EXECUTIVE SUMMERY Sun Pharma, established in 1983, makes specialty pharmaceuticals and APIs for use in Chronic therapy areas such as cardiology, psychiatry, neurology, gastroenterology, diabetes and respiratory conditions, sold in 26 markets worldwide. Sun Pharma enjoys a good market share in pharmaceutical industry. Sun Pharma is build of four different companies that are Caraco Pharmaceutical Laboratories, Laboratories, Sun Pharmaceutical Industries Inc. (SPI), Sun Pharmaceutical (Bangladesh) and Alkaloida Chemical Company Exclusive Group Ltd.
In first section of my report I had given brief information about pharmaceutical industry and in second section I had given brief information of Sun Pharmaceutical Industries.
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INDIAN PHARMACEUTICA L INDUSTRIES
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Introduction to Indian Pharma Industry A glance glance look at Indian Pharmaceutical Industry: Indi Indiaa curr curren entl tly y repr repreesent sentss just just U.S U.S. $6 bill billio ion n of the the $5 $550 50 bill billio ion n glob global al pharmaceutical industry but its share is increasing at 10 percent a year, compared to 7 percent annual growth for the world market overall. Also, while the Indian sector represents just 8 percent of the global industry total by volume, putting it in fourth place worldwide, it accounts for 13 percent by value, and its drug exports have been growing 30 percent annually. The “organized” sector of India's pharmaceutical industry consists of 250 to 300 companies, which account for 70 percent of products on the market, with the top 10 firms representing 30 percent. However, the total sector is estimated at nearly 20,000 businesses, some of which are extremely small. Approximately 75 percent of India's demand for medicines is met by local manufacturing. Acco Accord rdin ing g to the the Ger German man Chem Chemic ical alss Asso Associ ciat atio ion n, in 20 2005 05,, Indi India' a'ss top top 10 pharmaceutical companies were Ranbaxy, Cipla, Dr. Reddy's Laboratories, Lupin, Sun n Phar Pharma ma, Nic Nicola olass Pira Pirama mal, l, Aurob Aurobind indo o Phar Pharma ma,, Cadil Cadilaa Phar Pharma mace ceut utic ical als, s, Su Wockhardt Ltd. and Aventis Pharma. Indian-owned firms currently account for 70 percent of the domestic market, up from less than 20 percent in 1970. In 2005, nine of the top 10 companies in India were domestically owned, compared with just four in 1994. India's potential to further boost its already-leading role in global generics production, as well as an offshore location of choice for multinational drug manufacturers seeking to curb the increasing costs of their manufacturing, R&D and other support services, presents an opportunity worth an estimated $48 billion in 2007. Early Phase (1950-75) Small Sc al ale Unit s Market Market Domin Dominate ated d by by MNCs MNCs Manufacture of bulk (largely public sector) and import of formulations Inwa nward outl outloo ook k for for mar markets kets
Indian Market Evolution Mid Phase Recent Phase (1975-2000) (2000-) Medium / Large Scale Unit s E me mergence of Indian origin MNCs Growin Growing g share share of India Indian n Global scale of operations operations of entities Indian pharmacos Manufacture Manufacture and market ing of Formulations / Generics for bulk drugs and formulations the world market
Prim Prima arily rily dome domesti stic c orientation, nominal export presence
Limit ed ed IP R Prot ec ec tition
Limit ed ed IP R prot ec ect io ion
High P ric e Controls
High Price Cont rols
Strong export focus, domestic consolidations. Increasingly high level of R&D orientation Moves towards IPR prot ec ect io ion post 2005 Reduc ing pric e c ont rols
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Performance of Pharmaceutical Industry: The Indian Pharmaceutical industry, has shown remarkable progress in areas of i. Infr Infras astr truc uctur turee deve develop lopme ment nt,, ii. ii. Tech Techno nolo logy gy bas basee and and iii. iii. Wide Wide range range of prod produc ucts. ts. The Pharmaceutical Industry produces bulk drugs belonging to all major therapeutic groups groups requir requiring ing complic complicate ated d manufa manufactur cturing ing proces processs and also also produce producess differ different ent dosage forms. The main plus point of the industry is developing cost effective technologies in the shortest possible time for drug intermediates and bulk actives without compromising on quality. Indian companies maintain highest standards in Purity, Stability and International requirements namely, Safety, Health and Environmental protection in production and supply bulk drugs to even innovator companies. This speaks of the high quality standards maintained by large number of Indian companies as these bulk actives are used by the buyer companies in the dosage forms. The Pharma Pharmaceu ceutic tical al industry industry is an industr industry y involvi involving ng sophisti sophisticat cated ed and modern modern technology that is why major share of Indian Pharma exports itself going to highly developed western countries. They admired Indian Pharmaceutical company not only for excellent quality of drugs and medicines but also for the reasonableness of the cost of it.
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The Major Indian Pharmaceutical Companies
Company
Profit( per cent)
Ranbaxy Labs
167.2
Dr Reddy’s Dr Reddy’s Labs
65.8
Cipla
5.2
Nicholas Piramal
473.9
Sun Pharma
35.8
Lupin
26.8
Cadila Healthcare
66.4
Torrent Pharma
313.7
Glen mark
74.5
Biocon
26.1
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Opportunities The main 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).
1) Gen ener eric icss Prescription drugs worth $40 billion in the U.S. and $25 billion in Europe are due to lose patent protection by 2007-08. Indian firms will likely take around 30 percent of the increasing global generics market, the Associated Chambers of Commerce and Industry of India (Assocham) forecast. Currently, the Indian industry is estimated to account for 22 percent of the generics world market. Low production costs give India an edge over other generics-producing generics-producing nations, especially especially China and Israel. Israel. It will be easier for Indian firms to win larger generics market shares overseas than at home, particularly in the U.S. and Europe. Indian drug manufacturers currently export their products to more than 65 countries worldwide.14 Their largest customer is the U.S., the world's biggest pharmaceutical market. The use of generic drugs is growing quickly in the U.S. due to cost pressure by by paye payers rs and and the the intro introdu ducti ction on on Janu Januar ary y 1 this this year year of the the Medic Medicar aree Part Part D presc prescript ription ion benefi benefit, t, giving giving senior seniorss and people people with disabili disabilities ties prescr prescripti iption on drug drug coverage for the first time. With 74 facilities, India has the largest number of U.S. Food and Drug Administration (FDA)- approved drug manufacturing facilities outside the U.S. Indian firms now account for 35 percent of Drug Master File applications and one in four of all U.S. Abbreviated Abbreviated New Drug Application Application (ANDA) filings submitted to the FDA. Analysts at Credit Lyonnais Securities Asia say they expect the number of generic drug launches by Indian companies in the U.S. to increase from 93 in 2003 to over 250 by 2008.
2) Biot Biotec echn hnol olog ogyy In 20 2003 03-0 -04, 4, biop biopha harm rmac aceu euti tica cals ls acco accoun unte ted d for for 60 perc percen entt of Indi India' a'ss tota totall biotechnology market, which was worth an estimated $709 million-up 39 percent over the previous period. Investment in the sector was up 26 percent to $137 million-and exports orts accoun untted for 56 percent of ind industr stry revenues. The domesti stic biopharmaceuticals sector grew 38.5 percent and had the largest local market share, at 76 percent, followed by bioagriculture at 8.4 percent, bioservices at 7.7 percent, and industrial products at 5.5 percent and bio-informatics at 2.5 percent. With 200 biotech companies and total revenues of $500 million annually, India's Biotechnology sector is still in the relatively early stages of development. However, it is growing fast, with an initial emphasis on vaccines and bioservices. The industry is situa situate ted d mainl mainly y in Karn Karnat atak aka, a, altho although ugh there there are are op oper erat atio ions ns in Andra Andra Prad Prades esh, h, Hyderabad, Kerala, Maharashtra and West Bengal. The top 10 players in terms of 6
revenues in 2004 were Biocon, Serum Institute of India, Panacea Biotec, Nicholas Piramal, Novo Nordisk, Venkateshwara Hatcheries, Wockhardt, GSK, Bharat Serums & Vaccines, and Eli Lilly & Co, reports Burrill & Co, the U.S.-based life sciences merchant bank. As is generally the case worldwide, most biotech companies in India have developed along the contract or collaborative research models.
3) Outs Outsou ourc rcin ing g I.
