC) model
has been completed in the USA.
Chronic toxicity studies are ongoing.
Inflammation - SUN-0597
- Completed phase I clinical studies by intranasal route
- IND application for Phase II studies in patients with allergic rhinitis
has been filed in Germany and has been approved in Q2 FY13,
For the inhalation product, preclinical toxicity studies are in progress.
For the dermal product, preclinical studies are ongoing. Formulation
development is likely to be completed by Q4 FY13.
- For the ophthalmic formulation of Sun 0597, preclinical studies for the
selection of appropriate strength and formulation are ongoing.
Pro-drug - SUN-44
IND has been approved by the regulatory authority in India. Phase I trials
are to be initiated in FY13.
Pro-drug - SUN-09
Phase I studies of the slow release formulation of Sun-09 have been
completed in Ql FY13.
Preclinical studies to demonstrate its safety and efficacy are underway.
Toxicity studies are expected to be completed by Q4 FY13. IND filing is
expected to be done in Ql FY14.
Novel Drug Delivery Systems (NDDS)
ORAL CONTROLLED RELEASE SYSTEMS
Gastro retentive innovative device (GRID)
Baclofen GRS has already been launched in India. The product will now enter
Phase III in the US.
Study in alcohol dependence is ongoing.
Wrap matrix system
One ANDA based on this technology (Venlafaxine ER) has been approved by
USFDA and launched in the US. Two more ANDAs are filed and awaiting
approval. Levitiracetam will be filed as a 505b2 in the US. An anticancer
agent, a cardiovascular drug and a CNS drug are under development.
INJECTABLE TARGETED DRUG DELIVERY
PICN- Phase II/III study in metastatic breast cancer has completed
DICN- Phase I in patients with solid tumors has been completed in India.
Phase I in NSCLC is planned in FY2013.
Phase III in acromegaly patients has been completed with satisfactory
results, IND is expected to be filed in the US in FY13.
DRY POWDER INHALER
Product launched in India. Pre IND meeting completed for the US, IND likely
to befiled in FY13.
SMM TECHNOLOGY FOR OPHTHALMIC FORMULATIONS
Latonoprost eye drops have been launched in India. Phase III study for the
US has completed enrollment. NDA filing is likely in FY13.
GFR TECHNOLOGY FOR ONCE A DAY OPHTHALMIC
Timolol Maleate based on this technology is marketed in India An NCE is
also under development.
One combination product (Latanoprost and Timolol) based on this technology
is under development. Phase III efficacy and safety study is ongoing in
India, Pre IND meeting is planned for FY13.
Rs. in Thousand
4. EXPENDITURE ON R&D Year ended Year ended
31st March, 31st March,
a) Capital 42,281 51,590
b) Revenue 9,89,171 6,49,809
c) Total 10,31,452 7,01,399
d) Total R&D 356.0% 120.2%
expenditure as %
of Total Turnover
B. Technology Absorption, Adaptation and Innovation
1. Efforts in brief, made towards technology absorption, adaptation and
The Company continues its efforts to develop Innovative and Novel Drug
Delivery System and new chemical entities.
2. Benefits derived as a result of the above efforts e.g. Product
improvement, cost reduction, product development, import substitution.
Innovative NCE and NDDS programs will eventually bring new and effective
products to market. While developing NCE`s all efforts are taken to ensure
that the process is efficient and environment friendly. These products, if
and when commercialized, will help patients lead better lives.
3. Your company has not imported technology since its inception.
Rs. in Thousand
C. Foreign Exchange Earnings and Outgo Year ended Year ended
31st March, 31st March,
1. Earnings 1,60,444 4,21,474
2. Outgo 4,92,063 2,48,195
MANAGEMENT DISCUSSION AND ANALYSIS
INDUSTRY STRUCTURE AND DEVELOPMENTS
Innovative Pharma R&D in India continues to build the skill base,
infrastructure and framework of regulation to move to the next stage of
research evolution. This year saw the entry of India`s first indigenously
developed molecule, (Ranbaxy`s antimalarial, Arterolane), in world markets.
The first permission for phase II research in India, for home-grown stem
cell-based therapeutics was given this year (DCGI approval to Stempeutics
for Stemcell in several indications from osteoporosis to type 2 diabetes).
The first of the late stage licensing in deals for Indian pharma also
happened this year (Piramal`s deal for Bayer`s Florbetaben used in
diagnosis for Alzheimers).
These research initiatives from Indian companies address world markets and
are important validations of the caliber of R&D work being done in the
country. That too, in an environment that saw international companies react
to cost pressure by pruning research budgets, cutting R&D pipelines and
having to justify pricing on comparative effectiveness and efficacy.
When the Indian pharma sector began serious investments in drug discovery
in the country in the early 1990`s, it began with certain advantages on
account of the strong generic industry - such as strong chemistry and
formulation skills and high quality institutes across the country. One
drawback that often has been stated was the lack of clinical research
skills. But now these have begun to reach a critical mass with expertise
coming from international CROs and clinical research divisions established
by Indian companies.
