North Indian pharma majors consolidating operations worldwide
Thursday, January 26, 2006 08:00 IST
Most of the major Indian pharma companies located in and around New Delhi have established strong foothold in the international market. They are currently focusing on R&D based new products, tie-ups with international giants, setting up of new subsidiaries and joint ventures in export markets etc. to meet the challenges of new product patent era. These companies have ambitious growth plans and are working towards these goals with well charted out long term strategies. An overview of the performance and plans of companies like Ranbaxy Laboratories, Panacea Biotec, Ind-Swift Laboratories, Jubilant Organosys, Venus Remedies etc.
Delhi and its outskirts has special importance in the Indian pharmaceutical segment with presence of large companies like Ranbaxy Laboratories, Panacea Biotec, Ind-Swift Laboratories, Jubilant Organosys, Venus Remedies and so on. These companies have established strong foothold and are currently focusing on R&D based new products, tie-ups with international giants, setting up of new subsidiaries and joint ventures in export markets. Delhi based companies are covering segments like cardiovascular, specialised chronic therapeutic areas such as diabetes, osteoporosis, arthritis and organ transplant management infectious diseases, urology, Metabolic diseases, and inflammatory/respiratory diseases.
According to market analysts, the share prices of Delhi based pharmaceutical companies reached at their peak level recently with significant rise in market capitalization. The profitability of few companies were under pressure during the latest quarters on account of heavy investment in R&D activities, expansion of marketing activities and competition in the international markets. However, the analyst pointed out that the future is very strong and investments in assets will start yielding results within next couple of years. The change in Government policy of implementation of VAT, MRP based excise duty and change in Patent regime will have positive effect in long run.
Ranbaxy, the leader in the Indian Pharmaceutical segment and one of the top 10 generic pharma player worldwide, has a mission to become a research-based international pharmaceutical company. The company is known as the largest ANDA filers with the USFDA. It continues to forecast global sales of US$ 5 billion in 2012 and committed to increase its R&D spend of over 7 per cent of US$ one billion in 2004, to around 10 per cent of its targeted turnover of US$ two billion by 2007.
The company filed 29 ANDA during the year ended December 2004 with the USFDA including 3 Pepfar ANDA filings and 16 approvals were obtained. The total number of patent applications filed by the company with PCT/US PTO which could potentially have been filed as mailbox applications in India, stand at 338.
The company is already implementing various expansion plans to increase productivity and create manufacturing facilities as per requirements of other regulatory authorities. The company has carried out major expansion at its facilities in Dewas in Madhya Pradesh, Paonta Sahib in Himachal Pradesh, Mohali and Toansa in Punjab. Its state-of-the-art plants for formulation and APIs at Dewas are likely to commission shortly. The dosage form site in Himachal Pradesh will go on stream by end of 2005. The company has started construction of a new dosage forms facility at Mohali.
The company commissioned the new dosage forms facility at Terminal Road, New Brunswick during 2004. Further, it has successfully completed modernization at its Livingstone Road, New Brunswick facility. Ranbaxy has commissioned a high-speed infusion line at Guangzhou facility in China. It has also commissioned a new modern and spacious tablets and capsules facility at Malaysia. The company is setting up high-speed lines package product facility at Cashel, Ireland. It has also undertaken upgradation programme at its Nigerian facility. Thus these expansion and upgradation will be completed in the current year.
Ranbaxy developed three herbal products under OTC segment and several number of niche products are under different phases of development.
Ranbaxy's export earnings on FOB basis declined slightly to Rs 2,319 crore during the year 2005 from Rs 2,443 crore in the previous year basically due to stiff competition in USA. The company launched 12 new products to its portfolio of generics and also made 26 ANDA and 3 Pepfar ANDA filings during 2005. The company received US FDA approval for 16 ANDAs in 2004. It has increased its regulatory filings in the Europen Union with 39 national filings for 25 products in 11 EU Reference Member States, and 71 Mutual Recognition Procedure applications for 6 products in 21 EU concerned member states.
It is already selling its products in more than 100 countries and expanding its presence through mergers and acquisitions in the international market. It has ground operations in 44 countries and manufacturing operations in 7 countries.
Ranbaxy split its equity share of Rs 10 each into two shares of Rs 5 each in August 2005. Currently its equity share is quoted around Rs 380-390 on BSE.
