The Indian pharmaceutical sector has been witnessing a steady rise in research and development activity over the past decade. Realizing R&D as the growth engine of the future, Indian firms have successfully enhanced their ability to launch new products with filing of more DMFs and ANDAs in the highly regulated markets. The country's prowess in R&D is supported by strong skill-sets, cost effective technologies and trained manpower.
To take advantage of the situation, several MNCs are setting up R&D shops in India. Pfizer, GSK and Merck & Co are investing in R&D and also undertaking clinical research programmes either on their own or partnering with Indian companies. And many others are waiting for Government to make clear its policy in respect of patent and data exclusivity, to embark on R&D activities in a big way.
Spurred by the product patent regime, a good number of large and medium Indian companies have started consolidating their R&D efforts through substantially hiking R&D spends, of late.
Sun Pharma, for instance, has decided to de-merge of its innovative R&D business into a new company as this fifth largest company in India expects R&D spending to move much faster. The company is spending around 30-40 per cent of its R&D expenditure on innovative R&D. It is transferring around 100 scientists with running programmes in NCE and NDDS to new entity.
Sun Pharma is pursuing NCE and NDDS programmes with the aim to bring products based on proprietary technology to market. The company's consolidated R&D expenditure during the first nine months of 2005-06 went up by 33.7 per cent to Rs 133.70 crore from Rs 100 crore in the corresponding period of last year. During 2004-05, Sun remained as third largest R&D spender with R&D expenditure of Rs 115.98 crore.
Ranbaxy, which is already in the top ten generic companies in the world, has increased the R&D spend to Rs 468.99 crore for the year ended December 2005 from Rs 331.39 crore in the previous year. The company filed 26 ANDAs with USFDA during 2005, taking the cumulative number of ANDA filings to 170. It received approvals for 16 ANDAs, which makes the total ANDA approvals to 111, with 59 presently awaiting approvals from the USFDA. Further, Ranbaxy continued to step up its regulatory filings in Europe making a total of 52 National Filings in EU Reference Member States during the year 2005 as against 39 in 12 EU states in 2004.
Ranbaxy has set up a largest new drug discovery research centre at Gurgaon during 2005. The research is focused on four therapeutic areas, viz., infection, urology, inflammation/respiratory and metabolism. It has currently 10 programmes in these areas, including one NCE in phase-II clinical trials. This molecule, RBx 11160, is being developed under a collaborative research programme with Medicines for Malaria Venture (MMV), Geneva.
Nicholas Piramal stepped up its R&D expenditure to Rs 44.99 crore during the first nine months of 2005-06 from Rs 35.57 crore in the corresponding period of last year. The company is spending around 9 per cent of its net sales on R&D. Its R&D expenditure for the year ended March 2005 reached at Rs 108 crore. Similarly, Cadila Healthcare, an Ahmedabad based company, incurred R&D expenditure of Rs 103 crore during 2004-05, which worked out to 9 per cent of its net sales.
However, considering the stiff generic competition in the international market and heavy burden of R&D spending, few domestic as well as international companies cut down the R&D spending to reduce pressure on the bottom line. Dr Reddy's Laboratories reduced its R&D expenditure 34.5 per cent to Rs 120.73 crore during the first nine months 2005-06 from Rs 184.20 crore in the corresponding period of last year. Few international players like Pfizer Inc. USA, AstraZeneca, UK and Merck & Co, USA also reduced their spending during 2005 in the range of 2 to 4 per cent.
Dr Reddy's Laboratories' R&D expenditure declined on account of lower R&D expenses in generics. The company received Rs 11.20 crore as income under the R&D partnership deal with ICICI Venture. With significant spending on R&D, the company filed 3 ANDAs during the quarter ended December 2005 and it received approval for two ANDAs, which takes the total ANDAs pending at the US FDA to 51. Further it filed one DMF and its total filings went up to 79 DMFs. In addition to this, it also filed DMFs and 3 Canada PMFs.
Aurobindo Pharma's R&D expenditure went up to Rs 32.43 crore during the nine months period ended December 2005. It filed 5 DMFs and 2 ANDAs for the US markets. Further, it also filed 22 EDMFs/COS for EU markets. Aurobindo received its first certificate of suitability approvals from European Directorate for Quality Medicines (EDQM) for its product in the therapeutic segment of gastroenterology.
Lupin received approval for three ANDAs during the quarter ended December 2005 and it filed five ANDAs, three DMFs, nine EDMFs six MAA (EU) and two dossiers. Its R&D expenditure for the first nine months went up to Rs 69.34 crore from Rs 57.13 crore, a rise of 21.4 per cent. Zydus Cadila received approvals for ribavirin capsules, promethazine tablets and tentative approval for gatifloxacin tablets from the USFDA. In all Zydus received 10 generic approvals so far. Its cumulative filings stands at 30 ANDAs and 35 DMFs. The group entered into a 50:50 joint venture with Bharat Serums and Vaccines to develop, manufacture and market a non-infringing and proprietary NDDS of an approved anti-cancer product for the global market.
Glenmark Pharmaceuticals runs discovery projects in the areas of inflammation (asthma/COPD) and metabolic disorders (diabetes, obesity). The company has licensed out its first asthma/COPD molecule, GRC 3886 to Forest Labs and Teljin Pharma for the North American and Japanese markets, respectively. This compound has subsequently completed phase I clinical trials successfully and will be entering phase II clinical trials in the US shortly. Its second lead GRC 8200, a DPP IV inhibitor for type II diabetes, has commenced Phase I clinical trials in the UK in October 2005. Glenmark recorded R&D expenditure of Rs 48.96 crore during 2004-05.
Torrent Pharmaceuticals, a Rs 500-crore plus pharma company from Ahmedabad, has increased its R&D activities and for the nine months period ended December 2005 its R&D expenditure amounted to Rs 43.07 crore as against Rs 36.14 crore in the corresponding period of last year. It employs over 500 scientists and has combined experience of around 3000 scientific man-years in drug discovery and development. Currently, it has seven discovery projects in pipeline - 3 in diabetes and related complications, 1 in cerebro-vascular, 2 in obesity and 1 in cardio-vascular. The company has filed 208 patents for NCEs in all major markets worldwide.
Orchid Chemicals and Pharmaceuticals has stepped up the filings of DMFs and ANDAs. Filings in the non-penicillin, non-cephalosporin segments have also begun and the company expects this process to pick up speed in the near future. The company filled 26 DMFs and 21 ANDAs during the first nine months of current year. With 9 ANDAs already approved, the company has the highest approval record in the antibiotics space.
Suven Life Sciences, a Hyderabad based life sciences company, has embarked on new business model 'Drug Discovery and Development Support Services' (DDDSS) with the onset of intellectual property regime in India since January 2005. Under DDDSS business model it provides services from preclinical through clinical development and clinical data management. It has R&D strength of more than 170 professionals with the state of the art infrastructure for drug discovery and development activities with 30 clinical research professionals and the front-end project management services from New Jersey, USA.
Evidently, Indian firms are endeavoring to build up healthy financial position to invest in R&D operations, despite the fact that these investments are always for a longer period of at least 10 to 12 years and higher amount of risk involved.