Indian Pharmaceutical Industry: Overcoming Hurdles And Opening Up New Opportunities

Transcription

1 November 02, 2012 Indian Pharmaceutical Industry: Overcoming Hurdles And Opening Up New Opportunities Manu Jaggi, Ph.D Vice President Dabur Research Foundation 22, Site IV, Sahibabad Ghaziabad Uttar Pradesh, INDIA 1

2 Global Economy New world order has emerged Advanced economies slowing down Emerging economies driving growth GDP Growth % Advanced economies India China 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 Base Growth % Brazil 3.7 Russia 3.0 India 6.0 China 4.8 2

3 Global Pharmaceutical Markets Global Pharma Market % 12% 10% 8% 6% 4% 2% 0% Market Size ($ Bn) Growth (%) 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: : 4-5% (Economic recovery, large patent expirations) 3

4 Top Emerging Pharmaceutical Markets 2008: $ 91 Bn 2013: $ 174 Bn China, 25 Russia, 7 S. Korea, 9 Russia, 13 S. Korea, 15 India, 9 China, 68 India, 16 Brazil, 19 Turkey, 11 Mexico, 11 Mexico, 15 Mature Markets: US, Canada, Japan, Top 5 European Countries Brazil, 27 CAGR: : 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 : 13-14%, 40% contribution to global growth China: 3 rd largest by 2013 (currently 6 th ), Brazil 8 th largest by 2013 (currently 10 th ) Turkey, 20 4

5 Health Care in India Much to be proud of India with a population of 1.2 billion is currently the 12 th 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 5

6 The Indian Pharmaceutical Industry 6

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 7

8 India: CRAMS - Custom Manufacturing Global Pharma Mfg. Outsourcing: $ 33 Bn Outsourcing accounts for 24% of pharma mfg. spend, CAGR: 13% ( ) 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 1/5 th 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 8

9 Key Activities DRUG DISCOVERY & PRECLINICAL CRAM CLINICAL Drug Discovery Early Preclinical Advanced Preclinical API Synthesis & Form. Dev Drug Manufacture Phase I Phase II Phase III Clinical Support Biochemical & Cell based screens Target based screens Signal transduction Molecular modeling ermentation Tech. Bioinformatics 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 Data Management Plan Database Design CRF Management Double Data Entry Central Lab Data Import Medical / AE Coding Query Management Manual Data Quality Control Bioavailability Bioequivalence Tissue banking Chemistry Medicinal Combichem Computational Natural Product Analytical 9

10 Key Players DRUG DISCOVERY & PRECLINICAL CRAM CLINICAL Drug Discovery Early Preclinical Advanced Preclinical API Synthesis & Form. Dev Drug Manufacture Phase I Phase II Phase III Clinical Support 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 10

11 Business Models in India Current status Internal Programs Services Model MNC Outposts Partnerships Dr. Reddy s Glenmark Ranbaxy Cadila Dabur Torrent Sun Pharma Biocon Wockhardt Nicholas Piramal Aurigene Advinus GVK Lifesciences Dr. Reddy s Discman Dabur Nicholas Jubilant Shasun Suven Siro Clinpharm Asian Clinical Quintiles Drug Discovery AstraZeneca Altana Clinical trials & data management Pfizer Eli Lilly Novartis GSK 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 Lambda Source: Company news, industry reports 11

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

13 Opportunities in different therapeutic areas Company Dr. Reddy s Glenmark Ranbaxy Cadila Torrent Wockhardt Sun Pharma Nicholas Piramal Biocon Dabur Therapeutic Focus Metabolic Disorders, Cardiovascular Metabolic Disorders, Respiratory, Pain Management Metabolic Disorders, Inflammation/Respiratory, Anti-Infectives, Urology Metabolic Disorders, Inflammation Metabolic Disorders, Cardiovascular Sepsis & Anti-Infectives Asthma/COPD, CNS, Allergy Metabolic Disorders, Inflammation, Anti-Infectives, Oncology Metabolic Disorders, Inflammation, Cardiovascular, Oncology Oncology, Metabolic Disorders, Inflammation, Dermatology, Hair Biology 13

14 Expansion opportunities & strategy Clinical services Manufacturing services Contract Manufacturing Organizations Clinical Research Organizations Opportunity area Opportunity area Opportunity area Opportunity area Preclinical services Drug Discovery Contract Research Opportunity area Opportunity area Traditional APIs & Dosage forms Cytotoxic, steroids, hormone APIs & Dosage forms Biotech based APIs & Dosage forms 14

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. 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. Some others like Parexel, Covance and INC Research to be on safer side, took the alliance partnership approach. 15

16 Reasons for Declining Productivity in NCE programs and what have we learnt 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 16

17 OVERCOMING THE CHALLENGES 17

18 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)? 18

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 19

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 20

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 21

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 22

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 23

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 24

25 Business Models Fee for service FTE Licensing Collaborative Research Risk sharing 25

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 26

27 Our collaboration in Australia 27

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 28

29 S M A 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 29

30 Other successful collaborations Oxford University, UK New York State University, USA U.S. U.K. France Finland Denmark Switzerland Germany Israel Pakistan Russia China Korea Japan Egypt India Hong Kong Thailand Taiwan Three among top 10 Pharma Companies in the world Malaysia Australia Among the largest Finnish Pharmaceutical Company other collaborations in APAC Collaborations in Scandinavia Denmark, Sweden, Finland Major Pharma Companies in India 30

31 Thanks for listening and hoping to do business with you in India 31