IT Outsourcing
Indi India' a'ss statu statuss as an infor informa mati tion on tech technol nology ogy super superpo powe wer, r, with with acce access ss to specialist skills and 24/7 work hours, is a huge advantage as it strengthens its positi position on as the destin destinatio ation n of choice choice for contra contract ct resear research, ch, includi including ng drug drug discovery. Eighty-two percent of U.S. companies overall rank India as their first-c first-choi hoice ce IT outsourc outsourcing ing destin destinatio ation, n, says says leading leading interna internation tional al clinica clinicall research organization Chiltern International, adding that IT and IT enabled services (ITES) companies have been expanding their activities in India to new business segments such as bioinformatics and life sciences; those doing so or planning to include Accenture, Intel, Satyam, Cognizant, IBM, Oracle and TCS. Wipro Spectramind, Spectramind, India's largest third-party third-party offshore business process process outs ou tsou ourrcing cing prov provid ider er,, is con ondu duct ctin ing g bioi bioinf nfor orm matic aticss wor work for for glob global al pharmaceutical companies. II.
Contract Man Manufacturing
The globa The globall ph phar arma mace ceuti utica call mark market et is estim estimat ated ed to repr repres esent ent a $48 billi billion on opportunity for India by 2007, in terms of: • manufacturin manufacturing g outsourcing-sup outsourcing-supply ply of active pharmaceuti pharmaceutical cal ingredients ingredients (APIs) and Intermediates • Development outsourcing-conducting preclinical and clinical trials • customi customized zed chemis chemistry try service services-c s-contr ontract act resea research rch service servicess for compound compoundss pre-launch. Worldwide revenues for pharmaceutical industry contract manufacturing and research services (CRAMS) totalled $100 billion in 2004 and will grow at an average annual rate of 10.8 percent to reach $168 billion by 2009, say analysts at Fros Frostt & Sull Sulliv ivan an.. With Within in this this tota total, l, the the glob global al mark market et for for cont contra ract ct manufacturing of prescription drugs is estimated to increase from a value of $26.2 billion to $43.9 billion, although the over-the-counter medicines and nutritional products sector will show the fastest growth.
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Challenges “The three strategic drivers for acceleratin accelerating g growth of the pharmaceutical pharmaceutical industry in India are intellectual property rights-its implementation in letter and spirit; liberal drug pricing policies; and regulatory (as well as labor) law reforms,”
1) Patents Patents and Intellectu Intellectual al Property Property Rights Rights Indi India' a'ss new new prod produc uctt pate patent nt regi regim me is the the resu result lt of the the WTO' WTO'ss Doha Doha Roun Round d of negotiations in 2001. Final agreement was reached on TRIPs ground rules for patent protection among WTO member countries, stating that both processes and products should be protected. Subs Subseq eque uent ntly ly,, on Marc March h 22 22,, 20 2005 05,, Indi India' a'ss parl parlia iame ment nt appr approv oved ed the the Patents system of product patents patents backdated to January (Amendment) (Amendment) Act 2005, bringing in a system 1, 2005. The new regime regime protects protects only products arriving on the market after January January 1, 1995, abolishing the previous the previous process patent system established by the 1970 Patent Act .
2) Pric Pricin ing g Issue Issuess The prices of 74 bulk drugs and their formulations, which account for around 40 percent of the retail pharmaceutical market, are controlled by the Drug Price Control Order (DPCO) of 1995. The government's 2002 Pharmaceutical Policy would have redu reduce ced d the the numbe numbers rs of price price-c -cont ontro roll lled ed drug drugss still still furt furthe her, r, but this this propo proposa sall is currently under judicial review in the Supreme Court. If it is approved, the number of price-controlled drugs is expected to drop to 25. 3) Re Regul gulat ator oryy Ref Refor orms ms The government is now starting to develop an infrastructure for clinical trials in India, with amendments made recently to Schedule Y of the Drugs and Cosmetics Rules of 1945 to allow allow for multic multicente enterr concur concurren rentt clinica clinicall trials trials in India India and address address the protection of trial participants, and the integration and quality of data. Among other develop developmen ments, ts, Good Clinic Clinical al Practic Practicee guideli guidelines nes have have been been publishe published d and made made mandatory. The government is now starting to develop an infrastructure for clinical trials in India, with amendments made recently to Schedule Y of the Drugs and Cosmetics Rules of 1945 to allow for multicenter concurrent clinical trials in India and address the protection of trial participants, and the integration and quality of data. Among other developments, Good Clinical Practice guidelines have been published and made mandatory.
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Breaking the export barriers Indian pharmaceutical industry is expected to register a growth rate of 11 percent to enhance its size to Rs 600 billion by 2007-08, as against Rs 432.90 billion in 2004-05. According to a study undertaken by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), this increase will primarily come from generic pharma exports to regulated markets of US and Europe, where $65 billion worth of drugs are slated to go off patent. Exports in 2006-07 were Rs 24,600 crore. Indian pharmaceutical exports have tremendous potential to grow at around 18 percent by 2007-08 to take its total export volume to about Rs300 billion as against Rs182.90 billion in 2004-05. The Indian pharma industry currently ranks 17th in terms of export value of bulk actives and dosage. Indian exports cover more than 200 countries including the highly regulated markets of US, Western Europe, Japan, North America, all the European Union (EU) countries, Brazil, Australia; as well as semi-regulated markets of South East Asia, Africa, Eastern Europe, South and Central America. In last ten years pharma exports have grown multi-fold. The reasons for growth in regulated/semi-regulated markets would include cost effectiveness of products with high quality, large number of inspection compliance plans from regulated and semiregulated markets and availability of highly qualified and skilled personnel in R&D, manufacturing, marketing and regulatory areas. Also, India is the most competitive destination for bulk drugs, formulations, ayurvedic and herbal products with more than 75 US FDA approved manufacturing plants ensuring quality products. Another reason for the growth is that, "In terms of regulatory requirements of the countries, whether it is US or Europe, Indian companies have understood what they need, and they have complied with the regulatory requirements," says Amar Lulla, Managing Director, Cipla. Ashwin Thacker, Managing Director, Flamingo Pharmaceuticals, cites another reason for growth in exports, "Export growth is due to export of new molecules (generic), especially to regulated markets." And Indian companies are proving to be better at developing Active Pharmaceutical Ingredients (APIs) with non-infringing processes for target markets than their competitors, he adds. From APIs, we have moved to manufactured formulations and finished dosages and all this at a fraction of the cost in Western countries. Regulatory authorities in these countries have also inspected Indian facilities are over a period of time, have come to accept the high standards of the Indian capabilities. "Cipla was the first company, to get a US FDA approval in 1985 and at that time the focus was more on APIs. It then gradually moved on to span more dosage forms", informs informs Lulla. So it seems that Indian companies have been on the learning curve for the last few years and are on the road to success.
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The market drivers in both these areas are different Drivers Drivers in in the regul regulat ated ed market markets s
Drivers Drivers in the the semi-reg semi-regula ulated ted markets
Inspection compliance plans
Less Entry barriers
Comm Common on Tech Techni nica call Doss Dossie ierr (CTD (CTD))
Simp Simple le doss dossie iers rs
Bio eq equivalence fo for ge generics
Registration ti time is is le less
Clinical Trials
Registration requirements are comparatively easy to meet
Fina Financ ncia iall Musc Muscle le of the the com compa pany ny
Affo Afford rdab able le regi regist stra rati tion on fees fees
High registration fees Big volumes for generic following Strict Patent law
In the years to come "Growth will happen because there are more products which will go off patent and these products will start entering new markets, including Middle East, Africa, Western America, Canada and Mexico," feels Lulla. Even though there has been a decline in demand with respect to key markets, India's export prospects still remain bright as new markets open up. As against a global pharma industry of over $300 billion, India's export sales are in the region of $1.5 billion. The potential for growth is enormous; a 20 per annual growth in exports is expected over the next five years. The next five years will witness a spate of patent expiries of blockbuster drugs that will accord opportunities to supply bulk drugs and formulations to advanced markets. And India will be a dominant pharma player by 2020 in manufacturing, R&D, CRO and NDDS (New Drug Delivery System). Espicom's market projections assume stable market growth of around 7.2 percent, putting the market at $13.4 billion by 2011. It should be noted, however, that if calls for an end to drug price controls, come to fruition, short-term market growth is likely to be much higher.