Jubilant Organosys has achieved significant growth during the financial year 2005. The pharma and life sciences business and the acquisition of PSI and PSI supply in Europe pushed its bottomline. Its net sales increased by 36.2 per cent to Rs 1170 crore. The company has a strategic focus on increasing the exports to regulated markets. During FY2005, exports were Rs 364.40 crore as compared to Rs 228.5 crore in the previous year, recording a growth of 59.5 per cent. Exports contributed Rs 32.6 per cent of net sales.
It has more than 130 global customer relationships in the life sciences industry. Out of the top 20 global pharmaceutical companies, 15 are now its customers. The company has set up subsidiary in China in addition to existing marketing subsidiary in USA.
The company is focusing more on Pharma and Life Sciences business which reached at Rs 484 crore during 2004-05, contributing 41.4 per cent of its total revenue. The company has chalked out plans to rapidly grow this business over the next 3 years. And enhance its contribution to about 70 per cent of total revenue. Its activities in pharma business comprise the four fast-growing areas of CRAMS, APIs & Dosage Forms, Research Services and Food Polymers.
The Gajraula facility is the company's largest speciality chemicals, including specialty gases, fertilizers and agrochemicals manufacturing unit. It also has largest distillery. The Nira facility's product line includes acetyls and specialty gases. While the Samlaya manufacturing facility produces latex and animal feed additives, the Nanjangud facility manufacturers APIs. The carbamazeine plant of the API unit at Nanjangud has US FDA approval.
The company has R&D centers at Noida, Gajraula, Nanjangud and Samalaya. The Noida R&D Center was started during 2003-04 and has state-of-art infrastructure and facilities. Currently, it is employing 175 persons at its R&D centers. The R&D is focusing on process development of APIs and intermediates, improvements in the processes for the manufacture of APIs and creation of intellectual property. It is also undertaking R&D for biotechnology products.
Ind-Swift Laboratories, the world's second largest manufacturer of Clarithromycin, is a part of the Swift group and is based at Chandigarh. Ind-Swift Ltd promotes the company in joint venture with the Punjab State Industries Corporation Ltd (PSIDC). The group has established a strong reputation as innovators in the pharmaceutical industry. The company went public in 1997 and concentrated on the manufacturing of API. It has buy-back equity stake of PSIDC during the year 2002-03.
The company earmarked Rs 200 crore for capacity expansion over the next three years, with a view to expand its statins capacity by 500 per cent, anti-histamine capacity by 300 per cent and anti-infective capacity by 80 per cent. The company commissioned its expansion of Clarithromycin capacity to 120 tpa during October 2005. The company filed more than 52 DMFs across the globe.
Ind-Swift Labs selected to be present in the life-style therapeutic segments like cardiovascular, diabetolgy, hyperlipidemic and anti-depressants, which are growing faster than the industry average. Further, it is also manufacturing complex APIs with high entry barriers, hazardous reactions and with large working capital requirements.
The company invested around Rs 50 core towards R&D during last five years. It is upgrading infrastructure at par with international standards. Ind-Swift has installed a biobatch plant, operating as per cGMP norms, facilitating the approvals of its products in the international and domestic markets.. The company is now setting up Rs 25 crore R&D centre at Mohali, comprising eight synthetic labs. It planning to launch several new molecules through in-house research. The company is focusing on 20 products expected to go off patent between 2007 and 2010.
Ind-Swift Labs grew its customer base by 30 per cent during 2004-05 and consolidated its leadership in Turkey and maintained its edge in Syria, Pakistan, Korea and Greece. It has consolidated its position in Middle East, Latin America and Bangladesh. It entered into long-term tie-ups as the primary API supplier for international pharmaceutical companies in Brazil, other Latin American countries, Greece and the Middle East.
Panacea Biotec was incorporated in 1984 as Panacea Drugs Private Ltd with Soshil Kumar Jain as its main promoter. The company became a deemed public limited company in 1993. The company commenced operations by importing life saving drugs. Over the years, it started manufacturing formulations and biologicals. Panacea Biotec manufactures drugs and formulations, ranging from tablets, hard and soft gelatin capsules, dry powder injectables, liquid parenterals, vaccines, transdermal gels etc.
