In an effort to play crucial in the international market place, Indian pharmaceutical industry has increased the momentum of its overseas activities through a spate of mergers and acquisitions, new tie-ups, setting up of joint ventures and subsidiaries. Indian pharma has also stepped up their spends in research & developments anticipating a tougher competition in the coming days. These companies are now focusing on filling up of DMFs, ANDAs, approvals for facilities from regulatory authorities and launching of affordable products.
The Indian top companies like Ranbaxy Laboratories, Cipla Ltd, Dr Reddy's Laboratories, Sun Pharmaceuticals, Wockhardt, Lupin have entered into new regions by adopting aggressive marketing tactics. Further, Biocon, Matrix Laboratories, Divi's, Torrent Pharma, Alembic, Unichem, Glenmark, Orchid and Ipca Laboratories have created strong brand image.
Though the business in developed markets is passing through difficult phase with severe price erosion the business in emerging market is going ahead smoothly. Despite some odds in the highly regulated markets, the Indian companies are managed to push their business operations and consolidating in emerging market.
Ranbaxy, a Rs 5300-crore leader of Indian Pharma industry, accelerated its internal initiatives on cost optimization, productivity enhancement, and also built a robust and secure work environment. The company's exports, little under pressure, touched to Rs 2319 crore during 2005-06 from Rs 2,443 crore in the previous year. Cipla recorded a smart growth of 44 per cent in exports, which touched to Rs 1518 crore during the year ended March 2006 from Rs 1053 crore in the previous year. Similarly, Sun Pharmaceutical's exports increased by 28 per cent to Rs 694.46 crore from Rs 503 crore in 2004-05. Dr Reddy's exports went up to Rs 1600 crore, a growth of 25 per cent and that of Lupin's exports amounted to Rs 860 crore as compared to Rs 662 crore.
The Indian pharma industry is well set to grab the new opportunities coming up with a greater number of branded products losing patent protection and face genericization. Within last couple of years, the pharma industry has established its brand image and now undertaking major contract manufacturing jobs from world's large entities. Focus on R&D, expansion and tie-ups helped the Indian pharma sector to boost exports earnings.
The government is also offering excellent environment for pharma industry to spread its business operations in the other part of world. The pharma companies have converted their facilities as per international standards. Easy availability of talent pool, low-cost labour, raw materials and huge domestic market with increased medical awareness helped the Indian pharma industry to move other places. The economic size is very crucial for spreading up of operations and Indian companies have created strong base to compete with international giants.
A number of nations are undertaking cost-cutting measures in healthcare segment by introducing generics for balancing their healthcare costs. Rising aging population is further pushing the need of cost-effective medicines for a longer period time. This will give new opportunities for strong R&D based Indian companies, which have created strong product pipeline based on own R&D activities. The Indian pharma entities have realigned and strengthened their business activities pursuing various options to augment its global operations
The Indian companies are entering into new markets. Ranbaxy commenced its operations in Canada during 2005-06, the 8th largest pharma market of the world, with introduction of eight products. It has consolidated its business in Europe. The company extended product portfolio with launch of 12 new products in France. Ranbaxy successfully launched its first generic product in Japan, the world's second largest pharma market, and became a first company from India to meet the most stringent quality standards of the Japanese regulatory agencies. The company stepped up its stake in joint venture i.e., Nihon Pharmaceutical Industry Co Ltd to 50 per cent.
Ranbaxy launched its first generic injectable product imipenem plus cilastatin in China. It also introduced once-a-day formulation of ciprofloxacin, recently. The company has stepped up its marketing and product launches in Russia, South Africa, Brazil and other CIS countries.
Cipla continues to grow at a very healthy pace with strong topline and bottomline growth during 2005-06. The company is exporting APIs and formulation product to more than 160 countries including the US, Europe, Africa, Australia, Latin America and the Middle East. Its anti-retrovirals, anti-malarials, anti-asthmatics, anti-depressants and cardiovascular segments have performed well in the export markets.
Dr Reddy's Laboratories acquired betapharm, 4th largest generics company in Germany for Euro 480 million. Further, it acquired API business of Roche in Mexico for $ 61.5 million during 2005-06. DRL promoted Perlecan Pharma Pvt Ltd together with Citigoup Venture Capital International Growth Partnership Mauritius Ltd and ICICI Venture Funds Management Company. Perlecan will be engaged in the clinical development and out-licensing of NCE assets. The company filed 12 ANDAs during 2005-06, which takes the total ANDAs pending at the USFDA to 49. It also received 12 approvals including tentative approvals. The company filed 17 DMFs during 2005-06 taking the total filings to 81 DMFs in US.
Matrix Laboratories is planning to file approximately 30 ANDAs/dossiers in US and Europe in the current year. It also filed 15 DMFs in US, taking the total tally to 60. In the current year it is planning to file 30 DMFs. upgraded its Nasik facility as per USFDA norms. The company incurred a total capital expenditure of Rs 122.5 crore during 2005-06 for enhancement of capacities and upgradation of facilities. Matrix acquired Docpharma, Belgium and strengthen its supply chain through Mchem Group, China. Further, it has set up joint venture Astrix Laboratories, with Aspen Pharmacare, South Africa. Its CRAM business increased to Rs 90.50 crore and the company is expecting significant rise in the revenue during current year. The company's export earning on FOB basis increased to Rs 395.99 crore from Rs 341.01 crore.
Lupin, a Rs 1661- core Mumbai based company, achieved international sales of Rs 860 crore during the year ended March 2006 as compared to Rs 662 crore in the previous year. When many companies in advanced markets are suffering, Lupin has recorded a 91 per cent growth in sales to Rs 385 crore as against Rs 202 crore in advanced markets. The company filed 18 ANDAs and 16 DMFs during 2005-06.
Sun Pharmaceutical Industries made several US-centric acquisitions during 2005-06. It acquired assets of the New Jersey based Able Labs, which includes large formulation facilities for US$ 23 million. It also acquired two manufacturing facilities at Hungary and in Ohio, USA for less than US$ 10 million. It Detroit based subsidiary recorded sales of $ 82.8 million, up by 29 per cent from $ 64.1 million. Caraco filed 10 ANDAs and currently it has 14 ANDAs awaiting USFDA approval. Sun Pharm filed 14 ANDAs and expecting approval for 30 approvals.
Wockhardt is exploring ways to increase it presence in South East Asia and Pacific, Middle East, South America and Africa. Europe emerged as No 1 market for the company and its sales increased by 15 per cent despite pricing pressures and a fall in the value of European currencies. Wockhardt UK, a wholly owned subsidiary, launched terbinafine on the first working day after patent expiry. Further, Esparma, its wholly owned subsidiary in Germany, launched lamotrigine.
Wockhardt filed 16 ANDAs, nine of them for injectables, during 2005-06. The company achieved sales growth of 50 per cent in USA and currently selling 11 products in the US. The company first acquired Wallis Laboratory, UK, in 1998 and then CP Pharmaceuticals in Wales during 2003 and Esparma GmbH in 2004.
Thus the Indian pharma sector is well set to grab the future opportunities in the international market through investments in M&A, R&D and tie-ups. Several companies are entering into recombinant biotechnology including gene cloning, development of production strains, development of expression systems in yeast, mammalian and bacterial cells. This will further boost the international presence in years to come.