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Research and Development In Pharmaceutical Industry Research and development is for most and very prime requirement, because unknown and dangerous dieses are spreding everywhere very rapidly. A two-tier structure exists to manage the programme, viz., an Apex Executive Committee at the Secretariat level, chaired by the Secretary, Department of Science & Technology and an Expert Committee at the operational level. The Department of Science and Technology has a dedicated programme for promoting R&D in the drugs and Pharmaceutical sector A Research and Development is necessary not only to cure from dieses but also to beat global competitors. So a high level expertise and adequate human resources with mode modern rn faci facili litie tiess are are requi require red d for for drug drug deve develop lopme ment nt,, so go gove vern rnme ment nt gives gives this this responsibility to Science and Technology programme. . Accordingly, facilities that are needed urgently and that would need to be created, namely, (a) DHA gyrase screening facility; (b) Quantity- Structure-Activity-Relationship (QSAR) facility; (c) Immunomodulators modeling and screening and (d) Pharmacological testing was identified. Gover Governm nmen entt has has take taken n seve severa rall polic policy y initi initiati ative vess for for stre streng ngthe thenin ning g Rese Resear arch ch & Development in Pharma sector. Some of the initiatives are… Fiscal incentives to R&D units Development of new drug molecules, Clinical research, New drug delivery systems, Excellent infrastructure. As per information few products are expected to go for clinical trials in the next few years in the areas of Anti-infective, Anti-cancer and, Life-style segments. Compared to the reported average R&D spending of 2% of turnover in the sector, a few leading Indian Pharma companies have increased their R&D spending to over 5% of their turnover.
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THE GROWTH SCENARIO India's US$ 5.5 billion Pharmaceutical industry is growing at the rate of 14 percent per year. It is one of the largest and most advanced among the developing countries. Over 20,000 registered Pharmaceutical manufacturers exist in the country. The domestic Pharmaceuticals industry output is expected to exceed Rs260 billion in the financial year 2008, which accounts for merely 1.3% of the global Pharmaceutical sector. Of this, bulk drugs will account for Rs 54 bn (21%) and formulations, the remaining Rs 210 bn (79%). In financial year 2007, imports were Rs 20 bn while exports were Rs87 bn. So far as Indian Pharmaceutical industry is concern it is adorn by different advantage available in India due to this reason other country’s MNCs also attracted towards it and try to enter in Indian market. Some of the advantages of India are as under..
Financial Strength: Indian market has full financial strength not only that but finance is also available at low rate of interest and credibility is also high.
Less Legal Restriction: Government encourages new promoters so they keep very less legal binding for Pharmaceutical industry.
Human Capital: India has a pool of personnel with high managerial and technical competence as also skilled workforce. It has an educated work force and English is commonly used. Professional services are easily available.
Cheap chemical synthesis: Its track record of development, particularly in the area of improved cost-beneficial chemical chemical synthesis for various drug molecules is excellent. excellent. It provides provides a wide variety variety of bulk drugs and exports sophisticated bulk drugs.
Globalization: After 1994 Government has adopted new policy of globalization in which country is committed to a free market economy and above all, it has a 70 million middle class market, which is continuously growing and expanding.
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Consolidation: For the first time in many years, the international Pharmaceutical industry is finding grea greatt op oppor portu tunit nitie iess in Indi India. a. Th Thee proc proces esss of conso consoli lidat datio ion, n, whic which h has has beco become me a generalized phenomenon in the world Pharmaceutical industry, has started taking place in India.
Latest Information & Technology: India India has a goo good d network network of world-c world-clas lasss educati educational onal institu institution tionss and establi established shed strengths in Information Technology. India possesses latest technology which enhance its strength.
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Analysis to Indian Pharma Industry The industry now produces bulk drugs belonging to all major therapeutic groups. The Indi Indian an Phar Pharma mace ceut utic ical al indu indust stry ry has has show shown n trem tremen endo dous us prog progre ress ss in term termss of infrastructure development, technology base creation and a wide range of production. The country ranks fourth worldwide accounting for 8% of world's production by volume and 1.5% by value. It ranks 17th in terms of export value of bulk actives and dosage forms. Indian exports are destined to more than 200 countries around the globe includin including g highly highly regulat regulated ed market marketss of US, Europe, Europe, Japan Japan and Austra Australia. lia. Strong Strong scientific scientific and technical technical manpower and pioneering pioneering work done in process process development have contributed to this. Today, India is not just looking at seeking technology but is a potential exporter of products and technology and so an international exhibition will help the industry showcase its strengths. The Pharmaceutical industry in India has undoubtedly created ripples. The success of this industry is quite crucial for the well being of the nation. The Union government too realizes the importance of the Pharmaceutical industry. The basic objectives of Government's Policy relating to the drugs and Pharmaceutical sector were enumerated in the Drug Policy of 1986. These basic objectives still remain largely valid. However, the drug and Pharmaceutical industry in the country today faces new challenges on account of liberalization of the Indian economy. The need for radically improving the policy framework for knowledge-based industry has also been acknowledged by the Government. The Prime Minister's Advisory Council Council on Trade Trade and Industr Industry y has made made import important ant recomm recommenda endation tionss regard regarding ing knowledge-based industry. So that policy inputs are directed more towards promoting accele accelerat rated ed growth growth of the Pharma Pharmaceu ceutica ticall industry industry and towards towards making making it more more internationally competitive.
The Phar The Pharma mace ceut utic ical al indust industry ry has has been been iden identi tifi fied ed as on onee of the most most impo import rtan antt knowledge based industries in which India has a comparative advantage. Therefore government announces some provision in this regards as… •
•
•
Reservation of 5 drugs for manufacture by the public sector only was abolished in Feb. 1999. Foreign investment through automatic route was raised from 51% to 74% in March 2000 and the same has been raised to 100%. Automatic approval for Foreign Technology Agreements is being given in the case of all bulk drugs.
The Pharmaceutical industry in India has achieved global recognition as a low cost producer and supplier of quality bulk drugs and formulations to the world. 14
Indian Pharma Industry: SWOT analysis It is often said that the pharma sector has no cyclical factor attached to it. Irrespective of whether the economy is in a downturn or in an upturn, the general belief is that demand for drugs is likely to grow steadily over the long-term. True in some sense. But are there risks? The Industry is a largely fragmented and highly competitive with a large number of players having interest in it. The SWOT analysis of the industry reveals the position of the Indian pharma industry in respect to its internal and external environment.
Strengths: 1. Indian with with a population population of over over a billion is a largely largely untapped untapped market. market. In fact the penetration of modern medicine is less than 30% in India. To put things in perspective, per capita expenditure on health care in India is US$ 93 while the same for countries like Brazil is US$ 453 and Malaysia US$189. 2. The growth growth of middle middle class class in the the country country has resulted resulted in fast fast changing changing lifestyles in urban and to some extent rural centers. This opens a huge market for lifestyle drugs, which has a very low contribution in the Indian markets. 3. Indian manufa manufacturer cturerss are one one of the lowest cost cost producers producers of drugs in the world. With a scalable labor force, Indian manufactures can produce drugs at 40% to 50% of the cost to the rest of the world. In some cases, this cost is as low as 90%. 4. Indian pharmac pharmaceutica euticall industry posses’ posses’ excellent excellent chemistry chemistry and process process reengineering skills. This adds to the competitive advantage of the Indian companies. The strength in chemistry skill helps Indian companies to develop processes, which are cost effective.
Weakness: 1. The Indian Indian pharma pharma companies companies are marred marred by the price price regulation. regulation. The companies, which are lowest cost producers, are at advantage while those who cannot produce have either to stop production or bear losses. 2. Indian pharma pharma sector has been been marred marred by lack lack of product product patent, patent, which prevents global pharma companies to introduce new drugs in the country and 15
discourages innovation and drug discovery. But this has provided an upper hand to the Indian pharma companies. 3. Indian pharma pharma market market is one one of the least least penetrated penetrated in the the world. world. However However, growth has been slow to come by. As a result, Indian majors are relying on exports for growth. To put things in to perspective, India accounts for almost 16% of the world population while the total size of industry is just 1% of the global pharma industry. industry. 4. Due to very very low barriers barriers to entry entry,, Indian pharma pharma industry industry is highly fragme fragmented nted with about 300 large manufacturing units and about 18,000 small units spread across the country. This makes Indian pharma market increasingly i ncreasingly competitive. The industry witnesses price competition, which reduces the growth of the industry in value term.
