indian pharma opportunities and challenges...
TRANSCRIPT
2
Outline of presentation
Evolution of Indian Pharma
Opportunity landscape
API & Generics
Contract services
Innovation
India Advantage &Partnering opportunities
3
Evolution of Indian pharma industry has been driven by changes in the patent laws
Growth of API and Formulations
API to US & EuropeReverse engineering of molecules
Leveraged excellent Chemistry skills
Research only in Government institutionsImport substitution
Export Led growth
Global generics opportunity US and EU as key markets
Globalization of key players
Outsourcing wave contract research and manufacturing
Emerging Discovery research in Indian Pharma companies
Transition to patent regime
70 s thru 90 s
90 s onwards
Dominated by MNC players (>70%)
Prices comparable to International prices
Government started IDPL and HAB with Soviet support
1970 patent law passed in 1972 which allowed only process patents
Prior to 1970
Indian Pharma has to find new and novel ways to grow in the global arena
4
3.23.5
4.1
4.44.7
0
1
2
3
4
5
2000 2001 2002 2003 2004
10.4% 9.7%8.3% 5.1% 6.4%
Indian Pharmaceutical Market
$ bn
Source:ORG-IMS
CAGR of 8.7%
Growth Drivers New introductions in chronic lifestyle driven therapies CVS, Metabolic Disorders and CNS
5
Outline of presentation
Evolution of Indian Pharma
Opportunity landscape
API & Generics
Contract services
Innovation
India Advantage &Partnering opportunities
6
Development services including clinical trials and data management
Supply of API and Generics to RegulatedLess Regulated markets
Launch of NME/NCEs through analog research, NDDS and emerging therapies
Global opportunities
Innovation led global research
development opportunity
Global Generics & API
opportunity
Research services such as bioinformatics, structure based drug design
Global Opportunities
Short Term
Long Term
Contract ServicesCRAMS Space
Contract manufacturing for innovator and generics companies
7
Indian Companies are poised to capture the Global API Opportunity
1,350
130
520
~1,000
1993 1998 2003 2005
API Exports by Indian companies are growing at a CAGR of over 30%
API exports $ Million
17% 22% 29% 36%
83% 78% 71% 64%
2001 2002 2003 2004
India
Rest of the World
Number of Drug Master Files (DMFs) filed annually
100% = 331 352 541461
Over 40% of the DMF s filed in Q1 2005 were from India
8
Indian Pharma is making its presence felt in the Global generics market
164
1538
47
72
2000 2001 2002 2003 2004
Indian companies currently have <3% share of generics market, but have filed 15% of incremental applications
One in every 4 ANDA s filed today are by Indian companies
Number of Abbreviated New Drug Applications (ANDAs) filed annually
Sales of top 20 US prescription drugs
Indian companies have filed ANDA s for 10 of the top 20 US drugs worth $35 bn
Para 4 Filed57%
No Para 4 Filed43% 80%
20%
Para 4 Filed
Source Source -- CLSACLSA
9
Outline of presentation
Evolution of Indian Pharma
Opportunity landscape
API & Generics
Contract services
Innovation
India Advantage &Partnering opportunities
10
Pharmaceutical outsourcing India s future landscape
Global Pharmaceutical outsourcing market
Development outsourcing
Manufacturingoutsourcing
CustomizedChemistry services
$ 3bn by 2007
$ 18bn by 2007$ 27bn by 2007
Source: Industry Reports, Kotak Institutional Equities
Technical skills
Regulatory & quality compliance
Cost advantage
Global relationships
Clinical Trial India advtg. factors
11
Indian Pharma Positioning in the outsourcing space
Pharmaceutical product life cycle
Pre-launch Growing Mature Early-to-market Late-to-market
On-patent On-patent Off-patent
Customized chemistry services
Albany Molecular, Divi s Labs, Biocon, Shasun Chemicals, Dr. Reddy s
Manufacturing outsourcing: Off patent
Ranbaxy, Dr. Reddy s, Cipla, Biocon, Lupin, Aurobindo Pharma, Ipca, Divi s Laboratories, Shasun Chemicals
Manufacturing outsourcing: On patent
Nicholas Piramal, Shasun Chemicals, Cadila Healthcare
Development Outsourcing
Biocon, Nicholas Piramal, GVK
Source: Industry Reports, Kotak Institutional Equities
12
Outline of presentation
Evolution of Indian Pharma
Opportunity landscape
API & Generics
Contract services
Innovation
India Advantage &Partnering opportunities
13
Ascending the value chain is key to growth .
