Pharma Jaggu

8/8/2019 Pharma Jaggu

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PHARMACEUTICAL

INDUSTRY

IN INDIA

HUMERA

JAGADEESWAR SAJAN

SUDHAKAR



The first Indian , Bengal Chemicals andPharmaceutical Works, which still exists today as one

of 5 government-owned drug manufacturers, appeared

in Calcutta in 1930.

For the next 60 years, most of the drugs in India were

imported by multinationals either in fully-formulated

or bulk form.



The government started to encourage the growth of drug manufacturing by Indian companies in the early

1960s, and with the Patents Act in 1970, enabled the

industry to become what it is today.

This patent act removed composition patents from

food and drugs, and though it kept process patents,

these were shortened to a period of five to seven

years



India AdvantageIndia Advantage

Large skill baseExperts in process chemistry

Long history of reverse engineering

Vast talent poolSheer number of scientists

Motivated & English speaking

Large number of trained Indians returning home from NorthAmerica and Europe

Unmatched cost competitivenessLower cost of infrastructure and skilled manpower

Vertical integration



y Strong local industry Growing expertise with international regulatory compliance

High quality manufacturing with abundant capacities

y Speed Very strong entrepreneurial spirit

Hungry for growth and recognition Quick learners and fast movers

y Availability of capital Stock market has seen unprecedented growth in the last decade

Continues to be bullish on the pharma industry



Indian Pharmaceutical EvolutionIndian Pharmaceutical Evolution

Phase II

GovernmentControl

Indian Patent Act²1970

Drug pricescapped

Local companiesbegin to make animpact

Phase III

Development

Phase

Processdevelopment

Production

infrastructure

creation

Export initiatives

Phase IV

Growth Phase

Rapid expansion

of domestic market

Internationalmarket

development

Research

orientation

Phase V

Innovation and

Research

New IP law

Discovery Research

Convergence

1970 1980 1990 2000 2010

Phase I

Early Years

Market sharedomination by

foreign companiesRelative absence of organized Indiancompanies



SOME OF THE SOME OF THE PHARMACEUTICALS IN INDIAPHARMACEUTICALS IN INDIA



Emerging Trends & OpportunitiesEmerging Trends & Opportunities

y Geographic Convergence Established and growing destination for Generic product

development and manufacturing

Leading Indian companies seeking overseas markets and global

scale

y Generic ± Innovator Convergence Leading Indian companies trying to climb the value chain into

innovative research

India developing into a Drug Discovery services outsourcingdestination



Generic Product Development &ManufacturingGeneric Product Development &Manufacturing

DestinationDestination

y Leader in API DMF filings in the US Jan-Jun 2006 ± 175 of the 601 DMF¶s filed were by Indian companies

2005 - 313 of the 946 DMF¶s filed were by Indian companies

y Leader in capital investments - largest number of US FDA approvedmanufacturing facilities (outside the US)

y Almost 20% of ANDA filings in the US

y No place like India for generics R&D and manufacturing of API¶s &formulations

y India¶s biggest assets ± cost, speed & scientists ± churning out generics

faster than you can say µcopy¶y In 5 years, 30-35% of the global demand for generic products is expected

to be met by India



y Leading global/regional generic players

establishing a presence:

Teva ± acquired an Indian co in 2003, setting up new

development centre & another manufacturing facility

Sandoz ± development centre, 3 manufacturing

facilities, more than 1000 employeesActavis - development centre, acquired CRO (Lotus)

Mylan ± acquired controlling stake in Matrix last

month for US$ 736 mn

Ratiopharm ± development centre, manufacturingfacilities



INDIAN PHARMACEUTICALSINDIAN PHARMACEUTICALS

INDUSTRY OVER YEARSINDUSTRY OVER YEARS

The industry has grown at a compounded annual

growth rate (CAGR) of 13% during the last five

years.



