Indian pharmaceutical sector continues to register excellent growth in the current year with country's top ten listed pharma companies reporting a 24.4 per cent growth in net profit in the quarter ended June 2006. The net profit of these companies has moved up to Rs 877.71 crore in the quarter ended June 2006 from Rs 705.75 crore in the same period in the previous year. Their net sales also increased by 19 per cent to Rs 5,384 crore from Rs 4,525 crore in the corresponding period of last year.

The top companies viz., Ranbaxy Laboratories, Cipla, Dr Reddy's Laboratories, Lupin, GlaxoSmithKline Pharma, Aurobindo Pharma, Nicholas Piramal India, Sun Pharmaceuticals, Cadila Healthcare and Wockhardt recorded EBDIT of Rs 1,392 crore as against Rs 1,046 crore in the last period, registering a strong growth of 33.1 per cent. Except, GSK and Nicholas Piramal all other eight companies pushed their bottom line significantly during the quarter under review.

The pharma analyst pointed out that the figures for the quarter ended June 2006 came out strongly and the same trend is likely to maintain in the coming quarters. Focus on R&D, filing of DMFs and ANDAs in highly regulated markets, more and more approvals for products, increasing orders for CRAMS, integration of acquired companies and setting up new subsidiaries in foreign countries will give necessary favourable boost to operations. The Indian pharma companies are also undertaking clinical trials for future growth.

However, the uncertainty regarding the Pharma Policy and Drugs under Price Control may turn out to be a bit tough for the industry. Pharma companies are very much against inclusion of more drugs under price control. They are suggesting government that the prices should be monitored and not controlled. Even organizations like FICCI, CII and other bodies are protesting against the inclusion of more drugs in the list of DPCO. Further, interest rates are going up and likely to put burden on bottom line.

MNCs are waiting to launch their patented product in India for more clarity regarding data exclusivity. Once that is clear, MNCs will launch their patented products aggressively in the Indian market. Although the government is yet to decide about data exclusivity, MNCs are expecting that the data exclusivity should be granted for 5 years. However, a section of industry is suggesting that it should be for three years only.

Every player is stepping up R&D investment to introduce new products and overcome patent problem. DRL's R&D expenditure increased to Rs 58.20 crore during the quarter ended June 2006 from Rs 44.41 crore in the corresponding period of last year. Lupin's R&D expenditure went up to Rs 31.98 crore from 18.75 crore and Sun Pharmaceuticals' increased to Rs 32.06 crore from Rs 19.34 crore. However, India's leading pharma giant Ranbaxy Laboratories reduced its R&D expenditure to Rs 81.47 crore from Rs 112.06 crore in the similar period of last year.

The pharma companies are entering aggressively in the regulated market. Sun Pharmaceuticals filed 6 ANDAs - taking to total pending approval to 50, of which ten products received tentative approval. Cadila filed 3 more ANDAs and its total reached at 39. The company received 16 product approvals so far and 23 are still pending. Wockhardt filed 11 new ANDA during the first half ended June 2006 as its year ending is December 2005. It received four approvals. Thus, the filing of DMFs and ANDAs is likely to increase in the next couple of months.

Financial Performance of TOP 10 Cos