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November 02, 2012
Dabur Research Foundation 22, Site IV, Sahibabad Ghaziabad – 201010 Uttar Pradesh, INDIA
www.daburresearch.in
Manu Jaggi, Ph.D Vice President
Indian Pharmaceutical Industry: Overcoming Hurdles And Opening Up New Opportunities
2
Global Economy
• New world order has emerged
– Advanced economies slowing down
– Emerging economies driving growth
• Emerging Economies:
– “Developing countries undergoing rapid growth & industrialization”
– Strong economic fundamentals, domestic consumption demand
– Lesser impact of current economic slowdown, early signs of recovery
• Brazil, Russia, India, China (BRIC)
– All 4 projected to be amongst largest 6 economies by 2040
– China will overtake US by 2035 (Rank 1)
– India will overtake US by 2050 (Rank 2)
GDP Growth % 2007 2008 2009 2010
Advanced economies 2.7 0.8 -3.8 0.6
India 9.0 6.7 5.4 6.5
China 13.0 9.0 7.5 8.5
GDP Base Growth % 2006-50
Brazil 3.7
Russia 3.0
India 6.0
China 4.8
3
Global Pharmaceutical Markets
• Global Pharma growth slowing down
– Reducing R&D productivity, Fewer blockbusters, Increasing market genericization
• Global Market Growth: 4.8% in 2008 (slowest growth rate of the decade)
– U.S & Europe (73% of global market) achieved growths of 1.4% & 5.8% respectively
• Expected to grow at 3% in 2012 (Impact of economic slowdown)
– US will further decline by 1–2% in 2013
• CAGR: 2009-13: 4-5% (Economic recovery, large patent expirations)
0100200300400500600700800900
2001 2002 2003 2004 2005 2006 2007 20080%2%
4%6%8%10%
12%14%
Market Size ($ Bn) Growth (%)
Global Pharma Market
4
Top Emerging Pharmaceutical Markets
Russia, 7
S. Korea, 9
India, 9
Mexico, 11
Turkey, 11Brazil, 19
China, 25
Russia, 13
S. Korea, 15
India, 16
Mexico, 15
Turkey, 20Brazil, 27
China, 68
2008: $ 91 Bn 2013: $ 174 Bn
• Mature Markets: US, Canada, Japan, Top 5 European Countries – CAGR: 2008-13: 1-2% (US: zero to negative growth)
• Top Emerging Markets: BRIC; Mexico, Turkey (MT); South Korea – 12% Market Share, 51% contribution to global growth in 2012 (up from 16% in 2006)
– CAGR for 2009-13: 13-14%, 40% contribution to global growth
• China: 3rd largest by 2013 (currently 6th), Brazil 8th largest by 2013 (currently 10th)
5
Health Care in India
Much to be proud of…
India – with a population of 1.2 billion – is currently the 12th largest economy India has made tremendous gains in critical areas such as malaria, smallpox, polio
Life expectancy has improved significantly in last 40 years
Annual healthcare expenditures are growing at 15% per annum, about $50 billion
in 2012 from a low base
6
The Indian Pharmaceutical Industry
7
Indian Pharma Market is More Attractive Than Ever Before
• Infrastructure: Government spending on healthcare aimed to increase to 3-4% of GDP
• Pricing: Providing higher flexibility to companies to expand the market
• Patentability: Broadening of the current narrow definition of patentability
• Data Protection & Exclusivity: Rewarding innovation
• Phase I Clinical Trials: Approval to ensure realization of full value chain
• PPPs: Collaboration between industry & government on healthcare issues
• Partnerships: Increase in partnerships between Indian cos. & MNCs
8
India: CRAMS - Custom Manufacturing
• Global Pharma Mfg. Outsourcing: $ 33 Bn
– Outsourcing accounts for 24% of pharma mfg. spend, CAGR: 13% (2007-10)
• India market: $ 1 Bn, 43% growth
– Estimated to cross $ 3 Bn in 2013
– Share of global outsourcing mkt: 2.8% (2007), 5.5% (2010)
– Dominated by API/Intermediate outsourcing (64%)
• Advantage India:
– Mfg costs: 65% lower than in US, 50% lower than in Europe
– Cost of installation of US FDA approved plant in India is 30% lower than in US
– Trained chemists & pharmacists is 6 times of US’, at less than 1/5th cost
– Export growth of 24% ($ 3.2 Bn in 2004 to $ 7.4 Bn in 2008)
• Partnerships in Mfg: GSK & Dr. Reddy’s; Pfizer & Aurobindo, Claris
9
Drug Discovery
Early Preclinical
Advanced Preclinical
API Synthesis & Form. Dev
Drug Manufacture Phase I Phase II Phase III Clinical
Support
DRUG DISCOVERY & PRECLINICAL CRAM CLINICAL
Biochemical & Cell based screens
Target based screens
Signal transduction
Molecular modeling
Fermentation Tech.
