transgene biotek ltd share price Management discussions

"ANNEXURE B "

CAUTION

Statements in the Management Discussion and Analysis describing the Companys and its subsidiaries objectives, projections, estimates and expectations may be ‘forward-looking statements within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include among others, climatic conditions, economic conditions affecting demand-supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.

(a) Oral and Nasal drug delivery technologies and opportunities

Oral drug delivery is the most preferred administration route due to noninvasive, high patient compliance, convenient to handle, and does not require any specific sterile conditions. However, some of the drugs administered orally face several physical, biological, and biochemical barriers which lower the therapeutic efficacy of the drugs before getting absorbed into the systemic circulation. The utilization of nanocarriers for oral drug delivery overcome abovementioned barriers and considered as an alternative strategy to address the drawbacks of oral drug delivery. However, the challenges faced in oral drug delivery include poor bioavailability of drug, which is determined by three vital factors, namely, dissolution, permeability, and solubility. In addition, behavior of the drug in gastrointestinal tract (GIT) is dependent on intrinsic factors of drug and physiological aspects, namely, pH, microbial colonization, and enzymes.

Relating to Nasal drug delivery system, it is also considered to be advantageous when compared with other routes of drug delivery as it avoids the hepatic first-pass effect, blood- brain barrier penetration, and compliance issues with parenteral administration. Nasal administration, with its many advantages, naturally has made researchers interested in the nasal route of drug delivery. However, mucociliary clearance poses significant obstacles to the systemic delivery of drugs via the nasal cavity. The entire surface of the nasal cavity is covered by a mucus layer. Mucociliary clearance rapidly removes drugs from the absorption site. In addition to mucociliary clearance, hair in the nostrils, sneezing, and coughing also greatly reduce the number of particles available to enter the human body through the mucosal surface.

However, nasal administration also has some limitations, such as its low bioavailability due to metabolism on the mucosal surface, and irreversible damage to the nasal mucosa due to the ingredients added into the formula. Moreover, the method of nasal administration is not applicable to all drugs.

In both oral and nasal drug delivery systems of drug delivery, bioavailability issues are one of the major challenges for formulation research and development. There are many formulation strategies adopted to improve the bioavailability of many poorly water-soluble and low- permeable drugs.

All the afore mentioned challenges are reported to have been adequately addressed by NiedlFree resulting in the demonstration of exceptional bio-availability, a key indicator of the success of technology.

In view of the large and potential opportunities for these technologies, the management has evolved a strategy to advance the oral delivery technology for its monetization overcoming several internal and external challenges.

Internal Auditing and Controls

The internal control systems of the Company are adequate and commensurate with the size of operations. These controls ensure that transactions are authorized, recorded and reported on time. They ensure that assets are safe guarded and protected against loss or unauthorized disposal.

The Internal Audit department carried out audits in different areas of the Companys operations. Post-audit reviews were carried out to ensure that audit recommendations were implemented.

The Audit Committee of the Board of Directors reviewed the audit program and findings of the Internal Audit department.

Outlook

The outlook for Transgene is on the path of sustainable growth that has been eluding for several years with a successful alliance with NiedlFree that lit up the bright light for Transgene too diversifying its focus on several medical conditions in addition to Diabetes.