Opportunities 1. The migrat migration ion into a product product patent patent based regime regime is likely likely to transf transform orm industry fortunes in the long term. The new patent product regime will bring with it new innovative drugs. This will increase the profitability profitability of MNC pharma companies and will force domestic pharma companies to focus more on R&D. 2. Large Large number number of drugs drugs going off-p off-patent atent in Europe and and in the US between between 2005 to 2009 offers a big opportunity for the Indian companies to capture this market market.. Since Since generi genericc drugs drugs are commod commoditie itiess by nature, nature, Indian Indian producers have the competitive advantage, as they are the lowest cost producers of drugs in the world. 3. Open Opening ing up of health health insura insuranc ncee sect sector or and the expe expect cted ed growth growth in per per capita income are key growth drivers from a long-term perspective. This leads to the expansion of healthcare industry of which pharma industry is an integral part. 4. Being Being the lowes lowestt cost cost prod produc ucer er comb combin ined ed with with FDA FDA approv approved ed plant plants, s, Indian ian companies ies can become ome a global bal outsou sourcing hu hub b for pharmaceutical products.
Threats: 1. Ther Theree are are cert certai ain n conc concer erns ns ov over er the the pate patent nt regi regime me rega regard rdin ing g its its curr curren entt structure. It might be possible that the new government may change certain provisions of the patent act formulated by the preceding government. 16
2. Threats Threats from other other low cost cost countries countries like China China and Israel Israel exist. exist. However However,, on the quality front, India is better placed relative to China. So, differentiation in the contract manufacturing side may wane. 3. The short-te short-term rm threat threat for the pharma pharma industry industry is the uncert uncertain ainty ty regarding regarding the implementation of VAT. Though this is likely to have a negative impact in the short-term, the implications over the long-term are positive for the industry. 4. Incr Increa ease se in ov over er the counte counterr medi medici cine ness also also crea create te prob problem lem for medi medici cine ness because people will buy it directly from market.
PEST ANALYSIS of INDIAN PHARMA INDUSTRY To und under ersta stand nd the impli implica cati tions ons of the envir environm onment ent on any any indus industr try y it is impe impera rati tive ve to study study the the four four card cardin inal al influ influen ence cers rs on the indus industr try y name namely ly Political, Political, Economic, Economic, Social and Technological Technological factors. It is rather unfortunate unfortunate that in India these factors have a rather disproportionate influence on the functioning of a commercial commercial organization. From the days of independence the business environment has been overly regulated by a handful of bureaucrats, middlemen, businessmen and politicians. Its only a decade since the country has seen an emergence of a political thought that encourages free enterprise.
Political Factors: 1. The Minister Minister in charge of the industry industry has been been threatening threatening to impose impose even more stringent Price Control on the industry than before. before. This is throwing many an investment plan into the doldrums. 2. DPCO which which is the the bible for the industry has in effect effect worked contrary contrary to the stated objectives. DPCO nullifies the market market forces from encouraging competitive pricing of goods dictated by the market. Now the pricing is determined by the Government based on the approved costs irrespective of the real costs. 3. Effective Effective January, January, 2005 the country goes in for the IPR (Intellec (Intellectual tual Property Rights) regime, popularly known as the Patent Act. This Act will impact the Pharmaceutical Industry the most. Thus far an Indian company could escape paying a patent fee to the inventor of a drug by manufacturing it using a different different chemical route. Indian companies exploited this law and used the reverse-engineering route to invent a lot of alternate manufacturing manufacturing methods. A lot of money was saved this way. This also encouraged competing company to market their versions of the same drug.
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4. In Pharma Pharma industry industry there there is is a huge PSU segment segment which which is chronic chronically ally sick and highly inefficient. The Government puts the surpluses generated by efficient units into the price equalization account of inefficient units thereby unduly subsidizing them. On a long term term basis this has made practically everybody inefficient. 5. Effective Effective the January, January, 2005 2005 the Governmen Governmentt has shifted shifted from from charging charging the Excise Duty on the cost of manufacturing to the MRP thereby making the finished products more costly. Just for a few extra bucks the current government has made many a life saving drugs unaffordable to the poor. 6. The Governmen Governmentt provides provides extra extra drawbacks drawbacks to some some units units located located in specified area, providing them with subsidies that are unfair to the rest of the industry, bringing in a skewed development of the industry. As a results Pharma units have come up at place unsuitable for a best cost manufacturing activity.
Economic Factors: 1. India spends a very very small small proportion proportion of its GDP on healthcare healthcare ( A mere 1% ). This has stunted stunted the demand demand and therefore therefore the growth growth of the industry. 2. Per capita capita income income of an averag averagee Indian Indian is low ( Rs. 12,890 12,890 ), theref therefore ore,, spending on the healthcare takes a low priority. An Indian would visit a doctor only when there is an emergency. This has led to a mushrooming of unqualified doctors and spread of non-standardized medication. 3. The incide incidence nce of Taxes Taxes are are very high. high. There There is Excise Excise Duty Duty ( State & Centra Central), l), Custom Custom Duty, Duty, Servic Servicee Tax, Tax, Profes Profession sion Tax, Tax, License License Fees, Fees, Royalty Royalty,, Polluti Pollution on Cleara Clearance nce Tax, Tax, Hazard Hazardous ous substan substance ce (Stora (Storage ge & Handling) license, income tax, Stamp Duty and a host of other levies and charg charges es to be paid. On an average average it amounts amounts to no less than than 4045% of the costs. 4. The numbe numberr of Registe Registered red Medi Medical cal pract practitio itioner nerss is low. As a result result the the reach of Pharmaceuticals is affected adversely. 5. There There are are only 50,0 50,00,0 0,000 00 Medic Medical al shops. shops. Again Again this affe affects cts adver adversel sely y the distribution of medicines and also adds to the distribution costs. 6. India is a high interest interest rate rate regime. regime. Therefo Therefore re the cost cost of funds funds is double double that in America. This adds to the cost of goods.
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7. India has poor roads and rail rail network. network. Therefore, Therefore, the transportation transportation time is higher. higher. This calls calls for higher invento inventory ry carryin carrying g costs and longer delivery time. All this adds to the invisible costs. Its only during the last couple of years that good quality highways have been constructed.
Socio-cultural Factors: 1. Pove Povert rty y and and asso associ ciat ated ed maln malnut utri riti tion on dram dramat atic ical ally ly exac exacer erba bate te the the incidence incidence of Malaria Malaria and TB, preventable preventable diseases that continue to play havoc in India decades after they were eradicated in other countries. 2. Poor Poor Sanitatio Sanitation n and polluted polluted water water sources sources prematur prematurely ely end the life life of about 1 million children under the age of five every year. 3. In Indi Indiaa peop people le pref prefer er using using hou house seho hold ld trea treatm tmen ents ts hand handed ed do down wn for for generations for common ailments. 4. The use use of magic/tantric magic/tantrics/ozhas s/ozhas/hakim /hakimss is prevale prevalent nt in India. India. 5. Increasing Increasing pollution pollution is adding to the healthcare healthcare problem. problem. 6. Smoki moking ng,, gu gutk tkaa, drin drinki king ng and po poor or oral oral hy hygi gien enee is add ddin ing g to the the healthcare problem. 7. Larg Largee join jointt fami famili lies es tran transm smit it comm commun unic icab able le dise diseas ases es amon amongs gstt the the members. 8. Cattle-rear Cattle-rearing ing encourage encourage diseases diseases communica communicated ted by animals. animals. 9. Early child child bearing bearing affects affects the health health standards standards of women women and and children. children. 10. Ignorance of inoculation and vaccination has prevented the eradication of diseases like polio, chicken-pox, small-pox, mumps and measles. 11. People don’t go in for vaccination vaccination due superstitious superstitious beliefs and any sort of ailment is considered as a curse from God for sins committed.
Technological Factors: 1. Advanced Advanced automated automated machines machines have increa increased sed the output and and reduced reduced the cost. 2. Computerizat Computerization ion has increase increased d the efficiency efficiency of the Pharma Pharma Industry. Industry.
