1. PH Buch 1 INTERNATIONAL SYMPOSIUM ON GLOBAL PERSPECTIVE ON PHARMA & BIOTECH PATENTS AN OVERVIEW OF PHARMA AND BIOTECH INDUSTRY AND KEY IPR ISSUES By PADMIN BUCH B. Pharm, MBA, CMC Chief Consultant GITCO LTD, Ahmedabad April 19, 2007 Ahmedabad

2. PH Buch 2 GITCO PATENT ASSISTANCE CELL GITCO is a multi-disciplinary consultancy organization Promoted by ICICI Bank, IDBI, State Govt. Corporations & Nationalized Banks Offers Project, Management, Financial, Industrial & Technical Consultancy Services Patent Assistance Cell is one of them

3. PH Buch 3 GITCO PATENT ASSISTANCE CELL Patent Awareness Patent Counseling Patent Drafting Patent Filing Twenty Seven Patents filed so far Initiated by Government of Gujarat Patent Awareness Patent Counseling Patent Drafting Patent Filing Twenty Seven Patents filed so far Initiated by Government of Gujarat

4. PH Buch 4 Cash Subsidy By State Government 50% (Maximum Rs. 5 Lakhs) against the expenses incurred by any organization, Institute, Individual or Industrial unit for obtaining patent registration. This assistance will be given only once per product/process per institution/individual. A pioneering initiative

5. PH Buch 5 Pharma Industry : The Churn Factors The Product Patent New MRP based Excise VAT Revised Schedule-M Unequal Taxation in states Price Control Dynamics of International Market

6. PH Buch 6 Indian Drugs and Pharmaceutical Industry - An Overview Size :US$ 5.7billion(2005-06)( ASSOCHAM ) Formulations @ 78%; Bulk Drugs @ 22% CAGR of 9.7 over last 5 years Growth of Export : 22%, Domestic Market 8% to 10% Exports estimated at US $ 3.5 Billions Also Highly fragmented Industry ◄◄◄ Gujarat occupies a Prominent Position @ 40% plus share

7. PH Buch 7 Where Gujarat Pharma Stands India has three distinct Pharma Clusters (Zones) of manufacturing bases. Primarily Bulk Drugs, Some Formulations Southern India (Chennai- Hyderabad Axis) III -do-Northern IndiaII Bulk Drugs, Formulation & Merchant Exports Western India (Mumbai - Gujarat Axis) I Product FocusRegionZone/ Cluster Gujarat is primarily a formulation zone

8. PH Buch 8 INDIAN PHARMA : OVERVIEW Strengths: Highly developed industry High Intellectual Capital India a huge market: 1.1 billion potential local patients Pro-active approach by several companies Low cost of drug development and clinical trials Strong Bio diversity Implementation of Product Patent act : Modified Provisions

9. PH Buch 9 Outsourcing : Contract Research and Manufacturing R&D - Different strategies for SMEs Herbal Products Contract Manufacturing Bio-technology Generic Products Patent free segments of North American & Europe Many others - for a proactive industry Low cost - high quality manufacturing hub Opportunities

10. PH Buch 10 BIOTECH SCENARIO (Courtesy:Biotechnology in Gujarat;Status Paper by GSBTM & www.vibrantgujarat.com)

11. PH Buch 11 BIOTECH SCENARIO Acknowledged as an economy leveler and a tool for socio-economic development  New Diagnostic tools  Prevention based healthcare  Personalised medical treatment  Genetic testing & medicines Great contribution in Food & Agri sector Also environment friendly, energy efficient Driven by Innovation,Research & Enterprise

12. PH Buch 12 GLOBAL SCENARIO The Global Biotechnology market : $63 billion (2004-2005) Compound annual growth rate @ 18% Market dominated by the United States The industry is rapidly maturing and is closer to profitability The agriculture and food segment also contributed significantly

13. PH Buch 13 INDIAN SCENARIO Indian Biotechnology Industry growing @ 36.5 % Around 280 Companies and revenue of over USD 1.1 billion (2004-05) Western region contributes 49.60% Emerging vaccine hub: Vaccines constitute the largest segment of the Indian Biopharma Industry India a competitive outsourcing destination for high-end laboratory and diagnostic testing  200 Biotech Companies employed 25,000 scientists in R &D  Total manpower in Biopharma segment is 11,800  40 National Research Institutes involving 15,000 scientists

