Express Pharma December 16-31, 2012 by Indian Express

I N D I A’ S F O R E M O S T P H A R M A & B I OT E C H P U B L I C AT I O N December 16-31, 2012 ` 40

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FORTNIGHTLY INSIGHT FOR PHARMA PROFESSIONALS

VOL 8 | NO. 4 | PAGES 76

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Pharma VOL 8. NO. 4 DECEMBER 16-31, 2012

Chairman of the Board Viveck Goenka

CONTENTS

Editor Viveka Roychowdhury*

MANAGEMENT Patent backlog – A qualitative analysis PAGE 44

BUREAUS Mumbai Sachin Jagdale, Usha Sharma, Raelene Kambli, Lakshmipriya Nair, Sanjiv Das

Bribery, corruption key compliance risks to pharma cos: KPMG India Fraud Survey 2012 PAGE 46

Bangalore Neelam M Kachhap Delhi Shalini Gupta

RESEARCH

MARKETING

The bigger menace: malaria or dengue? PAGE 47

Deputy General Manager Harit Mohanty Senior Manager Rajesh Bhatkal

PHARMA ALLY

PRODUCTION

ACG Worldwide to invest ` 400 cr to set up mfg plant at Pithampur PAGE 49

General Manager B R Tipnis Production Manager Bhadresh Valia Asst. Manager - Scheduling & Coordination Arvind Mane

Industry conducts a meeting with ministry on 2D implementation PAGE 50

Asst. Art Director Surajit Patro Chief Designer Pravin Temble

Machine vision to keep India’s manufacturing industry globally competitive PAGE 53

Senior Graphic Designer Rushikesh Konka Photo Editor Sandeep Patil Layout Rakesh Sharma

PHARMA LIFE Glenn Saldanha honoured with ‘Swiss Ambassador’s Award for Exceptional Innovation’ PAGE 72

C I R C U L AT I O N Circulation Team Mohan Varadkar Express Pharma Reg. No.MH/MR/SOUTH-77/2010-12 RNI Regn. No.MAHENG/2005/21398 Printed for the proprietors,The Indian Express Limited by Ms.Vaidehi Thakar at The Indian Express Press, Plot No. EL-208, TTC Industrial Area, Mahape, Navi Mumbai 400710 and Published from Express Towers, 2nd Floor, Nariman Point, Mumbai - 400021. (Editorial & Administra-tive Offices: Express Towers, 1st Floor, Nariman Point, Mumbai - 400021) *Responsible for selection of news under the PRB Act. Copyright @ 2011 The Indian Express Ltd. All rights reserved throughout the world. Reproduction in any manner, electronic or otherwise, in whole or in part, without prior written permission is prohibited.

December 16-31, 2012

NSF International expands health sciences div with 3 key appointments PAGE 74

MARKET Ind-Swift looking for strategic partners

PAGE 8

Pharmexcil to represent India Pavilion at Arab Health 2013 in Dubai PAGE 13 CPhI India 2012 meet exhibitors' expectations

PAGE 14

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EDITOR’S NOTE

Re booting for 2013 ... Piramal Enterprises' second buy in the

presence in India as well. It is becoming a trend for

pharmaceutical analytics sector, the UK-based

some of the MNCs who have already had a long

Abacus International, is an indicator of the

innings in India to close down older manufacturing

maturing appetite for growth of India’s big pharma

facilities in India and outsource production to other

firms. Piramal's first move into analytics was the

smaller players with more up-to-date infrastructure.

$635 million buy of US-based Decision Resources

For instance, in August, GSK closed its five decade-

Group. This was followed by Abacus across the

old plant in Thane, Maharashtra. More recently, in

Atlantic. Piramal is using its war chest from the

end November, Sandoz, the generics arm of

Abbott deal but why isn't it buying up other

Novartis, closed down its drug development unit in

pharma companies? Clearly, both DRG and Abacus

Mumbai. This followed an earlier closure of its API

have much more than products: the lure here is

development centre.

data. Between DRG and Abacus, Piramal now has

With governments all over the world pushing

access to insider data on the world's leading life

for more affordable medicines (Obamacare is

sciences companies, spanning pharma, diagnostics

probably the biggest such push), it is industry

and medical equipment.

players who will have to adopt new business

Strides' deal with Eli Lilly for generic cancer

models. For instance, Abbott is already

medicines for emerging markets is another example

consolidating three business units, to tap

of this pragmatic approach of playing to one's

operational synergies and cut costs as India’s new

strengths. While Strides sold off its generics

pricing norms will definitely squeeze profit margins.

business in Australia to Watson Pharma, it is

Look out for our first issue of the 2013 where we

notching up partnerships with the likes of Pfizer,

have pharma pundits predicting what will be the

GSK, Sandoz, Teva, Novartis and Aspen. Clearly,

hot trends to look out for in the year ahead.

each global partner derives significant cost savings, attracting more partners. Meanwhile, big pharma is re-shaping its

4 EXPRESS PHARMA

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Viveka Roychowdhury viveka.r@expressindia.com

December 16-31, 2012

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MARKET

W H AT ’ S INSIDE

THE BUSINESS OF PHARMACEUTICALS

Ind-Swift looking for strategic partners PG 8 Nov' 12 pharma M&A dips in volume, stablises in value PG 12 Pharmexcil to represent India Pavilion at Arab Health 2013 in Dubai PG 13 FLASHBACK 2012 PG 16

MANAGEMENT 41 RESEARCH 47 PHARMA ALLY 49 PHARMA LIFE 72 December 16-31, 2012

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COMPANY WATCH Ind-Swift looking for strategic partners Open to equity sale

Usha Sharma Mumbai handigarh-based leading active pharmaceutical ingredient (API) manufacturer Ind-Swift Laboratories is looking for a partner for accelerating the company's growth. The partnership could take the form of a strategic equity investment as well. NR Munjal, ViceChairman cum Managing Director, Ind Swift Laboratories said, “We have a good base in R&D, formulations and marketing field force. We have more than 100 scientists at one of the largest API manufacturing sites in India which has been approved by UK MHRA, US FDA, Australia's TGA, and many more regula-

tory agencies which is required for exports.” Munjal elaborated, “ We are looking for a partner with synergies with our business with whom we can take the existing business to the next level.” Presently, the company's domestic formulation business has grown rapidly. It has over 1500 medical representatives with nearly 150 branded products. The company has developed fully integrated distribution centres. At present it has five depots and 30 C&F centres which basically manage the company's entire supply chain distribution system. The company has multilocation manufacturing sites which produce APIs. The company's WHO-GMP approved manufacturing

NR Munjal, Vice-Chairman cum Managing Director, Ind Swift Laboratories facility at Punjab with 17 manufacturing blocks comprises a pilot plant, dedicated blocks and multi-purpose blocks designed to comply

with stringent US FDA and other regulatory standards. It has fully approved sites from different regulator bodies like UK MHRA, US FDA, Brazil Anvisa, TGAAustralia, Middle East GCC and many more. Ind-Swift is exporting to almost 50 countries worldwide medicines worth over ` 200 crore which are manufactured from its Dera Bassi plant near Chandigarh. While responding on the actual volume of fund infusion/equity sale involved, Munjal replied, “Currently, we have not decided on the amount. Basically we are focussing on the synergy model which will help our company to grow in a much faster way.” u.sharma@expressindia.com

Ranbaxy introduces Absorica in US Could become largest selling product in US by 2014 anbaxy Laboratories, Inc. (RLI), a wholly owned subsidiary of Ranbaxy Laboratories (RLL), announced the sales and promotion launch of Absorica (Isotretinoin) Capsules, a product that is licensed from Cipher Pharmaceuticals, Ontario. A Prabhudas Lilladher report anticipates that the product could

become the largest selling product for the company in the US latest by 2014. Absorica is indicated for the treatment of severe recalcitrant nodular acne in patients 12 years of age and older. Due to its high lipophilicity, oral absorption of isotretinoin is enhanced when given with a high-fat meal, however, Absorica, which is formulated using patented lidose technology,

can be given without regards to meals. The fasted AUC0-t of Absorica is approximately 83 per cent greater than that of Accutane, while both products are bioequivalent under fed conditions. Absorica is therefore not interchangeable and not substitutable with generic products of Accutane. Absorica, NDA, was approved based on a large pivotal clinical trial enrolling 925 patients.

