Multi Directional Growth

(http://expresspharmaonline.com/20100515/market01.shtml)

The growth in the biologics and oncology segments, penetration of health insurance, government support and the need for more efficacious products will set the wheels turning for the injectables and parenterals market. Arshiya Khan considers a few deals that may encourage MNCs to collaborate with Indian companies While the concept of injectables was revolutionary when discovered, the innovation in this segment has been evolutionary. Drug delivery systems with various biotechnology drugs have brought new innovations in the industry. Also, the kinds of deals witnessed in this segment are indicators of the prospects that lie in this area. Indian players have made themselves regulatory compliant to attract the world markets. According to IndiaVenture Advisors, the total Indian market for injectables has been estimated at about Rs 6,500 crore for FY09. The total domestic injectables market is estimated at about $450 million and was estimated to have grown at more than 20 percent in the last three years. Deals galore The Hospira-Orchid and Pfizer-Strides or Pfizer-Claris deals indicate that the injectables and parenterals market is in tumult. MNCs are closely monitoring the market changes in this segment. Likewise, a number of Indian pharma companies have successfully gained FDA approval for a growing portfolio of injectables generics, to gain foothold in the US generics market. Vikram Gupta, Chief Operating Officer, IndiaVenture Advisors remarks, international markets where generics injectables have a huge market share include US, Germany and UK. These countries have seen maximum penetration of generic injectables in the oncology area. However, there are European markets such as Spain and Italy, where generic penetration is still low. In case of US, the generic penetration is about 65 percent by volume and 45 percent by value and continues to grow. "This relatively exclusive segment of the generics market appears to be gaining traction, which has become evident with Hospira and Pfizer increasing their market shares by doing deals with Indian manufacturers," agrees Sujay Shetty, Associate Director, Pharma Practice, PricewaterhouseCoopers. He cites another example: last year Hospira acquired Orchid's generic injectable finished-dosage form pharma business for approximately $400 million. The acquisition included Orchid's betalactam antibiotics manufacturing complex and R&D facility at Chennai, as well as its generic injectable product portfolio and pipeline. In addition, the companies signed a long-term agreement for Orchid to supply APIs for the acquired generic injectable pharma business. In another such deal, Pfizer and Strides Arcolab entered into a collaboration whereby Pfizer agreed to commercialise Stride's off-patent sterile injectables and oral products in the US through its Established Products Business Unit. This is a highly complementary collaboration, expected to deliver 40 off-patent products, many of which are oncology therapeutics, to healthcare providers and patients in the US, by joining Pfizer's solid commercial infrastructure with Strides' high-quality manufacturing capabilities. These deals are signs that, "MNC players like Pfizer are keen to work with Indian manufacturers to provide a boost to the injectable generics market," as Shetty underlines. Besides this, last May Pfizer also signed a commercialisation agreement with Claris Lifesciences, under which the firm acquired the rights to 15 injectable products that have lost patent protection in major markets, covering a wide range of therapeutic areas including anti-infectives and pain management. The products will be marketed under the Pfizer brand in the US, where the deal is exclusive; Claris will continue to market the products elsewhere.

Citing these deals, Gupta says, "Deals in the injectables space have been mostly driven by objectives of capacity expansion, cost optimisation and technology acquisition, and the growing interest of international companies to acquire or collaborate with Indian companies." Bibhuti Bhusan Kar, Program Manager, South Asia & Middle East, Healthcare, Pharmaceuticals & Biotechnology, Frost & Sullivan, sings the same tune. He says, in addition to the above, low cost of production, and availability of low-cost scientific manpower are the core strengths of the Indian market which force MNCs to look for production partners to supply their injectable drugs in India and other parts of the world. Adds Bhavesh Patel, Managing Director, Marck Biosciences says, the injectables business is highly capital intensive with a long gestation period. Therefore players look for collaboration in this area. He quips, "Even we are not averse to alliances. In fact in the pharma industry nowadays, it is very common to collaborate with competitors, suppliers and customers. We also have alliances with various companies within and outside India. In fact, we have filed our first ANDA with our partners in the US." The scene in India
"The relatively exclusive segment of the generics market appears to be gaining traction, which has become evident with Hospira and Pfizer increasing their market shares by doing deals with manufacturers"

Indian

Sujay Shetty, Associate Director, Pharma Practice, PricewaterhouseCoopers "The rural market has tremendous growth potential, for several reasonspatients come at a late stage to the physicians and want to see instant results from a drug; higher margins are provided to the physicians for the injectable drugs; absence of adequately qualified physicians in the rural areas has led them to use injectables frequently to avoid any further complications of the disease. These reasons have attracted many smaller companies to enter the rural market to tap its potential" Bibhuti Bhusan Kar, Program Manager, South Asia & Middle East, Healthcare, Pharmaceuticals & Biotechnology, Frost & Sullivan

Kar enumerates, "The Indian market is at an early stage of growth because of the low penetration of all healthcare needs, as compared to other parts of the world. Vaccination, patients receiving oncology treatment, usage of biologics are at nascent stages in India because of poor reimbursement policies, lack of government support, lack of awareness, and lower patient affordability, and thus there is a lot of opportunity for growth." He elaborates that the majority of the injectable drugs are sold on huge bonus offers and at discounted price. Moreover, a large portion of the market is hospital-based. While changing lifestyle patterns have forced companies to tap cardiovascular diseases and diabetes segments more aggressively, Kar says that major markets for injectables/parenterals include vaccines, anti-infectives, oncology, biological, and nutritionals. Apart from these, several other drug classes such as insulins, drugs for pain management, CNS (Central Nervous System) drugs, and GI (Gastro Intestinal) drugs also contribute considerably to the injectable drugs market. These things have jointly propelled the growth in this segment to be at or close to 15 percent over the last five years. However, "the booming vaccine market, growing at more than 20 percent in the last five years and with ample opportunities for further growth, is expected to favour the growth of the injectables market," says Kar.

And biotech drugs, which comprise two-thirds of the market, represent the biggest segment and are the fastest to grow at 15 percent, according to Gupta. Giving details, he says injectables using small molecules represent 25 percent of the market and are estimated to be at $35 billion, growing at 11 percent. But what is interesting is that most generic injectables use small molecules and are focused on oncology and cardiovasculars. Though the market is highly fragmented there are small players as well as MNCs operating in this segment. But lacking capital, smaller domestic players are confined to market segments such as anti-infectives, GI and pain management drugs. Marck, however, focuses on a different league of products. Patel avers, "So far we have restricted our activities to respiratory solutions, ophthalmics and injectables in terms of therapeutics. Now we have augmented our capacities in

large volume parenterals (LVP) as well as Small Volume Parenterals (SVP). Apart from fluid therapy and formulations, we have added ophthalmic, respiratory care and irrigation products by developing manufacturing capabilities. Today, we have the ability to offer six different therapeutic segments." He continues, "So far we have grown in a very organic manner. We have never chased top line centric growth. We have been quite an inward looking organisation. We had Blow/Fill/Seal (BFS) technology only but now we are looking for anything which has synergy with BFS. We also have overseas companies approaching us for marketing tie-ups to launch in India. Marck's distribution network and hospital coverage attracts them. We have developed significant capabilities in terms of F&D, filings and our presence in various markets; as an extension to that now we are open to explore the opportunities available in the marketplace. Differently put, we would like to be a sterile dosage company and now we are looking at sterile drug systems other than BFS." On the manufacturers' side, players would include Tablets India, Grandix, Lincoln Pharma, Noel Pharma, Molekule India, Martin Harris, Bombay Tablet, Synokem and others. However, in the formulations for vaccines, biologicals, and oncology drugs, large domestic companies and MNCs have a major share since the market is quality conscious and the products need technical expertise to manufacture and stock. Key players in this market segment are big size pharma companies and MNCs such as GSK, Pfizer, Sanofi Pasteur, MSD, Serum Institute, Panacea Biotech, Shantha Biotechnics and so on. "This market segment is growing healthily in terms of value because of the product differentiation and product benefit it offers to the patients," explains Kar. A few collaborations
Panacea Biotec is associated with WHO for supplying polio vaccine throughout the world Panacea also has a JV with Chiron which will strengthen their position in terms of technology to produce and market paediatrics combination vaccines in India Bangalore based Strides Arcolab has acquired a sterile injectable manufacturing facility in Brazil to cater to the injectable market for infectious diseases globally Strides Arcolab also has signed an agreement with Pfizer (the world's largest pharmaceutical company by value) to supply Pfizer's off-patent sterile injectables and oral drugs for the US market Serum Institute has an agreement with the Global Alliance for Vaccines and Immunization (GAVI) to develop, manufacture and sell meningitis vaccine Shantha Biotechnics was taken over by Sanofi Pasteur (the vaccine division of Sanofi-Aventis) and was awarded a contract by the UN to supply pentavalent vaccine worth $340 million over the period 2010-12

