India has been recognized as one of the leading global players with large number of drug master files and dossier registrations for Active Pharmaceutical Ingredients (APIs) with manufacturing facilities approved by regulatory authorities of the developed countries.
Indian companies have emerged as a preferred pharmaceuticals manufacturing partners on account of R&D investments, international quality standards and easy availability of talent pool. Indian API players can look forward to have massive gains as several drugs are going off patent in the next couple of years. R&D based pharma companies are all set to grab the API contracts through technology tie-ups, expansions, cost optimization and development of new products.
The Indian APIs manufacturers have improved their capabilities through continuous process innovations and their international subsidiaries and CRAMS. These companies are providing comprehensive CRAMS offerings, technology development and collaborative research with pharmaceutical industry.
India's API manufacturers have maintained momentum of filing Drug Master Files (DMFs) in US with higher investments in cGMP facilities, research and development and talent pool during last couple of years. The major factors like better infrastructure, cost-effectiveness, contract research and manufacturing services and tie-ups with international players assisted well to these API players.
India remains one of most favoured API destinations globally. Despite several odds like stiff competition, slowdown in world economy, cost-cutting measures in highly regulated market and adverse foreign exchange rates, Indian API players dominated market share after China. Indian producers are well set to grab future opportunities up coming from expiration of patents in next few years.
Indian companies filed 417 DMFs during the year 2012 with USFDA as against 404 DMFs in the previous year. The DMF filings during the year 2010 and 2009 was at 311 and 271 respectively. This shows that the API segment is spreading its presence in market with higher filings. Hetero Drugs Ltd filed 24 DMFs followed by Emcure Pharmaceuticals Ltd 16, Hetero Laboratories Ltd 15, Aurobindo Pharma and Dr Reddy's Laboratories 13 each, Lupin 12 and Cadila Healthcare 11 during 2012. Macleods Pharmaceuticals and Sun Pharmaceutical Industries filed 9 DMFs each.
The same trend is likely to continue in the current year also as Indian companies filed 79 DMFs during the first quarter ended March 2013. Jubilant Life Sciences has filed 6 DMFs followed by Lupin and Sun Pharmaceutical 5 each.
The major Indian companies like Dr Reddy's Laboratories, Lupin, Aurobindo Pharma, Divi's Laboratories, Ipca Laboratories, Alembic Pharmaceuticals, Glenmark Pharmaceuticals, Jubilant Life Sciences, Shasun Pharmaceuticals, Dishman Pharmaceuticals etc have established strong presence in the markets and is set to capture future opportunities. Mylan Laboratories, (formerly known as Matrix Laboratories Ltd) is also moving ahead with investments in R&D. The financial performance of these companies remained mixed during the year 2012-13 due to competition, exchange rates and limited outcome.
However, the Indian API industry is facing stiff competition from China in the international market. Currency fluctuations, inflation, price erosion in the key international markets and increase in input costs have put pressure on overall working during the last few years. The increased captive consumption of APIs due to substantial growth in the international formulations business has restricted the sales volume of the APIs. The overcapacity for bulk products is adversely impacting the margins of API players. Several players have reduced focus on APIs and have shifted to other profitable business of formulations.
Dr Reddy's Laboratories
DRL's consolidated net sales for the full year ended March 2013 increased by 20.2 per cent to Rs 11,627 crore from Rs 9,674 crore in the previous year and its net profit surged by 17.6 per cent to Rs 1,678 crore from Rs 1,426 crore. EBDITA improved by 9.5 per cent to Rs 278 core from Rs 254 crore. Its selling, general and administrative expenses increased by 16.3 per cent to to Rs 3,358 crore from Rs 2,887 crore and R&D expenditure by 29.8 per cent to Rs 767.33 crore from Rs 591.05 crore.
The sales of global generic increased by 17.5 per cent to Rs 8,256 crore from Rs 7,024 crore. Similarly, the sales of pharmaceutical services and active ingredients moved up by 29 per cent to Rs 3,070 crore from Rs 2,381 crore in the previous year. The company launched 78 new generic products and filed 56 new product registrations. Further, it filed 47 DMFs globally and its cumulative total reached at 577 DMFs as at the end of March 2013. It also filed 18 ANDAs and one NDA, and its cumulative figure reached 65 ANDA pending with US FDA for approval.