The necessary national clinical research framework has also evolved over
the years. The National Biotech Regulatory Authority Bill that is awaiting
consideration by the Parliament, is expected to regulate the safe
deployment and development of biotech products. The health ministry, in a
separate move, has also issued the final draft of the health research
policy. In a move that would assist companies that follow internationally
accepted clinical trial practices, the government made the registration of
ethics committees mandatory. Also, a Clinical Trials Registry has been
created and the registration of all clinical trials including
bioavailability/bio-equivalence studies have been made mandatory in India.
The regulatory framework that research requires is gradually being put into
place, though several industry experts have pointed to a need to balance
caution with speed.
Starting out with reverse engineering skills, the sector has now built
capabilities across a wide spectrum of R&D -genomics, custom synthesis,
physical and chemical analysis, in vitro and ex vivo studies, ADME,
efficacy studies in animal models, animal toxicology, biopharmaceutics,
biological sciences such as molecular biology, pharmacology, clinical
pharmacology, data management and statistics.
An impending shortage of skills, especially in biological sciences, has
been highlighted in the past. Both government and private initiatives are
attempting to address this shortfall in biological sciences such as
molecular biology, pharmacology, toxicology, clinical pharmacology.
Private-public partnership is one of the ways that is being increasingly
adopted for addressing this skill shortage. For instance, the National
Center for Biological Sciences has instituted an innovation one-stop shop
called C Camp that seeks to bridge the gap between lab and market, by
fostering innovation and turning technology into products.
One of the key reasons that has often been quoted for the industry`s slower
than expected growth is lack of funding. But this might be changing. While
compared to the developed world, there possibly isn`t enough risk capital,
but there have been instances of venture capitalists beginning to invest in
the seed funding stage as well. Another as yet nascent source of funding is
the government. The Department of Pharmaceuticals is setting up a
Rs.10,000 cr venture fund to incentivize drug discovery and innovation in
Indian pharma companies earn revenues out of branded generics in India and
rest of world markets, but invest in high risk R&D. The cost of bringing a
new molecule to market globally is estimated by experts at around $800
million. Industry experts estimate that on an average, out of 10,000
molecules being developed, only one or two are likely to reach market.
Indian companies at this point have limited capacity to take this risk. Of
course, this should change once the first few completely indigenously
developed products reach market. Any demonstration of success will attract
investment and interest.
One way that companies seek to address this resource gap is through co-
development tie-ups, partnering with a much larger multinational in order
to focus on specific areas, or working jointly with a smaller company that
has the requisite technical expertise.
Over the last few years, new developmental pipelines from in-house R&D have
begun to dry up for large multinationals. One reason for this is stringent
expectations at the USFDA. Another reason is that new leads address complex
therapies and may be more prone to failure.
Pharma R&D in developed countries is becoming increasingly costly,
requiring a relook at basic competencies, research areas and returns,
sometimes requiring a look at smaller, below-the-radar opportunities. A
number of new drugs approved for marketing reflects this renewed focus. Of
the 35 drugs that the USFDA cleared last year, several represented
therapeutic advances such as the first drug for Hodgkin`s lymphoma in the
last thirty years and the first lupus drug in ffty years. While larger
companies have been reducing unproductive R&D investments to better
conserve resources and focus on specific therapies, the trend of new
molecules being licensed in and/ or acquired from smaller or boutique
pharma companies, or even university departments, continues.
Another interesting trend worth considering is the effort of the National
Institutes of Health in the US to work systematically with industry to
repurpose and re-examine old and new drugs and discarded leads for new
uses. This effort, "repositioning" has found several successes, such as the
development of thalidomide for leprosy and multiple myeloma. This
initiative is considering drugs across a wide list: off patent generics,
branded blockbusters, experimental candidates and abandoned products. A
database of molecules has been created, with over 8000 alternatives.
The USFDA is also looking at ways to fast track research. Experimental
drugs that show a big effect early in development for treating serious or
life-threatening diseases could possibly get a faster and cheaper path to
U.S. approval, under a proposal currently with the Congress. U.S. drug
regulators would be able to label such treatments "breakthrough" therapies
and work with companies to speed up clinical trials, for example by testing
the drugs for a shorter time or enrolling fewer patients.
An emerging trend is that of pharma companies and venture capital or
private equity funds partnering for specific projects or entire pipelines,
in exchange for a stake. In such cases, several rounds of capital infusion
happen before if and when a product reaches market. Since R&D projects
carry uncertain time frames and high risks, private equity companies
typically invest in a portfolio of leads or companies in order to better
balance the risks. Yet, at the risk of repetition, a critical mass in
research may be reached only after the first few successes of Indian
research reach market.
OPPORTUNITIES AND THREATS
Most Indian companies, like SPARC, have been focusing on addressing two
areas: analogue chemistry for new chemical entities with improved profles
of validated targets and the development of novel drug delivery systems for
existing or new molecules speally designed to address a certain issue
with current therapy or offer advantages.