Nimulid, Panimun Bioral, Alphadol, Enivac HB, Nimulid Gel, Cefaperazone and Glcaizid are some of its products. It has two manufacturing units in New Delhi and one in Punjab. During 1997-98, it launched the Hepatitis B vaccine and also launched Rispid, a formulation for the psychiatric segment.
Panacea Biotec has significant presence in highly specialised chronic therapeutic areas such as diabetes, osteoporosis, arthritis and organ transplant management.
The company entered into Licensing Agreement with Biotechnology Consortium of India Ltd (BCIL) for manufacture & marketing of Anti-Anthrax Vaccine. The phase-I and II clinical trials of this vaccine have been initiated during the year 2003-04 and the company is set to grab future opportunities. Further, Panacea has tie-up with National Institute of Immunology for licensing of technology and processes for the production of tissue culture-derived formalin inactivated Japanese Encephalitis Candidate Vaccine (JE), an infection of the central nervous system caused by Japanese Encephalitis Virus.
The company is setting up a new unit at Baddi (Himachal Pradesh) as per norms of USFDA, MHRA, MCC-South Africa, WHO and other regulatory agencies of the world. The company is also investing in upgradation of its existing formulation and vaccines facilities at New Delhi. Its new state-of-the-art vaccine filling facility with an installed capacity of 3.25 million vials per annum was commissioned during the beginning of current year. Further the company has also commissioned its natural products formulation facility at Lalru in Punjab. The focus is towards adding high value products to existing brand range. It has also commissioned recombinant bacterial bulk vaccines facility at Lalru as backward integration project based on Cuban Technology.
The company has three modern state of the art R&D centers at Delhi and Lalru in Punjab. The company incurred R&D expenditure of Rs 19.96 crore during the year ended March 2005, which worked out to 6.14 per cent of its net sales. Clinical research became an integral part of company's R&D activity and strengthen its position in the pharmaceutical segment. The company is planning to invest Rs 35 crore for setting up new vaccine R&D facility at Delhi and Chemical Research Division at Mohali in next 2-3 years.
The company continued to be enthused by opportunities ahead in the international branded products market and its efforts on brand building have continued to show positive results. Its export turnover touched to Rs 228.8 crore during the year ended March 2005 from Rs 162.3 crore in the previous year.
Venus Remedies Ltd, formerly known as Venus Glucose Pvt Ltd was incorporated during March 1991. It started commercial production of Large Volume Parenterals with a product range of 15 products. It has restricted its operations to the State of Haryana and Punjab. Though it was started as a private limited company, which was manufacturing I.V. Fluids, the company has kept its promise to itself for striving to get better and cost-effective formulations through its in-house Research program by Research and Development wing. The company went Public during 1994-95 and expanded its operations with additional sections for liquid vials, ampoules and dry powder injectables.
With its WHO-GMP accredited plant it has been manufacturing quality products at competitive prices in not only IV fluids section, but also in antibiotics, anti-histamines, oncology drugs, cardiovascular drugs, anti-diabetic medications and anti-allergic medicines. It has completely separate anti-cancer filling section duly approved by the State and Central Drug Authorities.
The Company is having state o the art manufacturing facilities at Panchkula with a strong marketing network. It has a strong foothold and major market share in glass bottle I.V. fluids market in North India, along with own ethical product markets, which extends to more than 7 Northern states. The company is also undertaking contact manufacturing activities for major pharmaceutical giants. It has marketing tie-ups with Elder Pharmaceuticals, IPCA Laboratories, etc.
The company sees a lot of opportunities in the field of latest generation Cephalo-sporins. The R&D team is focusing on these lines. Product patents are another opportunity areas in the post-GATT scenario. The company is planning to file 3 new formulations developed by its R&D team.
During the year ended March 2004, the company focused itself on launching new and improved formulations and concentrated on making each of the new launch a volume builder. Its R&D team developed 10 new formulations belonging to two segments for commercial launch in domestic markets. It is focusing on development and commercial launch of latest generation Cephalosporins and build them into volume building products. These efforts will help the company to achieve the turnover of Rs 100 crore by March 2007.
The company is planning to enter regulated markets of USA and Europe. It is in process of upgrading its manufacturing plant in phase manner for getting it up to the standards set by the USFDA. It is planning to file DMFs in USA in short time.