The company's pharmaceutical services and active ingredients (PSAI) in North America surged by 34.5 per cent to Rs 574 crore from Rs 427 crore and that in Europe jumped by 42.5 per cent to Rs 1,201 crore from Rs 842 crore. Its sales of PSAI improved by 29.3 per cent to Rs 464 crore in India and by 10.4 per cent to Rs 831 crore in Rest of the World.
Lupin
For the full year ended March 2013, Lupin's consolidated net sales increased by 36 per cent to Rs 9,462 crore from Rs 6,960 crore in the previous year. Its other operating income also grew by 46.3 per cent to Rs 180 crore from Rs 123 crore. The net profit moved up by 51.5 per cent to Rs 1,314 crore from Rs 868 crore and its EPS worked out to Rs 29.39 as against Rs 19.43 in the last year. Its APIs sales improved by 12 per cent to Rs 950 crore from Rs 849 crore and contributed 10 per cent to its consolidated revenues. Its revenue R&D expenditure for the full year increased by 35.8 per cent to Rs 710 crore from Rs 523 crore. It filed 21 ANDAs and received 14 approvals from the US FDA during 2012-13.
Divi's Laboratory
Divi's Laboratories, a Hyderabad based Active Pharmaceuticals Ingredients and Intermediates manufacturer, improved consolidated net sales by 5.2 per cent to Rs 2,140 crore from Rs 1,858 crore in the previous year. Its EBDITA moved up by 15.2 per cent to Rs 860 crore from Rs 746 crore and net profit by 12.9 per cent to Rs 602 crore from Rs 533 crore. The company received major setback due to severe power shortage in the State of Andhra Pradesh. Further it incurred a forex loss of Rs 7.78 crore during the quarter. Exports constituted 90 per cent of sales and bout 76 per cent to advanced markets in North America and Europe.
Alembic
For the full year ended March 2013, Alembic's consolidated net sales increased by 3.8 per cent to Rs 1,517 crore from Rs 1,462 crore in the previous year. Its domestic sales grew by 15.1 per cent to Rs 1,009 crore from Rs 877 crore. However, its exports declined by 12.5 per cent to Rs 517 crore from Rs 591 crore. Though its domestic API sales increased by 21 per cent to Rs 113 crore from Rs 94 crore, its international API sales declined by 15 per cent to Rs 237 crore from Rs 279 crore.
Glenmark
The regulatory agency of Japan has approved its Anklelshwar API facility during the year ended March 2013 and major inroads were made in to japan with 3 new products filings. It filed 7 new DMFs in US including several first DMF's targeting FTF and 3 DMF's to support Europe market. The business continues its leadership position for Amiodarone, Lercanidipine, Adapalene, Perindopril, combined with launches of new products viz., Atovaquone in Canada through partner and Levocetirizine in Europe through partner. Its revenue from sale of API to regulated and semi-regulated markets globally was at Rs 398 crore during the year ended March 2013 as compared to Rs 309 crore in the last year, a growth of 28.5 per cent.
Jubilant Life Science
For the full year ended March 2013, Jubilant posted strong bottom line growth and its net profit jumped to Rs 152.73 crore from Rs 14.56 crore in the previous year. Exceptional items reduced to Rs 230 crore as against Rs 349 crore. Its consolidated net sales improved by 20.9 per cent to Rs 5,143 crore from Rs 4,254 crore. The earnings per share moved up to Rs 9.59 as compared to Rs 0.91 in the previous year.
Its APIs revenue increased by 13 per cent to Rs 508 crore during the year ended March 2013 focusing in CVS, CNS and anti-infectives. It has commercialized 27 products – 19 in North America, 24 in Europe and 23 in ROW. It has developed strong product pipeline and filed 35 products across regions in 2012-12, including 7 DMFs in the US. Its cumulative filing reached at 235, including 65 in the US and 29 in the Europe.
