1 1
Drug Discovery & Development
for the World Market from India: How Real
GV Prasad
Vice Chairman & CEO,
Dr. Reddy’s Labo...
2
Indian Pharma Industry: Poised for
Transformation
3
348
472
669
802
2002-03 2003-04 2004-05 2005-06
CAPEX(US$Mn)
Source: Capex of Top 15 companies; Annual reports, Analyst ...
4
Indian Pharma Industry Backdrop
Home Market also Poised for Transformation!!
 Growth in disposable incomes &
the number...
5
Innovation: Opportunity for India
6
Innovation Capacity  Unmet Needs
7
Innovation Capacity  Unmet Needs
Why Is It Important?
4%
Though the R&D spend is increasing, success is decreasing
1980...
8
1980 1985 1990 1995 2000 ‘02 ‘03
Innovation Capacity  Unmet Needs
Why Is It Important?
$138
$318
$802
$1,200
1975 1987 ...
9
1980 1985 1990 1995 2000 ‘02 ‘03
Innovation Capacity  Unmet Needs
Why Is It Important?
$138
$318
$802
$1,200
1975 1987 ...
10
Innovation Capacity  Unmet Needs
India’s Cost Structure… Key Advantage
Lower Filing
Cost
Process
Innovation
Manpower C...
11
 Improving R&D productivity, a high priority for innovator pharma
companies
 Exploring opportunities for expanding pi...
12
Innovation in India: Current Status
13
Current status of Discovery & Development in India
 Dr. Reddy’s
 Glenmark
 Ranbaxy
 Cadila
 Torrent
 Sun Pharma
...
14
Headlines Today
 More than three-quarters of the Top 50 pharma companies
conduct clinical development in India(1)
 Ou...
15
NCE Pipeline of Indian Companies
What would be the timeframe when innovative product from India will hit the market
Com...
16
NCE Programs focused on Metabolic Disorders
Company Therapeutic Focus
Dr. Reddy’s Metabolic Disorders, Cardiovascular
G...
17
Building a sustainable Innovation-led
business : Key Challenges
18
Key Challenges
Target Selection :
• Precedent targets vs Unprecedented targets
• Translatability of in vivo disease mod...
19
Key Challenges
• Challenges operating out of India
• Not yet part of the innovation eco system of venture capital, acad...
20
Closing Thoughts…
“We try never to forget that medicine is for the people. It is not for the profits. The profits follo...
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Drug Discovery

