The much awaited amendments to the Indian Patent Act of 1970 and other regulatory aspects have lead the Indian pharmaceutical industry to explore newer avenues in drug development. The Indian pharmaceutical companies are expected to invest higher capital in gross fixed assets in the near future. However, multinational pharma giants are not ready to invest big amount on further expansion in India. The MNCs are reducing their fixed assets, compared to their Indian counterparts.

The Pharmabiz study of top 25 Indian pharmaceutical companies shows that their fixed assets went up by 20.2 per cent to Rs 16682.88 crore in 2006-07 from Rs 31873.76 crore in the last year. Simultaneously, the capital work in progress also increased by 41 per cent to Rs 2560.82 crore from 1808.37 crore in the previous year. The Indian pharmaceutical companies like Biocon, Wockdart, Cipla, Nicholas Piramal, Ipca Laboratories and Matrix Laboratories are engaged in expansion activities. These companies are investing huge money for setting up new manufacturing unit and expansion.

The Indian pharmaceutical research is backed by strong government support and availability of skilled technical workers at lower costs. At a growth rate of 9 per cent per year, the pharmaceutical industry in India is well set for rapid expansion. As a result of this expansion, the Indian pharmaceutical and healthcare market is undergoing a spurt of growth in its coverage, services and spending in public and private sectors. The healthcare market has opened a window of opportunities in the medical device field and has boosted clinical trials in India.

With the government support, Indian pharma companies are enjoying excise free zone. The pharma companies also need to set up their special economics zone at different locations. As per the industry report, government is considering Jammu and Kashmir for the next excise free tax zone. Currently, many pharma companies have started its manufacturing journey towards new excise free areas like Sikkim. Many multinational companies have penetrated into India with an aim to market drugs and conduct clinical trails. Thus, Indian pharmaceutical research, manufacturing and outsourcing have received an impetus, creating an image of a potential healthcare market and a land of opportunities.

Biocon
Biocon's gross fixed assets went up by 156.2 per cent to Rs 809.98 crore in 2006-07 from Rs 316.10 crore in the corresponding period of last year. The company's capital work in progress also increased by 1.5 per cent to Rs 69.48 crore from Rs 68.42 crore. In the current year, the company has invested Rs 357.98 crore for the plant and machinery. In June 2006, Biocon invested Rs 750 crore for setting up Biocon Park facility at SEZ. It is an important milestone for the company, as it represents the country's first SEZ in the biotechnology sector and the largest investment in biotechnology. The proposed park would utilize over 90 acres. This integrated biopharmaceutical hub incorporates state-of-the-art research laboratories, US FDA qualified fermentation based manufacturing plants and India's first antibody manufacturing facility.

The company is committed to global excellence in research and manufacturing and its all facilities are designed in such a way as to meet the highest international regulatory and quality standards. Biocon Park is expected to bring global scale in manufacturing and research operations. Biocon is committed to develop affordable antibodies for patients across the globe. Since its launch in September 2006, BIOMAb EGFRTM has attained leadership in its segment in the Indian market and has provided affordable access to cancer patients across the country.

Cipla
Cipla, the third largest pharmaceutical company in India with net sales of Rs 3438 crore, has chalked out Rs 930 crore expansion plans for the next two years. The company's gross fixed assets increased by 31.7 per cent to Rs 1799.71 crore in 2006-07 from Rs 1366.67 crore in the last year. The company is setting up manufacturing units at Sikkim, Goa and Indore. The expansion is likely to be completed by the end of 2008.

Speaking to Pharmabiz, Amar Lulla, CEO, Cipla, said, "Our expansion plans are already finalized and construction activity will start by the end of this year. We are investing Rs 350 crore for setting up production and formulation unit for aerosols, tablets capsules at Indore, Madhya Pradesh. The compny's investment plans also comprises of Rs 180 crore for tablets, capsules, ointments and injectibles facility in Sikkim and Rs 400 crore for a SEZ in Goa. We are expecting sales and profit growth of 10-12 per cent for the next two years. We are also likely to file 21-22 new ANDAs in the current financial year."