Mylan Laboratories
Mylan Laboratories, formerly known as Matrix Laboratories, offers one of the industry’s broadest and highest quality API portfolios and a robust pipeline to a global customer base in more than 80 countries. It service the requirements of top generic players in diverse markets with a wide portfolio of more than 150 APIs spread across varied therapeutic segments. It is engaged in providing integrated solutions to API customers with support in early development, intellectual property support, drug master files submissions, query responses and timely commercial supplies for launch.
Mylan Labs has eight state-of-the-art API manufacturing facilities, certified by regulatory bodies like US FDA, European Authorities, Australia’s Therapeutic Goods Administration, Japan’s Pharmaceuticals and Medical Devices Agency, Korean Food and drug Administration, and World Health Organization. Mylan Labs has diverse chemistry capabilities and over four million liters of reactor volume in a cGMP environment.
Further, its Contract Manufacturing Services (CMS) offer world class products and services related to the manufacturing of intermediates and active pharmaceutical ingredients (APIs), from advanced clinical supplies to trade-demand quantities.
Ipca Laboratories
For the nine months period ended December 2012, Ipca's net sales increased by 19.1 per cent to Rs 2,080 crore from Rs 1,746 crore in the similar period of last year. Its net profit went up by 25.5 per cent to Rs 256 crore from Rs 204 crore. Its earnings per share improved to Rs 20.29 from Rs 16.19 in the last period.
Its foreign exchange loss amounted to Rs 71.05 crore as compared to Rs 57.93 crore. The domestic formulation sales improved by 16 per cent to Rs 700 crore from Rs 606 crore and its exports also improved by 16 per cent to Rs 881 crore from Rs 757 crore. However, its domestic sales of APIs declined marginally by 2 per cent to Rs 107 crore from Rs 110 crore and that from exports improved sharply by 43 per cent to Rs 393 crore from Rs 274 crore.
Ipca is exporting APIs to 95 countries across the globe and it has also stepped up Drug Master File registration activities. It filed 61 DMFs during 2011-12 with US FDA and also obtained Certificate of Suitability for 40 APIs from European Directorate for Quality Medicines (EDQM) for EU countries. It expanded its API manufacturing facility at Ratlam to cater to growing manufacturing needs of APIs.
Shasun Pharmaceuticals
Shasun Pharmaceuticals, a Rs 1,000 crore pharma giant, has set up the largest cGMP manufacturing facility of Ibuprofen globally at Puducherry with approvals from major international regulatory organizations. It has also set up multipurpose manufacturing facility at Cuddalore, specializes both in CRAMS and API generics. Cuddalore unit's current API portfolio includes Ibuprofen, Nizatidine, Ranitidine, Gabapentin, Olanzapine and Cycloserine amongst others.
On a consolidated basis, API and intermediate business contributed close to 55 per cent during the year 2011-12 of the turnover of the company. On a standalone basis, they contributed to 79 per cent of the total sales. Its sales of Ibuprofen and its derivatives improved by 10 per cent to RS 253 crore from Rs 231 crore in the previous year. Ranitidine is a widely used anti-ulcerant. Its API business improved by 25 per cent during 2011-12.
For the nine months period ended December 2012, Shasun's net sales increase marginally by 5.4 per cent to Rs. 765.45 crore from Rs. 726.20 crore. However, its net profit declined 4.4 per cent to Rs. 39.78 crore from Rs. 41.59 crore. EBDITA worked out to Rs104.43 crore as compared to Rs. 98.73 crore in the same period of last year.
Aurobindo
Aurobindo has established strong presence in pharmaceutical chain, manufacturing and marketing APIs and generics. Its APIs sales registered 14.5 per cent growth during 2011-12 to Rs 2063 crore. The company commissioned a new API unit to cater exclusively to the Japanese market. Nearly 30 new products are under development at its R&D center. It has robust product portfolio spread over major products areas and has global presence. It has 200 APIs with diversified product portfolio in life-style disease, anti-AIDS, anti-infectives and pain management with pediatric products and technology. Its six units for APIs and four units or formulations are designed for the regulated markets.