Dr Ashish Anvekar, Senior Director, Ranbaxy Laboratories Inc said, “We are most pleased to make Absorica available as a valuable option for dermatologists and a subset of patients who suffer from severe recalcitrant nodular acne. Absorica will be the flagship brand of the Ranbaxy dermatology product portfolio in the US.” EP News Bureau- Mumbai

Mylan to supply ARVs to South African National Department of Health Company secured 19.1 per cent of R5.9 billion tender value for 2013 ylan announced that its subsidiary in India, Mylan Laboratories, a leading manufacturer of antiretroviral (ARV) drugs, has been selected, through its South African-based subsidiary Mylan (Proprietary) Limited (Mylan Limited), as one of the leading suppliers of ARV drugs to the South African National Department of Health for the tender period January 1, 2013 to December 31, 2014. Mylan Limited secured a R1.12 billion share, which represents 19.1 per cent of

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the R5.9 billion tender value. As a part of this award, Mylan will supply the South African Government with 31 per cent of the 30 million units of triple therapy fixed dose combination (FDC) called for in the tender. Mylan CEO Heather Bresch commented, “Mylan's mission is to provide the world's 7 billion people access to high quality medicines, including affordable ARVs. Only through access to these vital medicines can we stem the tide of HIV/AIDS in South Africa and around the world. This award reinforces Mylan’s commitment to provide high www.expresspharmaonline.com

quality advanced drugs to help people suffering from HIV/AIDS in South Africa, and we are proud to have been selected as a partner to the South African Department of Health.” “We believe Mylan’s selection as a leading supplier to the South African Government’s ARV tender reflects our vertical integration, quality manufacturing, global scale and proven-track record of being a reliable partner in supplying affordable ARV medicines across the world. We are pleased to bring this global scale, quality and reliability to the South African market and continue

our legacy in fighting HIV/AIDS,” said Paul Miller, Managing Director and Vice President of Mylan’s South African business. Mylan supplies ARV drugs to more than 120 countries around the world and approximately one-third of HIV/AIDS patients receiving treatment in developing countries depend on a Mylan ARV product. Mylan will be entering the South African market with a comprehensive portfolio of ARV drugs, consisting of first- and second-line adult and pediatric therapies, including several dual and triple FDCs. EP News Bureau- Mumbai December 16-31, 2012

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Calyx doubles IPO amount to Rs 200 cr Targets to raise IPO before March 2013

Usha Sharma Mumbai umbai-based leading API manufacturing company, Calyx Chemicals has revised its Initial Public Offer (IPO) plan from ` 100 crore to ` 200 crore. The company has filed a Draft Red Herring Prospectus (DRHP) and will be filing a Red Herring Prospectus (RHP)

before first half of January 2013. The company had initially attempted to tap the capital markets in May 2010 but had to defer the plan due to the instability in the capital market. While sharing information on the delay in the IPO, Smitesh Shah, Chairman and Managing Director, Calyx said, "We were ready with our plan in 2010 but due to market

instability we waited for the right time. Now we see that the capital market is good and considering our company's performance, we have now planned to double the IPO amount from ` 100 crore to ` 200 crore. We are targeting to come out with an IPO in this financial year itself." The company has an active therapeutic presence in the anti-tuberculosis, anti-

malaria, anti-hypertension and macrolides segments. Commenting on the investments plans, Shah highlighted, "We see that the domestic market is growing continuously and there is a huge demand in API segment. To grab this opportunity, we have major plans for the domestic market itself instead of expanding presence globally." u.sharma@expressindia.com

Pharma pricing policy to be notified soon Activist angst still to be addressed satisfactorily

December 16-31, 2012

he Department of Pharmaceuticals has assured the Supreme Court that it will soon notify the new pharmaceutical pricing policy. Upon this assurance, the Supreme Court (SC) deferred the hearing of the public interest litigation (PIL) on the pharma pricing policy to December 12 acceding to a petition filed

by the Department to allow it two weeks time (from November 27) to notify the new policy. The SC will review the terms and clauses of the policy after it is notified. Industry had mixed reactions when the Sharad Pawarled Group of Ministers (GoP) got the Cabinet's approval for the Draft National Pharmaceutical Pricing Policy

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2011 (NPPP 2011). As reported earlier, (http://bit.ly/SXJTNv) the GoM switched from the Weighted Average Price (WAP) to the Simple Average Price (SAP) as the basis for computing the price cap based as the Finance Minister P Chidambaram opined that the former would take the average price of the more expensive medicines and

would therefore not serve the purpose of bringing down medicine prices. Commenting on the news (http://bit.ly/Qxz9tU), industry sources had commented that while the draft policy with the SAP method was unfair to the industry and would further squeeze margins, it was important that the uncertainty end. EP News Bureau- Mumbai

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GSK, J&J, Sanofi top this year's Access to Medicine Index Report finds Big Pharma doing more for access to medicine in developing countries than two years ago he latest Access to Medicine Index, which ranks the top 20 pharmaceutical companies on their efforts to improve access to medicine in developing countries, finds that the industry is doing more than it was two years ago, with GlaxoSmithKline still outperforming its peers, but an expanding group of leaders closing the gap. The recently Index found that Johnson & Johnson was one of the most dramatic risers, climbing from the middle of the field in 9th position in the 2010 Index to 2nd this year, closely behind GlaxoSmithKline. It is one of two newcomers to the top three. Its rise is due largely to its consolidation of its access activities under one business unit, which has resulted in a more strategic and integrated approach, and to its acquisition of vaccine maker Crucell, which has increased the relevance of its research and development investments. It has also disclosed more overall about its access activities. “This year’s Index shows that companies are becoming more organised internally in their approach to access to medicine and that those who do this best tend to perform well across the other aspects we measure. The leaders are really raising the bar,” said Wim Leereveld, founder and CEO of the Access to Medicine Index. “It’s also clear that companies that do not continue to step up their efforts tend to be overtaken by their peers.” The Access to Medicine Index provides insight into what the world’s leading pharma companies are doing for people in developing countries who do not have reliable access to safe, effective and affordable medicines, vaccines and other health-related technologies. Published every two years, it scores companies on their commitments, performance, innovation and level of

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transparency across seven areas of activity considered key to improving access to medicine. The companies are graded on more than 100 factors covering these areas, including whether they are developing new drugs for neglected diseases, to what extent they facilitate or resist efforts to create generic versions of their drugs, and how they approach pricing in developing countries. Lobbying activities, marketing ethics and product donations and other philanthropic activities are also tracked.

Who is doing the most? GlaxoSmithKline remains at the top of the Index with a marginal improvement in performance since 2010, and this year, Johnson & Johnson

of the leading group has expanded from three to seven companies, and there is a smaller difference between the scores of the Index leaders than there was in 2010. Meanwhile, the gap has also narrowed between the bottom few companies and the top performers. This is notable given the fact that the Index set higher standards this year in many areas. Companies are developing more products for more diseases that particularly affect the world’s poor, and collaborating more in the process than they were two years ago. There is more target setting and some now devote as much as 20 per cent of their pipeline to developing products that

AREAS WHERE COMPANIES COULD IMPROVE THEIR APPROACHES SIGNIFICANTLY INCLUDE BEING MORE TRANSPARENT ABOUT LOBBYING PRACTICES, EXPANDING TIERED PRICING SCHEMES, ADAPTING PACKAGING TO LOCAL NEEDS, MAKING DRUG DONATIONS MORE NEEDS-BASED, AND ALLOWING CLINICAL TRIAL DATA TO BE USED TO ACCELERATE APPROVAL OF GENERIC MEDICINES IN DEVELOPING COUNTRIES and Sanofi, both new to the top three, follow closely in 2nd and 3rd positions respectively. The companies that rose in rank the most were Merck KGaA, followed by Johnson & Johnson, and then Bayer. AstraZeneca fell down the rankings most significantly, followed by Boehringer-Ingelheim, then Novartis and Roche. The bottom of the league is dominated by Japanese companies Takeda, Daiichi and Astellas.

