An Overview of Indian Pharmaceutical Industry

and Pre Clinical Research Services Destination

ASHISH JAIN
CDM

TCS

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Agenda

1. Global R&D market size and portfolio

2. Challenges of pharma R&D
3. Trend for outsourcing
4. Indian capability to be the R&D services hub

2
 Indian Pharma Industry - A Historical Perspective
International 
Orientation

2005+ Key capabilities

2001- 2005
Import 
Dependence 1991-2000
– Innovative Process 
1971-90
– Industry research development 
1950-70
becomes a seed competencies
– Process patents
introduced net exporter investments
– Highly
– Indian companies – Recognition – Developme Economies of 
profitable as world- nt partner
start making an scale, low 
market for R&D
impact class API cost high 
– Dominated center services quality 
– Focus on
by MNCs – Move into – Internationa manufacturing
backward
– Relative integration DF exports lization
absence of – Proliferation– New Patent
– Economies of International 
domestic of domestic Regime
scale exposure
players players
– Commodity
exports to – Intense
erstwhile USSR fragmentation
3
 Trends in Global Biopharma
R&D
Drug Development Process

Research & Development & Commercial &

Discovery Clinical Trials Manufacturing

• ~$25B Global Pharma • ~$45B Spend on Dev’t & • 35 New Drugs Approved
Spend … +11% CAGR Clinical Trials … +12% CAGR Annually

• 450+ Investigational New • 2,800 Total Clinical Trials … • Protein Manufacturing

Drug Filings Annually 350+ Protein-Based Trials Capacity Growing 50%/yr

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 Indian* Attractiveness in the Drug
Development Process

Vision: A Market-Focused Global Pharmaceutical

Services Co.

* *

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Portfolio of Services & Development Partnering

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7
 BioPharma Business Challenge
It’s Getting Even More Difficult
 
• 100 Screens Produce 12 Candidates
• 12 years from idea to market
• 1 in 15/20/25 survival rate during development
• 8 years of market exclusivity
• Only 1 of 4 products shows a significant profit average cost to
develop a drug = $802 MM
• Escalating investments & Wall Street Expectations for growth

• Increasing regulatory reqmts. & Speed of FDA approval process

Drug withdrawals in PMS as Vioxx, Merck in 2004
• Expectations for sustained leadership and global presence
requires 2-3
NCE/year with 15% growth

“Merck’s 25bn heart attack” from Fortune Cover Nov’04” 8

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 Where do new drugs come from?
Most new drugs launched in 2000 came from other known drugs
(me-too), literature leads, and natural products. J.R. Proudfoot, Bioorg.
Med.Chem. Lett. 12, 1647-1650, 2002.
More Rx/Dx combinations…personalizing medicine
Asia will become more active both in start-ups and integration with
world’s biotech community
Cloning/stem cells/GMOs, pressure will ease
Pressure on pricing/Medicare will turn more favourable

Source: Steve Burrill

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Ho w do we improve resea rch prod ucti vity
to buil d a sustain ab le g lob al service s
busin ess?
 Improve the Service
 Improve the Economics
 Change the Paradigm
 The short & medium term opportunity
 The long term opportunity

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 Improve the Service
 Quality of innovation

 Speed of innovation and pace of delivery

 Integration to make the drug discovery

research & development process seamless

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GSK R&D Strategy
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GSK Geographic coverage & spread 14
GSK focus within its own discovery units
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 Improve the Economics
 Outsourcing
 Partnering
 Inlicensing
 Redesigning internal R&D through
electronic data capture

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 GSK Therapeutic focus for productivity

“The no. of molecules in Phase-II clearly defines potential health of an

organisation”
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Trends/Basic Research Outsourcing

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Projected Global Pharmaceutical Outsourcing Market

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 The Importance of Outsourcing

US$50B will be spent on US$16.3B of this

research and research and
development by the development will be
biopharmaceutical undertaken by CROs in
industry in 2005 clinical research

30%
42% Pre clinical
toxicology & analytical
58% clinical research

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 The Growth of Outsourcing

US$B

16.3
US$16.3B of
65% research and
increase development
in 5 years will be
conducted by
9.8 CROs in 2005
US$9.8B of
clinical
research and
development
was conducted
by CROs in
2001

1976 2001 2005

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Overseas Clinical Trials
Percentage of NDA Submissions Using Foreign Data
1995 --- 9%
1999 --- 27%
Numbers of Foreign Human Subjects Participating in
NDA Clinical Trials
1995 --- 4,000
1999 --- 400,000

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 The CRO Market

There are 1500 CROs to

choose from

70% of the CRO market is

shared by the top 20 CROs
eg: Quintiles, Covance,
Parexel, MDS Pharma
Services, ICON, PPD etc

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Change the Paradigm

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 Technology
Science/technology continuing advance ( perhaps even faster than
expected)…
• RNAi
• Whole genome scanning
• Stem Cells
• Drug delivery
… along with increased complexity and integration
• Gene -> Cell -> System -> Drug
• Genomics -> Proteomics -> Metabolomics ->
Toxicogenomics
->………
Source: Burrill & Company

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Increased integration of technologies

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 Why New Dx over Traditional Dx?

• Sensitivity
• Specificity
• Compliance
New Trends in Dx
• Accelerated growth and expanding margins
• Convergence of Diagnostics with Therapeutics
(personalized medicine)
• Value-based pricing
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GSK Strategy

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Maximizing GSK near term opportunities

Seizing opportunities for better

medicines
New products
New formulations
New indications

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Daiichi

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Example of Daiichi

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Daiichi

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Daiichi

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Daiichi

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Indian capability to be the R&D services hub

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Emerging competition from China

Eastern Europe,
Russia, South
Africa, Israel &
Latin America
Countries

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The Indian Advantage:
Cost-Effectiveness and Quality, the Research Experience
The R&D Scenario
• Quality
– Success rate for FDA approvals of ANDA
– Timelines for FDA approval significantly below the
industry average for the past 5 years
– Successful outlicensing
– Manufacturing facilities approved by most
regulatory agencies, including FDA
• Speed
– Ability to complete first time in human studies
within 4 months
• Cost
– IND, ANDA and NDAs

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 Portfolio of Contract Research Services
in India
st revenue Rs:400crores for drug development services in 20

•1 Chemistry & custom synthesis (70%)

• Leading CROs Syngene, Divis Lab, Chembiotek, Sanmar,GVK Bio, Avra
Lab,Hikal, Jubilant, Innovasynth, Shasun, Suven, Nicholas Piramal,
Alembic etc.
• Albany Molecular the leading chemistry solution provider setting up in
Hyderabad

1.2 Molecular biology services (30%)

Molecular biology-Protein expression, purification,characterization & assay
development)
• Leading CROs are Syngene, Nicholas Piramal, Avesthagen, Aurigene,
Chembiotek etc.

Migration of global CROs for chemistry to India as a hub

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2. Discovery services (limited)
Syngene, Aurigene, Nicholas Piramal, Torrent Pharma

Research Services still evolving for

 Discovery culture for novel technology platform informatics lead
optimisation through High Through Put screening (HTS) or virtual
screening (VS) lacking for automation & resources
 Medicinal chemistry expertise
 Biological formulation development technologies
 ADME & Pre clinical toxicity studies
 Clinical studies Phase-I for global trials

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