Surging rural market Though the urban setup is attractive and lucrative enough for major deals to make it through, the rural market is also up for a surge. As Kar rightly claims, "The rural market has tremendous growth potential for injectables in anti- infectives, GI segments and pain management drugs for several reasons-patients come at a late stage to the physicians and want to see instant results from a drug; higher margins are provided to the physicians for the injectable drugs; absence of adequately qualified physicians in the rural areas has led them to use injectables frequently to avoid any further complications of the disease. These reasons have attracted many smaller companies to enter the rural market to tap its potential." Growth areas Oncology drugs form one of the largest and fastest-growing sectors of the global generic injectables market, informs Shetty, highlighting the numbers. Annual sales of the global generic injectables sector were $10-12 billion in 2008, according to IMS Health, with injectable oncology medicines accounting for about 30 percent. Additionally, injectable oncology medicines worth $9 billion in annual sales are expected to lose patent protection by 2015. The other area that he feels will drive growth in the Indian market is the antibiotics segment, as the injectable antibiotics market in India has shown robust growth in the last four to five years. This, Shetty says, is due to the introduction of high-end antibiotic brands at higher prices and the subsequent proliferation of their generic versions. The domestic injectable antibiotics market is worth $425 million and has been growing at a Compounded Annual Growth Rate (CAGR) of 21 percent in the last three years. And so is Troikaa's focus on pain management, cardiology and nutraceuticals, to leverage the high potential that lies herein.
"Pens are finding increasing popularity to self-administer insulin in Europe. These devices are becoming more popular among diabetics in the US and this could find a niche market in India as well" Vikram Chief Operating IndiaVenture Advisors Gupta, Officer,

"With modernisation and new hospitals, the number of quality conscious customers who prefer to buy dependable parenteral products for their modern healthcare setup is steadily rising and will continue to rise for the next few years. Accordingly, the parenteral segment will enjoy excellent growth in the coming years. The key challenge, to emerge successful in this segment, is to provide consistent quality" Ketan Managing Troikaa Pharmaceuticals "The injectables business is highly capital intensive with a long gestation period. Therefore players look for collaboration in this area" Patel, Director,

Gupta points to another growth area. He says, "It is also expected that there will be higher growth in the pre-filled and lyophilised - Bhavesh Patel, Director, products due to increasing demand for simplified processes at the Managing point of care. The main challenge for pharma companies is to Marck Biosciences make these drugs easier to administer, safer, more reliable, and economical." Patel agrees that keeping in sync with the demand for certain products, "Marck is also looking at other products like lipids, and total parenterals nutrition, which will strengthen our IV parenterals formulation basket. Besides this, we are working on new drug delivery systems to facilitate treatment. This will be a first time offering to the medical fraternity." The market for injectables in the antibiotics segment and particularly for cephalosporin has been growing significantly and there is a huge opportunity in the Indian market itself. The other market with huge potential is multivitamin injectables, as per Gupta. The size of the nonbiological injectables market is estimated to reach about $80 to $100 billion in 2015, out of which generics could account for about $35 billion. It is estimated that from 2006 to 2009 patents expired on non-biological injectables worth $15 billion. Collaborate to grow The adage that adversity makes strange bedfellows is true of many industries and pharma is no exception. To cope with rising demand and increase their profit margins, Indian players have adopted the acquisition route to tap the world markets. The synergies that India has been boasting about for so long have once again taken the lead to bring in business. Due to a few

factors like low cost of production and availability of adequately qualified manpower, Indian companies are able to manufacture and supply high volumes of parenteral drugs to the world market through JVs with MNCs/NGOs/international health organisations such as WHO, UNICEF and so on. More such JVs are expected in future, which will shape the injectables/parenterals market, opines Kar. Coming soon In recent past there has been double digit growth in market segments where injectables and parenterals are largely used such as vaccines, anti-infectives, oncology, biologic therapy, nutrition, pain management and so on. Most of these markets are growing at a rate close to or more than 20 percent, except for injectables in the antibiotic and pain management segment, which are growing at a rate close to 15 percent. These market segments are expected to grow at a similar rate in the coming three to five years, which will drive the usage of parenterals, feels Kar. However, Bhavesh Patel thinks that the injectables market is driven largely by private investment, the number of hospital beds, physicians, health insurance, corporate hospitals and patent infrastructure. According to a KPMG report, it is expected that two million hospital beds and 4,00,000 physicians will be added by 2015, which will set the market to grow. With this there will be an emergence of newer and more sophisticated devices, which are cost-effective, and safe for use, opines Gupta. He cites an example: "Pens are finding increasing popularity to self-administer insulin in Europe. These devices are becoming more popular among diabetics in the US and this could find a niche market in India as well." Also, while healthcare service providers and insurance companies abroad continue to drive prices down, injectable products, because of their higher regulatory standards and the complexity of development or manufacturing process, tend to command higher margins and price stability as compared to oral products. It is therefore expected that this market will continue to attract pharma and biotech companies who will focus on new product innovation as well as cost-cutting to improve their overall profit margins, Gupta predicts. Ketan Patel, Managing Director, Troikaa Pharmaceuticals, concludes, "With modernisation and new hospitals, the number of quality conscious customers who prefer to buy dependable parenteral products for their modern healthcare setup is steadily rising and will continue to rise for the next few years. Accordingly, the parenteral segment will enjoy excellent growth in the coming years. The key challenge, to emerge successful in this segment, is to provide consistent quality." Another challenge that will be an opportunity for biological injectables developers, Gupta remarks, is the fragile nature of the biological drugs themselves, which requires they be transported and stored at low temperature-which adds to the cost of distribution. To avoid the problem of temperaturedependent stability, these drugs are often processed and packaged in dry or powder form. These trends indicate that over a period of time more players will emerge in this segment either as independent entities or collaboration that will bring new high-end products.
arshiya.khan@expressindia.com