Overall trends Seventeen out of the 20 companies perform better than they did at the time of the last Index report in 2010. At the top end, membership www.expresspharmaonline.com

address the needs of the poor. For instance, Sanofi is adapting its leishmaniasis drug, which currently requires health workers to administer repeated injections, to develop a product that patients can apply to their skin at home. Meanwhile, Johnson & Johnson is collaborating to develop a simple portable rapid screening test for tuberculosis that doesn’t need to be operated by a health professional, requires patients to simply cough into a breathalyser, and yields results within minutes. In addition, more companies are using tiered pricing schemes to lower prices for certain countries or popula-

tion groups within a country, and applying them to a broader range of products and in more countries.

Need more transparency on outsourcing of clinical trials However, there are still several areas where all companies could improve their approaches significantly. These include being more transparent about their lobbying practices, expanding their tiered pricing schemes, adapting packaging to local needs, making their drug donations more needsbased, and allowing their clinical trial data to be used to accelerate the approval of generic medicines in developing countries. An area where current industry performance falls far short of Index expectations is transparency around the outsourcing of clinical trials to Contract Research Organisations (CROs). Companies often hire them to conduct clinical trials on their behalf in developing countries, but no company is publicly transparent about all the CROs they employ. Company accountability involves ensuring the wellbeing of trial participants through adequate due diligence in selecting these contractors, monitoring how they conduct the trials and willingness to enforce codes of conduct with disciplinary action. However, only four companies (Merck & Co., Sanofi, GlaxoSmithKline and Eisai) provided evidence that they use disciplinary measures to enforce codes of conduct with their CROs to ensure that trials of their products are conducted safely and ethically. “Access to medicine is a multi-faceted challenge and therefore responsibility for improving it lies with a number of different actors, but the pharmaceutical industry has a critical role to play. While the Index shows it has made strides in many areas, companies that have sectorleading practices also show us there is more the industry can contribute,” Leereveld said. December 16-31, 2012

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Novartis vs India– Supreme Court hearing ends Judges retire to consider verdict he Novartis vs Union of India case challenging the interpretation of Section 3(d) of India's patent law came to an end on december 4, after 12 weeks of hearings in India's Supreme Court, according to an update from Médecins Sans Frontières (MSF). Section 3(d) led to Novartis being denied a patent for imatinib mesylate (marketed by Novartis as Glivec). Novartis is contesting the Indian patent office’s and appellate body’s decisions to reject the company’s application for a patent on the salt form of imatinib. Final arguments commenced on September 11, starting with the two judges presiding over the case heard arguments from Novartis as to why they deserved a patent on the mesylate salt of the blood and intestinal cancer drug imatinib. This was followed by arguments from the counsel for the Indian government, and then representatives for the Cancer Patient Aid Association defending India’s stricter patentability criteria that discourages patenting of new forms of known medicines. This case has garnered a lot of global attention as it is a "precedent-setting case", as Leena Menghaney, Access Campaign Manager India, MSF puts it. As the case nears it end, NGOs and patient activist groups have made their stance very clear. Meghaney hopes that "the integrity and intention of India's patent law, and Section 3(d) in particular, is upheld. India's ability to continue production of affordable medicines for the developing world depends a great deal on the country's patentability standards and how they are interpreted by the courts in India." MSF believes that a win for Novartis would set a dangerous precedent, severely weakening India’s legal norms against ‘evergreening’, a common practice in the pharmaceutical industry. In this case Novartis is pushing for an interpretation of patentability standards that would inevitably lead to patents being granted far more widely in the country, blocking the competition among multiple producers which drives down prices, and restricting access

December 16-31, 2012

to affordable medicines for millions in India and across the developing world. The other end of the spectrum is represented by a recent blogpost on a personal blog PILMAN of Tapan Ray,

Director General, Organisation of Pharma ceutical Producers of India, (OPPI), which represents MNC pharma companies like Novartis in India. Ray lists fostering innovation and intellectual property rights (IPR) as one of the 'Nine Major Challenges Constraining

Indian Pharmaceutical Industry From Taking a Quantum Leap'. Provisions in the Indian Patents Act like Section 3d 'throw a major challenge to the global innovator companies spreading across the continents to get many of their new molecules

patented in India and subsequently launch in the country.' While the judges have now retired to consider their verdict, there is no indication at this stage to suggest when the judges may hand down their findings. EP News Bureau-Mumbai

33-year history of partnership with leading pharma companies

AZITHROMYCIN AZITHROMY CIN active pharmaceutical ingredients & its intermediates* Commercial scale Antitubercular Pyrazinamide# * Isoniazid # *

Antimalarial Artesunate Arteether Artemether# * Dihydroartemisinin Lumefantrine# * Piperaquine

Macrolides

Antihypertensive

Azithromycin Clarithromycin Erythromycin base # # Erythromycin estolate Erythromycin ethyl succinate+ Erythromycin oxime (intermediate) Erythromycin stearate #

Irbesartan # Losartan potassium Telmisartan Valsartan

Antihistaminic

Alendronate sodium Zoledronic acid

Sedative, Hypnotic Zopiclone

Antifungal Flucytosine

Cetirizine dihydrochloride # Hydroxyzine diydrochlorid + Meclizine diydrochlorid

Antiosteoporotic

Antiepileptic Valproic acid

Antidepressant Venlafaxine hydrochloride

Under Development Antiretroviral

Antidiabetic

Hypnotic

Antithrombotic

Ganciclovir Valaciclovir Valganciclovir Maraviroc

Linagliptin Vildagliptin

Eszopiclone

Clopidogrel bisulphate

* WHO APIMF

CEP / COS

*The Technical and Physical manufacturing capabilities exist with us for the above APIs and their intermediates. However these products will be offered only to the markets where any product or process patents are not infringing. During the validity of a patent the research quantities for developing products for regulatory submissions will only be offered to countries where such exemption exists (Hatch Waxman Act / Bolar exemption). While Calyx offers to work with the clients on Patent Status Verification, the final responsibility vests with the buyer. Recipients are requested to make their evaluation and determination as to the patent status prior to their use of the information or materials in their respective jurisdiction. Products under patent offered only for exempted research, clinical and development purposes. Only non-infringing products and processes are offered, subject to patent status verification by client.

Calyx Chemicals and Pharmaceuticals Limited Reg. Office: Unit No.110, Marwah's Complex, Krishanlal Marwah Marg, Off. Saki Vihar Road, Andheri (East), Mumbai – 400072, Maharashtra, India. Tel: +91-22-28571191, Fax: +91-22-66466416, Email: sales@calyxindia.com, crams@calyxindia.com USA Contact : 11728 E. Imperial Highway, Norwalk, CA 90650, Tel - 213-291-7773, Email: sales@calyxusa.com, crams@calyxusa.com Website : www.calyxindia.com "Calyx Chemicals and Pharmaceuticals Limited (the “Company”) is proposing to make, subject to receipt of requisite approvals, market conditions and other considerations, an Initial Public Offering of its equity shares (the “IPO") and has filed the Draft Red Herring Prospectus (the “DRHP”) with the Securities and Exchange Board of India (“SEBI”). The DRHP is available on the website of SEBI at www.sebi.gov.in, the website of the BRLMs, i.e. PL Capital Markets Private Limited at www.plindia.com and YES Bank Limited at www.yesbank.in and is also available on the website of the Company at www.calyx-pharma.com. Potential investors should note that investment in equity shares involves a degree of risk. For details, please refer to the DRHP, including the section titled “Risk Factors” of the DRHP. This publicity material does not constitute an offer of securities in any jurisdiction, including the United States of America (“USA”). Securities may not be offered or sold in the USA without registration under the U.S. Securities Act of 1933 as amended, or an exemption therefrom. The Company has not and does not intend to offer any securities to the public in the USA”.