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3. Newer medication, medication, molecules molecules and and active active ingredient ingredientss are being discovered. As of January 2005, the Government of India has more than 10,000 substances for patenting. 4. Ayurveda Ayurveda is a well recogniz recognized ed science science and and it is providing providing the the industry industry with a cutting edge. 5. Advances Advances in Bio-technol Bio-technology, ogy, Stem-ce Stem-cell ll research research have have given India India a step forward. 6. Humano-Insuli Humano-Insulin, n, Hepatitis Hepatitis B vaccines, vaccines, AIDS drugs drugs and and many many such such molecules have given the industry a pioneering status. 7. Newer drug delivery delivery systems systems are the innovation innovationss of the the day. day. 8. The huge unemployment unemployment in India prevents prevents industries industries from from going going fully automatic as the Government as well as the Labor Unions voice complains against such establishments.
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SUN PHARMACEUTICAL INDUSTRIES LTD.
21
PROFILE Sun Pharma Pharma makes specialty pharmaceuticals pharmaceuticals and active pharmaceutical pharmaceutical ingredients. The brands brands are prescr prescribe ibed d in chronic chronic therap therapy y areas areas like cardiol cardiology ogy,, psychi psychiatr atry, y, neurology, gastroenterology, diabetology and respiratory. Sun Pharma has the same drive for growth that marked our early days. Sun Pharma came into existence as a startup with just 5 products in 1983. In the time since, Sun Pharma have crossed several milestones to emerge as a leading pharma company in India, a rank that we have now been at for more than 5 years. (IMS-ORG Retail Store Audit, March 2006) Sun Pharma has reached leadership in each of the therapy areas that we operate in, and are rated among the leading companies by key customers. Strengthening market share and keeping this customer focus remains a high priority area for the company. In the post 1996 years, Sun Pharma used a combination of internal growth and acquisitions to drive growth; important mergers were those of the US, Detroit based Caraco Pharm Labs and that of the plant at Halol which is now UKMHRA and USFDA approved. Under a recent corporate development, the areas related to new molecular entities and drug delivery systems are proposed to be demerged into a separate company.
HISTORY Sun Pharma began in 1983 with just 5 products to treat psychiatry ailments. Sales were initially limited to 2 states - West Bengal and Bihar. Sales were rolled out nationally in 1985. Products that are used in cardiology were introduced in 1987, and Monotrate, one of the first products launched at that time has since become one of our largest selling products. Important products in Cardiology were then added; several of these were introduced for the first time in India. Realizing the fact that research is a critical growth driver, it established its research cent center er SPAR SPARC C in 19 1993 93 and and this this crea create ted d a base base of stro strong ng prod produc uctt and and proc proces esss development skills. Sun Pharma was listed on the main stock exchanges in India in 1994; and the Rs. 55 crore issue of a Rs. 10 face value equity share at a premium of Rs. 140/- was oversubscribed 55 times. The minimum 25% that was required under the regulations then for listing was offered to the public, the owner family continues to hold a majority stake in Sun Pharma. It used this money to build a greenfield site for API manufacture, as well as for acquisitions. For the acquisitions, typically companies or assets that could be turned around and brought on track were identified. Its first API manufacturing plant was built in Panoli in 1995, for access to high quality 22
acti active vess ahea ahead d of comp compet etiti ition, on, and and to tap the the vast vast inter interna natio tiona nall op oppor portun tunity ity for for speciality APIs. Another API plant, its Ahmednagar Ahmednagar plant, was acquired from the multinational multinational Knoll Pharmaceuticals in 1996, and upgraded for approvals from regulated markets, with substantial capacity addition over the years. This was the first of several sensibly price priced d acquisi acquisition tions, s, each each of which which would would bring bring import important ant parts parts to the long-te long-term rm strategy. By 1997, its headquarters were shifted to Mumbai, the commercial capital of the country. country. Sun Pharma Pharma began on the first of its international international acquisitions acquisitions with an initial $7.5 million investment in Caraco Pharm Labs, Detroit. By 2000, it had completed 8 acqu acquisi isiti tions ons,, each each such such move move addi adding ng new new ther therap apy y area areass or offe offeri ring ng an entr entry y to important international markets. A new research center was set up in Mumbai for generic product development for the US market. In India, as new therapy areas were entered entered into post acquisi acquisition tion;; custom customer er attent attention, ion, produc productt select selection ion and focuse focused d marketing marketing helped us gain a foothold foothold in areas like orthopedics, orthopedics, gynecology, gynecology, oncology, oncology, th th etc. From a ranking at 38 in 1994, by 2000 it was ranked 5 with a leadership in 8 of the 11 therapy areas that it is present present in. The year 2000 was the year of turnaround at the US subsidiary, Caraco, as it began to receive approvals after successful inspection by the USFDA. In December 2004, a research center spread over 16 acres was inaugurated by the President of India, with special lab space for drug discovery and innovation. The post 2005 years have witnessed important acquisitions to strengthen our US business- the purchase of manufacturing assets for controlled substances in Cranbury,NJ; that of a site to make creams and lotions in Bryan, that of Alkaloida, a Hungary based API and dosage form manufacturer , and recently, Chattem Ltd., a Tennessee-based controlled substance API manufacturer.
The tally at the end of 2008: 1) 17 manufacturing plants in 3 continents
2) 3) 4) 5) 6) 7)
8000 empl 8000 employ oyee eess 2 World World class class rese researc arch h center centerss Brand Brand sellin selling g in marke markets ts world worldwide wide A growing growing prese presence nce in the the US gener generic ic marke markett Increa Increasing sing rese researc arch h investme investments nts 60% of sales sales from from intern internatio ational nal marke markets ts
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SHAREHOLDING PATTERN The company has share capital base of Rs.15.4 crore. The number of total outstanding outstanding shares is 1.54 crore. crore. The face value per share is Rs. 10. The share is currently trading at Rs. 625, as on 16th May, 2001. The market capitalization of the company is Rs. 962.5 crore. The free float available is 11% and the promoters hold 73% stake in the company. Shareholding
BOARD OF DIRECTORS Dilip S. Shanghvi, Shanghvi, Chairman and Managing Director. Mr. Shanghvi founded the company in 1982. Sudhir V. Valia Executive Director Sailesh T. Desai Executive Director Hasmukh S. Shah Non-Executive Independent Director Keki M. Mistry Non-Executive Independent Director Ashwin Dani Non-Executive Independent Director Arvind Joshi President
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GROUP COMPANIES Caraco Pharmaceutical Laboratories: Laboratories :
Based in Detroit, Michigan, Caraco develops, manufactures, market and distributes generic and private label pharmaceuticals* and markets them throughout the United States. The corporation's present portfolio consists of a number of products in various strength strengthss and packag packagee sizes, sizes, across across a variety variety of therap therapeuti euticc segment segments, s, includi including ng epilepsy and hypertension. For the most recent year ending March 2008, Caraco had sales of over $350 mill. Caraco's manufacturing facility and executive offices were constructed in 1991, after a $9.1 million loan from the Economic Development Corporation of the city of Detroit. Sinc Sincee August August 19 1997 97,, capi capita tall infusi infusions ons and and loan loanss have have prim primar arily ily come come from from Sun Sun Pharma. Sun Pharma's investment in and support of Caraco has resulted in, since the second quarter of 2002, Caraco achieving the sales to support its operations. As on March 2008, Sun Pharma owns approx 76% on a diluted basis of the outstanding common shares of Caraco. Sun Pharma has two R&D centers in Baroda and Mumbai, where development work for generics is done.
Sun Pharmaceutical Industries Inc. (SPI):
Sun Pharmaceutical Industries Inc is a Michigan Corporation and a wholly owned subsidiary of Sun Pharmaceutical Industries Ltd, India. In the second half of 2004, Sun Pharma acquired the trademarks, manufacturing know-how and other intellectual property of certain pharmaceutical products from Wome Women' n'ss First First Heal Health thca care re,, Inc, Inc, which which was was und under er bank bankru ruptc ptcy y proc procee eedin dings gs.. On completion of the acquisition in December 2004, these products were assigned to Sun 25
Pharma Inc. In Dece Decemb mber er 20 2005 05,, Sun Sun Phar Pharma ma Inc Inc comp comple lete ted d the the pu purc rcha hase se of do dosa sage ge form form manufacturing operations of Able Labs in the US for USD 23.15 million from the US Bankruptcy Bankruptcy Court of the District of New Jersey, Trenton. Trenton. A plant spread over 35,000 sq ft, in Bryan, Ohio, manufactures liquids, creams, and ointments. This plant was purchased from Valeant Pharma. The Ohio plant is now approved by the USFDA and the Cranbury plant expects to receive approval shortly. In January 2005, the company entered into a distribution and sale agreement with Caraco. Under the agreement, Caraco distributes and sells SPI’s products using its business organization, management personnel, and distribution set up. Sun Pharmaceutical (Bangladesh) :
Sun Pharmaceutical (Bangladesh) is a private limited company incorporated in March 2001 under the Companies Act 1994. This company was formed jointly with Sun Pharma, City Overseas Ltd, a company incorporated in Bangladesh and Sun Pharma Global Inc, a company incorporated incorporated under the laws of the British British Virgin Islands. The company began commercial operations in October 2004. The company owns and operates a pharmaceutical factory and makes pharmaceutical products that are sold in the local market. It currently markets markets 58 products products and had reported a turnover of 105 mill Rs with a profit of Rs.22 mill Rs for the year ending March 08 . Alkaloida Chemical Company Exclusive Group Ltd.