Eyes on the big prize

In a competitive scenario not just Indian but global pharmaceutical companies are also looking for both quality and quantity without any compromise. Usha Sharma writes about the scope for business in the EU market Dramatic changes in the pharmaceutical markets make it imperative for generic medicines producers to seek out and work with governments to create the best conditions for developing, manufacturing and marketing their products in the European Union (EU). EU generic pharma markets have experienced changes in recent years. The business environment has become significantly more complex, and generic pharma companies are becoming increasingly international. As per the IMS World Review 2009, the EU market for pharma products is worth $235.5 billion a year and growing approximately at 30.5 percent annually. There are 27 countries in the EU region; however, the top five markets are France, Germany, Italy, Spain and the UK, constituting approximately 65 percent of the total pharma market. The Indian pharma companies are rich with research knowledge and are seeking the best conditions for developing, manufacturing and marketing their products in these regions. Abhay Bhole, Business Development Manager, Ranbaxy Europe describes the EU generics market, "Generic medicines in Europe are well established. Generics constitute nearly half of the total prescriptions dispensed in Europe, but in dollar value terms it is only 18 percent of the total pharma market." S Ramesh, President, Finance & Planning, Lupin highlights the different growth levels in EU regions, "The EU countries have seen varied levels of growth in the last two years, with Germany leading. The German market grew at a Compounded Annual Growth Rate (CAGR) of 3.1 percent for the period spanning 2005-2009, the French and UK markets at 3.2 percent, the Spanish market at 4.7 percent and the Italian market at only one percent." He explains, "The reason for these variations is that these markets are diverse in terms of health provision, funding, domestic production and health plans. For the same reasons, while some countries such as the UK have both branded and generic drugs, others like Germany are generic tender driven markets. But globally, we are seeing a fast and consistent movement towards generics adoption, and the EU is no different in this regard." The EU Generics Association reveals in its report that, given the importance of generic medicines in the European healthcare equation, it is ever more important to have a firm understanding of the various European pricing and reimbursement systems and the ways in which these systems can be improved to develop a viable and competitive generic medicines industry in Europe. It is equally important to establish the progress of national governments and generic pharma companies in achieving their goal of promoting the manufacture and use of generics in Europe. Generics market shares across a broad selection of European countries can serve as an indicator of this progress. Ramesh elaborates, "The EU market is expanding due to an ageing population, earlier diagnosis of disease and wider use of pharma (products). Government responses to meet the rising demands in publicly funded health range from increased health insurance, co-payments and related taxes to increased use of private funding and generic substitution. So there is a lot of scope for companies such as Lupin in the EU. We already have a presence in Germany with our acquisition of Hormosan, and we have registered consistent growth in the region."

How best to grow

"It is useful to focus on a niche or speciality therapy area and develop products with an eye on collaborating with bigger generics players on a partnership basis" Abhay Business Development Ranbaxy Europe Bhole, Manager,

"Our company has had a three-pronged strategy in its approach towards European markets. These include having a direct presence as observed in our operations in the UK, inorganic growth through acquisitions such as in Germany and forging strategic marketing alliances as we have had in France and Turkey" S Finance Lupin Ramesh, & President, Planning,

The EU has always been a fragmented and diverse market in itself, in terms of its orientation. The gamut includes generic, brand specific, branded generics, and plain generics markets. Oncology is one of the fastest growing therapeutic categories in most of the European markets. Cardiovascular is very big and still growing with a large number of patent expiries in the next three to five years. CNS is another growing category and has significant forthcoming patent expiries. Also therapeutic areas like alimentary canal, metabolic disorder, anti-ulcerants, anti-diabetic, and anticancer show major business potential in terms of growth prospects. Each country has a different regulatory environment. A range of factors can affect generics markets within Europe. Businesses, for example, in an effort to simplify the market, are seeking to harmonise pharma registration processes as well as product packaging, marketing strategies and branding. Ramesh shares Lupin's experience with regulatory body and required prevalence, "Lupin has always worked closely with the regulatory bodies of the countries that it operates in, and our practices and standards have always conformed to their requirements. Our company has had a three-pronged strategy in its approach towards European markets. These include having a direct presence as observed in our operations in UK, inorganic growth through acquisitions such as in Germany and forging strategic marketing alliances as we have had in France and Turkey."

"The stringent rules and regulations will improve defaults and also serve as a warning to those manufacturers who concentrate only on short-term profits by compromising on quality"

Bhole illustrates the other side of the coin, "Presently established European generic companies are aggressively sourcing products from across the globe. Some of them also have their strategic offices and operations in India and China. They are fully aware of the capabilities of the Chinese and Indian companies and likely cost levels of sourced products. Indian pharma companies can RK Thukral, Executive Director, survive and grow in this scenario by focusing on offering first to IOL Chemicals & Pharmaceuticals market (ahead of competitors) development of the products ahead of patent expiries, by focusing on developing non-infringing products and process innovations to be able to compete as and when prices come down drastically post patent expiry. It is also useful to focus on a niche or speciality therapy area and develop products with an eye on collaborating with bigger generics players on a partnership basis." Lupin's secret of success Ramesh explains his company's strategy,"We have always been in the practice of manufacturing cost effective generics and branded generics. Having said that, the EU market is in a transition phase, and therefore cost effectiveness becomes important. In this regard, India holds the distinction of being one of the world's largest and best generics manufacturers, maintaining quality with affordability, and this has worked well in our favour. At Lupin, we enjoy a backward integration process that helps us to control costs, while also maintaining competitive pricing and superior quality." He shares Lupin's EU business insight, "The EU is a part of Lupin's advanced markets businessit is a market of choice and priority. And one in which we have grown from strength to strength. While we have historically been well entrenched in the EU region given our API business, we further strengthened our position in the market by introducing our own formulations over the last two years, specifically in key generic markets such as France, Germany and UK where we have a direct presence. We further strengthened our presence in Germany when we acquired

Hormosan, a German pharma company, to tap into the lucrative and growing German generic market and opportunity therein." Lupin's revenues from this region have shown a consistent upward trend and doubled over the last two years. The company's strategy for this market has been well tuned to the unique demands of the very fragmented and diverse EU market. Pharma research strengths, strong intellectual property management competencies, and very sophisticated product identification strategy have helped Lupin grow in both size and scale and helped create strong differentiation for their products in the market and contributed handsomely to the company's growth in the region. Ramesh reveals, "We are looking at expanding our business. We have made about 54 submissions to the EU regulatory authority of which over 26 have already been approved, which is an indication of things to come. Our product portfolio in this market encompasses offerings in the anti-Infectives, cardiovascular, CNS and other segments, as a fully integrated pharma company. The accent today is on leveraging our strengths in APIs, research and development, manufacturing and commercialisation capabilities in India and offering complex products which would provide a natural hedge against competition and price erosion." Acquisitions and alliances form a very important part of Lupin's overall strategic tool kit and they have been able to successfully leverage this to their advantage. Over the last 20 months, Lupin has completed six acquisitions, all of them profitable forays. The acquisitions helped Lupin enter, build, consolidate and expand their reach to become market leaders in their chosen segments and markets. Differentiate to rule Bhole's advice to pharma companies for better business in the EU market is, "Each country in Europe has unique market characteristics and requires individual market level plans and investments. However, markets can be broadly clustered on the basis of generic substitution versus branded generic (prescription driven). The markets with high volumes and allowing generic substitution at pharmacy level are predominantly low price markets but have easy market entry strategy requiring low investment. The branded generics markets like Poland, Hungary etc. are relatively better priced markets but have high entry barriers and require heavy investments and local market expertise. The strategy for a company depends on their portfolio breadth and level of investment commitments. In the branded generic market it is recommended to focus on a therapeutic category with a sustainable portfolio (preferably a few big general products plus niche/ protected products with likely low competition) backed by investment in marketing and brand promotion." Ramesh agrees, "Markets such as the Netherlands, Switzerland, Turkey and Bulgaria would be easier to tap into because they are not as established as Germany or France. They also have more industry-friendly policies that would be favourable to Indian companies looking to sell their drugs. This makes them more profitable. On the other hand, heavily regulated markets such as France and Germany would not give a company substantial returns just because of their sheer size and increased competition. The EU is a very competitive market and margins are healthy in select markets like France. Our EU business has shown consistent and healthy growth and we expect this trend to continue going forward. While we have shown a 100 percent growth in our EU business, we expect to sustain our margins and gather further momentum as we expand focus in this region and strengthen our footprint." The matured generic markets allowing generic substitution and tenders have low entry barriers and are easy to enter but offer low returns. The branded generic markets in Central, Eastern and some of Southern Europe are challenging in regulations, difficult to enter-requiring local marketing expertise and heavy investment in promotion-but are more profitable. Ramesh is positive, "For the EU market, if we are able to find a company that we believe offers the right value and has strategic synergies with our philosophy then we are open to acquisitions and we should be looking at expanding and investing in growth markets of Europe."