While the country continues to lead for outsourced services such as data
management, statistics and biometrics, countries across South East Asia and
some countries across Central Europe, as well as BRICS and China are moving
up the ranks. While we benefa on account of a broad range of skills, any
substantial shift in the cost differential will work against the sector.
Experts estimate that the wage and cost differentials may normalize over a
Biotech is being viewed as the next ITlike sector. Several non-pharma
companies have entered this space - Samsung, Fulm, Sony to name a few.
This new competition can change competitive intensity fundamentally.
There are reports of non-pharma companies developing drug technologies as a
corollary - IBM`s nanotechnology skills and expertise which has helped them
develop a nanotech based drug to fght antibiotic resistance, for instance.
As global multinationals set up R&D centers in India, which over the longer
term increases the talent pool in the country, this directly exerts wage
pressure on the limited talent pool in the newer areas of research such as
There is a serious need for upgrading the quality of support services, such
as the quality of preliminary and continuing training, quality and
timeliness of support services from local or supplementary vendors. There
is a concern, too, as to whether our administrative setup for regulatory
work and patents is capable of handling both the complexity of new research
and a large volume of patent applications.
If India has to compete with developed markets for a share of the research
pie, a renewed focus on speed across the concerned areas will be required.
To kickstart this initiative, the Government of India has announced a
public-private partnership with 50% public funding. The Government intends
to catapult India to a top 5 pharma innovation hub by 2020, so that one out
of every 5 to 10 drugs discovered worldwide originates from India.
Regulatory lead time when applicable, speed of patient recruitment in
clinical research, availability of high tech solutions such as high
throughput instrumentation and remote data capture are other important
factors that need to be considered for speedy execution.
1. NDDS PROJECTS
Considerable progress was made on some of the NDDS projects that the SPARC
team is working on. Products based on seven NDDS platform technologies are
being developed, including oral, injectable and topical dosage forms.
Products using each of these platforms have reached the Indian market other
than the nano particulate injection platform.
1. Gastro Retentive Innovative Device (GRIDT)
2. Controlled Release Technology - Wrap matrixT
1. Nanoparticulate formulations
2. Biodegradable depot injections
1. Dry powder inhaler and nasal sprays
2. SMM technology for ophthalmic formulations
3. GFR technology for once-a-day ophthalmic formulations
1. GASTRO RETENTIVE INNOVATIVE DEVICE (GRID(TM))
This is an ideal once-a-day delivery system for drugs that are otherwise
absorbed only from the upper part of the intestine, or drugs that may have
a low solubility in intestinal fluid. However, since most dosage forms
would transit the stomach rather quickly, it is difficult to make these
into long acting or controlled release formulations.
Longer retention in the stomach improves absorption of drugs that are
absorbed from the stomach.
This oral dosage form can be designed to offer a combination of instant and
sustained drug release profiles and can be tailored to meet specific
Since the medication is released over 8 hours, the tablet can be designed
as once-a-day and offer better patient compliance.
Baclofen GRS, a once-a-day capsule to treat muscle spasticity, had been
launched in India and has been welcomed by the medical fraternity.
Spasticity is a neurological condition in which certain muscles are
continuously contracted. Estimates place the incidence at over 12 million
worldwide. Spasticity may also be associated with common neurological
disorders like multiple sclerosis, stroke, cerebral palsy and spinal cord
injury or a trauma-related injury.
Baclofen and Tizanidine are the drugs of choice for treating spasticity.
Baclofen is the largest prescribed drug for this indication, worldwide.
Baclofen GRS uses a proprietary GRIDT system which ensures longer retention
in the stomach, hence providing optimum bioavailability. Baclofen GRS
eliminates frequent day and night time dosing and reduces the adverse
effects from peak concentration, specially sedative effects.
After extensive clinical trials, Baclofen ER capsules in six strengths are
being marketed in India.
Baclofen GRS has been fled using the 505(b)(2) route and will enter Phase
III clinical trials for spasticity This trial is being initiated after a
special protocol assessment (SPA) and agreement by the USFDA. The purpose
of the Baclofen GRS Phase III Clinical study is to assess whether Baclofen
ER capsules demonstrate efficacy and safety in the treatment of spasticity.
2. CONTROLLED RELEASE TECHNOLOGY - WRAP MATRIX (TM)
This oral delivery system is designed to offer symptom control of a drug
administered once-a-day which would otherwise have to be taken several
times a day.
Usually, controlled release dosage forms of very high dose and high
solubility products are eithervery large and difficult to swallow, or tend
to release drug faster.
A combination of instant and long-term release is also tough to achieve in
the same tablet. With SPARC`s proprietary Wrap Matrix(TM) technology, a
multi-layered matrix-based tablet of such drugs offers controlled release
with just once-a-day dosing without creating too bulky a tablet for
products requiring a large daily dose.