ICN Hungary, purchased from Valeant Pharmaceuticals in 2005, is one of the few units worldwide, authorized to make controlled substances. ICN Hungary has now been renamed Alkaloida Chemical Company. This 170 acre site has facilities spread over 1,75,000 sq ft for the manufacture of bulk actives, with 500 KL capacity and designated areas to make controlled substances. It has a 150,000 sq ft facility for different dosage forms such as film coated and effervescent tablets, capsules, etc. A large 65,000 sq ft research center has labs across synthetic chemistry, instrumentation analytical and structural elucidation. The site is operational with 450 people and additional recruitments are planned over time.
MANUFACTURING With worldclass technology and a team of strong professionals, we have built sites and system systemss that that meet meet the most stringen stringentt interna internation tional al manufa manufactur cturing ing standa standards. rds. Expert quality teams ensure that systems and processes remain in compliance with the 26
latest standards. A number of our plants hold approvals from the USFDA and the UK MHRA. APIs and Dosage forms are made in 19 sites across India, US, Hungary and Bangladesh.
Formulation Sun Su n Ph Phar arma ma ma make kess sp spec ecia iali lity ty fo form rmul ulat atio ions ns ac acro ross ss a ra rang ngee of do dosa sage ge forms- oral, injectable and delivery system based. API( Active Pharmaceutical Ingredients) Sun Pharma makes specialty APIs including peptides, steroids, hormones and anticancers at internationally approved worldclass sites. Quality Policy Regularly updated system, procedures and an expert team support a stringent quality policy. Environmental Policy At Sun pharma, a concern for safety and the environment is part of our plan.
Company's Philosophy on Code of Corporate Governance Sun Pharma's philosophy on corporate governance envisages working towards high levels of transparency transparency,, accountabilit accountability, y, consistent consistent value systems, delegation across all facets facets of its operations operations leading to sharply focused focused and operationally operationally efficient efficient growth. The company tries to work by these principles in all its interactions with stakeholders, including shareholders, employees, customers, suppliers and statutory authorities .
LOOKING AHEAD Over the last few years, we have been moving towards a profile that is much more international and formulation-driven. The Sun Pharma of tomorrow will have brands registered in major markets of the world, and in most markets, promoted by a high quality field force. In India, we expect to retain our position of market leadership leadership in our key therapy areas, and reach leadership in newer therapy areas that we entered after 1997. In key international 27
markets across Asia, South East Asia, Russia, China, the Middle East, Latam and Africa we would be a strong speciality company with prescription driven sales. With a strong network and established company equity, we would be an excellent partner for a company seeking to license out products across markets. In the high value generic markets markets of the US we expect to become become a respected respected generic company, with a portfolio comprising both of complex and simple-to-file generics, building an edge with technology and the cost advantage of vertical integration. While we have recently completed our fourth acquisition in the US, we believe there are excellent opportunities in the US generic space, where we can affect a turnaround and add value to a business. We have about $400 million earmarked for acquisitions in the US generic/drug discovery space. Its innovation-based R&D programs were recently demerged into a separate company. The new R&D company will have projects covering new molecule and novel drug delivery in late phase human trials over the next few years, which it may seek to license out.
BUSINESS DEVELOPMENT Sun Pharma is an international speciality pharma company. We have a significant presence in the US through our subsidiary Caraco. In the rest of world markets, we have a strong ground network of 400 committed field force in 30 countries, with a pipeline of over 2600 products of which 1600 are registered and marketed. We have 2500-person strong sales team in India distributing through 2000 stockists, We are now at a stage of rapid growth across geographies spanning Russia and CIS countries, China and South east Asia, Africa and Latin America, where we are rapidly emerging as a branded generic company of choice. In India, we are among the largest pharmaceutical companies and command a 3.6% market share (ORG IMS Stockist Audit, Aug 2009). In India, we market over 500 products through 18 speciality marketing divisions that are built around chronic therapy areas. Typically, every year we introduce 25-30 new products. All of these are developed in-house supported by strong bulk synthesis, formulation development, bioequivalence and regulatory teams. CMARC (A prescription audit agency) has ranked us as No.1 in key chronic therapy areas of Neuropsychiatry, Cardiology, Orthopedics and Ophthalmology. We rank among the top 5 companies for Diabetology, Respiratory, Pain, Cancer and Gynecology.
In-Licensing We look look at part partne neri ring ng and and coll collab abor orati ating ng as an impor importan tantt stra strate tegic gic appr approa oach ch that that will will complement our growth in India and international markets. Our constant need is to add to our speciality product portfolio for prescription leadership in India. We also seek to strengthen our presence, with a complete basket of specialty products, in Russia and CIS countries,
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China and South East Asia, Africa, Brazil and Mexico. We are currently interested in in-licensing products that are already marketed or are in late stage clinical development in our key therapy areas. We seek products that leverage our core strengths and complement our existing product portfolio in the following therapy areas: CNS disorders Cardiology Diabetes and Metabolic disorders Gastroenterology Ophthalmology Oncology Pain Allergy, Allergy, Asthma and Inflammation Gynecologicals
We also have strategic interest in licensing biosimilar products and new products based on recombinant/humanized monoclonal antibody technology that find use in these therapy areas We seek seek to esta establi blish sh a long long term term,, mutua mutuall lly y rewa reward rding ing rela relatio tionsh nship ip base based d on exclu exclusiv sivee marketing marketing rights business model for the above listed geographies, geographies, as well as co-marketin co-marketing g or strateg strategic ic allianc alliances es for co-dev co-develop elopmen mentt includi including ng clinica clinicall trials trials of product productss for necess necessary ary regulatory approvals. Out-licensing
Its formulation development expertise enables us to develop complex generic products which which are are bioequ bioequiva ivalen lent, t, susta sustaine ined d rele releas asee oral oral do dosag sagee form formss and and long long actin acting g injectable depot formulations. We offer a range of dosage forms for oral, injectable, topical and transdermal routes developed through non-infringing routes and/or patented routes. Our Organic synthesis team develops highly complex bulk actives like Peptides, Hormones, Hormones, Steroids, Steroids, Anticancer Anticancer drugs and Cephalospori Cephalosporins ns through non-infringing non-infringing rout routes es and/o and/orr pate patent nted ed route routes. s. We offe offerr over over 150 bulk bulk acti active vess manu manufa fact ctur ured ed at USFDA/UK MHRA approved sites. We seek out-licensing opportunities for our speciality generics, super generics, and bulk drugs for global markets. C V S 29
CNS Pain Cancer Gynecologicals Allergy, Asthma other respiratory diseases Our Organic synthesis team develops highly complex bulk actives like Peptides, Hormones, Steroi Steroids, ds, Antican Anticancer cer drugs drugs and Cephalo Cephalospor sporins ins through through non-inf non-infrin ringing ging routes routes and/or and/or patent patented ed routes. routes. We offer offer over over 150 bulk bulk active activess manufa manufactur ctured ed at USFDA/U USFDA/UK K MHRA MHRA approved sites. We seek out-licensing opportunities for our speciality generics, super generics, and bulk drugs for global markets.