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M|A|R|K|E|T DEAL TRACKER

Nov' 12 pharma M&A dips in volume, stablises in value Increasing product offerings, to accelerate growth opportunities, drives M&A activity in November, according to Datamonitor’s Medtrack database M&A (including private equity) trend analysis

Mergers & Acquisitions

Source:

Top M&A deals (Nov 2012) Rank

Date

Target

Acquirer

Deal value ($m)

Nov 16, 2012

Schiff Nutrition International Inc (US)

Reckitt Benckiser Group plc (GB)

1400

Nov 21, 2012

Pronova BioPharma ASA (NO)

BASF AG (DE)

844.44

Nov 8, 2012

Fortitech, Inc. (US)

Royal DSM N.V. (NL)

634

Nov 19, 2012

BioMimetic Therapeutics, Inc. (US)

Wright Medical Group, Inc. (US)

380

Nov 8, 2012

DUSA Pharmaceuticals, Inc. (US)

Sun Pharmaceutical Industries Limited (IN)

230

Nov 21, 2012

Cipla Medpro South Africa Limited (ZA)

Cipla, Ltd. (IN)

220

Nov 6, 2012

Envoy Therapeutics, Inc. (US)

Takeda America Holdings, Inc. (JP)

140

Nov 5, 2012

MEI Pharma, Inc. (AU)

Vivo Ventures ; New Leaf Venture Partners, LLC ; RA Capital Management, LLC ; Three Arch Opportunity Fund ; Undisclosed Investors

28.43

Nov 14, 2012

NOX Technologies, Inc. (US)

Nu Skin Enterprises, Inc. (US)

12.5

Nov 21, 2012

Proteologics, Ltd. (IL)

XTL Biopharmaceuticals, Ltd. (IL)

1.66

Source:

Venture financing trend analysis

M&A activity in the pharma sector was focused on increasing product pipeline as companies were looking to see and accelerate their growth opportunities. In line with the above trend, Wright Medical Group agreed to acquire BioMimetic Therapeutics, a US-based biotechnology company, for approximately $380 million. This acquisition will add breakthrough biologics platform and pipeline to further accelerate growth opportunities in Wright Medical’s extremities business. With this transaction, Wright Medical will gain access to BioMimetic’s complementary product portfolio which includes Augment Bone Graft, a protein therapeutic under late stage FDA review as a replacement for autologous bone graft in foot and ankle fusions. In another key deal, India-based Sun Pharmaceutical Industries agreed to acquire DUSA Pharmaceuticals, a US-based dermatology company for approximately $230 million. This transaction would enable Sun Pharma enter into the dermatology market, where they expect to see good growth opportunities. With this acquisition, Sun Pharmaceutical will gain access to Levulan and BLU-U, FDA approved treatments for dermatological conditions. M&A activity in the pharma sector decreased in volume terms and stabled in value terms, when compared to the average of previous six months’ (May 2012–Oct 2012). According to Datamonitor's Medtrack database, the pharma sector recorded 25 M&A transactions in November 2012, against the previous six months’ average of 34.6 transactions. In value terms, the sector recorded deals worth $3.9 billion against the previous six months’ average of $3.9 billion. The Indian pharma sector witnessed no deals during November 2012, against the average of 0.8 deals over the previous six months.

Venture Funding Companies in the pharma sector raised $599 million during November 2012, against the previous six months’ average of $295.8 million. In terms of volume, the sector recorded 24 venture funded deals, compared to the previous six months’ average of 23 transactions.

Notes and Definitions

Source:

Top venture financing deals (Nov 2012) Rank

Date

Target

Investors

Deal value ($m)

Nov 15, 2012

Intarcia Therapeutics, Inc. (US)

New Enterprise Associates, Inc. ; Venrock ; New Leaf Venture Partners, LLC ; The Baupost Group, LLC ; Farallon Capital Management, L.L.C. ; Undisclosed Investors

210.00

Nov 27, 2012

BRAIN AG (DE)

MP Beteiligungs-GmbH ; MIG Verwaltungs AG ; Undisclosed Investors

77.78

Nov 13, 2012

Pearl Therapeutics, Vatera Healthcare Partners ; 5AM Ventures ; Clarus Ventures, LLC ; New Inc. (US) Leaf Venture Partners, LLC

Nov 19, 2012

Applied Genetic Technologies Corporation (US)

Alta Partners ; S.R. One, Limited ; InterWest Partners, LLC ; Intersouth Partners ; MedImmune Ventures, Inc.; Osage University Partners

37.5

Nov 8, 2012

Auspex Pharmaceuticals, Inc. (US)

Panorama Capital ; Thomas, McNerney & Partners ; CMEA Capital ; Sloan Biotech Fund

Nov 6, 2012

Ambit Biosciences Corporation (US)

OrbiMed Advisors, LLC; Aisling Capital ; Roche Venture Fund ; MedImmune Ventures, Inc. ; Forward Ventures ; Gimv NV ; Radius Ventures, LLC ; GrowthWorks Capital, Ltd. ; Apposite Capital LLP

Medtrack is a comprehensive, fully integrated, global biomedical database providing information on companies, products, patents, deals, venture financing, and epidemiology. It is a live database, constantly updated with news, milestones, trial information, etc. Medtrack’s unmatched coverage is supported by a userfriendly, highly dynamic set of decision support tools and analytics. In-house analysts and researchers add key insights and conclusions to provide you with the primary and secondary information you need. Key uses of the database include competitive intelligence, target identification, screen potential licensing and investment opportunities, patent assessments, product due diligence, royalty valuations, and developmental benchmarking. For more information, visit us at www.medtrack.com

Definitions 1. Deal value trend is based on transactions where associate values have been disclosed. 2. Trend analysis excludes rumored and terminated deals. 3. Value and volume analysis excludes private equity exits.

Source:

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December 16-31, 2012

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PRE EVENT Pharmexcil to represent India Pavilion at Arab Health 2013 in Dubai he Pharmaceuticals Export Promotion Council of India (Pharmexcil) is confident of India’s pharmaceutical industry’s growth opportunities and is looking to continue strengthening its relationship with other countries for export, by preparing to participate at Arab Health 2013. Representing Pharmexcil at Arab Health 2013 Dr PV Appaji, Director General, Pharmaceuticals Export Promotions Council of India, said, “Amid global economic concerns, the Indian pharmaceutical industry is bullish with a steep growth target. Within the pharmal sector, India is one of the top five generic exporters of the world and maintains a positive trade balance. This is the seventh year for the council to take part at the prestigious Arab Health event. Indian companies are very aware of the

December 16-31, 2012

market potential in the Middle East and they will showcase a unique variety of high-tech and innovative products, aiming to expand their business in the Middle East region.” Arab Health Exhibition & Congress is the second largest healthcare event in the world, the largest in the Middle East. Established 38 years ago, Arab Health provides a platform for the world’s leading manufacturers, wholesalers and distributors to meet the medical and scientific community in the Middle East and subcontinent. Arab Health, organised by Informa Life Sciences Exhibitions, takes place from January 28-31, 2013 at the Dubai International Convention and Exhibition Centre. With more than 3500 exhibiting companies from 32 countries, and 18 CME accredited medical conferences, Arab Health is a much anticipated addition to

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the 2013 medical event calendar in the Middle East and subcontinent region. Indian firms manufactured products for nearly 60,000 generic brands, covering 60 key therapeutic areas. Approximately 80 per cent of this domestic production consisted of formulations, while the remaining 20 per cent comprised bulk drugs. India accounts for almost 10 per cent of global drug production by volume and is increasingly focusing on indigenous R&D. There are about 3000 pharma manufacturers, with over 10500 units, the vast majority of which focus on generic drugs.Companies such as Ascent Healthcare, Adroit Manufacturing Co, Dr. Surgicals, Lab Care Diagnostics (I) PVT LTD, and approx. 70 other healthcare and pharmaceutical companies from India will be exhibiting at Arab Health

this year. Arab Health 2013 is one of the major International exhibitions for surgical, hospital, medical equipment and pharmaceuticals. It offers important opportunities to build relations within the industry, to showcase progress and achievement in the field and to explore new opportunities with stakeholders in the healthcare field. This year more than 200 new exhibitors will bring the total to almost 3500 from 63 countries across the globe. The trade show is followed by The Arab Heath Innovation & Achievement Awards which continues to draw hundreds of nominations from healthcare facilities and individuals across the region. The 2013 Arab Health Awards ceremony will take place on January 29 in Dubai, UAE EP News Bureau- Mumbai

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POST EVENT

The event provided an efficient platform for global pharma buyers to identify business opportunities and meet with potential partners. Check out what the exhibitors had to say about the event

Suresh Pareek Managing Director Ideal Cures his year, we have seen more visitors. Initially, we were afraid of seeing less visitors. We have launched Insta Model and have received excellent responses from our new and existing customers.

