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E Q Pharmaceuticals. e Q Market Size (US$ mn)8200 As % of total health expenditure25.3 As % of GDP1.3 As % of world market1.6 Growth rate %7.2 Per capita.

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Presentation on theme: "E Q Pharmaceuticals. e Q Market Size (US$ mn)8200 As % of total health expenditure25.3 As % of GDP1.3 As % of world market1.6 Growth rate %7.2 Per capita."— Presentation transcript:

1 e Q Pharmaceuticals

2 e Q Market Size (US$ mn)8200 As % of total health expenditure25.3 As % of GDP1.3 As % of world market1.6 Growth rate %7.2 Per capita expenditure (US$)8 Summary of Indian Pharmaceutical market in 2004 Indian pharmaceutical market currently estimated at U$ 8.7 bn Globally, India market ranks fourth in terms of volume and the 13th largest by value Predicted to grow by over 7 % to become a US$ 11.6 bn opportunity by 2009 In 2005, Indian companies controlled 70 per cent of the domestic market Indian pharma majors launched more than 10 products per year, global MNCs averaged 1-2 annually. US$ bn Projected Pharmaceutical market, 2004-2005 Source: Epsicom Indian Pharmaceutical Market – USD 11.6 billion opportunity Source: Epsicom

3 e Q Maximum New Product Launch Acute therapy make up about 60% of the total pharmaceutical market Changing lifestyles shifting disease profile from acute to chronic Sales of chronic therapies growing at 15-20% Category Value (Rs bn) Value Market Share (%) Value growth (%) Volume Growth (%) Anti-infective32.816.4411 Gastrointestinal21.810.989 Cardiac20.710.31815 Respiratory20.410.296 Vitamins/minerals/nutrients19.39.655 Pain/analgesic19.19.589 Dermatological10.85.484 Gynaecology10.75.33(1) Neuro psychiatry10.65.3106 Antidiabetics8.84.41116 Opthologicals3.51.71816 Others22.011-- Aggregate200. 5 10089 Lifestyle drugs underlie market growth Anti Diabetic Cardiology Anti Infective Neurology Source: CLSA Asia-Pacific Markets, BT

4 e Q Only 30 % of one billion population have access to modern medicine. 80% of the health care payments borne by individuals Increasing disposable income and awareness will drive the growth 300 million strong middle class have higher healthcare expectations 35 – 45 million Indians are estimated to be able to afford the best medicine Availability and Affordability will drive growth Breakdown of Healthcare Payments Source: CLSA Asia-Pacific Markets, BT

5 e Q Manufacturing opportunities Innovation opportunities Contract Research Clinical Research Indian Pharmaceutical Aldorado Key Opportunities Segments

6 e Q Introduction of product patents has renewed the interest of formerly cautious big pharma in India Global pharmacos expected to launch 200-250 new drugs over next 8-10 years totaling an estimated US$ 3-5 bn. FDI inflow grew over six fold from US$ 60.7 mn in 2003 to US$ 340 mn, in fiscal year 2004 Bristol Myers Squibb, Boehringer Ingelheim and Eisai without Indian presence earlier, have made recent foray Indian firms tying up with foreign companies to in-license drugs Post 2005, India an exciting market for Big Pharma

7 e Q Maximum FDA approved plant Globally harmonized regulations cGMP compliance Process chemistry skills Large, skilled workforce Big pharma Collaborative Research Contract Research Contract Manufacturing Distribution in India Ranbaxy and GSK Torrent Divi’s Matrix Dishman, Shasun Nicholas, Cadila, Wockhardt Big pharma partnering with Indian pharma Out sourcing and offshoring opportunities abound Cost competitive research base Success in IT

8 e Q India’s Cost Competitiveness key advantage Low cost heaven India Western companies able to provide a step down of 30- 40% in cost by a mere site transfer to India Companies in India able to reduce the upfront capital cost of setting up a project by 25-50% Indian companies have been able to establish USFDA approved plants at about 50% lower capital costs Benefit of continuous cost reduction through process re- engineering. India’s huge resource of skilled scientists, available at a fraction of the cost in developed countries

9 e Q Global bid to tap India’s manufacturing prowess Contract manufacturing estimated to generate US$ 1 billion in revenue in 2010 Growth likely to be driven by increasing outsourcing of late-stage and off-patent molecules by big-pharma On-patent molecules in highly competitive therapies e.g., proton pump inhibitors (PPI) also being outsourced Roche, Bayer, Aventis and Chiron are all executing plans to make India the regional hub for APIs and supplies of bulk drugs Contract Manufacturing Deals in India Source: CLSA Asia-Pacific Markets, BT

10 e Q Significant capacity build up by the Indian industries Indian pharma companies have undertaken combined total capex of over US$ 1 bn between 2003 – 05 Net fixed assets of Indian pharma companies have grown by 50% to US$ 1.6 bn during 2003 - 05 Aggregate capital expenditure of fifteen largest generic companies tripled between 2000-04 Second and third tier companies making heavy investment to service planned forays into regulated market India tops in number of USFDA approved plants outside the US Significant capacity expansion by Indian companies

