2.  Indian Pharmaceutical Evolution
 India Advantage
 Emerging Trends & Opportunities
 Key Partnership Considerations

3. Phase V
Phase IV
Innovation and Research
Growth Phase •New IP law
Phase III
Development Phase •Rapid expansion of •Discovery Research
domestic market
•Process •Convergence
Phase II development •International market
Government Control development
•Production
Phase I •Indian Patent Act – infrastructure •Research orientation
Early Years 1970 creation
•Market share •Drug prices capped •Export initiatives
domination by •Local companies begin
foreign companies to make an impact
•Relative absence
of organized
Indian companies
1970 1980 1990 2000 2010

4. VALUE
Innovative
Products
Specialty
Generic
Generic exports Products
exports to
to under- developed
developed & countries
developing
API
countries
Exports
TIME

5.  Large skill base
◦ Experts in process chemistry
◦ Long history of reverse engineering
 Vast talent pool
◦ Sheer number of scientists
◦ Motivated & English speaking
◦ Large number of trained Indians returning home from North
America and Europe
 Unmatched cost competitiveness
◦ Lower cost of infrastructure and skilled manpower
◦ Vertical integration

6.  Strong local industry
◦ Growing expertise with international regulatory compliance
◦ High quality manufacturing with abundant capacities
 Speed
◦ Very strong entrepreneurial spirit
◦ Hungry for growth and recognition
◦ Quick learners and fast movers
 Availability of capital
◦ Stock market has seen unprecedented growth in the last decade
◦ Continues to be bullish on the pharma industry

7.  Geographic Convergence
◦ Established and growing destination for Generic product
development and manufacturing
◦ Leading Indian companies seeking overseas markets
and global scale
 Generic – Innovator Convergence
◦ Leading Indian companies trying to climb the value
chain into innovative research
◦ India developing into a Drug Discovery services
outsourcing destination

8.  Leader in API DMF filings in the US
◦ Jan-Jun 2006 – 175 of the 601 DMF’s filed were by Indian companies
◦ 2005 - 313 of the 946 DMF’s filed were by Indian companies
 Leader in capital investments - largest number of US FDA
approved manufacturing facilities (outside the US)
 Almost 20% of ANDA filings in the US
 No place like India for generics R&D and manufacturing of API’s &
formulations
 India’s biggest assets – cost, speed & scientists – churning out
generics faster than you can say ‘copy’
 In 5 years, 30-35% of the global demand for generic products is
expected to be met by India

9.  Leading global/regional generic players establishing a
presence:
◦ Teva – acquired an Indian co in 2003, setting up new
development centre & another manufacturing facility
◦ Sandoz – development centre, 3 manufacturing facilities,
more than 1000 employees
◦ Actavis - development centre, acquired CRO (Lotus)
◦ Mylan – acquired controlling stake in Matrix last month for
US$ 736 mn
◦ Ratiopharm – development centre, manufacturing facilities

10.  Aggressive Growth Strategies
◦ For building a global scale – Ranbaxy aims to be one of the Top
5
◦ For market entry – acquiring local co or setting up subsidiaries
 Recent M&A activity – size of deals growing
◦ Ranbaxy going after acquisitions in US & Europe
 Acquired 3 companies in Europe in March/April 2006
 Terapia (Romania) for US$ 324 million
 Raising 1.5 billion to fund further acquisitions
◦ Dr. Reddy’s
 Acquired Betapharm (Germany) for US$ 570 million in March 2006
◦ Matrix (now part of Mylan)
 Acquired Docpharma (Belgium) for US$ 263 million in 2005.

11.  Partnership opportunities
◦ Large number of large and mid-sized Indian companies with world-class
generic product development and manufacturing capabilities and facilities
◦ Lot of under-utilized manufacturing capacities
◦ These companies prefer focusing attention & resources on some key
markets (US/EU) and look for partners in other markets
◦ Opportunities for supplementing pipelines, filling pipeline gaps and
reducing/optimizing cost of development and cost of goods:
 In-licensing products
 Dossier and API development
 Contract Manufacturing
 Contract Research – pilot & pivotal bio-equivalence studies
◦ Opportunities for out-licensing and supplying products to leading Indian
companies for other markets

12.  Increasing number of Indian companies moving up the value chain from
generic to NDDS/NCE research
 Low cost development/manufacturing to Low cost innovation
 Some examples:
◦ Ranbaxy
 1 project in Phase II
 1 project in Phase I
 7 projects in Pre-Clinical – 2 with GSK
◦ Dr. Reddy’s
 3 projects in Phase II
 2 projects in Phase I
 4 projects in Pre-Clinical
◦ Glenmark
 2 projects in Phase II – deals with US$ 190 million signed
 4 projects in Pre-Clinical
 Opportunities for in-licensing & out-licensing

13.  Global outsourcing market:
◦ US$ 15-20 billion – Manufacturing
◦ US$ 3-4 billion – Research (informatics, chemistry services &
chemical custom synthesis)
 Big pharma is entering into deals with Indian companies to
lower their cost of R&D
◦ Collaborative R&D – GSK - Ranbaxy
◦ Service outsourcing - Wyeth – GVK, Jubilant, Lilly – Suven
 Global discovery services companies are looking at India to
retain their cost advantages
◦ Albany Molecular & Nektar have already established a presence
 Indian industry hoping to see 3-4 global discovery services
companies emerging out of India

14.  Leading Indian Service Providers:
◦ Contract Manufacturing – Jubilant, Shasun, Divi’s
◦ Clinical Research – Syngene (Biocon), Aurigene
(Reddy’s), Synchron
◦ Bio-informatics & other IT services – TCS, Satyam,
Infosys, GVK Bio, Jubilant
◦ Drug Discovery/Medicinal Chemistry – Aurigene,
Divi’s, Syngene, Suven, GVK Bio
◦ Pre-clinicals – Vimta, Lambda
◦ Central laboratory services – SRL Ranbaxy, Vimta

15.  Supplier/Partner mapping/selection
◦ Capability / Keenness / Reliability / Competitiveness
◦ Key team members – development, regulatory & commercial
 Optimal Number of Partners
◦ Strategic – markets/product lines
◦ Opportunistic – product specific
 Relationship management
◦ Relationship oriented culture
 Contract negotiation
◦ Clear distribution of responsibilities and timelines
◦ Demand performance - penalties for not meeting deliverables
 Project management
◦ Regular visits and video/teleconferences a must

16. India is an acquired taste
Give it some time & it will grow on
you

17. Thank you!
Merci!