Market Overvew

India is one of the fastest-growing pharmaceutical markets in the world, and its market size has nearly doubled since 2005. The Indian pharmaceutical market is expected to reach US$ 20 billion by 2015, growing at a compound annual growth rate (CAGR) of 11.7 per cent during 20052015 and establish its presence among the worlds leading 10 markets. It is the third-largest market in the world in terms of volume and fourteenth in terms of value

Market Segment
Contract Research manufacturing services(CRAMS) Formulations Active pharma ingredients(APIs)

Why Indian Pharma

Opportunities in Research & development
Indian pharmaceutical companies are ascending thevalue chain with a focus on innovation. By June 2010,the countrys top 20 leading pharmaceutical companies and their subsidiaries had received US2010 FDA approval for 72 ANDAs Both the industry and the GoI have enhanced the level of investments in R&D capabilities and ininfrastructure. Ranbaxy Laboratories, a subsidiary of Daiichi Sankyo, was the top R&D spender during 20092010 at US$ 102 million. Few indigenous pharmaceutical companies such as Sun Pharma and Piramal Healthcare have demerged their research divisions to form separate companies in the last few years. Dr Reddys Laboratories NCE Balaglitazone is Indias first indigenously-developed molecule to enter thePhase III trial. The growing R&D pipeline of Indian companies presents significant in-licensing opportunities for global

India phramaceutical R&D expentidure

Specifics 2001-02 2009-2010

R&D expenditure as apercentage of sales

R&D expenditure in absolute terms (US$ Million)

1.4
55

7.5
622

No.Of Abbreviated New Drug Application (anda) approved by US FDA till june2010 Company Ranbaxy Dr. Reddy Glenmark Aurobindo Pharma Matrix Lab Luptin Sun ANDA 5 7 9 7 10 8 7

Opportunity contract manufacturing

Pharmaceutical companies preference for outsourcing as a strategic initiative has increased from 43 per cent in 2006 to 57 per cent in 2009. The Indian pharmaceutical manufacturing outsourcing market was valued at US$ 1.1 billion in2008, and the segment is currently growing at thrice the global market rate. Indias share of the outsourcing market is estimated to grow from 2.8 per cent in 2007 to 5.5 per cent in 2010. The outsourcing market is estimated to grow to US$ 1 billion by 2010. By 2010, the demand for the contract manufacturing of formulations is likely to range between US$ 210 million and US$ 300 million. The demand for APIs and intermediates is expected to amount to US$ 600 million and US$ 700 million, respectively, by 2010. APIs/intermediate outsourcing is more prevalent in India than formulation outsourcing; 64 per cent of total outsourcing is in the area ofAPIs/intermediates.

Opportunity - biosimilars
The increasing use of biologics in disease areas such as cancer and auto-immune and orphan diseases,in addition to healthcare cost containment, has driven the growth of biosimilars. Companies in this space include Reliance Biopharma, Shantha Biotech, Panacea Biotec, Wockhardt, Dr. Reddys, Biocon, Intas Biopharmaceuticals and Avesthagen

Growth Driver
Technical capability In 2009, India had more than120 US FDA-approved plants in addition to 84 UK MHRA-approved plants. Most of these plants have multiple approvalsfrom regulatory authorities in Canada, Australia,Germany and South Africa. These approved sites aptly demonstrate theability of Indian companies to deliver qualityproducts worldwide and serve as platforms for CRAMS players.

Cost efficiency The Indian market has about 8,000 manufacturers, driving the reduction in costs across the life cycleof a product. This is visibly reflected in the manufacturing costs of US FDA-approved plants in India, wherein the costs are 65 per cent lower than that in the US and 50 per cent lower than that in Europe. India rates higher than other countries on cost efficiency.

Government Support Reduction in approval time Collaborations between industry, academia and the government Focus on specialised pharmaceutical education Duty relief for technology upgrades Promotion of Indian drug discovery platforms

Indias top 10 branded drugs 2004: Corex(chlorpheniramine maleate, codeine phosphate) Asthalin(salbutamol) Sporide(cephalexin) Human Mixtard(insulin) Digene(aluminium hydroxide, magnesium hydroxide) Voveran (diclofenac sodium) Becosules(vitamin B complex, vitamin C) Betnesol(betamethasone) Taxim(cefotaxime) Althrocin(erythromycin)

The Indian Pharmaceutical Industry in 2004 Turnover: $6.02 billion, up 6.4 percent year over year Exports: $3.72 billion Imports: $985.3 million Bulk drug production: $2.10 billion, with over 400 bulk drugs produced. Over 60,000 formulations produced, in 60 therapeutic categories Capital investment: up 14.8 percent to $1.16 billion Employment: 5 million direct, 24 million indirect

Opportunities for the Indian pharmaceutical industry are in the areas of Generics (including biotechnology generics) Biotechnology Outsourcing (including contract manufacturing, information technology (IT) and R&D outsourcing).

ANDA Filings for Indian Mid-sized Companies

Company Glenmark Zydus Cadila Orchid Wockhardt

2004 12 5

2005 7 13 18 7

2006 14 8-18 18-30 12-13

Aurobindo

22

India's Other Advantages for Off shoring

Low-cost skill base Current Good Manufacturing Practice (cGMP) and U.S. FDA compliance levels High visibility in generics High-quality, compliant manufacturing Strong financial position with ability to scale up Manufacturing capacity Access to new technologies Cost efficiency and track record Industry position Recognition of product patents

Global demand for generics Patent molecules Rural market Opportunities Regulatory Frame work