Rules and regulations EU regulatory norms are getting more stringent every day. This will force Indian pharma companies to produce good quality medicines with GMP practices accepted worldwide in order to sustain themselves in the long run. RK Thukral, Executive Director, IOL Chemicals & Pharmaceuticals, highlights the need for stringent regulation for Indian pharma companies, "At present, the Indian exporters of APIs are following the standards set by the European Directorate for the Quality of Medicines (EDQM) ensured through Certificate of suitability of European Pharmacopoeia monographs (CEPs). For exports to countries not coming under the authority of EDQM, the companies have to comply with the standards set by the individual countries. The stringent rules and regulations will improve defaults and also serve as a warning to those manufacturers who concentrate only on short-term profits by compromising on quality." Thukral tries to explain the necessity of EDQM requirements in the current scenario, "The EDQM grants CEPs to manufacturers or suppliers for substances for pharma use when they have demonstrated compliance with the monographs of the European Pharmacopoeia. The certificate guarantees that all the impurities and potential contamination related to the manufacturing process including the manufacturing site and raw materials are satisfactorily controlled using the requirements of the monographs, by ensuring our products are high on quality and meet all the regulatory norms. Cheap products can't ensure this and will eventually be left far behind as sourcing cheap pharma will only put pressure on such producers to further compromise on quality. EUGMP is also becoming a major regulatory requirement." The EU is engaged in a regulatory dialogue with India. For this purpose an India-EC Joint Working Group on Pharmaceuticals and Biotechnology has been set up. Collaboration in medicinal products is based on the Cooperation Agreement between the European Community and India on Partnership and Development of 1994, which provides for specialised sub-groups in regulations. Technical regulations and standards as well as intellectual property rights are important issues dealt with by this Working Group, established to deepen dialogue on pharma and biotechnologies related to healthcare with a view to facilitating bilateral trade and increasing market access. The group aims to promote the protection of public health in the EU and India through the sharing of legislation, guidelines and experiences in pharmaceutical and biotechnology regulation. However, regulatory compliances and marketing adherence in EU are different from other countries. Marketing Authorisation (MA) for generic medicines is still a complex market in terms of transparency, hence making it difficult to assess how long it will take for generic manufacturers to obtain their price and reimbursement status after receiving MA. Although delays for price approval have improved, in part due to the European Commission's recommendations and the EU price transparency directive, the time delays for reimbursement status remain an obstacle to a competitive generic medicines industry in Europe.
u.sharma@expressindia.com

It's 'India Calling' for global pharma companies: PwC report

The huge potential of the Indian pharmaceuticals market is impossible for foreign companies to ignore, given that it will be one of the top 10 sales markets by 2020, according to a report by PricewaterhouseCoopers (PwC), Global pharma looks to India: Prospects for growth India's pharmaceutical industry ranks as a frontrunner among the country's science-based industries with wide ranging capabilities in the complex fields of drug manufacture and technology. The industry has been growing at an impressive CAGR in excess of 8-9 percent, and will touch $10 billion by 2010. India's population is growing rapidly, as is its economy - creating a large middle-class able to afford western medicines, PwC finds. India's epidemiological profile is also changing and the population is ageing, so demand is likely to increase for drugs for cardio-vascular problems, disorders of the central nervous system and other chronic diseases such as diabetes which is increasing at an alarming rate.

The total market is expected to rise to a value of approximately $50 billion by 2020 according to PricewaterhouseCoopers. The report highlights that India now has a growing and increasingly sophisticated pharma industry of its own. Indeed it is likely to become a competitor of global pharma in some key areas, and a potential partner in others. It has considerable contract manufacturing expertise; Indian companies are among the world leaders in the production of generics and vaccines. India now produces more than 20 percent of the world's generics. Around $70 billion worth of drugs are expected to go off patent in the US over the next three years, and PwC thinks that India is capable of manufacturing a substantial share of the product to support the resulting generics opportunities. In manufacturing big pharma companies are already striking closer relationships with Indian generics to service global markets under marketing alliances such as GSK-DRL and Pfizer - Aurobindo. Sujay Shetty, Associate Director- Pharma & Life Sciences, PricewaterhouseCoopers, India, "Global players in the pharma industry are seeing immense prospects in the Indian market due to its sheer demographic profile. The pharma industry's main markets are battling serious pressure. India could be the most populous country in the world by 2050 and is now making its mark as a growing market, potential competitor or partner in manufacturing and R&D, and as a location for clinical trials." PwC estimates that India's 10 largest drug firms spent $480 million on R&D in 2008. Some of the leading local producers have now started conducting original research, but despite Indian pharma companies' growing expertise in later stages of the R&D process, many of the drug candidates initially formulated in India are likely to be further developed by Western drug makers, because few Indian companies can currently afford the high costs and failure rates associated with pushing a drug right through the pipeline. Several Indian firms have already entered into research partnerships with multinationals; DRL and Torrent have joined forces with Novartis, for example, while Ranbaxy has formed alliances with GSK and Schwarz Pharmaceuticals. India has the world's second biggest pool of English speakers and a strong system of higher education, so it should be well-positioned to serve as a source for research talent, turning out roughly 115,000 scientists with Masters degrees and 12,000 with PhDs every year. India's developing biotech industry and cost advantages should drive significant growth in local development of biosimilars for the global market. India has also made considerable progress in terms of stem cell research. The Indian Government has made the provision of healthcare one of its key priorities. It has launched a new policy to build more hospitals, boost local access to healthcare and improve the quality of medical training, and promised to increase public expenditure on healthcare to 2-3 percent of GDP by 2010, up from a current low of 1 percent. PwC notes a number of methods for foreign companies to explore opportunities in India. Outsourcing. Recently there has been a move from outsourcing lower value and manufacturing activities to more research-based capabilities. Licensing is being used to establish a common platform in order to gain rapid in-market acceptance and create a complete therapy range. Franchising. US-based Medicine Shoppe International. For instance, has entered the market as Medicine Shoppe India and plans to expand to 1,000 stores by the end of 2010. Joint ventures with domestic partners bring local expertise and a local network and require government approval. Pharmaceuticals are deemed a high priority area so approvals can be quick. Some multinational companies such as Pfizer and Novartis are taking advantage of the potential in India through partially or wholly owned subsidiaries.

PwC also notes that as with any kind of new market opportunity there are additional factors to consider: Inadequate energy and transport infrastructure has historically posed challenging for companies operating in India but the situation is definitely improving as the government deems it as an investment need. India offers some attractive tax benefits for pharma companies such as R&D credits and income tax exemptions in special economic zones (SEZs). Reductions in customs duties should also help global manufacturers compete in the price sensitive Indian market. India will introduce Goods and Services Tax (GST) in April 2011, which will have transformational implication for supply chain in domestic market. Counterfeit drugs have been a serious issue in India but recent research suggests the prevalence of spurious drugs to have fallen to 0.046 percent of all medicines sold to consumers. Therefore companies should remain alert to possible counterfeiting issues. Whilst intellectual property protection has improved substantially, some holes remain. Compliance will always be an issue and as the market expands regulatory compliance will require attention with robust programmes, vigilance and improved policing to ensure that patients and India's reputation are protected. Although urbanisation continues, around 70 percent of India's population still resides in rural areas. PwC notes that this untapped potential is now the next volume driver for the industry but foreign companies looking to access rural markets face many hurdles such as communication, transport, marketing and a high penetration of spurious drugs so they will need to forge alliances and partnerships with local players.