Levetiracetam, an anti-epileptic with high solubility and very large dose
has been developed as a 1000 mg and 1500 mg tablet and bioequivalent to
Keppra. This will be fled as a 505(b)(2) in the US.
A skeletal muscle relaxant with an ultra short half life that has been
designed to offer better therapeutic action over the repeat dose IR product
currently available, is in clinical studies. Phase I study has been
completed in India.
A controlled release formulation has been developed for a cardiovascular
agent with high dose and high solubility. Combinations with various drugs
that have complementary mechanisms of action are under development.
For an anticancer combination, Phase I studies are planned. For one CNS
agent in a new indication, proof of concept is planned. For another CNS
agent with very high solubility, pharmacokinetic studies are ongoing.
Several controlled release products based on this technology have been
launched in India, and have earned decent prescribersupport. They include
molecules like Metoprolol (antihypertensive) & its combinations,
Ropinirole, Pramipexole & Bupropion.
Venlafaxine ER (antidepressant), based on this technology, has already been
approved by EU & USFDA. Two more ANDAs have been fled with the USFDA.
Products with a very high dose can be formulated into an easier-to-swallow
tablet using this technology. Since the release profile with this
technology is not simple to copy, the risk of generics is limited.
1. SELF DIPERSING NANOPRATICLE TECHNOLOGY - NANOTECTON
Water insoluble anticancer drugs have two issues with their use - first,
toxic surfactants often have to be used to solubilize the drug; and
secondly, such drugs not only reach the tumor tissues but also reach and
penetrate healthy tissues in the body.
The anticancer drugs that we`ve created using SPARC`s novel self dispersing
nanoparticle technology platform addresses these challenges. The products
that we have developed using this technology, deliver higher drug
localization to the cancer cells, use lesser excipients and deliver a
Using self dispersing nanoparticle technology, SPARC has developed
Paclitaxel Injection Concentrate for Nanodispersion (PICN) and Docetaxel
Injection Concentrate for Nanodispersion (DICN).
Usually, when anticancer drugs have to be administered, special preparation
is required - premedication with antihista-mines or steroids, use of
special infusion bags/bottles and in line filters. Products made with our
technology do not need such preparation. Our product has a quick and easy
one step dilution and infusion. Since infusion time is shorter with these
nanotech products, hospital stay could be shorter.
PACLITAXEL INJECTION FOR NANODISPERSION (PICN)
Taxanes are the most successful drug class for solid tumors, and molecules
like Paclitaxel and Docetaxel are blockbusters owing to significantly
higher response rates and survival advantages in a wide range of solid
Paclitaxel is the established standard of care for advanced cancers such as
those of the breast, lung, ovary, prostate, cervix, esophagus and stomach,
urinary tract and bladder, as well as head & neck.
Despite its success, Paclitaxel has some limitations - a high incidence and
severity of toxicities, such as hypersensitivity, neutropenia and
Some of the excipients used to dissolve the anticancer can also cause
Abraxaner, the world`s first reformulated Paclitaxel, tries to address this
issue of toxicity.
Abraxane (R) has several advantages - pre-medication with high dose
corticosteroids and antihistamines is not required, a higher dose of
Paclitaxel can be delivered As a result, Abraxane (R) commands a
significant premium to generic Paclitaxel.
However, one drawback is that Abraxane (R) uses solvent-processed human
serum albumin. The use of albumin poses risk of immunogenicity and viral
infection, specially in a patient with lowered immunity. Dosing and
administration are complex and time consuming.
Abraxane(R) was also found to be linked to higher incidence of side effects
like neuropathy compared to conventional Paclitaxel.
Our product, PICN is a novel formulation of Paclitaxel that uses
proprietary nanoparticle platform technology, Nanotecton. In this
formulation, the drug achieved 30% higher concentration in tumour tissues
compared to reported numbers for conventional Paclitaxel in animal studies.
For PICN, the patient does not need to be prepared by giving high doses of
steroids, antihistamines and antiemetics. No inline filters and special
infusion sets are required. The medication also shows a linear, predictable
response even at higher doses.
Unlike Abraxane(R), quick and easy "one step" dilution and infusion is
offered, with a shorter infusion time. Our product had shown a superior
safety profile compared to Abraxaner, observed in Phase I clinical study in
After extensive preclinical studies, Phase I clinical trials were completed
in 36 patients with metastatic breast cancer. Our product showed
significantly lower neutropenia and neuropathy and a superior safety
profile compared to reported data for Abraxane(R).
There was no hypersensitivity reaction in patients treated with PICN
despite the lack of pre-medication.
For India - Phase II/III study in metastatic breast cancer has completed
enrolment oftargeted 180 patients.
Indication of equivalent efficacy and safety compared to Abraxane(R) was
observed in this ongoing Phase II/III clinical study.
