The demand for quality active pharmaceutical ingredients (APIs) is likely to go up sharply in next couple of years mainly due to significant growth in the generics industry. This will give boost to exports of APIs from India to highly regulated markets. The Indian companies are entering regulated markets very aggressively and filed more than 70 Drug Master Files during the quarter ended March 2005. The cumulative total of DMF filed in the regulated market worked out to more than 200. The international market is getting increasingly competitive and commoditised, but Indian companies are moving fast to overcome several odds.
Indian API producers can easily overtake other competitors basically due to lower manufacturing costs, skilled workforce, trained scientific talent pool, highest number of regulated approvals for manufacturing plants, use of latest technology, significant investment in R&D activities and government support for developing necessary infrastructure. The manufacturing facilities are adopting cGMP and other regulatory requirements for synthesis and manufacture of an NCE from pre-clinical stage to commercialization. Several Indian companies like Cadila Healthcare, Dr. Reddy's Laboratories, Orchid Chemicals and Drugs, Glenmark, Lupin, Ranbaxy, Aurobindo, Sun Phramaceuticals, Shasun Chemicals and Drugs, etc have successfully expanded their APIs business during the last couple of years and currently APIs are significantly contributing to their revenues and profitability.
Aurobindo Pharma, a Hyderabad based multi-product company with 65 APIs in the non-antibiotics and over 55 APIs in the antibiotics segment, is entering regulated market in a big way. The company filed 64 DMFs, including 24 with US FDA and 11 in Europe. The company has entered into alliances with MNC customers for supplying APIs. However, looking at the growth in the generic segment in the regulated markets, the company is taking steps to tap opportunities. The company has stepped its R&D expenditure by 10.8 per cent to Rs 54.31 crore during 2004-05.
Ranbaxy Laboratories is filing its products very aggressively in the regulated market. It received 151 approvals and filed 109 DMF during the year ended December 2004. The company continued with its focus on developing niche technologies for high value APIs. The focus was on Para IV/First-to-file products. The company has taken up process developmental work for 12 new APIs during 2004. It commercialized technologies for 9 other APIs.
Sun Pharmaceuticals also pushed its API business and developed more than 100 products through its own R&D efforts. During 2004-05, 26 APIs were taken from lab to plant including 18 processes for drug master files. It incurred total R&D expenditure of Rs 115.98 crore, which worked out to 11.6 per cent of its total turnover. Sun developed 8 bulk actives and 18 processes for DMFs and the company filed for 29 more DMFs in US and Europe.
Dr Reddy's Laboratories, with a vision to become a discovery-led global pharmaceutical company, is investing a large amount in R&D activity to strengthen its product pipeline. The company has integrated the product development capabilities in API to increase the focus on productivity and product delivery. DRL's cumulative filing of DMFs reached at 65 during 2004-05 as against 56 in the last year.
Glenmark Pharmaceuticals Ltd, a Rs 500-crore plus company, has strengthened its API presence through a four-pronged strategy viz., 1) Exploration of opportunities in growing lifestyle segment, 2) Rapid launch of new molecules, 3) Building strong process research capabilities at low cost and 4) High quality manufacturing.
The company is entering new tie-ups and co-marketing agreements to increase the target number of products from 50 to 65. Further, Glenmark is developing 14 DMFs for the US market to develop the API and generic formulation business. It is upgrading manufacturing capacity of its plants located at Ankleshwar and Kurkumbh. The company is also setting up new plant with special focus on US and European markets.
Lupin's API division has strongly established its presence in various geographies with considerable success. It has established a significant position in Asia, especially in the key markets of China and India. The top 6 products in the API basket viz., cephalexin and cefaclor (anti-infectives), 7ADCA and 7 ACCA (cephalosporin intermediates), ethambutol and rifampicin (anti-TB) cover nearly 80 per cent of API sales to semi regulated markets. Lisinopril (cardiovascular) would form a very important part of API sales to regulated markets. Its API division has structured its growth around newer segments like cardiovasculars and statins. The company completed its expansion programme to meet the growing international demand. The company filed 15 DMFs during 2004-05.
Cadila is focusing on highly regulated markets like US and Europe for its APIs products. The company received USFDA approval for its API plant at Dabhasa and awaiting approval for its API plant at Ankleshwar. The company's performance in key API products like atorvastatin, loratidine, fluconazole and paroxetine and their intermediates were under pressure due to stiff competition from new players. The sales of API division declined by 9.5 per cent to Rs 174.50 crore and exports down by 8.3 per cent to Rs 124.6 crore. The company filed 16 DMFs with the US FDA, taking the total to 28 DMF at the end of 2004-05. Cadila introduced new products like pitavastatin, duloxetine and simvastatin.
Orchid Chemicals and Pharmaceuticals have built up a significantly higher global annual capacity of APIs and intermediates, of which, over 40 per cent is the technologically challenging sterile cephalosporin space. China continues to be a major market for its APIs both in terms of direct exports and the fast-expanding operations of the joint venture, NCPC-Orchid Pharmaceuticals Ltd. API revenues from China and Far East contributed 35 per cent of the total revenue during 2004-05. The company has consolidated its other APIs markets like Russia, Brazil and Middle East. Exports to regions other than China and US/EU posted an increase of 30 per cent during the fiscal under review.
Shasun Chemical and Drugs Ltd is selling its quality ingredients in more than 40 countries and now spreading its marketing activities in other countries also. The company commissioned large manufacturing capabilities to produce bulk actives complying with highest EHS standard. It has specialized in the manufacture of APIs like ibuprofen, ranitidine, nizatidine, gabapentin, isradepine and methohexital. The company possesses a rich experience in the manufacture of a range of products for locally renowned companies. This help to manufacture of several advanced intermediates and APIs like cycloserine, methohexital and isradepine. The company filed DMFs for about 16 products in more than 22 countries. Its R&D plays a critical role in corporate growth as it synthesizes the chemical entity for APIs, intermediates, technology transfers or process development of generics. Shasun's contract manufacturing activity is growing and during 2004-05 its revenue from CRAMs increased by 18 per cent to Rs 24.50 crore.
J B Chemicals has made investment of Rs 65 crore in new state-of-the-art facilities at Panoli for manufacture of APIs and large/small volume parenterals conforming to international regulatory standards. The company is now aggressively entering into regulated markets directly. It has strong presence in Russia and the CIS countries. Unichem Laboratories acquired API unit at Pithampur in Madhya Pradesh. Its sales of APIs increased to Rs 46.73 crore from Rs 44.62 crore and its captive consumption of APIs reached at Rs 6.34 crore. The company launched 34 new products, which includes rosuvastatin, ranolizine and escitalopram. It also introduced amlodipine besylate in Canada. The company has a strong product line up in APIs with major presence in anti-hypertensive, anti depressant, and anti amoebic/anti protozoal category.
The Indian companies are investing heavily on expansion and research & development to grab future opportunities in APIs. These companies are focusing on export earnings and launching new high quality products in the international markets.