On the prospects of global players entering the Indian arena, Sujay Shetty concluded: "India has long been a formidable player in pharma manufacturing, but its socioeconomic strengths provide even greater grounds for optimism. Companies that will be most successful in doing business in India will be those that are most adept at managing and mixing a range of contractual relationships and partnership strategies to create networks of collaboration and discovery. India has huge potential and is at a stage that it can help the industry address some of the issues that it finds itself dealing with in more developed markets." BioPh 2009 Special

Turning silver, aiming for gold

For a 25 year old company, Neuland Laboratories continues to show the same enthusiasm as it did when it started. Aashruti Kak traces its growth (http://expresspharmaonline.com/20091215/expressbiotech27.shtml) For a 25 year old company, Neuland Laboratories continues to show the same enthusiasm as it did when it started. Aashruti Kak traces its growth Dr D R Rao incorporated Neuland Laboratories in 1984 in Hyderabad and started the company's first commercial production of salbutamol sulphate in 1986. Since then it has grown to become a reliable Active Pharmaceutical Ingredients (API) source for the pharma industry with addition of more products over the course of years. In 1994 the company went public and oversubscribed 70 folds. Proceeds from the issue were used to build a large-scale production facility for the manufacture of ranitidine HCI and ciprofloxacin HCI. Three years later Neuland received its first USFDA inspection for its flagship product alburetol sulphate (Unit I). In 1999 Neuland received a string of regulatory approvals from USFDA and EDQM for its major products. In 2003 the company clocked more than 40 percent of its revenue from regulated markets of US and EU. In 2004 USFDA system inspection for its Bonthapally (Unit I) bringing both the facilities under full cGMP compliance, and also received cGMP clearance for both facilities from TGA, Australia. In the very same year the first office in North America was opened in New Jersey. In 2006 Neuland received certificate of suitability (CoS) for products, and its second office was opened in California, USA. In 2007

Neuland opened its office in Tokyo, Japan, while last year it signed a joint venture agreement with CATO Research Inc, USA for conducting clinical trials in India. Neuland started of with 40 employees. Today the company has total employee strength of over a 1,000. Neuland manufactures for over 700 customers located in 82 countries. The company's customers include the top 30-pharma companies in Europe and USA. Neuland's product portfolio spans a mix of APIs across eight major therapeutic categories. Saharsh R Davuluri, Vice President-Corporate Planning and Development, Neuland Laboratories, recalls, "The biggest challenge faced by Neuland during its early years was to compete on price in the price-sensitive domestic market. To overcome the challenge, Neuland focused on the quality-conscious regulated markets like North America and Europe where the barrier to entry was high, and thereby, price sensitivity was low." Today, with several API companies competing in the regulated markets, Neuland is increasingly focused on products where it can partner early with customers and where its past experience in the specific technology adds value. "Neuland was founded by a scientist with over 10 years of core experience in manufacturing of APIs in a large MNC. From its inception, the emphasis was on quality. The company filed its first DMF when the sales turnover was Rs 5 crore. By 1998, Neuland was the only Indian company with a US FDA approval, a Certificate of Suitability (CoS) with EDQM and an ISO 9001. This illustrates the company's commitment towards quality and the regulatory markets," says Davuluri. Although, the production of API has been one of Neuland's core competencies, the company is also focusing on contract research services in the area of chemical development as the services are closely related to their API manufacturing business. These include medicinal chemistry (discovery support), process development, drug development support and analytical R&D. The company inaugurated a 40,000 sq ft R&D centre last year to support these activities. From being a bulk drug and API manufacturer, Neuland shifted its focus last year to contract research to broad base its revenue stream. The contract research business was expected to increase its margin from last year's margin of five percent to 15-20 percent (PBT). While the API business was to remain key to the company's growth, contract research is likely to contribute around 30-35 percent of total sales after stabilisation. The contract research is a $20 billion industry and the company is certainly looking at tapping this huge potential. To diversify its export revenue base the company is also eyeing the $1.5 billion Japanese generic market. Besides focusing on broadening its revenue stream, Neuland also keeps in mind the hazards a chemistry focused organisation can impose on the environment. Davuluri elaborates, "Our organisation has USFDA, EDQM, and TGA compliant manufacturing facilities within close proximity to Hyderabad. The factories have been built conforming to the highest safety standards and complying with current environmental, occupational health and hazards regulations. For now, Neuland will continue to invest in strengthening its API manufacture and contract research capabilities. Besides servicing the generic customers, the company is also increasing focus on contract manufacture for discover-based companies, as Neuland has earmarked a significant investment for these expansions. Tech Interview (http://expresspharmaonline.com/20091215/expressbiotech16.shtml)

Life sciences industry in India is at a very exciting stage'

Nanotechnology has tremendous possibilities in drug discovery and in drug delivery systems. And it is no longer a futuristic technology at the conceptual stage, feels Sudhir Kant, President, Millipore, India. He shares the strategy adopted at Millipore to tap the life sciences market with Arshiya Khan How has Millipore kept pace with the changing trends, in terms of regulations, technological advancements etc?

Millipore's scientists collaborate with manufacturers, researchers and academia on their projects all over the world. The partnership begins at early stages in their research and development efforts and continues right through pilot and commercial stage production. For instance, Millipore got involved with the top manufacturers of monoclonal antibodies very early. Today, we are unique in that as we have almost 35 years of experience in this challenging area. In addition Millipore's own R&D efforts and alliances with some of the most prestigious centres of research in universities, research organisations keeps up ahead on technological advancements. On the regulatory aspect, we consult for customers in roughly 30 countries worldwide. The collective knowledge built up is another unique advantage. Finally, perhaps no other company in this business invests as much as we do in training and development of staff. This keeps us on top of the knowledge curve. What are the challenges in the technical advancements for the Life sciences industry? The life science industry in India is at a very exciting stage. Along with growth opportunities there are numerous technological challenges. Especially in areas such as drug discovery, stem cell research, the production of high quality yet affordable and safe vaccines for pandemics etc. Apart from the capital needed to transfer molecules from the R&D stage to commercial production, we need high quality talent from our educational Institutes, talent that comes ready with hands-on skills in biotechnology, laboratory techniques etc. What has been Millipore's focus mantra to meet the challenges of the life sciences industry? Millipore is constantly studying the needs of our customers and responding pro-actively as any market leader ought to do. Our vaccines initiative is one such effort as it involves working closely with vaccine manufacturers to produce high quality vaccines through modern processes. To be relevant for India, these vaccines need to be affordable too. India's first filter validation and process development lab is another example. We saw this need 10 years back. The development efforts and focus on Millipore's Mobious range of single use technologies in bioprocessing is the latest initiative as we are convinced that this flexible and reliable technology will give our customers a competitive edge to address the opportunities thrown up by global markets. We are also doing our bit to help research in India's most critical diseases cardiovascular, apoptosis, obesity, diabetes with our highly cited range of antibodies. The focus is clearly to help researchers do better, quicker, more productive research in emerging areas where we are better equipped. What will aid faster development of drugs to the market? Where does the technical expertise of Indian manufacturers lag and how can the gaps be filled? Adopting science based, risk assessment and quality by design approaches in R&D and scale ups at early stages in the drug development and manufacture process. Stronger partnerships between manufacturers and companies such as Millipore, as the cumulative experience of both will deliver results faster. What are the future trends that you foresee in the life sciences industry? Manufacturers seeking more flexibility in bioprocessing solutions in the labs and on the production floor The adoption of more modern and efficient methods of vaccine production Therapies based on monoclonal antibodies with its advantage of high specificity Rapid microbiology to cut down delays caused in releasing products to market at the QC stage

Single use solutions such as Millipore's Mobious for flexibility, sterility reassurance and speed to market Stem cell research and its application to treat diseases

You also mentioned about nanotechnology to bring in growth, can you please elaborate? Nanotechnology has tremendous possibilities in drug discovery and in drug delivery systems. It is no longer a futuristic technology at the conceptual stage. To confront the healthcare challenges facing the world it is already showing great benefits particularly in technologies such as nano-filtration, the use of microspheres and other new drug delivery systems that are more effective in the treatment of diseases. Tapping emerging markets is the new strategy for many companies, what would be Millipore's strategy? We will empower our customers in India with the regulatory knowledge that we have acquired by being present in these emerging economies in Latin America, Russia, China, and Singapore. The Centre of Excellence built up by Millipore in Singapore is a sure example of our commitment to the biotech industry. Indian manufacturers looking at emerging markets to drive growth and revenues can depend on our experience in those environments. That these markets are huge potential wise and that they are growing fast is beyond dispute. What are your future plans? There are lot's of them. We will share them with you and our customers at the appropriate time.

