The brand image of Maharashtra has been cast far and wide in India's fast-emerging pharmaceutical sector. Hailed as the Pharma Capital of the country, the state of Maharashtra is home for more than 4, 500 drug making units which accounts for nearly 40% of the country's total pharma produce.

The progressive policies of state government, better infrastructure facilities, easy availability of talent pool with strong support from research institutions and easy access for international market created strong foot hold for the pharma companies.

No wonder, except Ranbaxy, Dr Reddy's Laboratories and Cadila Healthcare, all others in the top ten list of India's pharma majors have chosen the western state as the operational hub.

Besides Cipla, Sun, Nicholas Piramal, Lupin and Wockhardt, almost all MNCs like GSK, Pfizer, Aventis, Abbott, Novartis, Fulford, Solvay, Merck and Wyeth made Maharashtra as the pivotal centre of activity.

Spurred by the new opportunities thrown open by the Patent regime, the Maharashtra-based companies are getting charged up. There's a wide range of activity across the value chain. They are spreading their business operations by setting up subsidiaries, joint ventures and business tie-ups in international markets.

The Maharashtra firms spending on research & development has gone up significantly, since last year. A Pharmabiz study shows that R&D spend of the top ten companies in the state has gone up by 40% in the current fiscal with Glenmark and FDC registering a 100% jump.

Nicholas Piramal incurred R&D expenditure of Rs 63.93 crore during the year ended December 2005 as against Rs 49.54 crore in the previous year. It commissioned its new 2-lakh sq.ft. R&D centre at Goregaon, Mumbai, which is one of the largest, single-site pharmaceuticals R&D centre in the country. The R&D centre has a capacity to house 400 scientists and is equipped with state-of-the-art instrumentation, laboratories and pilot plants to carry out new drug discovery, novel drug delivery technology, formulation activities and API process development. It currently employs 275 scientists to undertake long-term exploratory and basic research programmes.

Sun Pharmaceuticals increased its R&D spending to Rs 116 crore during the year ended March 2005 from Rs 197.68 crore in the previous year. The company set up 2.5-lakh sq.ft. R&D centre in Mumbai to undertake exciting projects in new chemical entity and novel drug delivery systems, bulk activities and formulations with renewed focus and enthusiasm. Its R&D centre is staffed with close to 355 scientists.

Glenmark Pharmaceuticals, with consolidated revenues of Rs 755 crore in 2005-06, is spending over Rs 50 crore on R&D activities. Its clinical research unit located in Navi Mumbai received ANVISA approval for conducting bioavailability and bio-equivalence studies inhuman volunteers as a part of its regulatory submissions to Brazil in the fourth quarter of 2005-06. This centre is spread across 15,000 esq. and provides all facilities which can accommodate around 72 volunteers participating in clinical studies.

Wockhardt's R&D expenditure touched to Rs 68.30 crore during the year ended December 2005. The company launched Hepatitis a vaccine-Biovac-A during the year 2005. It is fully geared up to take on the opportunities presented in the global place with strong focus on R&D, high quality & low cost manufacturing capabilities and front-end presence over 90 countries.

Other important companies in Maharashtra also undertake huge R&D activities to cater the future demand. Lupin has spent Rs 83.61 crore towards R&D in 2004-05. Ipca Laboratories incurred R&D expenditure of Rs 33.65 crore, J B Chemicals Rs 6.61 crore and Unichem Laboratories Rs 15.39 crore.

These companies are aggressively entering highly regulated markets and filing higher numbers of DMFs and ANDAs in USA, Europe, Japan, Brazil, CIS countries, Africa, Middle East and other emerging markets. Cipla, the second largest company in India, is spending over Rs 100 crore on R&D and filing increasing number of DMFs and ANDAs.

Remarkable increase in exports is another significant trend observed among Maharashtrian firms. A few companies focusing on highly regulated market and giving tough time to MNCs.

Cipla is marketing its products in more than 150 countries and its export earning for the year 2004-05 reached at Rs 1053 crore. Similarly, Nicholas Piramal's exports touched to Rs 126 crore during the year ended December 2005. Sun Pharmaceuticals notched up export earnings of Rs 275 crore and Lupin recorded exports of Rs 553 crore in 2004-05. Ipca Laboratories exports on FOB basis touched to Rs 391 crore from Rs 340 crore in 2003-04. Export earnings of J B Chemicals, Glenmark and Unichem reached at Rs 198 crore, 130 crore and Rs 59 crore respectively.

The pharmaceutical companies in Maharashtra are enjoying strong investors support on account of strong financial position and high returns in the form of dividend, bonus shares and improvement in market capitalization. These companies are taking proper investors care by declaring higher dividend. Recently Cipla announced bonus shares from its free reserves in the ratio of 3:2. Nicholas Piramal announced dividend of 150% for the year ended December 2005. Wockhardt declared equity dividend of 100% for the year 2005.

With the healthy financial performance and future product pipeline the market price of almost all the pharmaceutical companies are currently hovering around their 52-weeks peak level. Cipla is currently moving around Rs 260-265, Sun Pharma at Rs 864-865, Lupin Rs 1175-1180, Nicholas Piramal at Rs 238-240, Wockhardt Rs 450, Glenmark at Rs 325, Ipca Lab around Rs 330 on the BSE. The pharmaceutical shares of other small companies are also currently moving up and giving good returns to investors.

Several multinational companies have set up their manufacturing facilities in Maharashtra and now consolidating their operations to grab future opportunities coming up through patent regime. These companies are set to launch new products in India. GlaxoSmithKline Pharmaceuticals (GSK), an Indian arm of world's third largest GlaxoSmithKline Plc, has maintained its leading position among the MNCs in Maharashtra. Its net sales for the year ended December 2005 reached at Rs 1485 crore from Rs 1376 crore in the previous year. Similarly Aventis Pharma belonging to Sanofi-Aventis, clocked net sales of Rs 808 crore and Pfizer Rs 599 crore during 2005. MNCs are paying hefty dividend to their shareholders. GSK stepped up its equity dividend to 280% from 240% Merck increased its dividend to 150% from 100% Aventis and Pfizer maintained their dividend at 160% and 100% during the year 2005. Several new multinational national companies are looking forward for setting up business in the Maharashtra. With the changing government policies in respect of quality, taxation and labour laws, more and more multinational companies will enter in near future.