Margins
Low
High
Intermediates
API
CommodityGenerics & Hospital
Commodity
API to NA/Europe
NA/Europe Generic
OTC
NDDS
Patented New ProductsResearch servicesDevelopment services
Inn
ova
tio
n
14
Generics20%
Innovation80%
The real value lies in innovation .
Source: Goldman Sachs estimates
Global Pharmaceutical Market 450 bn
Innovation is not an easy game
Big Pharma spends around a billion dollars to bring a new NME / NCE to market
A vibrant risk capital market, a mindset that encourages innovation and involvement of academic institutions are pre-requisites for success
15
Indian Pharma Need to develop skill-sets for tapping NME/NCE opportunity
Follow on drugs and NDDS
Develop follow on molecules in existing drug classesNovel Drug Delivery Systems (NDDS)
Develop new leads for existing targets
First in class drugs for existing targets
Identify new targets using emerging technologies
Skill build-up Synthetic chemistry
Medicinal chemistry
Molecular biology
Pharmacology
Protein chemistry
Cell biology
New drugs for new targets
Current Indian skill set
16
Dr. Reddy sRanbaxyGlenmarkWockhardt
Just scratching the surface of innovation-led drug discovery
2
42**2*
Other companies with stated Discovery programs
Companies with wider portfolio
Sun PharmaceuticalsNicholas PiramalZydus
TorrentDaburLupin
Phase I Phase II Phase IIIPreclinical
48
* RBx 2258 l* RBx 2258 licensed to Schwarz Pharmaicensed to Schwarz Pharma** DRF 2593 being co** DRF 2593 being co--developed with developed with RheosciencesRheosciences
1313
Some Licensing Deals
Ranbaxy Schwarz PharmaDr. Reddy s Novartis, Novo NordiskTorrent Novartis (AGE breaker)Glenmark Forest Laboratories (PDE4)
NME research in areas like Malaria (Ranbaxy),
Anti-infectives (Dr. Reddy s) and Cancer (Dabur, Dr. Reddy s) focused on tackling
problems of developing countries
17
Summary
Increased commoditization & Increased commoditization & competitive intensity for competitive intensity for
generics & APIgenerics & API ss
Needs to gear up to address innovationNeeds to gear up to address innovation--led led business opportunity in both the developing business opportunity in both the developing and developed worldsand developed worlds
Indian Indian PharmaPharma
Opportunity for alternative Opportunity for alternative source of NCE research and source of NCE research and
development in the long term development in the long term
Utilize the global generics Utilize the global generics opportunity to fuel growthopportunity to fuel growth
Opportunity to capture Opportunity to capture the CRAMS spacethe CRAMS space
18
India Advantage &Partnering opportunities
Outline of presentation
Evolution of Indian Pharma
Opportunity landscape
API & Generics
Contract services
Innovation
19
Indian Pharma Self sufficient and gearing up to serve the world
When we joined the WTO ten years ago, Indian pharma exports were less than $ 1 bn. A decade
later our pharma exports are in excess of $ 3.5 bn and account for more than a third of the
industry s turnover
Indian Pharma exports ($ bn)
1.0
3.5
1995 2005
CAGR > 20%
Captive Import
Indian Pharmaceutical Industry
Indian Pharmaceutical industry meets around 70% of the country s demand for bulk drugs, drug
intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles.
20,000 registered units
250 large and 8000 small units
Meet around 70% of India s demand
21
Advantage India
Competent workforce
Cost-effective
Information & Technology
Globalisation
Good analytical set up
Quality, cGMP compliance
Communication
Good documentation
Long-term commitment
Pharmaceutical Development
Cost of conducting clinical trials
in India 40 60 % of developed
markets (cost of patient recruitment
and medical personnel
India has strong IT skills for
clinical data management
Heterogeneous gene pool
Speed Recruitment of patients
& conducting clinical trials
Return rate of patients
Clinical Development
22
Indian companies have strong roots in ASEAN, GCC and the African markets
Source Source -- PharmexilPharmexil
266 284
73 81
334 362
FY 2004 FY 2005
AFRICA ASEAN GCC
Increasing exports from India
$ mn
Offering affordable drugs
Indian brands dominate the CVS, GI and Anti infective therapies in most of the above markets
Brands like Ciprolet (Dr. Reddy s), Cifran and Simvor (Ranbaxy) are the top brands in many countries across GCC, ASEAN and Africa
Fighting AIDS
Indian companies are leading the fight against AIDS across the RoW markets companies like
Ranbaxy, Cipla (formulations) & Matrix (API) are the major ARV suppliers offering affordable drugs at a fraction of the innovator prices
Creating employment
Indian companies have set up manufacturing locations in a no. of countries including Nigeria,
Vietnam, and Malaysia
23
Thank You