Latest News from Millipore: Millipore remaining ownership of JV in India

acquires

Millipore Corporation, a leading provider of technologies, tools and services for the global life science industry, has acquired the remaining 60 percent ownership of its joint venture in India: Millipore India. The new subsidiary will enable Millipore to invest in initiatives that will drive growth and expand its leadership in India's thriving life science market. The purchase price of the transaction was not disclosed. "India has experienced unprecedented levels of investment and expansion in the country's biotechnology, pharmaceutical and life science research industries," said Dr Martin Madaus, Millipore's Chairman, President and CEO. "By establishing direct operations in the country, we will be able to more effectively execute our strategy and leverage our unique capabilities to accelerate growth and support our growing customer base in this dynamic market. We are very pleased to welcome our colleagues in India to the larger Millipore organisation." Based in Bangalore, Millipore India was first established as a joint venture in 1988. The organisation has since grown to include manufacturing, sales and marketing as well as an Access Services Lab providing unparalleled technical and field support to pharmaceutical and biotechnology customers throughout India. Millipore India currently employs approximately 300 people and has additional offices in Ahmedabad, Hyderabad, Kolkata, Mumbai, and Delhi. "Millipore's strategic initiative is expected to further enhance our role as a major partner to pharmaceutical and biotechnology drug manufacturers, researchers, scientists and academia in India," said Sudhir Kant, President of Millipore India. "The industry experience and technical expertise of the entire Millipore organisation will drive the growth of our customers through more collaborative efforts and successful partnerships-particularly in areas such as drug discovery and development, the production of difficult-to-make biologics and vaccines, and in the cutting-edge fields of life science research." India represents a critical part of Millipore's strategy to increase its growth by expanding its presence in key emerging markets, including Brazil, Russia, India, China and Singapore (BRICS countries). Today, more than 80 plants in India are approved by the US Food and Drug Administration to manufacture drugs for export to the US, and the country accounts for almost 25 percent of the global generic drug market. Additionally, the Indian government has invested $1.7 billion to grow the country's life science and biotechnology industries, and several Indian companies have emerged as global competitors in the biopharmaceutical industry. arshiya.khan@expressindia.com

Cover Story (http://expresspharmaonline.com/20091215/expressbiotech14.shtml)

Peptides to fuel drug discovery

As experts feel the next wave of new drugs would come from peptides, due to the potential this segment holds, companies are gearing to tap the same with different business models. By Arshiya Khan The Indian therapeutic peptides market is estimated to be around Rs 200 crore ($50-60 million), constituting one percent of the global peptide market, which is estimated at around $67 billion, according to an Ernst & Young survey. According to various estimates, the same is expected to reach $12 -13 billion by 2010. However, the market in India is at a nascent stage with very few players catering to this segment. Though there lies a huge potential in the peptides market, entry barriers to tap the same is a major hurdle, experts feel.

But of late, pharma companies are developing interest due to various reasons. Dr R B Smarta, Managing Director, Interlink Marketing Consultancy, says, "All over the world, new product pipeline is drying while peptides show a key growth area in the drug discovery sector." He elaborates that at present, inspite of offering therapeutic benefits, medicines also come with a lot of side-effects. Peptides have excellent potential as therapeutic agents and they have many advantages, including low side-effects, target specificity, low toxicity and immunogenicity. They are at a low dosage, with most of them being of parenteral nature. Smarta points out that several technical challenges in the use of peptides as drugs have been overcome in recent years, and therefore, it finds itself as a key focus for several biotech as well as pharma companies. A case in point is Neuland laboratories, which is currently ramping up its activities and expect revenues from peptides to contribute significantly to its topline and bottomline in the next 18 months. As Sucheth Rao, CEO, Neuland Laboratories, informs, "Our venture into peptides is a key milestone in Neuland's growth. As part of the overall business plan, Neuland in the past two years invested around Rs 150 crore in upgrading the manufacturing facilities and setting up cGMP compliant 40,000 sq feet R&D centre with USFDA approval. These investments include the costs for setting up our peptide operations." Rao explains the strategic reason for the focus, "The future of drug discovery and development largely circles around peptides. With very few companies in this segment and increasing demand for peptides, the potential for growth in this segment is huge." What also build up interest for companies, according to Ajit Mahadevan, Partner, Health Sciences Advisory Services, Ernst & Young is that peptides activity enhancing technologies such as glycosylation, amino acid sequence modification, pegylation and cyclisation have enhanced the interest in peptides as drugs. This is coupled with the recent advances in drug delivery through parenteral, mucosal, oral and transdermal routes which have boosted prospects of peptides as potential drug candidates, he adds, referring to the Journal Research J Pharm and Tech. Reason for pharma focus
"The future of drug discovery and development largely circles around peptides. With very few companies in this segment and increasing demand for peptides, the potential for growth in this segment is huge" Sucheth CEO, Neuland Laboratories Rao, "Indian pharma cos are mainly generic players with low focus on development of new molecules, especially in the biologicals space. Given this state, high technology barriers limit the entrance of new players in the peptide space" Ajit Mahadevan, Partner, Health Sciences Advisory Services, Ernst & Young

Of late, besides biotech players, even pharma companies are increasingly targeting the peptides market. According to Mahadevan, with pharma increasingly focusing on biologics and moving peptide drugs through their pipelines into late-stage development, the peptide market will witness a steady growth. He adds, "Also, with the research community focusing significant resources on vaccines and biomarker discovery, the demand for higher quality proteins and peptides, large peptide libraries for screening applications, and modified GMP peptides can drive a healthy annual growth."

It is estimated that peptide drugs worth $3 billion (at innovator's price) will go off patent in the next four years. With increasing number of therapeutic peptides expected to enter Phase II and III trials and gain approval and are marketed, the overall peptide market is expected to grow at a rate of 10 percent with growth rates increasing toward the end of this decade and beyond, says Mahadevan. Also, according to Tufts Center for the Study of Drug Development (in Boston, Massachusetts), the average annual number of therapeutic peptides used in clinical trials has increased from 9.7 during the 1990s to 16.9 between 2000 and 2007, which indicates that therapeutic peptides have emerged as a therapeutically and commercially important class of drugs, and 48 are now on the market worldwide, with four having generated global sales of more than $500 million each in 2007.

Business models Based on the core competency of a particular company, there exists broadly four-five different categories of peptide manufacturing with each segment providing huge growth potential, says Rao. He lists the categories asgeneric peptides API's, novel peptides (innovative peptides), custom synthesis of peptides for drug discovery and development, complex building blocks for peptides, building blocks of peptides as the manufacturer of peptides.
"The apparent business models could be very similar to that of the API business models, viz selling customised peptides and outsourcing peptide" Dr R B Smarta, Managing Director, Interlink Marketing Consultancy

Smarta says that based on these categories, the apparent business models could be very similar to that of the API business models, viz selling customised peptides and outsourcing peptide. But Rao feels that more apparent business model that will come to exist will be through outsourcing of contract manufacturing and research services.