CPhI India 2012 meet exhibitors' expectations Next year’s event to be held from December 3-5, 2013

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Usha Sharma Mumbai ore than 900 exhibitors and over 26,000 delegates from 21 countries participated in the CPhI India event to make it a huge success. The event was recently held in India's business capital Mumbai at the Bombay Exhibition Centre (BEC) from November 21-23, 2012. This year's event saw large number of international visitors and evinced satisfactory responses from the exhibitors. Rajeev Kher, Additional Secretary, Ministry of Commerce and Industry inaugurated the show along with Dr PV Appaji, Director General, Pharmexcil, NR Munjal, Chairman, Pharmexcil, and Sanjeev Kher, Managing Director, UBM. Making his rounds of the various exhibitor halls and spending time with key exhibitors like ACG Worldwide, Shimadzu Analytical, Signet Chemicals, Calyx Chemicals and the like, Kher spoke about the Commerce Ministry’s plans to support all segments of the industry. Speaking on the sidelines of the meet, Kher said, “Our overall target exports for this financial year is $320 billion and to ensure that we reach this in the remaining five months, we are reviewing our position and strategy. One of these strategies is to diversify into different geographies. We are working on breaking into markets other than the US and EU like Africa, China, CIS countries, Russia, the Middle East and North America.” He also mentioned that besides additional markets, the Ministry is also considering other measures like special incentives and more market promotional activities to boost pharma exports. He continued, “By the end of 2014-15, India’s pharma exports are expected to reach $25 billion. The Indian pharma industry is also cov-

ering a lot of ground in biopharmaceuticals at a rapid pace. Simultaneously, the global generic market segment is growing faster than the branded drugs. The market size of drugs losing patent protection was $270 billion in 2011 and is expected to go up to $430 billion by 2016. Therefore, it is but natural to view the Indian pharma industry at the top in the next decade. One of the major market promotional activities is the ‘Brand India Pharma’ campaign, a major branding initiative highlighting the three key proven characteristics of Indian pharma: presence across 230 countries, accessibility due to affordable pricing and high quality. Kher emphasised that the Ministry of Commerce will fully support Pharmexcil in its efforts to take the ‘Brand India Pharma campaign’, symbolised by a stylised Rx, to all countries and geographies. He further emphasised that the domestic pharma industry is gearing up in a big way, with more and more people likely to be covered by various health benefit policies, be it insurance and with facilities offered by the healthcare industry matching the best in the world. This year’s show had visitors from across the globe, who had pre-registered for the three-day exhibition, which was held in seven exhibition halls spread over 55,000 sq. mt. P-MEC India had 45 new exhibiting companies and several new features like a new mobile app for easy real time navigation of the exhibition halls. A series of technical seminars, presented by exhibitors, were held throughout the event. A CEO conclave with a panel discussion was held at the Westin Hotel, Goregaon, followed by the unveiling of the first CPhI India Pharma Awards. Next year, the event will held at the same venue, from December 3-5, 2013. u.sharma@expressindia.com www.expresspharmaonline.com

Sandeep Bijamwar Business Head-Healthcare API Advanced Enzymes PhI India is growing year by year. In India, we have a big base so it is the best platform for networking. We have received some good business enquiries which we will be taking further in the future.

Gergory D'souza Managing Director Anchor Mark Healthcare or us, CPhI India is a productive event and this year we have received good response from visitors and have received some business proposals from domestic and international markets

S M J Noronha President and CEO ACG Worldwide his year's event was very well planned and we have seen a good number of international visitors. We have grown 25 per cent year on year and most of the multinational companies have become our partners in this event itself.

Vishal Wagh Director—Marketing Adam Fabrick -Mec has been a good platform for us. This year, we have seen lots of new buyers with new project requirements from domestic and International markets. This year's show has been well organised with lots of international participation.

S M Rabee Director Bowman & Archer Pharma Machine India uring the event we got service buyers. For us overall this year's P-MEC show was good and satisfactory.

Suhas Rai Country Head-Sales and Dr Andreas Mattern, Business Unit Head— Pharma, Bosch t was a good event, with better customer quality. We sold one high speed capsule filling machine to Cipla during the event.

December 16-31, 2012

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July 16-31, 2012

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he European Union (EU) Parliament's July 4 vote against the ratification of the AntiCounterfeiting Trade Agreement (ACTA) had organisations like Médecins Sans Frontières celebrating the ‘death of ACTA’. But any illusion that this experience will force the EU Parliament to give India and other countries some leeway in other similar discussions, like the free trade negotiations (FTAs) being pursued by the European Commissioner (EC), is just that ... an illusion. As DG Shah, Secretary General, Indian Pharmaceutical Association, cautions, "Many who voted against the ACTA also stressed the need to find alternative ways to protect intellectual property in the EU. I therefore do not think that it would lead to any softening of the EC's negotiating position in the EUIndia FTA." Shah's Association represents many big Indian pharma companies, some of who have seen their consignments of generic medicines grounded at ports in the EU. These EU countries

seized these generic medicines for 'trademark violations' of patented drugs

Parliament's decision has come as a "great relief from the attempts of vested inter-

DG SHAH

PROF PRABUDDHA GANGULI

Secretary General IPA

CEO, VISION-IPR, Mumbai and MHRD IPR Chair Professor, Tezpur University, Assam

I do not think that it (rejection of ACTA by EU Parliament) would lead to any softening of the EC’s negotiating position in the EU-India FTA

ACTA is clearly superfluous and unnecessary as it attempts to create an additional framework that brings no value to the system

even though these generics were recognised in the destination countries like Africa and Latin America. Dr PV Appaji, Director General, Pharmexcil comments that the EU

ests to show that legitimate generics are substandard quality." Tapan Ray, Director General, Organisation of Pharmaceutical Producers of India (OPPI), points out that

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the agreement has not been formally approved by any of the signatory countries, as yet though it now appears that it will not be applicable to EU. The rejection in the EU is therefore not expected to reverse the other countries' support for ACTA. Proponents of ACTA warn that the EU's Parliament rejection of ACTA dilute IPR protection in the EU but IPR experts like Professor Prabuddha Ganguli, CEO, VISION-IPR, Mumbai and MHRD IPR Chair Professor, Tezpur University, Assam rubbish this claim. He feels that ACTA is "clearly superfluous and unnecessary as it attempts to creates a additional framework that brings no value to the system" and the rejection of ACTA in no way dilutes EU's strong intention to enforce IPR in its members. Ganguli opines that the TRIPS Agreement in Article 51 read with Footnote 14 adequately addresses issues related to measures against "anti-counterfeit" and further jurisdiction specific enforcement of patent rights, trademark rights and copyright are addressed December 16-31, 2012

within the framework of the IPR laws including civil and criminal procedures in each country.

More IP hurdles ahead There has been a long history of push back. For instance, one of the earliest well-organised attempts to discredit off-patent medicines was the launch of the International Medical Products Anti-Counterfeiting Taskforce (IMPACT) by the WHO in 2006. WHO was forced to water down its role in IMPACT after there were clashes between member countries at the both the 2008 and 2010 World Health Assemblies. WHO member countries from the developing world criticised WHO's role in IMPACT as well attempts use the word "counterfeit" as a public health term. The argument was that counterfeit matters should be handled by WTO and WIPO and not the WHO. A Third World Network report on the WHA 2010 proceedings featured a very telling reaction from WHO Director-General Dr Margaret Chan, who reacted to this tussle clarifying that WHO would focus on public health problems, and confirmed that the WHO had no role to play in IPR enforcement. She spoke of the need to take a multi-disciplinary and multi-faceted approach but only on the public health aspect and not on law enforcement or IP enforcement. Commenting on the perception that WHO was waging a war on generic medicines she said that if there is anything that WHO is doing to attack genuine, quality, generic medicines, "I will punish those staff". Added to this alphabet soup are the Patent Law Treaty (PLT) and Substantive Patent Law Treaty (SPLT) in the WIPO; and the Trans-Pacific Partnership (TPP) Agreement. The Patent Law Treaty (PLT) concluded on June 1, 2000 and Substantive Patent Law Treaty (SPLT) in the WIPO aims at going far beyond the formalities of the PLT to harmonise substantive requirements such as novelty, inventive step and non-obviousness, industrial applicability and utility, as well as sufficient disclosure,

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SWARAJ PAUL BAROOAH

DR PV APPAJI

TAPAN RAY

Director General, Pharmexcil

Director General, OPPI

TPP is more expansive than ACTA and potentially far more destructive

It's a great relief from the attempts of vested interests to show that legitimate generics are of substandard quality

The agreement has not been formally approved by any of the signatory countries, as yet though it now appears that it will not be will not be applicable to EU

unity of invention, or claim drafting and interpretation.

granting them power to challenge countries' laws, regulations and court decisions in this international tribunal. Thirdly, Barooah opines that the TPP makes corporate responsibility "a joke" as it obliges member countries to provide a host of extreme new privileges (taking some of the worst aspects of NAFTA) while there are no general exceptions to safeguard environmental, health, labour or consumer protection policies. Specific to the pharma industry, the proposals on pharma pricing include introducing new administrative and judicial appeal systems to ensure that governments are 'properly valuing' drug patents when they buy them for their public health programmes. The attempt is to bring in provisions which allow pharma companies to sell en masse to governments while also raising the prices. And Barooah's fifth point is on the IP front, where he says that the TPP seems more restrictive than ACTA because all signatory countries will have to bring their domestic laws in line with the IP provisions laid out in TPP. Some of the problematic IP proposals are that temporary reproductions, which could include digital copies of nearly anything online, are included as copyright infringement.

