Riding on the shoulders of economies of scale, intellectual property (IP) competence, large scientific pool, regulatory expertise and faster turnaround, Indian contract research space has over the past few years grown as a paradise of foreign and multinational pharma players across the globe, who were in search of a way to get rid off the spiralling costs and other predicaments associated with research activities. If we are to go by recent estimates, the global contract research opportunities for India is around US $30 billion.
Most of the Indian contract research organisations (CROs) offer a myriad of services, including drug discovery development of molecules and clinical trails. However, the country is much sought after for chemistry and biology analysis, clinical trials (phase II and phase III), pre-clinical studies and drug analysis services.
According to an independent source, the global clinical research market, comprising clinical research for phase II-IV, data management and bio availability/ bioequivalence (BA/BE) studies, is estimated at $60 billion. The size of the global contract manufacturing industry is around US $80 billion.
In contract research the chemistry services have taken off well and there could be at least 2,000 chemists working in the country's CROs. However, the biology service is still in the early stages. This is because biology demands expertise in various areas, including DMPK, cell and assay biology and in vivo, which is not as common as chemistry expertise in India. There is also a paradigm shift in assignments to CROs, as they are gearing up to gain higher value from existing projects, including IP generation.
Major Indian companies with a focus on contract research include Aurigene Drug Discovery Technologies, Jubilant Organosys, Bioneeds, Advinus Therapeutics, Strides Arcolab, Actavis, Nicholas Piramal and Syngene, a subsidiary of Biocon.
One of the recent trends ruling the contract research business space is that of partnerships. For instance, Aurigene has teamed up with world-class companies like Novo Nordisk, Rheoscience, Debiopharm, Forest Labs and Merck Serono on integrated discovery projects.
In another instance of partnerships in the contract research services space, Advinus Therapeutics has partnered with Merck and Drugs for Neglected Diseases initiative (DNDi), a not-for-profit research and development (R&D) organisation based in Geneva, Switzerland for discovery and development of novel therapies. The company will focus on three therapeutic categories - metabolic disorders (diabetes, cardiovascular and obesity), inflammatory (asthma, chronic obstructive pulmonary disease (COPD), rheumatoid arthritis, osteoarthritis and psoriasis) and neglected diseases (malaria, TB, leshmaniasis, dengue fever and leprosy). It has also associated itself with Veeda for clinical studies on humans.
If we are to believe the reports, Jubilant Organosys Ltd., an integrated pharmaceutical enterprise and India's largest custom research and manufacturing services (CRAMS) company, has bagged new contracts worth US $92 million for its proprietary products and exclusive synthesis segment under CRAMS business for 2008.
Besides, in what can be termed as a major initiative, GlaxoSmithKline (GSK) inked a multi-million dollar contract with Tata Consultancy Services to establish a global drug development support centre in Mumbai. Also, Bristol-Myers Squibb and Biocon's Syngene have signed a research collaboration agreement. Syngene and Clinigene, which are subsidiaries of Biocon, are looked upon as pioneers of custom research and clinical services industry in India.
The Indian market is not yet matured for high-end services. However, to make the CRO industry grow in India, CROs in the country must position itself to make sure that the country capitalises on the advantages it has to offer. At the same time, stricter implementation of patent laws, better regulatory clearances and international level work should be in place. The potential for this industry to be the next information technology wave is huge, according to Dr R Nadig, president, Triesta Sciences (India) Pvt Ltd.
According to the industry sources, between March 2006 and April 2007, contract research and manufacturing (CRAMS) market in India was valued at $800.4 million, of which contract manufacturing accounted for 84 per cent of the total market size, while contract research, excluding clinical trials accounted for the remaining 16 per cent. Both contract research and manufacturing segments have registered a robust growth of over 45 per cent in 2006-07.
Leading companies in the contract research and manufacturing services include Ranbaxy, Dr. Reddys, Cipla, Syngene, Nicholas Piramal, Hikal, Strides Arcolab, Biovel Lifesciences, Anthem Biosciences, Kemwell and Jubilant.
Given the recent reports, global companies have a special interest in the contract manufacturing services offered by India. The country has the highest number of US Food and Drug Administration (FDA) approved production plants and the skilled workforce. These two factors in conjunction have resulted in adhering to stringent quality standards and timelines, noted, VR Kannan, pharma consultant.
Under contract manufacture, companies are engaged in production of specialty generics for the regulated markets, apart from offering manufacturing services to multinational companies (MNCs), which have set up base in India. In addition, domestic contract manufacturers also supply active pharmaceutical ingredients (APIs) to MNCs.
As of now, India has around 29,000 manufacturing units. Out of the top 200-pharma manufacturers, who cater to 90 per cent production activities, around 30 are dedicated contract manufacturers. Out of the remaining 170 units, 120 companies are into both contract manufacture and production of their own branded generics, while the remaining 50 companies are non-contract manufacturers. Therefore, 150 units contribute to 60 per cent of the contract manufacture business in India.
In the last three to five years, in an effort to decrease manufacturing expenses and augment revenues, the global pharmaceutical companies are after outsourcing manufacturing of APIs, chemical intermediates and formulations, apart from clinical research, clinical testing and packaging and labelling to India. Contract manufacture in India is estimated to be around Rs. 25,000 crore and is growing at 20 per cent per year. A visible trend among the small and medium pharma units is that production is shifting from own manufacturing units to contract manufacturers.
CRO business throws open several challenges. With the need for strict scrutiny of practices, international regulatory bodies demand detailed safety assessments on drug candidates. There is a lot of focus on scientific evaluation in specific therapeutic areas.
As contract research business is on the rise in India, global majors are trying to capitalise opportunities in India. Going by the country's expertise in science, US-based Aptuit Inc. has taken a partnership route and has teamed up with Hyderabad-based Laurus, to form Aptuit Laurus, which is a contract drug development and life science informatics company. It now offers its 'Clinicopia' suite to support drug discovery to full product development. Its pre-clinical version focuses on pharmacology, drug metabolism, pharmacokinetics and toxicology. Besides, the company's clinical packaging and logistics version offers clinical supply chain strategy, project management, clinical manufacturing, blind dose forms, logistics from phase I to IV trails, packaging, labelling, clinical trials material storage, distribution and returns management.