The pharmaceutical industry in Maharashtra has successfully established its presence in domestic market with large investments in manufacturing assets and research & development activities. The pharma companies in Maharashtra put up good show during past and captured significant market share in the international area also. The pharma industry in the state is on the fast track by implementing major expansion programmes and playing crucial role in the healthcare segment. The industry in the state will be on forefront in the challenging business environment with new technological tie-ups, mergers and acquisitions, upgradation of facilities and several important approvals from foreign authorities. Besides, the industry is taking proper care of its investors by offering better returns in the form of dividend and bonus shares. Several scrips on the stock exchanges are moving ahead with higher market capitalization.
Out of the top 10 Indian companies, with net sales above Rs 700 crore, 5 major companies viz., Cipla, Nicholas Piramal, Lupin, Sun Pharmaceuticals and Wockhardt are located in Maharashtra. These five companies put up healthy show during the year 2003-04 and marching ahead strongly. The sales of these five companies touched to Rs 6100 crore during the year 2003-04 from Rs 5051 crore in the previous year, registering a growth of more than 21 per cent. The net profit has taken a quantum jump of 28 per cent to Rs 992 crore from Rs 778 crore in the previous year.
Several mid-sized companies are also moving ahead and entering more aggressively in domestic and international markets. These mid-sized companies are in process of launching new molecules and new products in the regulated markets. There are several companies like Glenmark Pharmaceuticals, J B Chemicals, Unichem Laboratories, FDC, RPG Life Sciences, Aarti Drugs, Zandu Pharmaceutical, Elder Pharmaceuticals, Ankur Drugs and Pharma, TASC Pharmaceuticals, Indoco Remedies and Makers Laboratories, have established their manufacturing units in Maharashtra. Recently Indoco Remedies entered into the capital market with public issue of 30 lakh equity shares. The issue received excellent support from investors and was oversubscribed. These mid-size companies are consolidating their business activities to meet future challenges.
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The companies are focusing more and more on research and development activities and investing large funds to develop new products for international as well as domestic market. Though the pharmaceutical industry's revenues are under pressure during the last year on account of stiff competition, the companies in the state achieved better working results during 2003-04 and in the first nine months of the current year.
The pharma companies have established excellent brand image by launching research-based, cost effective and quality products in the international market. The pharma sector is a net foreign exchange earner adding to country's foreign exchange reserves. The sector is not only exporting products, but also undertaking contract manufacturing from multinational companies in a big way. The pharma companies are concentrating on advanced profitable markets like USA and Europe. For instance, export earnings of Cipla went up sharply by 43.5 per cent to Rs 812 crore during 2003-04 from Rs 566 crore in the previous year. Similarly, Lupin and Wockhardt achieved exports of Rs 559 crore and Rs 280 crore which worked out to 47.4 per cent and 38.5 per cent of their sales during 2003-04. Sun Pharmaceutical exported products worth Rs 204 crore during 2003-04. IPCA Laboratories is exporting to more than 95 countries and notched up exports of Rs 340 crore as against Rs 266 crore in the preceding year. Sterling Biotec's exports went up by 267 per cent to Rs 88 crore. Similarly, Glenmark, a Mumbai based Rs 330-crore plus company, reported a rise of 167 per cent in exports to Rs 48.95 crore during 2003-04.
The companies in the Maharashtra are focusing more on R&D to step up market share. Though Cipla, the second largest company in India after Ranbaxy Laboratories, is not spending on R&D activity, Nicholas Piramal is planning an investment of Rs 200 crore on R&D and upgradation. Nicholas has set-up a new Rs 100 crore R&D centre at Mumbai to conduct all the stages of drug development, including clinical trials indigenously. To capture international markets, these companies are filing DMFs and ANDA in US and Europe. Lupin is investing Rs 20 crore in Aurangabad for manufacturing anti-TB products and also planning to launch herbal products. Cipla filed 7 DMFs and Sun Pharmaceuticals filed 4 DMFs during 2003-04. Lupin filed 32 patents including 10 finished products. Wockhardt also filed 30 DMFs in US. Thus the companies are moving aggressively in developed market and increasing their market share. The pharma companies are undertaking new molecular research and around 25 to 30 products are in pipeline. The NCE products will be crucial for post-WTO period. Several companies are now looking biotechnology as future growth area.
To increase the presence in the market, Cipla has recently announced a technical collaboration with the California-based Cymbiotics Inc to launch treatment for arthritis. The withdrawal of some Cox-2 inhibitors from pharmaceutical market place has created a real need for products that will safely relieve the pain and debilitating effects of arthritis. The Cipla products will likely to fulfill the gap. Further, Cipla has expanded the scope of collaboration with Bangalore based Avesthagen for their ongoing bio-therapeutics development programme. Cipla is also working on developing a dosage for treating AIDS.
Nicholas entered recently into two contract manufacturing deals with multinational pharmaceutical companies, which would translate into sales of more than Rs 150 crore in the current year. Lupin established its herbal division to capture sales of Rs 40 crore. The company is looking forward to export herbal product to Germany and France in near future. The company is also setting up subsidiary in Japan, the world's second largest pharma market.
The pharma companies in Maharashtra are built up on strong financial position with excellent back of high-tech manufacturing facilities and tie-ups with multinational entities. These companies are distributing handsome rewards to its investors. Cipla paid equity dividend of 150 per cent, which absorbed an amount of Rs 90 crore during 2003-04. Similarly, Nicholas also paid equity dividend of 150 per cent and Lupin paid dividend of 65 per cent. Sun Pharmaceuticals, Glenmark, Unichem, IPCA, FDC and Zandu rewarded their shareholders with liberal bonus issues during last couple of years.
The companies are set to achieve better performance in the current year also. The aggregate net profit of Maharashtra based top five companies i.e. Cipla, Nicholas, Lupin Sun Pharma and IPCA moved up by 30.5 per cent during the nine months period ended December 2004 to Rs 842.96 crore from Rs 645.96 crore in the corresponding period of last year. Their net sales also increased by 15.3 per cent to Rs 4950.42 core from Rs 4299.72 crore. Wockhardt achieved net profit growth of 56 per cent to Rs 207.80 crore during the year ended December 2004 and declared equity dividend of 100 per cent. Other companies like Glenmark, J B Chemicals, Aarti Drugs, Elder Pharmaceuticals, Ankur Drugs, TASC Pharma also strengthen their topline and bottomline during the nine months period of current year.