14. PH Buch 14 GUJARAT SCENARIO Evolved from convergence of successful industries Spin off / dedicated units of large diversified companies(Intas,Zydus,Bayer,Cadila Pharma,Alembic,Maps,Span,Concorde,etc.) Dominated by health-care companies Product mix include:  Biopharmaceuticals  Diagnostic kits/equipments  Animal health-care products  Preventive medicines Significant presence in agri-biotech Sector Has leading CROs : Quintiles, Lambda, Synchron,

15. PH Buch 15 GUJARAT SCENARIO 40 biotech companies & 66 support organisations Average annual turnover of the industry to the tune of Rs. 500-600 Crores Investment worth Rs.200 crores between 2003-2007 Proactive role of the State Government(Dept.of Science & Technology and GSBTM) Interphase among Industry,Academia,Research Organisations & Government

16. PH Buch 16 Business Case: Biotech in Gujarat Source: www.vibrantgujarat.com

17. PH Buch 17 The Patents (Amendment) Act 2005 (Indian Patent Act) The Patents (Amendment) Act 2005 (Indian Patent Act) Key Provisions Relevant to Pharma & Implications

18. PH Buch 18 Patent Act : Key Provisions and implications : Patentability Criteria Only Really New entity can be patented Difficult to seek Patent Extension on the basis of moderate improvements Opportunity for early entry of Generics in India Market Would benefit Generic Players

19. PH Buch 19 Patent Act : Key Provisions & its Impact Pre-Grant Opposition Most patent applications, especially with incremental modifications are likely to be keenly contested Benefit to Indian Generic Manufacturers and consumers On Flip side : delay for even genuine applications

20. PH Buch 20 Impact Analysis : Immediate Impact “Drugs based on Post-1995 molecules already being manufactured and sold in domestic market can continue … ……….. On payment of a reasonable royalty to the patent holder. Such liability would accrue prospectively after granting Patent in India”

21. PH Buch 21 Immediate Impact Almost no existing products (launched before 2005 in India) in the market would have to be withdrawn. Lack of clarity on “Reasonable Royalty” Estimates : 2-4% of revenue from the product.

22. PH Buch 22 Patent Litigations Threat Many Small Companies not aware of IP issues May face Litigations in future Patent Litigations are very costly Essential to perform Patent Analysis/ Mapping for newer drugs Also while acquiring a company : IPR Valuation

23. PH Buch 23 In-Licensing Opportunity Right given by Patent holder For marketing and distribution of Patented Drugs In return of Royalty or Profit sharing In-licensing to accelerate in next 3-4 years Opportunity for companies with strong domestic presence Also for niche players with strength in specific therapeutic segments

24. PH Buch 24 Contract Manufacturing Opportunity Outsourcing (Formulations and Bulk Drugs) Market : US $ 40 billions Estimated @ $ 900 millions in 2010 Contract Manufacturing in Domestic Market : Rs.10,000 crores Opportunity for Pro-active Small and Medium Units Plant set-up to be of standards required by Market / Regulatory Agencies Higher Investment and Professional Management Approach/Attitude

25. PH Buch 25 To adopt to the new Patent Regime, new business models would be in focus a) Contract Research b) Contract Manufacturing c) Co-marketing Alliances Herbal products ?

26. PH Buch 26 India can Do It For India, possibilities are endless Large educational infrastructure  Over 200 Universities  Over 1500 Research Institutes  Over 400 PhDs a year  8000 Pharma Graduates from 500 colleges IPR laws and mechanism being strengthened Curriculum of Institutions being revised Knowledge is India’s Intellectual Property Required : business like approach from all Signs are Positive : India will do it

27. PH Buch 27 India and Gujarat have the potential to emerge as the Major R&D and Contract Manufacturing Hub…... … It surely will happen

28. PH Buch 28 THANK YOU Padmin Buch... GITCO Limited GITCO HOUSE Opp: Sardar Patel Stadium Navrangpura Ahmedabad-380009 Ph. No. (079) 26565333; 26569617; 26564618 Fax : 079-26565279 E-mail : gitcoltd@eth.net THANK YOU Padmin Buch... GITCO Limited GITCO HOUSE Opp: Sardar Patel Stadium Navrangpura Ahmedabad-380009 Ph. No. (079) 26565333; 26569617; 26564618 Fax : 079-26565279 E-mail : gitcoltd@eth.net