The PICN - Phase III clinical study will be conducted to evaluate the
safety and efficacy of PICN at a selected dose and compare it with standard
approved treatment in patients with metastatic breast cancer.
Filing for Indian approval is planned in Q3 2013.
For the US, we plan to use the 505 (b) (2) route to register this product,
an IND has been fled.
Studies of PICN in combination therapy with a platinum compound with a
higher dose, as well as a weekly dosing study that uses a lower dose, have
DOCETAXEL INJECTION CONCENTRATE FOR NANODIS PERSION
Using similar technology as that used for PICN, SPARC has developed a self
dispersing nanoparticle Docetaxel. This novel formulation avoids the use of
toxic solvents that are used in the conventional Docetaxel.
In animal studies, the formulation was found to be safe at doses up to 7.5
times the conventional formulation. Our formulation also achieved
significantly higher concentration in tumors compared to reported data for
the innovator brand.
In Phase I clinical trials in patients with solid tumors is completed in
India, doses up to 150 mg/sq mt were found to be tolerated and effective.
Compared to this, the usual dose that Docetaxel is administered is from 60-
100 mg/ sq. mt. A poster on the outcome of Phase I study was presented at
the American Society of Clinical Oncology in June 2012 in Chicago.
For DICN also, the patient does not need premedication of steroids and
antihistamines. No inline filters and special infusion sets are required.
The extension of our nanoparticle technology platform to this product is a
validation that the platform technology works across numerous water-
A Phase Ib study in NSCLC patients is planned for FY 2013. For the US, this
product will be fled as a 505 (b) (2).
2. BIODEGRADABLE IMPLANTS/INJECTIONS
SPARC has developed a proprietary Depot Technology with biocompatible and
biodegradable micron size polymer particles that contains the drug in its
matrix and offer long term systemic delivery of the drug. In this delivery
system, the drug is encapsulated within microspheres from where it is
The treatment of serious conditions such as prostate cancer, acromegaly,
etc. requires long term maintenance of drug levels in the body, often over
several months or years. Drugs used for these indications are not suitable
for oral use and have very short half life when given by parenteral route
thus requiring daily or frequent injections, which is cumbersome for the
One solution involves use of a depot or reservoir from which drug is
released over a long period. Our Company has developed Octreotide Depot Inj
(1 month) and Octreotide Depot Inj (3 months) which offers rapid onset and
prolonged release over months. Since uniform blood levels are reached,
there are no peaks and valleys that are seen with frequent daily doses.
Since this is a simple injection by IM/SC routes; it requires no
specialized training for administration and the injection volume is also
low, which has better patient acceptance.
Our product is manufactured in a proprietary, automated manufacturing unit
with stringent controls and sophisticated analytical equipment.
Based on this technology, Somatostatin analogue microspheres for one month
and three-month release are under development.
SOMATOSTATIN ANALOGUE MICROSPHERES (OCTREOTIDE)
Somatostatin analogues are used to treat acromegaly and growth hormone
dependent cancers. Since Somatostatin has a short half life, it needs to be
administered 3-4 times per day. Our scientists have created a 1 month long
single injection that offers tailored release of the drug.
Our process of manufacturing microspheres is cleaner compared to the other
products available in the market which use class 2 solvents in large
quantities. Also, the manufacturing process is industry-scale.
A Phase III study in acromegaly patients has been completed with
satisfactory results and a brand has been launched in India.
Activities are ongoing for an IND fling of this product in US. IND fling of
this product is planned in US Q3 2013.
A similar product designed to release the drug over a three-month period is
currently under development.
A few CNS agents are also being investigated as injectable depot systems.
1. DRY POWDER INHALER
Asthma affects over 300 million patients worldwide. Total asthma market in
developed countries (US, Europe and Japan) was valued at $ 34 billion in
2010. Inhalation drugs contribute 70% of this market.
Inhaled short and long-acting beta agonists and corticosteroids are
fundamental to the treatment of asthma. Dry Powder Inhalers (DPIs)
containing long-acting beta agonists and inhaled corticosteroids constitute
the largest drug class with sales of $ 10.4 billion and market share of
SPARC`s Salmeterol and Fluticasone DPI (Starhaler(TM) device offers a pre-
metered 60 dose device that is activated by inhalation.
Our device is small, convenient and easy to carry. Our device is easy to
use across pediatric, geriatric and adult patient populations. The device
delivers uniform dose independent of breathing flow rate. What is more, the
device is designed to avoid double dosing.
Our device is specially designed in such a manner that it delivers the drug
at 50% of the dose of the branded product and still offers the same
efficacy. Our product has demonstrated comparable efficacy to Seretider
Accuhaler in a 113 patients Phase III clinical trial in India.