API Our API (Active Pharmaceutical Ingredients) program began in 1995 with a simple objective - facilitating the manufacture of complex formulations, for which, sourcing the API would restrict entry. Over time, we have been able to take the benefits of vertical integration to international markets and our US generic subsidiary, Caraco, has been able to source the active activ e of several key products to its advantage. Starting with 2 actives in 1995, our API list has since expanded to over 150, and this includes a number of APIs with regulated market approvals such as US and European drug master files (DMFs), filed out of Indian plants that hold international regulatory approval and one plant in Hungary. At our 8 world-class locations, all of which are ISO 14001 and ISO 9002 approved, besides being approved by the respective foreign regulatory authorities, every year we scale up about 30 APIs, and make a large number of filings, the technology for all of which is developed at our research centre. Currently this list addresses customers-both innovator companies and generic companies, in markets across Europe , Latam and the US .
A range of APIs including complex actives like anticancer, steroids, peptides and hormones are manufactured in dedicated areas that follow international norms for systems and processes. Our buyout, in 2005, of ICN Hungary (Alkaloida) has enabled us to enter the controlled substance API manufacturing space, one of the few sites in the world to hold these approvals. In November 2008, we acquired Chattem Chemicals, Inc., it is licensed by the DEA to manufacture Schedule 1 to 5 controlled substances. It has a facility spread over 6.5
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acres in Chattanooga, Tennessee, where it manufactures a variety of APIs with a focus on controlled substances. Complex APIs, controlled substances, APIs for the regulated markets - all of these are expected to power our API strategy going ahead.
Research and Development At Sun Pharma, we are committed to creating a continually replenished pipeline of speciality generics, included differentiated generics, and registering these across markets. Our research projects are geared to enable us develop the latest molecules and bring them to market, at a reasonable cost. Focused development of generics in defined speciality areas and creating difficult to mimic generics based on complex technologies, is key to our efforts. Our first research center, Sun Pharma Advanced Research Center (SPARC), was set up in 1993 in Baroda in the western state of Gujarat in India. The work done here was instrumental for the rapid growth at Sun Pharma. Starting from a small base, the infrastructure at this initially 32,000 sq ft research center was used to streamline product development to bring to market on an average 40 formulations and 25 new API every year. These facilities have since been shifted to our new research campus. In 2004, a new research campus with areas for process / product development went on stream in Baroda . His Excellency, Dr. A P J Abdul Kalam, the Hon. President of India , formally inaugurated this research center in a glittering ceremony in December 2004. This 16-acre campus with nearly 330,000 sq ft research area offers space for the development of generics meeting international development standards, including difficult to make complex generics and complex API processes, such as those for steroids and peptides. This site houses 168 labs that address different aspects of generic dosage form and API development. A full fledged bioequivalence center spread over 25,000 sq ft and fully equipped with 222 beds works on biostudies for submissions in India and international markets. In addit addition ion to a wells wells stock stocked ed libra library ry and and conf confer erenc encee area areas, s, spac spacio ious us and well well equipped labs are in place for process chemistry for API development, formulation development for conventional dosage forms and complex delivery systems. In addition, well-equipped and staffed areas for pharmacokinetics, bioequivalence, and analytical development offer the required support. A second research center in Mumbai, spread over 50,000 sq ft of floor area, develops generics for the developed markets. This center has developed products for Caracomost of the products that are marketed by our US subsidiary were developed by this team. This lab works with tight timeframes to support Caraco's new product pipeline. Our research commitment for 2009-10 is between 7-8% of the company's turnover and we've put in a total of Rs. 15 billion for research since 1993. Our approach to research has been incremental starting with the simple and moving on to the more 31
complex. We began with simpler dosage forms, then moved on to novel drug delivery systems and complex API. Across areas, 76 patents have been received of 233 patents filed. Every year, we typically bring about 40 new products to the Indian market, scale up 25 API, develop and file for 30 plus ANDAs for the US and 8-10 DMFs for US / Europe .
Generics Dosage form development The current formulation formulation development team has the capability to bring to market over 40 new new prod product uctss ever every y year year,, produ product ctss that that are are bioe bioequ quiva ivale lent nt to inter interna natio tiona nally lly available brands. This expertise spans immediate/controlled release products as well as complex injectables and differentiated delivery systems. Simpler dosage forms handled include tablets, capsules, liquids, and ointments. Complex products include soft gel caps, liposome targeted drug delivery, osmotic delivery systems, inclusion complexes, complexes, meltabs, meltabs, transdermals transdermals,, aerosols, aerosols, biodegradable biodegradable depot-based depot-based formulations formulations for 1 month/3 month release. Dedicated labs for formulation development are similar to facilities at the plants and this facilitates easier scale up. Facilities Solid oral dosage form labs Semisolid lab Nanotechnology/liposome lab Sterile lab for parenterals Aerosol area Packaging development lab Stability testing labs
SWOT ANALYSIS Strengths:
Sun Pharma is highly regarded for its ability to launch new products with a great amount of speed and consistency. The company has only 20% exposure to the DPCO. he past growth rate of the company has always been double that of the industry as a whole.
Weaknesses:
Continuous losses of Caraco Pharma is a major concern for Sun Pharma. 32
The profit margins are declining for the company.
Opportunities:
The relaxation of DPCO will be a big boost for the company and this might marginally improve the profit margin. The company has already made ANDAs (Abbreviated new drug application) in USA and it provides a great opportunity for growth for the company. The company has entered the US market through its subsidiary Caraco Pharma. This provides a great opportunity for the company to make the most out of the expiring patents in USA.
Threats:
The entry of foreign players will pose a major threat to the company. The company is more into acquisition based growth and this might lead to a stage of financial crunch as it has already happened in the case of Caraco pharma. Sun pharma provided debt to Caraco and is facing problems due to the continuous losses made by the latter.
SUN PHARMA ORPDUCT LIST SSun
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Sun Pharma Product List
Product
Therapeutic Category
Specifications
Alcoholism Treatment Alendronate Sodium [#] Antiosteoporosis Antidepressant Amitriptyline [$] Antineoplastic Anastrozole Antidepressant Atomoxetine Hcl Antiinflammatory Balsalazide NSAID Bicalutamide Antiinflammatory Steroid Budesonide Antidepressant Bupropion Hcl Antiosteoporosis Calcitonin Antineoplastic Capecitabine Antiepileptic Carbamazepine Anticancer Carboplatin [$,*] Muscle Relaxant Carisoprodol [$] Antihypertensive Carvedilol [$,*] 3rd Generation Cephalosporin Cefuroxime Axetil [*] Anticancer Cisplatin [*] Antidepressant Citalopram Hbr. [$] Antidepressant Clomipramine Hcl [*] Antiepileptic Clonazepam [$] Antithrombotic Clopidogrel Bisulfate Androgen Derivative Danazol Antihistaminic Desloratadine [$] Vasopressin Analogue Desmopressin Monoacetate Antiepileptic Divalproex Sodium Cardiovascular Dobutamine Hcl Antialzheimer Donepezil [$] Antidepressant Dothiepin Hcl [*] Antiparkinsons Entacapone Antithrombotic Eptifibatide Drug Escital talopram Antidepressant Oxalate Hypnotic Eszopiclone Antialopecia Agent Finasteride NSAID Flurbiprofen [*] NSAID Flurbiprofen R(-) NSAID Flurbiprofen S(-) Fluticaso Fluticasone ne Propiona Propionate te Antiallergic Acamprosate Calcium
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BP / EP EP USP PN PN PN
CAS No.