Bioinformatics
Chemistry • Medicinal • Combichem • Computational • Natural Product • Analytical
Efficacy • Oncology • Diabetes • Pain • Inflammation • CVS • Dermatology • Urology • Respiratory
ADME
Bioanalytical
Characterization
Pharmacokinetics
Toxicology
Special Toxicity
Safety Pharmacology
Process Development
Scale up
Characterization
GMP Synthesis
GMP • Manufacture • Solid oral • Injectible
Bioavailability
Bioequivalence
Tissue banking
• Data Management Plan • Database Design • CRF Management • Double Data Entry • Central Lab Data Import • Medical / AE Coding • Query Management • Manual Data Quality Control
Key Activities
10
Drug Discovery
Early Preclinical
Advanced Preclinical
API Synthesis & Form. Dev
Drug Manufacture Phase I Phase II Phase III Clinical
Support
DRUG DISCOVERY & PRECLINICAL CRAM CLINICAL
Key Players
• Jubilant (Biosys)
• Reliance
• Advinus
• GVK
• Aurigene
• TCG (Chembiotek)
• Dabur
• Jubilant (Biosys)
• Reliance
• Advinus
• GVK
• RCC
• Aurigene
• Biocon (Syngene)
• Dabur
• Jubilant (Biosys)
• Reliance
• Advinus
• GVK
• RCC
• Intox
• Ind It. Tox
• JRF
• Dabur
• Jubilant
• Reliance
• Advinus
• GVK
• Biocon
• Suven
• Accutest
• Jubilant
• Reliance
• Advinus
• Biocon
• Jubilant (Clinsys)
• Reliance
• GVK
• Lambda Therapeutics
• Veeda
• Siro Clinpharm
• Biocon (Clinigene)
• TCG (Clininvent)
• Jubilant
• Reliance
• GVK
• Lambda
• Veeda
• Siro Clinpharm
• Biocon
(Clinigene)
• Suven
• Lotus Labs
• Accutest
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Current status
Dr. Reddy’s Glenmark Ranbaxy Cadila Dabur Torrent Sun Pharma Biocon Wockhardt Nicholas Piramal
Internal Programs Aurigene Advinus GVK Lifesciences Dr. Reddy’s Discman Dabur Nicholas Jubilant Shasun Suven Siro Clinpharm Asian Clinical Quintiles Lambda
Services Model Drug Discovery AstraZeneca Altana Clinical trials & data management Pfizer Eli Lilly Novartis GSK
MNC Outposts GSK – Ranbaxy Eli Lilly – Jubilant, Suven Zydus – BI, Onconova, Dr. Reddy’s – Rheoscience,
Argenta, ClinTec Aurigene – Merck / Serono,
Forest Labs, Rheoscience Merck & Co. – Advinus
Therapeutics AstraZeneca – Torrent Wyeth – GVK Nicholas – Morvus, Connexios,
Biosynth Syngene - Innate
Partnerships
Source: Company news, industry reports
Business Models in India
12
What makes India a hot destination
• Capabilities to alleviate the bottlenecks in the R&D pipeline
• Reducing R&D costs
• Accelerating clinical trials
• Proven prowess in chemistry and data management
• Emerging skills in preclinical development
• IPR protection since 2005
• Speed to overcome drying pipeline Source: BCG | Focus, Harnessing the Power of India – May 2006
13
Opportunities in different therapeutic areas
Company Therapeutic Focus
Dr. Reddy’s Metabolic Disorders, Cardiovascular
Glenmark Metabolic Disorders, Respiratory, Pain Management
Ranbaxy Metabolic Disorders, Inflammation/Respiratory, Anti-Infectives, Urology
Cadila Metabolic Disorders, Inflammation
Torrent Metabolic Disorders, Cardiovascular
Wockhardt Sepsis & Anti-Infectives
Sun Pharma Asthma/COPD, CNS, Allergy
Nicholas Piramal Metabolic Disorders, Inflammation, Anti-Infectives, Oncology
Biocon Metabolic Disorders, Inflammation, Cardiovascular, Oncology
Dabur Oncology, Metabolic Disorders, Inflammation, Dermatology, Hair Biology
14
Expansion opportunities & strategy
Traditional APIs & Dosage forms
Cytotoxic, steroids, hormone APIs & Dosage
forms
Biotech based APIs & Dosage forms
Pre
clin
ical
se
rvic
es
Clin
ical
ser
vice
s M
anu
fact
uri
ng
se
rvic
es
Clinical Research Organizations
Contract Manufacturing Organizations
Drug Discovery Contract Research
Opportunity area
Opportunity area
Opportunity area Opportunity area
Opportunity area
Opportunity area
15
MNCs are leveraging the India advantage
• Quintiles Transnational, a leading global CRO with revenues touching $2 billion, has completed 10 years in India.