Rao continues, "We want to become an end-to-end service provider for our customers by becoming preferred destination for providing contract research and contract manufacturing services to other pharma companies in peptides. Our foray into peptides is a reflection of our focused plans of being profitable and giving more value to our investors, besides growing our client base." Rao explains the strategy, "Our strategy for peptides will be in line with our overall strategy of being an end-to-end service provider for the pharma industry. Starting with providing important peptide building blocks pseudoprolines and isoacyl dipeptides, we will develop capabilities and scale to supply any pharmaceutical company with commercial scale peptides (as per cGMP) and also provide process R&D services for new peptide drug candidates." Entry barriers Peptides have always been considered to be good drug candidates for various therapeutic areas. The complexities involved in the synthesis of peptides, coupled with their high cost of development, were the prohibiting factors for the development of peptides as mainstream drugs. Highlighting the roadblocks, Mahadevan informs that in order to set up a biopharmaceutical firm producing recombinant DNA therapeutics, a company should have R&D capability in molecular biology, genetic engineering, biochemistry and process engineering, technical know-how in fermentation and protein purification process, and in drug formulations. Besides it should also have marketing and legal capabilities. However he points out, "Indian pharma companies are mainly generic players with low focus on development of new molecules, especially in the biologicals space. Given this state of the Indian pharmaceutical players, high technology barriers limit the entrance of new players in the peptide space." Rao agrees that the development and manufacture of peptides is extremely scientific driven. Moreover, manufacturing controls as per CGMP requirements are also quite complex, which also requires specialised analytical equipment and a strong cGMP track record, which restricts pharmacos tapping this market. However, Rao feels that these obstacles can be overcome by time as more focus will be put into this segment by the industry. Government increase in peptide-based research will also lower the barriers of entry, as it will address the inadequacy of trained professionals in this segment." People in business
Among the few companies involved in peptide R&D, the Jupiter Group and its subsidiary Sven Genetech, has invested substantially over the past two and a half decades on peptide research and technology development, particularly in the area of peptides as drug intermediates and APIs. Ranbaxy Laboratories has been a significant investor in the company. Jupiter has an alliance with Clariant Group, a global leader in the field for specialty chemicals, for development of peptides. Jupiter

Bioscience is one of the few companies in the world to have competency in synthesis of peptides starting from the basic stage to finished peptides. Biocon tied up with Amylin Pharmaceuticals to jointly develop, make and market a novel peptide drug to treat diabetes. Biocon will conduct research, trials and manufacture of the potential drug based on Amylin's 'phybrid' or peptide hybrid technologythe Amylin technology can combine two hormones into one potential drug. Amylin holds the market rights in North America, Biocon in South Asia, most of East Asia and the Gulf region and in other markets, they will commercialise jointly. The two are discussing early-stage manufacturing feasibility programs and other opportunities to work together. Neuland announced the successful commencement of manufacturing of peptides blocks by successfully commercialising the production of Fmoc Pseudoproline Dipeptides and other building blocks in India and the US subsidiary. In the initial phase, the company will target the US and Europe markets. Developing markets will follow in the next phase. Neuland's quality of products with attractive pricing is expected to penetrate into this peptide synthesis market. Source: Company websites

Growth ahead The fact that peptides is a niche area, with very few companies catering to this segment along with the increasing demand for peptides highlights the huge growth potential in this segment. However, companies will have to address the issues involved in synthesis of complex peptides and the huge capital expenditure. "We expect the demand for outsourcing contract research and manufacturing for peptides to increase and thus provide a huge market to expand into," feels Rao. However, with the predicted growth in the peptides market, it remains to be seen whether such a growth through the development of a strong generic sector can be replicated in the biopharmaceutical sector in India in the present product patent regime, says Mahadevan, referring to the report Biopharmaceutical Patents: Emerging Issues for Biogeneric Industry in India, prepared for the third International Conference Organised by the European Policy for Intellectual Property, in 2008. Rao remarks, "Today, more peptides are coming from companies into drug discovery pipelines than in the past. There exists a niche opportunity for peptides in the market today and the demands for contract manufacturing and research services is increasing. The potential for growth in this segment is huge, thus you will see more and more companies entering this segment."
arshiya.khan@expressindia.com

Spotlight (http://expresspharmaonline.com/20100228/expressbiotech10.shtml)

Bharat Biotech A glocal vision

Vaccines manufactured at Bharat Biotech are protecting millions in the world from dreaded diseases today. Sachin Jagdale reveals more about the company Indian biotech industry has some big stars like Bharat Biotech. The history, present and future of Indian biotech industry, will not be completed without mentioning Bharat Biotech. This company in a true sense is the mirror of Indian biotech industry. The journey that started more than a decade before has covered not only Indian markets but also many global countries. The global image of Bharat Biotech is an outcome of the vision and efforts of Dr Krishna M Ella, Chairman and Managing Director of the company.

The company started in 1996 with the vision to provide a disease-free future by offering safe, affordable and effective healthcare solutions to combat mankind's most dreaded illnesses and to thus eradicate/control their occurrence in the years to come. The primary focus of the company was on innovation to address the needs of developing world populations with novel health care solutions. Bharat Biotech's name is synonymous with vaccines. The quality and innovation at Bharat Biotech has been appreciated all over the world. Ella informs, "Bharat Biotech's vaccine manufacturing methods are best suited to meet growing demand for novel, cost effective vaccines. For instance, INDIRAB, our third generation rabies vero cell based vaccine produced using a chromatographically purified manufacturing process, offers not just lower costs but also, a highly purified vaccine with minimal side effects. INDIRAB is technologically at par with its international competition, and even a better than certain international anti-rabies vaccines." The company's facility in Genome Valley, Andhra Pradesh adheres to strict International Manufacturing, Control Procedures and Protocols, conforming to stringent standards laid down by internationally recognized institutions such as USFDA, UKMCA and WHO. Bharat Biotech is also the first bio-pharma company in India to be audited and approved by Korean Food & Drugs Administration (KFDA) for the manufacture of an injectable. Growing strong In a short span of just more than a decade Bharat Biotech has come to a point which others could just dream of. "We are now a Rs. 250 crores turnover company. Bharat Biotech wants to be a major player in the domestic market. That is also our strategy for growth. We are doing very well in the Latin American market and Africa. Our customers are public health organizations, government - Dr Krishna M Ella ministries of health in the domestic market. We have significant Chairman and Managing Director market share in the domestic market," says Ella. He adds, "The Bharat Biotech company has some unique achievements in its kitty. It is the largest producer of hepatitis-B vaccines in the world and has the capacity to manufacture 100 million doses per year. Till now the company has sold over 270 million doses and enjoys market share of around 40 percent in India."
"The major challenge that we have been facing is from China, which is without much regulation, without quality"