Indian companies seeking overseas marketsIndian companies seeking overseas markets

and global scaleand global scaley Aggressive Growth Strategies

For building a global scale ± Ranbaxy aims to be one of the Top 5

For market entry ± acquiring local co or setting up subsidiaries

y Recent M&A activity ± size of deals growing

Ranbaxy going after acquisitions in US & Europex Acquired 3 companies in Europe in March/April 2006 Terapia (Romania) for US$ 324 million

x Raising 1.5 billion to fund further acquisitions

Dr. Reddy¶s

x

Acquired Betapharm (G

ermany) for US$ 570 million in March 2006 Matrix (now part of Mylan)

x Acquired Docpharma (Belgium) for US$ 263 million in 2005.



y Partnership opportunities

Large number of large and mid-sized Indian companies with

world-class generic product development and manufacturingcapabilities and facilities

Lot of under-utilized manufacturing capacities

These companies prefer focusing attention & resources on somekey markets (US/EU) and look for partners in other markets

Opportunities for supplementing pipelines, filling pipeline gapsand reducing/optimizing cost of development and cost of goods:

x In-licensing products

x Dossier and API development

x Contract Manufacturing

x Contract Research ± pilot & pivotal bio-equivalence studies

Opportunities for out-licensing and supplying products to leadingIndian companies for other markets



GenericGeneric ± ± Innovator convergenceInnovator convergence

y Increasing number of Indian companies moving up the value chain fromgeneric to NDDS/NCE research

y Low cost development/manufacturing to Low cost innovation

y Some examples:

Ranbaxy

x 1 project in Phase II

x

1 project in Phase Ix 7 projects in Pre-Clinical ± 2 with GSK

Dr. Reddy¶s

x 3 projects in Phase II

x 2 projects in Phase I

x 4 projects in Pre-Clinical

Glenmark

x 2 projects in Phase II ± deals with US$ 190 million signed

x 4 projects in Pre-Clinical



Drug Discovery Services OutsourcingDrug Discovery Services Outsourcing

y Global outsourcing market: US$ 15-20 billion ± Manufacturing

US$ 3-4 billion ± Research (informatics, chemistry services & chemicalcustom synthesis)

y Big pharma is entering into deals with Indian companies to lower their cost of R&D

Collaborative R&D ± GSK - Ranbaxy Service outsourcing - Wyeth ± GVK, Jubilant, Lilly ± Suven

y Global discovery services companies are looking at India toretain their cost advantages Albany Molecular & Nektar have already established a presence

y Indian industry hoping to see 3-4 global discovery servicescompanies emerging out of India



Drug Discovery Services OutsourcingDrug Discovery Services Outsourcing

y Leading Indian Service Providers: Contract Manufacturing ± Jubilant, Shasun, Divi¶s

Clinical Research ± Syngene (Biocon), Aurigene (Reddy¶s),Synchron

Bio-informatics & other IT services ± TCS, Satyam,

Infosys, GVK Bio, Jubilant Drug Discovery/Medicinal Chemistry ± Aurigene, Divi¶s,

Syngene, Suven, GVK Bio

Pre-clinicals ± Vimta, Lambda

Central laboratory services ± SR L Ranbaxy, Vimta



K ey Partnership ConsiderationsK ey Partnership Considerations

y

Supplier/Partner mapping/selection Capability / Keenness / Reliability / Competitiveness

Key team members ± development, regulatory & commercial

y Optimal Number of Partners Strategic ± markets/product lines

Opportunistic ± product specific

y Relationship management Relationship oriented culture

y Contract negotiation Clear distribution of responsibilities and timelines

Demand performance - penalties for not meeting deliverables

y Project management Regular visits and video/teleconferences a must



Market structure



BioBio--PharmaceuticalsPharmaceuticals

Bio Pharma market is valued USD 1.3 million in 2007.

Vaccines is the largest segment of Biopharma

accounting for 50% of the sectoral revenue. India is leader in global vaccine market (over 33%

market as per E&Y 2007 report) . India is the largest

producer of recombinant Hepatitis B vaccine in the

world



Vaccines market in India in 2007 was USD 0.65million registering a 40.26% growth over the

previous year.Diagnostics contributed 19% with USD 0.25 millionmarket size in 2007 ,over 50% growth over previousyear.

Therapeutics, 3rd largest contributed 14% of the total biopharma sales ±USD 0.18 million in revenues,growth of 28% in 2007.

In 2007 Biopharma contributed USD 0.65 million

worth exports.



THANQTHANQ

Pharma Jaggu

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