Certain features have been added that make it user-friendly - there is a
visual, audible and tactile feedback upon dose administration. A glow-in-
the-dark feature ensures easy night-time use. There is a feature for
assisting visually impaired, as reminderto refill device, when eight doses
A Phase III study in India had been successfully completed. In this head-on
trial versus the innovator device, Seretider Accuhaler, SPARC`s DPI
demonstrated statistically and clinically significant improvement from the
base line on all efficacy parameters studied. There was also a reduction in
use of rescue medication, by day and night time asthma symptoms. The
efficacy and safety was comparable to the innovator device. SPARC`s DPI has
been launched in the domestic market in 2011.
For the US, we are using the 505 (b) (2) route, a pre IND meeting has been
completed with the USFDA and the initial response seems to be positive. An
IND is likelyto befiled in FY2013.
2. SWOLLEN MICELLE MICROEMULSION (SMM) TECHNOLOGY
SMM technology is a platform technology for solubilizing ophthalmic drugs
with limited or no water solubility. This technology does not require the
use of quaternary ammonium preservative/ surfactants like Benzalkonium
Chloride (BAK) which may be damaging to the eyes.
Glaucoma is a type of optic neuropathy characterized by progressive injury
to the retinal ganglion cells. Elevated intraocular pressure (IOP) is
considered the primary cause of the optic nerve damage.
Glaucoma is said to be the second leading cause of blindness globally and
is estimated to have a global incidence of 65 million glaucoma patients.
Prostaglandin analogues such as Latanoprost are the first line treatment
for glaucoma and form the largest drug class. The currently marketed
Latanoprost product contains the preservative, Benzalkonium Chloride
("BAK"). BAK not only acts as a preservative, but it also solubilizes the
drug in its micelle structure and is used in almost double quantity than
normally required. Chronic exposure to BAK containing ophthalmic
formulation results in serious ocular toxicities viz., loss of tear film
stability and damage to corneal and conjunctival surface.
SPARC has developed BAK-free Latanoprost eye drops using SMM Technology.
This is a patented formulation of Latanoprost with the same strength and
dosing as the market leader Xalatanr. Removal of BAK reduces tearing,
burning, itching and hence reduces drainage from the surface of the eye.
Our brand of Latanoprost, Latoprost RT has gained good prescriber support
in the Indian market.
Prior to the launch, SPARC had completed a 4-week, randomised, multicenter
Phase III study with 100 subjects to compare the safety and efficacy of
SPARC`s Latanoprost with Xalatan. Clinically and statistically significant
reductions in IOP were observed with SPARC`s Latanoprost. Safety and
efficacy outcomes were comparable to Xalatan. A 8-week study on 25 subjects
demonstrated improved tear breakup time and overall ocular surface disease
index scores after switching patients from a BAK -containing Latanoprost to
the BAK-free Latanoprost.
Previously, an IND had been approved at the USFDA. The USFDA had required a
Phase III study for product registration, enrolment for which has been
The LSLV (last subject last visit) has been completed in April this year.
The NDA fling is planned in Q4 FY 2013.
GEL FREE RESERVOIR (GFR) TECHNOLOGY
Chronic eye ailments like glaucoma typically require drugs to be instilled
several times a day. To increase the duration of action of such drugs and
to localize drug action with minimal systemic absorption, also to create a
clear and non irritant formulation, SPARC has developed Gel Free Reservoir
Gel Free Reservoir technology platform consists of a unique polymer ratio
that shows synergistic increase in viscosity without the loss of clarity
and flow property. Timolol Maleate once-a-day ophthalmic solution developed
by our Company has been launched in India to very good acceptance. Prior to
the launch, SPARC had completed a 6-week, randomized, multicenter Phase III
study with 100 subjects to compare the safety and efficacy of SPARC`s
Timolol once daily with Timoptic twice daily. Clinically and statistically
significant reductions in IOP were observed with SPARC`s Timolol. Efficacy
and safety was comparable to Timoptic. The physical properties of our
product are similar to natural tears. The product has the characteristics
of an ideal eye drop - clear colorless solution, bioadhesive yet non
An NCE is also being developed using this technology.
LATANOPROST AND TIMOLOL COMBINATION ONCE-A-DAY OPHTHALMIC
Both these drugs - Latanoprost and Timolol, have different mechanisms of
action. In over 40% of patients with glaucoma, a combination of drugs is
required to be given. However, if these drugs are given singly and one
after the other, there is a strong likelihood of the drug that is
administered first, being washed out.
This product is being developed combining essential features of both SMM
Technology and GFR Technology Latanoprost and Timolol are existing drugs
used for the treatment of glaucoma. Typically, these drugs need to be
Our product contains BAK-free Latanoprost for improved ocular retention.
Removal of BAK reduces tearing, burning, itching and hence reduces drainage
from the surface of the eye. Another advantage is that our product contains
Latanoprost in an unbound form, which also enables its partition across eye
The second active ingredient in our formulation is Timolol. Timolol is
typically instilled into the eye 2-3 times a day. SPARC`s unique Timolol OD
formulation traps the drug in a viscous matrix. However, this unique
polymer mix has been created with similar properties as natural tears, so
there is no change in visibility for the patient. Timolol is released
gradually from this matrix during the course of the day. This Timolol OD
has clinically been proven to be equal to twice-a-day Timolol.