Deadly dragon Ella's experience, intelligence and ability to guide Indian biotech industry have been used by many government bodies. Ella is a member of many government organizations that have specifically been formed for the growth of Indian biotech industry. The efforts to nurture biotech industry have a long history. However, this history hasn't yet paid rich dividend. It is evident in the fact that Indian biotech industry has a global share of just close to two percent. Ella could be the best person to give the reasons for this fact. He says, "The major challenge that we have been facing is from China, which is without much regulation, without quality. But they are competing with us. The major problem is the Chinese companies coming to India without regulation. Indian vaccine manufacturers including Serum Institute of India will never be able to sell a single dose of vaccine in China. So there is a barrier by the Chinese regulatory authority for the vaccines coming from India, but our regulatory authority open the floodgates. Anything can come from China without any regulation. So we the Indian vaccine manufacturers see a major threat coming to us from China. They are very upgraded and very aggressive. It's a concern for all of us." He adds, "While Indian companies are spending significant amount of time and financial resources in developing new products, Chinese companies are able to sell relatively untested vaccines in India, without much oversight, this is of great concern to us." Intelligent advice Ella is an advisor on biotechnology to many state governments. During his discussions with state authorities Ella insisted on teaching our young generation the values of innovation and entrepreneurship, which he strongly believes, will be the drivers of growth for our economy. Ella

advices the government to establish incubators for entrepreneurs to develop their thoughts and business plans. Valuable vaccines Bharat Biotech is unique in many ways. They believe in innovation rather than imitation. The company is working to manufacture the vaccines which will be effective, of global standards and more importantly affordable to common people. Business is not the only goal at Bharat Biotech. Ella informs, "As a company we are most keen on innovation. We don't want to be a biosimilar or biogeneric drug manufacturer. Our focus is on new molecules, new ideas and innovation for the developing world. In the last one year our significant contribution has been the Rotavirus vaccine. It has ungerdone the phase II clinical trial. It is being developed by a consortium led by Bharat Biotech that includes, DBT, AIIMS, NII, CDC, SAS, NIH, Stanford University, PATH, etc" Ella is of the opinion that India has never developed a new vaccine. It is only a biogeneric country. Bharat Biotech's uniqueness lies in the fact that they are the first to bring this kind of concept of bringing innovation and developing a vaccine of our own with multilateral partnerships. Ella sheds light on a few more crucial points. He says, "This partnership is with Indian Institute of Science (IISc), Bangalore, All India Institute of Medical Sciences (AIIMS), Stanford University, Department of Biotechnology (DBT). All helped us in making this programme a grand success. The second important thing is the therapeutic molecule, BBIL5 against MRSA Staphylococcus aureus the multi drug resistant strain. Thanks to the New Millennium Indian Technology Leadership Initiative (NIMITLI), they funded this project. We completed again from the IND application, so this is going to be the second Investigational New Drug Application (IND) from India. The first IND is rotavirus. Many companies have not filed an IND in this country so we are the first company in India to file IND Rota, IND BBIL5, this is funded by NIMITLI as a part of the New Millenium Technology Initiative by CSIR. The product has completed phase one and now entering phase 2. The third one we produced is in partnership with International Centre for Genetic Engineering and Biotechnology (ICGEB), the malaria vaccine. This is presently at a development stage." According to Ella, what is important for them now is this year they will be supplying the entire national immunization for Hepatitis B and they will also be supplying the National Polio Immunization programme. They are also the second company in the world to produce thimerosol free vaccine after GSK. But now they are better than GSK. GSK uses Cesium Chloride, Bharat Biotech does not use that. GSK use CsCl during the down stream processing but does not use thimerosol in the vaccine but Bharat Biotech do not use CsCl in the process and do not use thimerosol in the vaccine either. So Bharat Biotech's product is double chemical free. Bharat Biotech has manufactured million doses of HIB titre vaccines without any preservative and has exported that to the Korean market. Bharat Biotech has a few more feathers in their cap. Ella informs, "Bharat Biotech is the first company to manufacture preservative free vaccine for a multinational like Wyeth and that led to us a confidence level that we can also produce our own preservative free vaccine. We are also making thimerosol free vaccines in typhoid and rabies. So we want that the consumers get safe product." Bharat Biotech always comes forward when it sees people in need. The recent swine flu epidemic made the company pull up their socks and work to find out a vaccine for this new health hazard. At this front also they have made a successful journey. Bharat Biotech's vaccine will soon undergo Phase I clinical trials and company hopes to achieve the roll out the product once all regulatory approvals are received by the regulator and the MoH. The development of the vaccine is progressing as per company's plans. Predictions

The coming years are predicted to provide many opportunities of growth to pharma and biotech sectors. Will this period help Indian biotech sector to add to its global share? The future direction of Indian biotech sector will largely be decided by biotech veterans like Bharat Biotech. Ella opines, "Yes, Indian biotech companies will definitely increase their share of the global market for biologics and biotechnology products. As Indian companies develop and manufacture more novel and high value products, the share of Indian companies is bound to increase. Companies like Bharat Biotech are developing novel vaccines against rotavirus, Typhoid fever, etc which promise to generate more revenues. Several Indian companies have also developed biogeneric products for off patent drugs, which will be commercialized shortly." Future plans Bharat Biotech has ambitious future plans with primary focus on generating additional revenues from existing products, and executing pipeline projects. Ella informs, "We have a lot of products in the pipeline. Some of the important ones are the dengue vaccine, chickungunya vaccine and Staphylococcus aureas vaccine. We also have the typhoid conjugate programme. We are also moving to specialized vaccines. For e.g Rabies, Japanese Encephalitis vaccine was also a diversition from our main stream vaccines. chickungunya, Staph Aureas vaccine are all specialized ones, away from the route of government immunization scheme. Additionally, we have an aggressive approach towards patenting some of the technologies for example some of the chickungunya vaccines." To compete better in the market Bharat Biotech has devised well thought strategies. Ella explains, "For instance if you look at Hepatitis B, we have a depreciated plant and our high max technology on which we have two global patents that brings in a lot of economic value. This initiative has made us a very strong player in Hepatitis b Vaccine; we even sell hepatitis B vaccine to Wockhardt. We also work with partners. The key is now that each is going for value addition differently. Now if I produce hepatitis B alone it is of no use. So we will have to go for penta, then for hexa. So, if I sell a monovalent vaccine then I will be totally out of the market place."
sachin.jagdale@expressindia.com

News Capsule National (http://expresspharmaonline.com/20100228/expressbiotech04.shtml)

Bharat Biotech begins Phase I Trials of HN-VAC

Our News Bureau - Hyderabad

Bharat Biotech recently announced that it has commenced Phase I clinical evaluation of HNVAC, its cell culture based H1N1 vaccine candidate. Bharat Biotech received the nod from Drugs Controller General of India (DCGI) to conduct the Phase I clinical trials. This vaccine under development will boost immunity against the new H1N1 influenza strains, and help protect public health as the pandemic evolves. Bharat Biotech is the first company in India to develop, a cell culture based vaccine candidate for influenza, which can serve as a platform technology for both pandemic and seasonal flu vaccines. "We welcome the decision by DCGI/Ministry of Health (MOH) and we are very excited at the prospect of commencing Phase I testing of HN-VAC in the clinic. I am extremely pleased with the efforts put in by our R&D and Technical Operations teams, as each step of vaccine development has progressed well according to our plans. For the company, this is yet another important milestone in our endeavor to develop vaccines and provide human healthcare solutions. I would also like to thank the DCGI, MOH, and Indian Council of Medical Research, for their proactive and accelerated approval process for this pandemic flu vaccine, said Dr. Krishna Ella, Chairman and Managing Director of Bharat Biotech International.

"In Preclinical evaluation the vaccine candidate triggered a beneficial immune response. The phase I clinical trial has started in Bangalore with more than 150 subjects under evaluation for safety and immunogenicity and is slated for completion within six weeks," Ella commented. Vaccines are one of the most effective ways to protect people from contracting illness during influenza epidemics and pandemics. H1N1 pandemic influenza is caused by a new virus and virtually everyone is susceptible. Bharat Biotech has an outlay of INR 70 crores towards product development, manufacturing facilities and R&D facilities for this cell culture based H1N1 vaccine. Bharat Biotech has received the H1N1 vaccine strains from WHO/CDC centers. Pandemic H1N1 influenza was reported in more than 208 countries and with more than 12,500 deaths. India has reported approximately 26,000 cases with more than 1000 deaths. Cell culture based flu vaccines represent a new generation vaccine technology that removes the need for traditional egg based vaccines. Egg based vaccines are limited by the availability of high quality eggs in millions to manufacture the vaccine and require a cumbersome manufacturing process. Cell culture based vaccines would enable Bharat Biotech to respond quickly to pandemics and rapidly increase the manufacturing capacity as required.