Cipla has significantly increased its capital expenditure on modernisation and expansion of existing units and set up new facilities. Recently, it has invested Rs 170 core in a new export oriented unit at Patalganga for APIs and formulation. Apart from this, the company has also set up two new units for APIs and formulation in Bangalore and Kurkumbh. The company's most of the manufacturing facilities are internationally approved. Cipla has formed key alliance with many companies and organizations, both domestically and internationally.

Cipla continues to focus on new medical devices in the area of respiratory medicine, including an inhaled device for insulin. The company has for the first time launched two unique spray patch systems in the world for testosterone and estradiol. In addition to a novel dry powder inhaler device, a new inhaler has been launched for asthma under the brand name 'simply one', which allows a single daily dose.

The world's first HIV triple fixed dose combinations made by the company under the brand name triomune baby and junior have recently bagged US FDA and WHO approval. The company has on going research agreement with Bangalore-based Avestagen for collaborative biopharmaceutical products to be marketed in and outside India.

Cipla has 108 ongoing projects in USA with various partners. The company has over 100 DMFs for APIs in USA and 80 in Europe. Many products are on the verge of approval, essentially in regulated markets. The company is also making its efforts to develop treatment for malaria and diseases like thalassaemia, leishmanisasis and schistosomiasis.

Ipca Lab
The Mumbai-based Rs 900 crore Ipca Lab is on an expansion mode. Its gross fixed assets went up by 12.4 per cent to Rs 509.23 crore in 2006-07 from Rs 453.13 in the last year. Its capital work in progress has taken a quantum jump of 91.8 per cent to Rs 57.00 crore from Rs 29.72 crore. The company is investing Rs 43.50 crore for the plant and machinery. Also, Ipca lab will invest Rs 95 crore for setting up manufacturing unit at different locations.

The company has earmarked Rs 75 crore for setting up two new API manufacturing facilities and laboratories at research and development centre, Ratlam, Madhya Pradesh. The expansion is expected to be completed by the end of November 2007. Also, the company will invest Rs 20 crore for upgrading its manufacturing facility and setting up new sterile vial filling injectables line at Dehradun. The expansion is expected to be commissioned by March 2008.

Speaking to Pharmabiz, A K Jain, executive director, Ipca, said, "We have drawn a detailed plan for expansion for the next two years. Currently, we are investing Rs 70 crore for setting up two new API facilities. Simultaneously, we are investing Rs 5 crore for setting up additional lab at our research and development centre. Our new API facility will mainly focus on the hydrocloroquinsulfate and metformin for anti-malaria and anti-diabetic segment. Every year we are producing 10-12 new APIs for the domestic market."

"We are also putting up new sterile vial filling injectables line at Dehradun with a total investment of Rs 20 crore. We have chalked out the investment plan for the next couples of years and will invest around Rs 70-90 crore every year. Our major initiative will be towards active pharmaceutical ingredients (API) segments. Currently, our 15 APIs were commercialised in the domestic and international markets. We are expecting to increase our API strength to 75 from 15 by the end of current financial year," he added.

Nicholas Piramal
The Mumbai-based leading Pharmaceutical company Nicholas Piramal's gross fixed assets grew by 29.2 per cent to Rs 1152.56 crore in 2006-07 from Rs 891.84 crore in the last year.

The company's total R&D expenditure during the year was Rs.1,074.0 million, including capital expenditure of Rs 195.1 million. In the corresponding previous year, the company's R&D and capital expenditure were Rs. 911.5 million and Rs. 272.2 million, respectively. During the year, research and development staff increased to 387 from 350 in FY2006. The company continues to expand its global footprint in the custom manufacturing business and has acquired Pfizer's manufacturing facility at Morpeth, with a supply arrangement till November 2011.