11 e Q India tops in global DMF and ANDA filings India companies have approximate share of 35% in DMFs and 25% in ANDAs filing globally Second and third tier companies have aggressively scaled up ANDA/DMF filing in the US market over the last 2-3 years DMF fillings from India ANDA fillings from India No of Indian Companies filing ANDAs ANDA pipeline of Indian companies

12 e Q Indian companies raising R&D budget significantly Major domestic companies currently investing 6 -10% of turnover in R&D Partnering, especially out-licensing of lead compounds is the preferred route adopted by Indian companies Indian pharmacos have entered into about 8 out- licensing deals to date with global majors. GSK has signed up a drug discovery alliance with Ranbaxy. AstraZeneca has tied up with Torrent Pharma for research aimed at discovering a drug for the treatment of hypertension India’s innovation being harnessed through in-licensing & partnering

13 e Q Contract research in India estimated to grow at 40-50% per annum Indian companies redefining their business model to harness global R&D opportunities. Outsourced Research generating new revenue sources Contract Research Collaborative Research Captive Research ADME Toxicology Drug Discovery Research Process Chemistry Astra Zeneca GSK + Ranbaxy Players Strategy Niche Areas

14 e Q Indian chemists, highly skilled in activities such as organic synthesis, medicinal chemistry, process chemistry and analytical chemistry in demand ADME/Toxicology, Drug discovery research and Process chemistry being increasingly outsourced Indian companies strength lies in low cost of operation, competent scientific workforce and experience in IT Collaboration with Indian CRO helps to Cover gaps in capacity, optimization of cost, widened skill base and enhancement of drug development pipeline Preclinical R&D – India’s chemistry skills in demand Pfizer, Novartis, Astra Zeneca and GSK have established own R&D infrastructure to conduct Offshore research in India

15 e Q Need to conduct pre-clinical studies driving companies to India to set up captive facilities or form alliances with Indian CROs Enhanced biomedical infrastructure and competitive costs are key growth drivers Indian CROs capable of offering complete pre-clinical solutions at one place Laboratories and facilities at par with international standard Capability to undertake studies in line with international regulatory guidelines e.g. OECD, EC, EU etc. Most players affiliated to Independent Institutional animal ethics committee Toxicology services – US$ 20-22 mn opportunity Dossier preparation Regulatory summaries Product registration Product defence Range of services

16 e Q Government support for pre-clinical research technical and financial assistance from NIH, USA On 25 acres of land with an Investment of US$ 16.7 mn Facility to house 7500 breeding stocks Center has received US$ 3mn grant from US and US$ 4 mn from ICMR Govt. of Andhra Pradesh has allotted 100 acres of land at the Biotech Park in Genome Valley Deptt. Of Biotechnology providing US$ 4.4 mn for the facility Facility will be of international standards with animal testing facilities, hi-tech equipment, a strong technical board and ethical committee Primate Research Facility, MumbaiInternational Animal Research Facility, Hyderabad Indian Council of Medical Research

17 e Q Indian clinical research industry estimated at over US$ 100 mn Increasing compliance with ICH-GCP protocols Growing body of trained and experienced investigators India expected to capture about 10% of the global clinical research market by 2010 Big Pharma contributing patients from India for multicentric global trials for FDA/EMEA submissions. 7 of the Top 10 global CROs have a presence in India Cost Advantage Fast Rate of Subject Recruitments Improved Medical Infrastructure Large Pool of English Speaking Investigators Increasing Compliance with ICH –GCP Success Drivers Clinical Research – India, most significant emerging geography

18 e Q Pfizer, Novartis and Eli Lilly and now GSK are all understood to be making India a global hub for their clinical research activities. Quintiles, India is believed to be one of the most profitable subsidiaries (by operating profit margins) of Quintiles Transnational. Phase III study of Zymar gatifloxacin ophthalmic solution conducted by Quintiles in India accepted by FDA for approval to treat bacterial conjunctivitis Multinational Success Story

19 e Q Policy Initiatives The patent (Third amendment) Act, 2005 Revision of schedule Y to permit conduct of phase II-IV clinical trials in India Amendment of schedule M to make industry compliance to Good Manufacturing Practices Stringent measures for makers of spurious drugs Creation of pharma R&D fund with a total corpus of US$ 33.3 million Concessional Industrial Package for pharmaceutical manufacturers in certain hilly states Constitution of India Pharmacopoeia Commission Creation of Export Promotion Council “Pharmexcil”

20 e Q This presentation has been prepared jointly by the India Brand Equity Foundation (“IBEF”) and Ernst & Young (“Authors”) All rights reserved. All copyright in this presentation and related works is owned by IBEF and the Authors. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of the Author’s and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. The Author and IBEF neither recommend or endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed in this presentation. Neither the Author nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation. Disclaimer

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