TPP also proposes to further extend the copyright period making the minimum duration for corporate owned works-for-hire as 95 years, +70 years for the standard copyright protection and 120 years for unpublished works. Regardless of copyright violation, the TPP proposes anti-circumvention provisions so that even after an extended copyright protection period, one can continue to 'protect' work simply by attaching a technological protection measure (TPM). The TPP also provides for TRIPS plus damages for copyright infringement. Barooah hints that there are many more such proposals in TPP. While Ganguli is a "supporter of strong and enforceable IPR laws as they are essential for the socio-economic development of any country and also to build and support an innovation ecosystem", he believes that there is no need for more such jurisdictions like ACTA or for that matter TPP. Instead, he advocates strengthening and better implementation of the existing framework.

IP Scholar, UC Berkeley's Law School

The TPP threat Indeed, the next immediate threat on the horizon is thought to be the TPP, which "is more expansive than ACTA and potentially far more destructive," opines Swaraj Paul Barooah, IP Scholar at UC Berkeley's Law School in his blog post titled 'Exit ACTA, Enter TPP' on SpicyIP. As Barooah explains in this blog post, TPP is ostensibly a free trade agreement (FTA) that the US is negotiating with eight other nations (Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore and Brunei); Mexico and Canada have also been invited to join in and Japan is expected to join in as well. He points out that the 'secretive' negotiations have been going on since 2009 and are expected to be complete by the end of 2012. Based on leaked drafts and documents, Barooah lists out five primary areas of concern in the TPP. While the lack of transparency is common to the early days of ACTA, TPP seems to propose extra-judicial enforcement, in that the dispute resolution process sets up an international tribunal which seems to circumvent domestic judicial systems. Barooah comments that it also seems to be very MNC friendly, www.expresspharmaonline.com

People power The July 4 vote of the EU Parliament is the latest manifestation of another trend when it comes to IP issues: the battle has long since gone from behind-closeddoors to street protests, December 16-31, 2012

sometimes coordinated across the globe in full media glare. These days, NGOs can match the â&#x20AC;&#x2DC;big industryâ&#x20AC;&#x2122; backers of these IPR treaties, in terms of reach and mind space of the consumer, if not funding. In fact, Appaji of Pharmexcil opines that the ratification process of ACTA in the proposed form would not be possible due to the very active role played by international NGOs. Shah of IPA also points to other allies: the media which played an important role in creating awareness and educating people on what is just and equitable as also the convergence of various forces (like health activists, civil liberty movement and internet users) to a common position. EU citizens organised street demonstrations, e-mails to MEPs and calls to their offices. EU Parliament also received a petition, signed by 2.8 million citizens worldwide, urging it to reject the Agreement. These efforts managed to turn the tide, reversing the unanimous support ACTA receivedfrom the EU, with the heads of all 27 EU member countries signing it last December. By July some member states obviously had second thoughts and feared a backlash. A ratification needed the consent of all member states, and with only 22 states consenting, ratification was not possible. The overwhelming vote against the ratification - 39 in favour, 478 against, with 165 abstentions â&#x20AC;&#x201C; is a testimony to the increased awareness levels on this issue. Of course, there is always the chance that ACTA could be resurrected in the EU. Shah points out that the EU Parliament has referred the ACTA to the European Court of Justice (ECJ) seeking opinion on its consistence with the EU Law. A favourable opinion could provide an avenue to modify the objectionable provisions and seek endorsement of the Parliament, he reasons. But this tactic might just back fire, as the Kenyan Government found out the hard way when it tried to push through an anti-counterfeit act. Appaji refers to the recent judgement of the Kenyan Supreme Court, December 16-31, 2012

directing the Government of Kenya to re-look the anticounterfeit act, and he feels that "the attempt of vested interests in blocking the use of generics is losing ground." Coupled with the Indian Government's initiative of taking the 'Brand India

Pharma' campaign global, Appaji feels that Indian pharma will strengthen its position in international markets. Pharmexcil is also organising the first ever India Show at this year's CPhI World Wide in Madrid. Projected as the first such show exclusively for the

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Indian pharma sector, this is another indication of the Government's determined effort to establish Indian pharma as a dependable source for quality generics at affordable prices. Signing off, Shah opines that this is an ongoing battle (i.e. protecting India's abili-

ty to manufacture and supply off-patent medicines at the affordable prices) and it would have moments of success as well as failures. One hopes that as IP law continues to evolve and mature, consumer/patient interest will reign supreme. viveka.r@expressindia.com

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Not just sourcing but right-sourcing Supplier relationships between MNC pharma and their Indian partners have been strained due to a number of issues, ranging from quality concerns to delays in projects. For instance, Mehra analyses Pfizer's sourcing arrangements with Indian pharma companies in the past few years. The MNC entered sourcing agreements with Claris Lifesciences and Aurobindo in early 2009, and with Strides Arcolab in early 2010. In 2010, Claris received a warning from US FDA and a subsequent warning for inadequate follow-up. Claris recalled some of its antibiotics and other products from the US in 2010, as a precautionary measure against possible contamination. Pfizer also had to voluntarily recalled certain lots of Citalopram and Finasteride, sourced from Aurobindo, from the US market, due to possible labelling issues. These incidents strained Pfizer's relationships with its Indian suppliers and the MNC down-sized its deals. In Aurobindo’s case, Pfizer reduced the number of target emerging markets from 60-70 to ~25, and the number of products to be launched from 800 to ~180.

June 1-15, 2012

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pencer Johnson's Who Moved My Cheese?, a oft-quoted best-seller even 14 years after its release in 1998, is all about coping with change by modifying strategies to achieve success. And deal activity in the biopharmaceutical space in India seems to be bearing out his premise once more. For instance, Aashish Mehra, Managing Director, India and Asia Pacific Practice, Strategic Decisions Group (SDG), a US-based consultancy concedes that Ranbaxy Laboratories' woes with the US FDA had caused pharma MNCs to becomes "increasingly cautious to avoid multi-million dollar penalties, loss of access to the attractive US market and significant erosion of brand equity". But he also points out that while the supplier relationships in the 'big ticket' zone have had some setback, there is modest activity in the terms of acquisition of mid-sized companies.

RAJIV MALIK President Mylan Inc.

Not only has Matrix contributed to Mylan’s very strong growth through the success of its business, it has also made it possible for Mylan to integrate vertically and realise substantial ongoing operational efficiencies on a global basis

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DR AJAYKUMAR SHARMA Practice Head – Pharma Healthcare, South Asia & Middle East, Frost & Sullivan

India has one of the weakest coalition governments which is not in a position to take strong decisions in spite of the Indian growth revised to an all-time low of 6.8 per cent for 2012

Political tangles Among the macro factors impacting business in general in India, Dr Ajaykumar Sharma, Practice Head – Pharma, Healthcare Practice, Frost & Sullivan, South Asia & Middle East says political stability is one of the stumbling blocks. He opines that India has one of the weakest coalition governments which is not in a position to take strong decisions in spite of the Indian growth revised to an all-time low of 6.8 percent for 2012. Sharma opines that this “policy paralysis” has forced many MNC pharma and even big Indian corporates to look beyond India for safer havens to continue propelling their double digit growth story. Biocon's announcement in October 2010 that it would invest around $161 million with the Malaysian Biotechnology Corporation has to be seen in this light, where the company obviously thought it could get a better and faster RoI elsewhere rather than within the country. When compared to India, Sharma says China and Russia (for the most part), and Indonesia in relative terms, have stronger political stability. Besides these three markets, he feels that the CIS countries,

AASHISH MEHRA Managing Director India and Asia Pacific Practice Strategic Decisions Group

Emerging markets require MNCs to tailor their product portfolios to cater to the 'middle of the pyramid' patients (not only the 'top of the pyramid'), especially in out-of -pocket markets like India, Indonesia, Philippines, etc.