The company is currently spending 2/3 of its total R&D cost on NCEs. Nicholas is expected to increase its R&D spends to Rs 1000 million by FY08 and Rs.1400 million by FY09 on the back of increased clinical trials. Nicholas is transferring Rs.900 million of assets and Rs 950 million cash to NPRC. The management has made it clear that there will be no more funding from the parent company to the new company.

Unichem Laboratories
The Mumbai-based Unichem Laboratories has also increased its gross fixed assets to Rs 270.06 crore, up 10.8 per cent from Rs 243.66 crore in the last year. The company's capital work in progress has increased by 517.3 per cent to Rs 65.43 crore from Rs 10.60 crore in the previous year.

Talking to Pharmabiz, Prakash A Mody, chairman and managing director, Unichem, said, "In view of the growth in the international business market, especially regulated market, we are undertaking expansion. The company will put up a facility for the manufacture of finished dosage forms conforming to international regulatory standards. In this direction, the company has already been allotted 27 acre land in Pitampur SEZ near Indore."

"Unichem is stepping up research and development (R&D) expenditure in a bid to get recognised as research and discovery oriented company in the global arena. This will help us to achieve our long-term goal. The company has pushed up its R&D expenditure to Rs 22.83 crore from Rs 12.32 crore. This worked out to 4.1 per cent of total turnover, as compared to 2.6 per cent in the last year. Currently, the strength of the manpower is 150 in the R&D sector. We are also willing to increase the manpower capacity in the next fiscal," he added.

Arch Pharmalab
The Mumbai-based Arch Pharmalabs Ltd is increasing its manufacturing capacity at Gurgaon with a total investment of Rs 60 crore. The company will invest Rs 40 crore in phase I. The expansion programme is expected to be over by the end of 2007. The rest of the amount will be utilized for phase II expansion of the same facility.

Speaking to Pharmabiz, Ajit Kamath, chairman and managing director, Arch Pharmalab, said, "Our expansion will take place in phase wise at Gurgaon. In phase I, we are adding 300 kiloliter rector to the existing capacity of 75 kiloliter rector. In phase II expansion we will further add 200-kiloliter reactor. Till now we have filed six DMFs and willing to file one DMF every month till the end of 2007."

Recently, the company has commissioned its new research and development facility at Taloja in Maharashtra. "This state-of-the-art facility is fully equipped with all required equipment and instruments. We are engaged in improving the cost for generics, filing DMFs and patents for non-infringing processes for various APIs that would go off patent in the next decade. Currently, in our R&D centre 115 scientists are working and we are adding nearly 200 scientists in near future," Kamath said.

"We plan to resort to both organic and inorganic ways for expansion. We are investing huge funds in CRAMS and at present handle six clients from Europe. We are expecting to get two clients from the US," he added.

Plethico Pharmaceutical Ltd
The Rs 325-crore plus leading pharmaceutical company Plethico Pharmaceutical Ltd is shifting its entire CRAMS and OTC business units to Sikkim with a total investment of Rs 20 crore. The new facility, located in this tax-free state, will be operational by 2009. The company is undertaking the construction work from early 2008.

Talking to Pharmabiz, Sanjay Pai, CFO, said, "We are having robust business in CRAMS and OTC. We are shifting our entire CRAMS as well as OTC business to Sikkim, which will enable us to save excise and sales tax. We are also planning to shift our export business to the same facility partially. Sikkim unit will take care of our entire semi-regulated market business."

Dishman Pharmaceuticals Ltd
The Ahmedabad-based Dishman Pharmaceuticals Ltd will invest Rs 75 crore in the existing API facility at Bavla, Ahmedabad, Gujarat. The company is expected to commence the expansion at Bavla in the third quarter of 2007.

"We are expanding our Bavla unit capacity to 180 ton per annum from 70 plus ton. As for the financial matter, we have arranged a loan of around US $12.5 million and the rest will be raised through internal accrual. We are already in long term supply agreement with Solvay Pharmaceutical and will continue to supply them. Our Bavla manufacturing facility is cGMP compliant. The plant also satisfies the US FDA requirements," said, a senior official of the company.