BP / EP BP / EP / USP BP PN BP BP / EP / USP USP BP / EP EP EP / USP USP BP / EP EP / USP USP USP PN EP
[77337-73-6] [121268-17-5] [50-48-6] [120511-73-1] [82248-59-7] [82101-18-6] USP [51333-22-3] [31677-93-7] [47931-85-1] [154361-50-9] [298-46-4] [41575-94-4] [78-44-4] [72956-09-3] [64544-07-6] [15663-27-1] [59729-32-7] [17321-77-6] [1622-61-3] [135046-48-9] [17230-88-5] [100643-71-8] [62288-83-9]
PN EP / USP PN BP / EP PN PN PN
[76584-70-8] [49745-95-1] [120014-06-4] [897-15-4] [130929-57-6] [188627-80-7] [59729-33-8]
PN PN
[138729-47-2] [98319-26-7] [5104-49-4] PN PN [80474-14-2]
BP / EP / JP
BP / EP
[$,*] Fluv Fluvox oxam amin inee [$]
Male Maleat atee Antidepressant
BP / EP
[61718-82-9]
Fosphe Fosphenyt nytoin oin [$]
Sodium Sodium Antiepileptic
USP
[92134-98-0]
USP EP / USP EP / USP EP PN PN PN PN USP PN PN EP USP PN PN BP / EP PN EP / USP PN PN BP / EP / USP USP BP / EP / USP
[60142-96-3] [122111-03-9] [93479-97-1] [107007-99-8] [138926-19-9] [220127-57-1] [138402-11-6] [100286-90-6] [75695-93-1] [84057-84-1] [132866-11-6] [112809-51-5] [124750-99-8] [82034-46-6] [62959-43-7] [71125-38-7] [41100-52-1] [89-57-6] [6150-97-6] [1665-48-1] [1115-70-4] [298-59-9] [98418-47-4]
BP / EP / USP
[56392-17-7]
PN USP USP USP
[84371-65-3] [61337-67-5] [68693-11-8] [83919-23-7] [16676-29-2] [105816-04-4] [79517-01-4] [132539-06-1] [116002-70-1] [103639-04-9] [61825-94-3] [28721-07-5]
Antiepileptic Anticancer Gemcitabine Hcl [$,#] Antidiabetic Glimepiride [$] Antiemetic Granisetron Hcl [$] Bone Resorption Inhibitor Ibandronate Sodium Anticancer Imatinib Mesylate [$] Antihypertensive Irbesartan Anticancer Irinotecan Hcl Antihypertensive Isradipine [$] Antiepileptic Lamotrigine [$] Antihypertensive Lercanidipine Hcl Anticancer Letrozole Losartan Potassium [#] Antihypertensive Loteprednol Etabonate Antiinflammatory Antiepileptic Magnesium Valproate Antiinflammatory Meloxicam [#] Antiparkinsons Memantine Hcl Antiinflammatory Mesalazine [$,*] Antispasmodic Metamizol Magnesium Muscle Relaxant Metaxalone Antidiabetic Metformin Hcl [$,*] CNS Stimulant Methylphenidate Hcl Antihypertensive/Antianginal inal Meto Metopr prol olol ol Succ Su ccin inat atee Antihypertensive/Antiang [*] Meto Metopr prol olol ol Tart Tartra rate te Cardiovascular [$,*] Abortifacient Mifepristone Antidepressant Mirtazapine [$] CNS Stimulant Modafinil [$] Antiinflammatory Steroid Mometasone Furoate Narcotic Antagonist Naltrexone Hcl Antidiabetic Netaglinide Octreotide Acetate [$,#] Somatostatin Analologue Antipsychotic Olanzapine Antiemetic Ondansetron Base [$] Antiemetic Ondansetron Hcl [$,*] Anticancer Oxaliplatin [$] Antiepileptic Oxcarbazepine Oxcarbazepine [$] Gabapentin [$, #]
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USP PN PN PN EP / USP EP / USP EP PN
Local Anaesthetic Pamidrona Pamidronate te Disodium Disodium Antiosteoporosis [$,#] Peripheral Vasodialotor Pentoxifylline [$,*] Calcium Channel Blocker Perindopril Antidiabetic Pioglitazone Antiinflammatory Piroxicam Betacyclodextrine Antiosteoporosis Raloxifene Hcl Antidiabetic Repaglinide [$] Acetyl ylch choli oline neste steras rasee inhib inhibit itors ors,, Rivast Rivastigm igmine ine Tartra Tartrate te Acet Cognition-enhancing drugs [$] Antiparkinsons Ropinirole Antidepressant Sertraline Hcl [$] Sodium Valproate [$,*] Antiepileptic Sumatripta Sumatriptan n Succ Succinate inate Antimigraine [$] Anticancer Temozolomide Vasopressor Analogue Terlipressin Androgen Derivative Testosterone Antiepileptic Tiagabine Hcl [$] Muscle Relaxant Tizanidine Hcl [$] Antiepileptic Topiramate [$,#] Analgesic Tramadol Hcl [$,*] Antiepileptic Valproic Acid Antidepressant Venlafaxine Hcl Antipsychotic Ziprasidone Hcl Bone Resorption Inhibitor Zoledronic Acid Zolpidem Tartrate [$,*] Hypnotic Antiepileptic Zonisamide [$] Oxethazaine
PN** Producer's Norms
BP / EP BP
[126-27-2] [109552-15-0]
BP / EP / USP BP / EP PN PN
[6493-05-6] [107133-36-8] [105355-27-9] [96684-40-1]
PN USP PN
[82640-04-8] [135062-02-1] [129101-54-8]
PN PN BP / EP / USP BP / EP
[91374-21-9] [79559-97-0] [1069-66-5] [103628-48-4]
PN PN USP USP USP USP EP BP / EP / USP EP PN PN BP / EP USP
[85622-93-1] [14636-12-5] [58-22-0] [145821-59-6] [64461-82-1] [97240-79-4] [36282-47-0] [99-66-1] [99300-78-4] [138982-67-9] [165800-06-6] [99294-93-6] [68291-97-4]
$ USDMF, # EDMF, * COS
Intermediates available on request for above Active Pharmaceutical Ingredients. All transactions are carried out in conformity with patent laws applicable in the user country. Responsibility with respect to third party’s patent rights in a specific country lies exclusively with the buyer.
ICN Product List
Product Acenocoumarol Aluminium-magnesiumhydroxy-carbonatehexahydrate Buprenorphine HCl
Therapeutic Category
Specifications
CAS No.
Anticoagulant Antacid
Ph.Hg. PN
[152-72-7] -
Analgesic
EP 36
[53152-21-9]
Anxiolytics Anxiolytics Buspirone HCl [$, #] Analgesic,Antitussive Codeine base Analgesic,Antitussive Codeine HCl Codeine phosphate Analgesic,Antitussive hemihydrate [*] Conce oncent ntrrate ate of popp ppy y Intermediate straw (CPS) Analgesic,Antitussive Dihydrocodeine hydrogentartrate Analgesic,Antitussive Ethylmorphine HCl Antidiabetic Glibornuride [#] Antimalarias,Antirheumatic Hydroxychloroquine sulphate [$] Analgesic Morphine HCl Narcotic analgesic Morphine sulphate Intermediate Noroxymorphone Antitussive Noscapine base Antitussive Noscapine HCl Intermediate Oxycodone Intermediate Oxymorphone Antiepileptic Phenobarbital acid [$, #] Antiepileptic Phenobarbital sodium Antitussive Pholcodine Laxative Sennoside A+B Buspirone base [$, #]
Thebaine Topiramate [$] PN** Producer's Norms
Intermediate Anticonvulsants
PN EP / USP BP / EP / USP BP / EP BP / EP / USP PN
[36505-84-7] [33386-08-2] [76-57-3] [1422-07-7] [41444-62-6] [57-27-2]
BP / EP
[5965-13-9]
BP / EP PN BP / USP
[125-30-4] [26944-48-9] [747-36-4]
BP / EP BP / EP / USP PN BP / EP / USP BP / EP PN PN BP / EP / USP BP / EP BP / EP PN
[52-26-6] [64-31-3] [33522-95-1] [128-62-1] [912-60-7] [76-42-6] [76-41-5] [50-06-6] [57-30-7] [509-67-1] [128-57-4] & [517-43-1] [115-37-7] [97240-79-4]
PN PN
$ USDMF, # EDMF, * COS***
Intermediates available on request for above Active Pharmaceutical Ingredients. All transactions are carried out in conformity with patent laws applicable in the user country. Responsibility with respect to third party’s patent rights in a specific country lies exclusively with the buyer.
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BIBLIOGRAPHY 1) http://www.sunpharma.com/index.php 2) en.wikipedia.org/wiki/ Sun Sun _Pharmaceutical 3) connect.in.com/ sun- pharma /profile-311528.html 4) portfolio.rediff.com/quotes/ sun+ pharmaceutical +industries+ltd +industries+ltd 5) www.business-standard.com/stockpage/stock_details.php?bs www.business-standard.com/stockpage/stock_details.php?bs.. 6) www.pharmaceutical-drug-manufacturers.com/pharmaceutical-industry/ 7) www.in.kpmg.com/pdf/Indian%20pharma%20outlook.pdf 8) en.wikipedia.org/wiki/ Pharmaceutical s_in_India Pharmaceutical s_in_ 9) www.espicom.com/prodcat.nsf/Product_ID.../00001851?...
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