With increasing investments in R&D, launch of new products and entering into new alliances, Gujarat- based pharmaceutical companies could establish a strong presence in domestic as well as international markets. They have beefed up the national as well as international presence by setting up multiple manufacturing sites in the US, Europe, India and other emerging markets.
With investments in new capacities, several Gujarat-based companies could offer global outsourcing partnerships to international players. Since the overall growth in new markets will be a critical factor to sustain global product revenues,these companies are taking steps to consolidate their position. However, the new DPCO, 2013 and adverse fluctuations in foreign exchange rates may impact growth in near the future.
India's numero uno pharma player, Sun Pharmaceutical Industries lead the pack during 2013-14 with net sales of Rs 16,000 crore and is all set to acquire the leading multinational company Ranbaxy Laboratories in the current year. With this acquisition, the consolidated net sales of the entity will cross the mark of Rs 25,000 crore in 2014-15.
The leading listed 10 pharma companies with registered offices in Gujarat viz., Sun Pharmaceutical Industries, Cadila Healthcare, Torrent Pharmaceuticals, Alembic Pharmaceuticals, Dishman Pharmaceuticals, Claris Lifesciences, Lincoln Pharma, Themis Medicare, Sun Pharmaceutical Advance Research Company (SPARC) and Lyka Labs have registered net sales growth of almost 16 per cent during the quarter ended June 2014 and EBDITA growth of 13.4 per cent. The net profit touched to Rs 2,003 crore as against a net loss of Rs 832 crore on account of Sun Pharma's net loss of Rs 1,276 crore in the corresponding period of last year.
For the year 2013-14, these 10 companies notched up net sales growth of 28.9 per cent to Rs 31,652 crore as compared to Rs 24,564 crore in the previous year, with major focus on the US, Europe and emerging markets. Their EBDITA moved up sharply by 36.1 per cent to Rs 10,976 crore from Rs 8,068 crore. The net profit has taken a jump of 15.3 per cent to Rs 5,147 crore from Rs 4,464 crore. The equity capital reached at Rs 582 crore and there market capitalisation worked out to Rs 2,26,987 crore. Thus, with strong financial position, these companies could gain investors confidence and now moving ahead to tap upcoming market opportunities through collaborations, mergers & acquisitions, new technologies, joint ventures and alliances.
The R&D expenditure of Sun Pharma, Cadila Healthcare, Torrent Pharma, Alembic Pharma and SPARC touched Rs 1,890 crore during 2013-14 and this worked out to almost six per cent of their aggregate net sales. Sun Pharma's R&D expenditure reached Rs 1,042 crore followed by Cadila Rs 445 crore, Torrent Pharma Rs 137 crore, Alembic Rs 130 crore and SPARC Rs 136 crore.
However the increase in R&D spend could not contribute to any significant growth in productivity.On the contrary it is showing a declining trend during last few years. The average economic return on R&D has dropped from between 13 and 15 per cent in the 1990s to between four and nine per cent in the past decade, resulted in lower value creation. The R&D in India is still at early stage and needs higher investments as compared to international players. .
Cadila Healthcare is developing a host of biologics. In the pipeline are 20 biologics, comprising 17 biosimilars and three novel biological products. It initiated Phase III clinical trials for one of the monoclonal antibodies (mAbs). It has continued to file dossiers of first generation biosimilars in the emerging markets. Cadila completed Phase I clinical trials for two products viz PEGEPO, which is being developed in collaboration with Prolong Pharma, USA and Rabimabs, being developed in collaboration with WHO. Cadila launched Lipaglyn (Sarogitazar) in India, its first NCE for treating Diabetic Dyslipidemia and hypertriglycedemia. The company also has 10 vaccines in the clinical development phase. It filed 115 patents in the US, Europe and other countries during 2013-14, taking the cumulative number of filings to over 1,075.
Torrent Pharma has incurred R&D expenditure of Rs 137 crore during 2013-14 and is currently working on several in-house New Chemical Entities (NCE ) projects in the areas of metabolic, cardiovascular and respiratory disorders. It has cumulatively filed 467 patents for NCEs of which 224 patents have been granted/accepted so far. It has completed discovery programme of Advanced Glycation End-Products Breaker for the indication of diabetes associated heart failure in India and Europe. Further, it has also completed the Phase-I (SAD) clinical trial of its third NCE for the indication of acute kidney injury and the molecule will progress to multiple dose studies in 2014-15.
SPARC has spend 81.5 per cent of its net sales on R&D activities during 2013-14. It undertakes projects in innovative research and technology for NCE or new molecules and novel drug delivery systems with focus on allergy, inflammation and cancer. It has developed SUN-L731, a novel cysteinyl leukotriene D4 (LTD4) antagonist for the treatment of allergic rhinitis and for mild to moderate asthma. It is also developing two products SUN-0597 nasal spray for allergic rhinitis and a dry powder inhaler for asthma and COPD. It has completed Phase I for SUN-0597 nasal spray in India and the molecule was found safe.
SPARC is filing IND in US and Europe. Its anticancer molecule SUN-K706 has been screened in a high throughput kinase panel. It has developed a stable formulation of SUN-K706 which is suitable for clinical studies. The company has developed Baclofen GRS once a day for the treatment of spasticity. It filed IND with US FDA and it received agreement on special protocol assessment for Phase-3 clinical trial of Baclofen GRS.
Alembic has emerged as a strong player in the anti-infective, pain management, cough & cold segments, cardiology, gastroenterology, gynaecology and diabetes. Its prominent brands comprise Azithra, Roxid, Wikoryl and Althrocin. It is strengthening its presence in the speciality therapeutic segments, growing its business between acute and chronic therapies. It launched 22 brands in the Indian market across various therapeutic segments. It plans to launch about 25 new products in 2014-15. In order to to tap the emerging market opportunities, the company has created more divisions.
Sun's consolidated R&D expenditure has reached Rs 257 crore during the first quarter ended June 2014 which worked out to 6.6 per cent of sales. The company has total approval for 350 products and 140 products are awaiting approval from the US FDA. During the first quarter, it filed 14 ANDAs and received approvals for six ANDAs. Its total number of patent applications submitted now stands at 575 with 349 patents granted so far. It filed 259 DMF/CEP and received approval for 176 so far.
Cadila healthcare filed 26 additional ANDAs with the US FDA and launched four new products in the US. It achieved a growth of 19 per cent with 12 new product launches in the different emerging markets. In the domestic formulations market, it launched 19 new products, including line extensions, of which six products were the first to be launched in India.
Its small molecule NCE, Zydpla1 advanced to Phase I clinical evaluation in the US. Zydpla1 works by blocking the enzyme Dipeptidyl Peptidase-4 (DPP-4) and aims at an overall improvement in the glucose homoeostasis, including reduction in HbA1c and blood sugar levels. The group also made brisk progress in its biologics research programme advancing its pipeline of mABs. The group has also initiated global clinical trials for one of the first generation biosimilars, which is currently being marketed in India.
Torrent Pharma has acquired Indian branded formulations business of Elder Pharmaceuticals about Rs 2,000 crore. During the quarter ended June 2014, Alembic Pharma has filed three ANDAs taking cumulative ANDA filings to 64. It received approval for three ANDAs taking cumulative approvals to 35.