December 16-31, 2012

African Federation, and the Middle East are other key markets attracting MNC interest. Will these markets outshine India, is the unspoken concern.

Pricing pitfalls The impending price control regime is also a major worry for industry stakeholders. In a recent Standard Chartered Securities report, analysts Ravi Agrawal and Neha Kothari opine that the broad potential impact range from a 1-2 per cent one-off industry profit hit to exponential outcomes to even more draconian cost-based, long-term growth-debilitating measures - creates an uncertain and higher risk investment decision profile for the sector. Their key takeaway is that a combination of costand market-based pricing will be implemented, reflecting affordability concerns and industry profitability

December 16-31, 2012

apprehension. Besides this, their analysis indicates that every 100-300 bps hit to India-based profit/growth assumptions would result in 6-28 per cent profit impact and 5-25 per cent valuation impact on companies. Given that the domestic business underpins the 50-100 per cent valuation premium to US generics peers, de-rating could be even higher in a lower investment/growth cycle scenario. Besides these macro industry policy level upheavals, there are company-specific issues at play which may come to light only on hindsight. Biocon's deal with Pfizer for generic insulin was called off barely two years after it was inked and created a perception that all was not well. Sharma rationalises that deals fall apart for various reasons. In this particular case, his analysis was that Biocon was supposed to start its operations in Enstek

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in Malaysia from the first payment received in 20092010 from Pfizer. But there were project delays which could have led to a fallout in the time line which Pfizer might have anticipated to get to market.

Fine tuning emerging market strategies But SDG's Mehra also points to many other deals that still seem to be intact, like for instance AstraZeneca's deal with Torrent, Glenmark's deal with Daiichi Sankyo, GSK's deal with Strides Acrolabs, etc. Pfizer still engages contract manufacturers from India in spite of the quality issues and reduced scope. Sharma too echoes Mehra's point that these deal breaks could be aberrations, reasoning that during this time Biocon announced other marketing deals for its analogue insulin stands like its tie up with Bayer Healthcare for China.

Mehra lists major deals like Aventis Pharma's buy of Mumbai-based Universal Medicare's marketing and distribution business of branded nutrition products and Abbott Laboratories' buy of Piramal Healthcareâ&#x20AC;&#x2122;s domestic formulation business which are signs of continued interest. Private equity investments into the sector have also continued, both from global as well as India-based PE firms. Bharat Serum and Vaccines picked up funding from Orbimed, the world's largest life-sciences focused PE fund, while Chrys Capital invested in Eris Lifesciences, SIDBI in Centaur Group. Dilip Shanghvi, promoter of Sun Pharma as also invested, albeit in his personal capacity, in Natco Pharma. These are but some selected examples that buttress the argument that the Indian biopharma space is still an attractive investment. An example of a

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successful long term combination between MNCIndian pharma is the MylanMatrix transaction. Rajiv Malik, President, Mylan Inc also points out that in addition, to the Matrix transaction, Mylan also has strong partnerships with Biocon for biogenerics, Natco for Copaxone, and Famy Care for women’s health. Malik avers that not only has Matrix contributed to Mylan’s very strong growth through the success of its business, it has also made it possible for Mylan to integrate vertically and realise substantial ongoing operational efficiencies on a global basis. These benefits have been felt commercially in every region in which we operate.

Reading the market Some course corrections seem to be in place as MNCs realise that emerging markets require different strategies from developed markets. For instance Mehra analyses that most MNCs like Pfizer, Sanofi, Novartis, GSK, MSD, AstraZeneca etc are increasingly focusing on emerging markets for their growth, and these markets require them to tailor their product portfolios to cater to the "middle of the pyramid" patients (not

only the "top of the pyramid"), especially in out-ofpocket markets like India, Indonesia, Philippines, etc. For this reason, Mehra predicts that they will continue their efforts to strike deals which reduce their costs, including partnering with Indian suppliers. Malik too believed that that there are ample opportunities for the pharma industry in India and that the "right partnerships", which can include overall or limited joint ventures, collaborations in therapeutic areas, and even outright acquisitions, will prove successful for both the MNC and Indian pharma company. An important point Mehra makes is that the cost structure of Indian companies is much lower, due to scale benefits, which allows them to provide attractive price points to MNCs. He opines that this gives Indian contract manufacturers and API manufacturers a head start over contract manufacturers in other emerging markets, even though there have been recent contract manufacturing deals in other emerging markets such as Vietnam - GSK engaging Savi Pharm to produce branded generics from

its Orange Line. Thus he points out that Astra Zeneca's deal (March 2010) with Torrent to market 18 branded generic drugs in nine emerging markets, is still going strong. A year later (March 2011), the two companies were said to have been engaging in talks to cooperate in clinical trials, co-marketing and new product development. There had also been speculation of a stake sale. Similarly, Bausch & Lomb entered into a deal with Micro Labs in mid 2011, for contract manufacturing.

Staying the course But it is important that India Pharma Inc should take the right steps to continue on this path. Mehra of SDG says that India's advantages should not be lost on quality concerns and the most important step is "greater emphasis on quality, particularly in mid-sized and small-sized companies. This is bound to happen as more such deals are forged, and issues identified." In addition, he says collaboration with MNCs could be to develop products tailored for emerging markets, as well as use Indian companies' sales & distribution reach to improve access for MNC products. The MSD -

Sun Pharma JV for emerging markets, signed in April 2011 is a case in point. The deal covers "innovative and differentiated" drugs, to be developed for markets in Asia Pacific, Latin America, Eastern Europe, the Middle East and Africa. These would be variations of known products and could be more convenient to take. The second example he cites is the Bayer - Cadila Healthcare sales and marketing JV called Bayer Zydus Pharma inked in January 2011, for the Indian market. On the policy side, Malik believes that in a fast paced economy such as India, "it is imperative that policies are framed and implemented to ensure the sector’s growth impetus is not affected." He believes that the Indian government will take steps to provide its 1.2 billion people with access to high quality medicine and Mylan is committed to partnering with them towards this cause. Thus while deal sizes have reduced and may stay small going forward, global biopharma players and their counterparts in India seem to have now adopted the slow and steady approach. That's until the market moves again. viveka.r@expressindia.com

Other emerging biopharma hotspots

ndia is by no means the only emerging market on the biopharma MNC radar. Mehra of SDG lists Brazil as a major destination attracting MNCs. Sanofi Aventis had acquired Medley in 2009, for ~$ 680 million, getting access to Medley’s portfolio of 127 products in the areas of endocrinology, gastroenterology, cardiology, gynaecology, dermatology, urology, neurology, and general clinic. After the purchase was announced, two Brazilian anti-trust bodies, SEAE and SDE, opposed the takeover, which they said would hurt competition in the sector in Brazil. The agencies later gave their approval. The deal set a trend of M&A in

Brazil, such as Pfizer-Teuto, Watson-Moksha8, GSK Lab Phoenix. The Pfizer-Teuto $ 240 million deal in October 2010, gave Pfizer access to Teuto's broad portfolio of generics, as well as its expansive distribution network in rural and suburban areas in Brazil. Central and East Europe are also deal hotspots, with Sanofi Aventis acquiring Zentiva in February 2009, to accelerate the group’s expansion in Central and East Europe, Russia and Turkey. Then there are the deals involving multiple emerging markets. Mehra cites GSK acquiring UCB's businesses in 2009, which spanned ~50 emerging markets

in Far East, Middle East, Lat Am and Africa. The deal size was ~ $ 650-700 million. As per the deal, manufacturing takes place in GSK and UCB subsidiaries in Egypt, South Africa and Turkey. The deal was seen as win-win, since UCB wanted to focus on its core areas while GSK acquired assets which fit with its growth strategy in emerging countries. Also in 2009, GSK acquired BMS' businesses in North Africa and Middle East. BMS continued to manufacture till GSK's plant in Giza came online.