• Other global CROs too started their operations in a country where economy is booming and has plenty of resources to do business in the CRO space.
• Some others like Parexel, Covance and INC Research to be on safer side, took the alliance partnership approach.
• Depending on the risk and confidence level, these CROs opted different routes such as acquisition, alliance and direct presence to enter the Indian the market.
• CROs like PPD, Kendle, PharmaNet, Omnicare, Chiltern, ClinTec, RCC and Simbec opted for direct entry route
• PRA International and ICON decided to adopt the acquisition model.
16
The most tractable targets have perhaps been exploited Higher risk compounds are now in portfolios The more difficult (or rare) clinical conditions are now being addressed, resulting in spiraling costs The expectations from some of the newer technologies have not been met Incorrect applications of some of the technologies Regulatory authorities are making approval of newer targeted agents more stringent Unlike the blockbusters (primarily the cytotoxics), the newly emerging targeted drugs need patient stratification to enter niche markets Growing realization that single target – single drug paradigm is an oversimplification… Biology is still more complex
With the closing of the era of blockbuster molecules, taking targeted molecules through clinical development is going to get increasingly technology dependent & cost intensive
Reasons for Declining Productivity in NCE programs …and what have we learnt
17
OVERCOMING THE
CHALLENGES
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Managing Risk in Innovation
• Innovation is expensive and risky – Even in India and in the best of circumstances
• Most Indian companies are too small to carry this risk
individually
• Can Indian companies form JV so that risk is bearable? – The government is helping (not interfering)?
19
Support of National Labs
• Indian national labs have significant lab infrastructure – Better managed now than before – Becoming accessible to industries
• Tremendous scope for PPP • Government opening up to the idea of ‘accountable access’ to
national labs
20
Industry Associations
• Industry associations setting up shared laboratory infrastructure
• CII, ABLE, ICMR, DCGI etc working with government to
develop a credible regulatory infrastructure
• DBT has recently started providing grants to biotech companies
21
How to get Talent back?
• Lack of good options in US or EU in current scenario
• ‘Parity’ compensation
• Professional work culture
• Commitment of management
22
VC Funding
• Financial crises has forced life-sciences VCs to look for investment opportunities in India – Small-sized funds, but enough to get going – Network of partnerships
• Financial crises has also lowered valuation expectations of Funds – Encouraging investment – Growth rates picking up
23
Role of Government
• Central Government – Policy reforms – Lab infrastructure for industry – Strengthening industry orientation of national labs
• State governments – Facilitation of business establishment – Duty exemptions – Venture funds for incubating start-ups
24
Recent Initiatives of CII
• Driving force for the growth of life science industry in India through its National committees on
pharmaceuticals and biotechnology
• Drug pricing policy : Key role played by CII towards moving away from a cost based model
to market based model
• Section 3(d) in the Indian Patents Act : yardstick for determining non-obviousness of an
invention
• “Compulsory Licensing” against a cancer drug drew huge criticism all around the world : CII
proposed a transparent process to ensure that CL is invoked for right candidate and for right reason
• Policy Documents to streamline regulatory norms • Biopharmaceuticals
• Agri-biotechnology products
• Clinical Trials
25
Business Models
• Fee for service
• FTE
• Licensing
• Collaborative Research
• Risk sharing
26
Concluding Remarks
• The financial crises has crystallized long-term changes in the industry
• Significant opportunities in innovation, partnerships, and
acquisitions • Challenges in managing financial risks and technical talent • Collaboration between countries, companies, industry
associations, and governments is the need of the hour
27
Our collaboration in Australia
28
About Dabur
• Established in 1884, Dabur India Ltd is among the oldest and largest healthcare company in India
• Has over 5000 employees working in more than 20 countries
• Market Cap of over 4 bn USD, DIL recently achieved sales of 1 bn USD
• More than 600 herbal products in market
• 17 ultra-modern manufacturing units spread around the globe
• Products marketed in over 60 countries
• More than 5000 distributors and over 2.8 million retail outlets all over India
29
M R T Package
Screening
Module for
Accelerating
Research in
Therapeutics
A comprehensive package from Discovery to Pre-IND selection
in vitro screens Efficacy Models ADMET Studies Lead Selection Formulation Dev Safety
S A
30
Other successful collaborations
• Oxford University, UK
• New York State University, USA
• Three among top 10 Pharma Companies in the world
• Among the largest Finnish Pharmaceutical Company
• 10-12 other collaborations in APAC
• Collaborations in Scandinavia – Denmark, Sweden, Finland
• Major Pharma Companies in India
U.K. U.S.
Germany
Finland
Korea
Thailand
China
India Hong Kong
Australia
Taiwan
Egypt
Pakistan
Israel Japan
Denmark
France
Switzerland
Russia
Malaysia
31
Thanks for listening… …and hoping to do business with you in India