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Drug Discovery

  1. 1. 1 1 Drug Discovery & Development for the World Market from India: How Real GV Prasad Vice Chairman & CEO, Dr. Reddy’s Laboratories 1 NOV 2007
  2. 2. 2 Indian Pharma Industry: Poised for Transformation
  3. 3. 3 348 472 669 802 2002-03 2003-04 2004-05 2005-06 CAPEX(US$Mn) Source: Capex of Top 15 companies; Annual reports, Analyst reports 177 144 90 80 41 65 2000 2001 2002 2003 2004 2005 80% 68% 57% 49% 20% 32% 43% 51% 2001 2003 2005 2006* CAPEX BY INDIAN COMPANIES SHARE OF THE GLOBAL GENERICS PIE ANDA FILINGS FROM INDIA DMF FILINGS FROM INDIA Source: Annual reports, Analyst reports Source: USFDA website 2.9 2.42.0 6.0% 5.5% 5.1% 2003-04 2004-05 2005-06 Source: International revenues of 13 Indian companies; Annual reports, Analyst/Industry reports Indian Pharma Industry Backdrop Indian Pharma to dominate Global generic industry
  4. 4. 4 Indian Pharma Industry Backdrop Home Market also Poised for Transformation!!  Growth in disposable incomes & the number of middle-class households  Expansion of medical infrastructure  Greater penetration of health insurance  Rising prevalence of chronic diseases  Adoption of product patents  Aggressive market penetration  Debut of organized retail chains 3.4 3.9 6.1 20 4.6 2000 2002 2004 2006 2015 RETAIL PHARMACEUTICAL MARKET IN INDIA US $ billion Source: India Pharma 2015, McKinsey & Co
  5. 5. 5 Innovation: Opportunity for India
  6. 6. 6 Innovation Capacity  Unmet Needs
  7. 7. 7 Innovation Capacity  Unmet Needs Why Is It Important? 4% Though the R&D spend is increasing, success is decreasing 1980 1985 1990 1995 2000 ‘02 ‘03
  8. 8. 8 1980 1985 1990 1995 2000 ‘02 ‘03 Innovation Capacity  Unmet Needs Why Is It Important? $138 $318 $802 $1,200 1975 1987 2001 2006 Source: PhRMA Pharmaceutical Industry Profiles 2007 Average Cost to Develop One Drug (US$Mn) ... As Does Average Cost Per Drug ... 4% Though the R&D spend is increasing, success is decreasing
  9. 9. 9 1980 1985 1990 1995 2000 ‘02 ‘03 Innovation Capacity  Unmet Needs Why Is It Important? $138 $318 $802 $1,200 1975 1987 2001 2006 Source: PhRMA Pharmaceutical Industry Profiles 2007 Average Cost to Develop One Drug (US$Mn) ... As Does Average Cost Per Drug ... 4% Though the R&D spend is increasing, success is decreasing ... With Only 3 of 10 Drugs Recovering Investment...
  10. 10. 10 Innovation Capacity  Unmet Needs India’s Cost Structure… Key Advantage Lower Filing Cost Process Innovation Manpower Cost Advantage Capital efficiency  Western companies able to obtain a step down of 30-40% in cost by a mere site transfer to India  Companies in India able to reduce the upfront capital cost of setting up a project by 25-50%  Outsourced services to India significantly reduces the cost and time of clinical trials  India’s huge resource of skilled scientists, available at a fraction of the cost in developed countries  Scientists of Indian origin retuning provide a strong talent pool Cost Leadership (in High Risk Game) Source: IBEF, E&Y Analysis
  11. 11. 11  Improving R&D productivity, a high priority for innovator pharma companies  Exploring opportunities for expanding pipeline while addressing costs as well  Testing the waters: Outsourcing of non-core activities on an experimental basis  Expanding partnerships: Drug discovery experimental programs in various countries  Indian companies are setting up internal drug discovery programs as well as exploring partnerships with large & medium innovator companies Global Pharma’s Challenge…Creating Opportunities for Indian Pharmacos
  12. 12. 12 Innovation in India: Current Status
  13. 13. 13 Current status of Discovery & Development in India  Dr. Reddy’s  Glenmark  Ranbaxy  Cadila  Torrent  Sun Pharma  Biocon  Wockhardt  Nicholas Piramal Internal Programs  Aurigene, Advinus, GVK Lifesciences  Dr. Reddy’s, Discman, Nicholas, Jubilant, Shasun, Divis, Suven  GVK Bio, Vimta, Lambda, Lotus, Accutest  Siro Clinpharm, iGate Clinical Research, Asian Clinical  Quintiles, ClinTec Services Model Drug Discovery  AstraZeneca  Altana Clinical trials & data management  Pfizer  Eli Lilly  Novartis  GSK MNC Outposts  GSK – Ranbaxy  Eli Lilly – Jubilant, Suven  Zydus – BI, Onconova,  Dr. Reddy’s – Rheoscience, Argenta, ClinTec  Aurigene – Merck/ Serono, Forest Labs, Rheoscience  Merck & Co. – Advinus Therapeutics  AstraZeneca – Torrent  Wyeth – GVK  Nicholas – Morvus, Connexios, Biosynth  Syngene - Innate Partnerships Source: Company news, industry reports
  14. 14. 14 Headlines Today  More than three-quarters of the Top 50 pharma companies conduct clinical development in India(1)  Outsourced manufacturing activity in India at $100 million(2)  Outsourced clinical trial activity in India at $75 million in 2005(3)  40 – 50 NCEs under development by Indian pharma companies (1,2) Motilal Oswal Report (3) Frost & Sullivan When will the first indigenously developed drug be launched from India?
  15. 15. 15 NCE Pipeline of Indian Companies What would be the timeframe when innovative product from India will hit the market Company Pre-Clinical Phase I Phase II Phase III TOTAL Dr. Reddy’s 2 1 2 1 6 Glenmark 4 - 2 - 6 Ranbaxy 8 1 1 - 10 Cadila n/a 3 1 - 4 Torrent 5 1 - - 6 Wockhardt 4 1 1 - 6 Sun Pharma 3 1 - - 4 Nicholas Piramal 2 - 3 - 5 Biocon 3 - 2 - 5 Total 31 8 12 1 52 Source: Analyst reports, company presentations At least 3-4 years away from launch
  16. 16. 16 NCE Programs focused on Metabolic Disorders Company Therapeutic Focus Dr. Reddy’s Metabolic Disorders, Cardiovascular Glenmark Metabolic Disorders, Respiratory, Pain Management Ranbaxy Metabolic Disorders, Inflammation/Respiratory, Anti-Infectives, Urology Cadila Metabolic Disorders, Inflammation Torrent Metabolic Disorders, Cardiovascular Wockhardt Sepsis & Anti-Infectives Sun Pharma Asthma/COPD, CNS, Allergy Nicholas Piramal Metabolic Disorders, Inflammation, Anti-Infectives, Oncology Biocon Metabolic Disorders, Inflammation, Cardiovascular, Oncology Source: Analyst reports
  17. 17. 17 Building a sustainable Innovation-led business : Key Challenges
  18. 18. 18 Key Challenges Target Selection : • Precedent targets vs Unprecedented targets • Translatability of in vivo disease models to humans • Length and Cost of meaningful human proof of concept studies •Increasingly crowded research makes selection of clinically differentiated products difficult
  19. 19. 19 Key Challenges • Challenges operating out of India • Not yet part of the innovation eco system of venture capital, academic research & biotech • Lack of talent in critical functions • Access to thought leadership • Funding • P&L driven valuation • Lack of “patient” capital • Regulatory Frameworks for timely approvals • Regulatory frameworks/expertise not in place • Pace of approvals not satisfactory
  20. 20. 20 Closing Thoughts… “We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered that, the larger they have been.” -- George W. Merck Indian Pharmaceutical Industry has the potential to… 1. Bring Affordability and Accessibility of Drugs to the Masses 2. Increase Global Pharma Industry’s Innovation Capacity to Meet Unmet Needs 3. But needs to get the basics right

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