Our combination product contains essential features of our two ophthalmic
SPARC is pursuing the 505(b)(2) route for development of this delivery
The Phase III efficacy and safety study is ongoing in India, for marketing
approval in India. The interim data is encouraging. The study will be
completed in Q2 FY 2013.
Subsequently, SPARC will also be initiating Phase III, active controlled,
non-inferiority clinical study. Pre-IND meeting with USFDA is planned in Q3
FY 2013 to understand the requirements for further clinical development in
2. NEW CHEMICAL ENTITIES
Over the last few years, we`d shared data about the projects related to
therapeutic analogues/bioavailability modification that the team at SPARC
has been working on. We believe that these projects, which are more focused
on chemistry, offer a better handle on risk, resources and timelines for
new molecule research, where uncertainty in development timelines and
clinical outcomes is inherent.
This antiallergic antihistamine, the first of SPARC Ltd`s molecules is
being developed for oral and topical (eyedrop and nasal) use.
Antihistamines are prescribed in conditions like allergic rhinitis,
urticaria, hay fever, conjunctivitis and pruritis.
1) SUN 1334H
Sun 1334H offers an advantageous pharmacological and safety profile
compared to the currently marketed antihistamines.
In preclinical studies, Sun 1334H showed efficacy as a potent antihistamine
and selective H1 blocker with fast onset and long duration of action. Sun
1334H also showed good anti-inflammatoryactivity.
A two-year-long carcinogenicity study in animal models, with the oral
of Sun 1334H, as a part of chronic toxicity studies, has been completed and
the initial results are quite encouraging.
On account of the cardiac toxicity seen with oral antihistamines, the USFDA
requires submission of safety data on thorough QT (TQT) studies at very
high doses. The pilot TQT studies with the oral Sun 1334H formulation are
ongoing and the initial results seem to be favorable.
Phase III studies of the oral Sun 1334H will commence once the data from
the TQT studies is completely analyzed and found acceptable. Renal safety
study in human volunteers is planned.
Sun 1334H is also being studied for ophthalmic conditions like pink eye or
allergic conjunctivitis. In preclinical studies as we had previously
shared, a 0.3% solution of Sun 1334H eye drop showed a good inhibition of
allergen and histamine induced conjunctivitis on once-a-day dosing. Chronic
toxicity for the eyedrop formulations is ongoing. In a Phase I study
conducted in India with the eyedrops, it was found to be well tolerated by
healthy volunteers. A Phase II study to assess efficacy of Sun 1334H in
allergic conjunctivitis in conjunctival allergen challenge (CAC) model has
been completed in the USA. Sun 1334H was shown to be safe and well
tolerated. At the highest dose, 0.45% Sun 1334H showed clinically effective
prevention of ocular itching with onset of action at fifteen minutes.
Although not clinically significant, 0.15% and 0.45% Sun 1334H showed
statistically significant effect for 8 hours. Chronic toxicity studies are
ongoing for the ophthalmic formulation. However, considering the results
from the Phase II proof of concept (POC) study, we are evaluating further
clinical development of Sun 1334H ophthalmicsolution.
Sun 0597 is a topical glucocorticoid that we are currently developing for
administration as a nasal spray for allergic rhinitis and as an inhalation
product. We are also contemplating development of this molecule later for
other topical applications viz. ophthalmic and dermal. Non-systemic
glucocorticoids are used to treat inflammations of the airway, skin, eye
and gastrointestinal tract.
However, long term use of glucocorticoids in chronic inflammatory disorders
can result in undesirable side effects such as hypothalamus-pituitary-
adrenal axis suppression, osteoporosis, lowered immunity, growth
suppression, behavioural changes and lipid metabolism changes. Sun 0597
appears to be a novel, safer glucocorticoid with a promising therapeutic
In preclinical studies, Sun 0597 administered through the nasal route had
shown good efficacy in animal models for inflammation, as well in models of
asthma and rhinitis. The oral bioavailability as well as the plasma half
life was very low and therefore the molecule is expected to show a low
likelihood of systemic side effects.
II) SUN 0597
Sun 0597 had also demonstrated in preclinical screens a higher therapeutic
index compared to the currently marketed corticosteroids, which means that
it is likely to be safer for long term use.
Phase I studies (dose escalation, both single dose and repeat dose) in
healthy human subjects for assessing the safety of Sun 0597 nasal
formulation have been completed in India and molecule was found to be safe
and well tolerated. In Phase I single dose escalating study, there were no
safety issues up to a dose of 3200 mcg. In Phase I multiple dose escalating
study, S0597 was found to be safe and well tolerated when given up to doses
of 3200 mcg/day for 14 days.
IND application for Phase II study in patients with allergic rhinitis has
been fled in Germany in April and the study is planned to start in Q2 this
For the inhalation product, preclinical toxicity studies are in progress.
