The Gujarat- based pharmaceutical companies have contributed significantly in overall growth of Indian pharma segment with investments in facilities, research & development, entry into new markets with more focus on highly regulated markets, new product filings and tie-ups with international players. They are all set to en-cash the upcoming opportunities with the expiration of several blockbuster patents in near future. The growth in generic products have established strong growth during last couple of years. This trend is visible not only in developing markets but also in developed markets.
The pharmerging markets including China, Brazil, India, Russia and other 13 countries offer tremendous opportunities with greater government investments in healthcare, increasing demand for drugs to treat diseases, relatively low entry barriers in terms of product registration and strengthening of regulatory & IP requirements. Further rising income levels, improving healthcare coverage in the emerging markets and higher use of generic to curb rising healthcare cost in regulated markets will offer positive outlook for generic segment. Gujarat - based companies are well positioned to capitalize these opportunities with relatively low manufacturing cost and better infrastructure facilities.
The leading 10 Gujarat- based companies, with net sales of above Rs 100 crore during 2011-12, have registered impressive performance during the quarter ended June 2012. These companies, with registered offices in Gujarat, viz., Sun Pharmaceuticals Industries, Cadila Healthcare, Torrent Pharmaceuticals, Alembic Pharmaceuticals, Dishman Pharmaceuticals, Claris Lifesciences, Lyka Labs, Themis Medicare, Lincoln Pharmaceuticals and India Gelatine and Chemicals, have posted net profit growth of 33 per cent to Rs 1,200 crore during the quarter ended June 2012 from Rs 902 crore in the corresponding period of last year. The net sales also increased by 37.7 per cent to Rs 5,919 crore from Rs 4,311 crore. The earnings before depreciation, interest, tax and adjustment jumped by 52.4 per cent to Rs 1,979 crore from Rs 1,299 crore. These companies have distributed handsome returns to their investors in the form of dividend.
Besides, there are several other pharma companies viz., Sun Pharma Advance Research, Ambalal Sarabhai Enterprise, Core Healthcare, Alkem Laboratories, Cadial Pharma, Intas Pharmaceutical, Kamron Laboratories, etc. are progressing well. Further, India's leading companies like Ranbaxy, Glenmark, IPCA, Lupin, J B Chemicals, Cipla, Wockhardt, Dr Reddy's Laboratories have also established their manufacturing units in Gujarat. With the strictly implementation of Schedule M norms in Gujarat, several small-scale units are now providing better support to growth of pharma segment in India.
These companies are increasing investments in research and development and strengthening there product pipeline and restructuring there activities. Sun Pharmaceutical, the third Indian largest pharma company from Vadodara , has now decided to spin off its domestic formulation business on a going concern basis comprising certain assets pertaining to the said business to its wholly owned subsidiary Sun Resins and Polymers Pvt Ltd with effect from March 31, 2012 after certain approvals. The company, with five plants in Gujarat, has made cumulative 228 DMF/CEP applications and received 162 approval upto June 2012. Its R&D expenditure worked out to five per cent of sales at Rs 139 crore.
After fighting a long takeover battle, it acquired Taro Pharmaceutical successfully and have filed aggregate 391 products with US FDA and received total approvals of 256 ANDAs. Currently, 135 products are awaiting approvals. The total number of patent applications submitted now stands at 638, with 304 patents granted so far.
Cadila Healthcare's R&D expenditure went up to Rs 400.7 crore during the year ended March 2012 and it worked out to 12.7 per cent of total turnover. It received US FDA approval for its Moraiya facility and expects to start getting new product approvals, which will further strengthen its US business. It launched three products in Japan including one day-1 launch. All three products have been developed and manufactured in India. Cadila filed 9 ANDAs including two for injectible products, taking the cumulative number of US ANDA filings to 157. It also filed 5 DMFs, taking the cumulative filings to 112 DMFs. Further, during the quarter ended June 2012, Cadial filed 11 new product dossiers and received four new product approvals for the European market, taking the cumulative approvals to 147 approvals. It also filed five additional dossiers for the Brazilian market with the regulatory authority ANVISA and three additional dossiers with the regulatory authority COFEPRIS for Mexico.
Torrent Pharma's R&D expenditure reached at Rs 124.64 crore during the year 2011-12 and worked out to 6.3 per cent of its turnover. Its R&D centre employs over 640 scientists. The company continues to be at the forefront of the Indian pharmaceutical industry through research, innovation and breakthrough discoveries in the therapeutics areas of diabetology, cardiovascular, central nervous system, gastrointestinal, anti-infective, pain management and gynaecology. At the end of the year 2011-12, it filed 66 ANDAs and 23 DMFs in US and 45 new product dossiers and 23 DMF submitted in the EU. It developed six processes and transferred to plant. It filed 767 patents for NDDS technology, drug discovery projects and innovative process of API & formulations for various geographies and 295 have been granted so far.
Alembic launched a dermatology division recently and likely to add to the basket of specialty products and growth in the future. Some of the specialty segments which the company entered recently are showing good progress. The company incurred R&D expenditure of Rs 64 crore during 2011-12 as against Rs 49 crore in the previous year. Its cumulative ANDA filings stand at 49 and cumulative ANDA approvals now stands at 20 (including two tentative approvals) as at the end of first quarter ended June 2012. The cumulative DMF filings stood at 62 as at the end of March 2012.
The financial working of Claris Lifescience remained under pressure due to the import alert from US and the adverse situations for business in the Middle East and EU. It has commenced sales in 5 new countries during the quarter ended June 2012 taking the total presence of the company in 96 countries. It has commercialized 39 marketing authorization across 23 countries during the quarter which includes Ciprofloxacin in Canada, Propofol (Spiva) in Netherlands, Metronidazole in South Korea. It received three follow-up queries from the FDA and the same have been replied to well within the stipulated time. The company is awaiting response from the FDA. It has 13 international and four Indian subsidiaries to market the products across the globe.
The financial performance of above mentioned 10 companies for the year 2011-12 improved significantly. The net profit improved by 21.9 per cent to Rs 3,808 crore from Rs 3,125 crore and the net sales moved up by 23.4 per cent to Rs 19,616 crore from Rs 15,895 crore previous year. Sun Pharma remained the star performer and stepped up its equity dividend to 425 per cent from 350 per cent. Cadila Healthcare paid equity dividend of 150 per cent as compared to 125 per cent. Torrent Pharma recommended equity dividend of 50 per cent and Dishman Pharma maintained dividend at 60 per cent. Alembic Chemicals declared higher equity dividend of 25 per cent compared to 20 in the last year. Thus, Gujarat -based companies are improving their performance despite foreign exchange loss, higher interest burden, competition and adverse economic conditions and taking due care of their investors.