IND fling to the Drug Controller General of India is expected by Q4 FY
For the dermal product, preclinical studies are ongoing. Formulation
development is likely to be completed by Q4 FY 2013. IND fling is expected
by Q4 FY 2013.
For the ophthalmic formulation of Sun 0597, preclinical studies for the
selection of appropriate strength and formulation are ongoing. Formulation
development is expected to be completed by Q2 FY 2013. IND fling is likely
by Q4 FY 2013.
Baclofen is the standard drug of choice for the treatment of spasticity.
However, it has a narrow absorption window in the intestine and after
absorption, is rapidly cleared from the blood. To offer adequate symptom
relief, the drug has to be administered frequently.
Our lead, Sun 09 is a prodrug of Baclofen and is being developed as "an
efficient Baclofen". Unlike Baclofen, this NCE would avoid a narrow window
of absorption, enabling absorbtion throughout the length of the intestine,
thus offering better systemic availability from an equivalent dose.
In extensive animal studies, Sun 09 had shown good efficacy without any
additional safety concerns.
Phase I studies have now been completed satisfactorily with the IR tablet,
where no dose limiting toxicity was observed. Phase I studies of the slow
release formulation of Sun 09 have been completed in Q1 FY 2013.
Sun 44, a prodrug of Gabapentin, is being developed as a Gabapentin with
improved pharmacokinetic profile. Gabapentin, an analogue of the brain
neurotransmitter GABA, is prescribed in the treatment of epilepsy, as also
for the treatment of neuropathic pain, restless leg syndrome and mood
Gabapentin has a non-linear dose dependent bioavailability - as the dose is
increased, the percentage of absorption decreases. This is because the
transport mechanism in the intestine gets saturated at a higher dose level.
Also, the expression of the transporter that links with the molecule and
carries it across the gastrointestinal tract tissues, may vary from patient
to patient. Besides, the molecule is also excreted relatively rapidly,
hence there is a great deal of variation in patients responding to the
Sun 44 has been designed to address this bioavailability issue. Once
absorbed, Sun 44 is converted to Gabapentin. In animal studies, Sun 44
shows good efficacy and rapid absorbtion.
Also, Sun 44 does not raise any additional safety concerns on account of
its molecule structure. Organ toxicities related to acetaldehyde, such as
liver, brain and cardiac toxicities have not been observed.
IND has been approved by the regulatory authority in India. Phase I trials
are to be initiated in FY 2013.
5) SUN K706
Sun K706 is a novel tyrosine kinase inhibitor, intended for the treatment
of chronic myelogenous leukemia (CML). While the currently available oral
drugs like Imatinib (Gleevecr), Nilotinib (Tasignar) and Dasatinib
(Sprycelr) are quite effective chemotherapeutic agents for CML, these drugs
are ineffective on the most resistant form of mutation in leukemic cells,
viz. the T315I mutation. In fact, currently there is no approved drug for
the patients who become resistant to therapy and are diagnosed with the
T315I mutation. Besides, the current therapeutic agents are also known to
cause cardiac side effects (QT prolongation), myelosuppression, liver
toxicity, bleeding, electrolyte imbalance and fluid retention.
Our novel NCE Sun K706 targets this T315I resistance in CML. In vitro
studies have demonstrated that Sun K706 potently inhibits, the T315I mutant
of the Abl kinase besides other major mutant forms. Further, preclinical
studies to demonstrate its safety and efficacy are underway. Toxicity
studies that are required for filing IND application are expected to be
completed by Q4 FY 2013. IND filing is expected to be done in Ql FY 2014.
PART OF MANAGEMENT DISCUSSION & ANALYSIS
As we take our NCE and NDDS projects ahead on the research pathway, we`re
learning about how to manage in a changing regulatory environment, handle
the technical demands of innovation, and balance the requirements of
projects that have short term, medium term and long term timeframes. While
we`re satisfied with the progress on our projects so far, we recognize that
we have quite some distance to go before we reach market, though some NDDS
projects are considerably closer to market than they were previously.
Risks and Concerns
Innovative research is a high risk area, and while we`ve tried to take on
manageable risks through our process of project selection, and by
simultaneously working on projects with different delivery timeframes. But
there is every likelihood that an investment may have to be abandoned if a
project is dropped or changed in subsequent stages of research progress. A
project may need longer timeframes, or may need additional tests or costs
that were not initially anticipated. We may or may not find a technology or
licensing partner to work with, in order to bring the product to market. A
competing technology or product might limit the potential for our NCE or
Internal control systems and their adequacy
SPARC Ltd. has in place a well defined organizational structure and
adequate internal controls for efficient operations. The team has in place
internal policies, and is cognizant of applicable laws and regulations,
particularly those related to protection of intellectual property,
resources and assets, and the accurate reporting of financial transactions.
The company continually upgrades these systems. The internal control system
is supplemented by extensive internal audits, conducted by independent
firms of chartered accountants.