Building the case for India biopharma

rom a Mylan viewpoint, Malik believes that a number of macro, regional and local dynamics will continue to drive strong growth in the Indian biopharma sector. First, continued population growth and an ageing population, both in India and around the world, will continue to drive demand for medicine. He points out that by 2025, the global population of those over 60 will be growing three and a half times as rapidly as the total population. India, as a low cost producer of high quality products, will continue to be on the forefront of meeting this need, both for its own population as well as for the global population. Thus, Mylan continues to expand its manufacturing footprint in India and currently has a headcount of more than 9,000

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people in the region. Further, he points out that the global trend of an increase in life expectancy and incidence of chronic disease requiring ongoing treatment is true of the population in India. Another trend, a growing middle class in India and China, will promote greater access to the treatments for chronic diseases. Two thirds of the new “global middle class” will be in China and India by 2020. On the infrastructure front, while Mylan expects to see improvements in infrastructure in markets like India, improving provision of medicine and healthcare to populations that have not been previously accessible, and hopes that some of these improvements can

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come through government investment; Malik says companies like Mylan also will work to identify innovative means to expand access in order to reach India’s large population. Finally, Malik points to the double digit growth of the Indian pharma market, which is still growing at a CAGR of 14 per cent and is expected to reach $20 billion by 2015. This provides significant continued opportunity for companies with the right assets and strategy. Malik believes Mylan is very well positioned to take advantage of this continued anticipated growth by leveraging our global portfolio, manufacturing network and operational platform to provide access to best-in-class, high quality and affordable medicines.

December 16-31, 2012

June 16-30, 2012

December 16-31, 2012

ive years after the National Biotechnology Development Strategy was approved in November 2007, India's biotech upstarts, armed with sometimes just an idea, struggling to make the transition to start-ups, seem to have finally found a champion. Because while India's 'big biotech' companies, like the bellwether Biocon and the globally acknowledged vaccine makers like Serum Institute of India, Bharat Biotech, Panacea Biotec, have always attracted funding and partners (with one of them, Shantha Biotech even being bought over by big pharma Sanofi), the smaller companies, remained below the radar of investors. India's Department of Biotechnology (DBT) also focussed on public sector research. The paradox of the Indian biotechnology sector, says Susan Finston, Chief Executive Officer / Managing Director, Amrita Therap-

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eutics, is that most investment to date—including both private and Government of India funding—has gone into well-established Indian companies, and/or newer contract service providers. So as she points out, the Indian biotech market is the opposite of the US paradigm of ‘highrisk, high-reward,’ for the innovative life sciences where biotech was driven forward by scores of small bio-discovery start-ups. Many have fallen by the wayside but those that have succeeded have grown beyond their dreams. Finston cites the example of a few such US biotech companies. Amgen in Thousand Oaks, CA recently has been valued at over $50 billion and employs 17,500 people; Gilead Sciences in Foster City, CA is worth nearly $38 billion and has 4,500 workers and Biogen Idec in Cambridge, MA with a market cap of roughly $31.5 billion has created over 5,000 jobs. This is in addition to

companies like Genentech, Genzyme or Chiron, founded by university professors, that have been sold to multinationals for tens of billions of dollars. She opines that no such companies exist in India because of the current government policies. She points out that while contract service providers in bioinformatics, early discovery, pre-clinical, CRAMS and clinical research, etc., have been very important to the growth of biotech opportunities in India, they do not, generate commercially valuable intellectual property (IP), and are considered to be at the lower end of the value chain because they do not engage in fundamental basic research to develop new types of drugs for the global market as Amrita Therapeutics is trying to do.

A break from the past The Indian biotech story was stuck in a familiar rut: investors wanted to see a

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success story, or least a glimmer of that success, but these smaller enterprises needed investment to get to that success. In that respect, the National Biotechnology Development Strategy was nothing less than pathbreaking, because it promised to look beyond the funding of existing companies and technologies. To do this, DBT committed to invest upto 30 per cent of its budget in private public partnerships (PPPs) by the end of the 11th Five Year Plan. It has a special focus on finding and funding innovative technologies/companies and hand-holding them through all the sometimes painful growth process. The search is now on for companies and technologies in their early stages of research, especially high-risk innovative research, who find it difficult to fund from the usual sources, as the concept maybe too futuristic or too complicated for the usual funding sources to comprehend. Many of these companies may not have the management bandwidth. Sometimes

UTKARSH PALNITKAR

NAVROZ MAHUDAWALA

Executive Director Centrum Capital

Managing Director Candle Partners

We need a baton exchange where the entrepreneurs move from seed level funding to more mature capital

It is important that unbiased personnel from the private sector evaluate these proposals and not academicians

it could be a researcher with a great idea, but without the financial resources or contacts to test it and take it to the next level. The first step towards this goal was the setting up of a pilot Biotechnology Industry Research Assistance Programme (BIRAP) in 2008.

As a DBT programme, BIRAP aimed to get an understanding of the needs and specialised requirement for creating and nurturing a 'biotech innovation research ecosystem' in the country, according to Dr Renu Swarup, Adviser, Ministry of Science and Technology, DBT.

She says the learning has been tremendously useful in setting up a separate public sector company, Biotechnology Industry Research Assistance Council (BIRAC), in March, 2012, which she heads as Director. The special feature of BIRAC is that as a not-for-profit Section 25 Company, with its own independent board of directors, it has the flexibility of operation and provides an excellent instrument for managing the PPP programmes. BIRAC's role is significant because, while DBT is focussed on funding biotech research in the public sector, BIRAC's brief is to support and manage all PPPs and nurture start-ups and small companies. BIRAC has been set up as DBT’s inter-phase agency which serves as a single window for the emerging biotech enterprises. Swarup indicates that currently upto 20 per cent of DBT's budget has being allocated and invested in promoting PPP programmes. BIRAC would be the agency through which this budget would be operated in future. Five years after the

Schemes under BIRAC Under BIRAC there are number of schemes which are currently being operated for promoting and nurturing innovation research. The schemes are (i) Igniting new ideas—By making available Biotech Ignition Grant (BIG) schemes centred on or around individuals, or a team of individuals that will help mature nascent ideas to a stage where a startup company can be envisioned. BIG was launched in June this year and its first call will end on July 15. (ii) Supporting early stage research for proof of concept, validationSmall Business Innovation Research Initiative (SBIRI) was launched in September 2005 which aims to encourage small and medium scale industries to take up risk in innovative R&D in biotech sector. Over 100 projects from small and medium entrepreneurs have been supported. Funds deployed: SBIRI has deployed $36 million, of which $5 million in grants and $31 million in soft loans, with a debt-togrant ratio of roughly six to one. Public SBIRI funding has leveraged an additional $33 million in private investment by recipient enterprises as their core contri-

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bution, for a total investment of $69 million across approved projects. (iii) Partnership with industry for high-risk discovery led innovation research—Biotechnology Industry Partnership Programme (BIPP) is a government partnership with industries for support on a cost sharing basis for path-breaking research in frontier futuristic technology areas having major economic potential and making the Indian industry globally competitive. It is focused on IP creation with ownership retained by Indian industry and wherever relevant, by collaborating scientists. BIPP supports the development of appropriate technologies in the context of recognised national priorities in the area of agriculture, health, bio-energy, green manufacturing, when the scale of the problem has serious consequences for social and economic development. BIPP is an Advanced Technology Scheme only for high risk, transformational technology/process development. It is for high risk futuristic technologies and mainly for viability gap funding. The uniqueness of this scheme is that it is for “break through research” which enables product and process devel-

opment and is patentable, with IP ownership rights resting with industry. Funds deployed: So far 88 agreements have been signed with 72 companies involving approximately 50 start ups and SMEs. Scheme provides for both soft loan and grant. A total investment of $ 141 million has been committed with $50 million by Government of India with a matching contribution of $91 million coming in as private sector contribution. (iv)Facilitating technology validation and development – Contract Research Scheme (CRS): This scheme was launched in January this year and the first call for projects was closed on February 29. (v) Creating world class quality Incubation space (Bio-incubators) for entrepreneurs and startups: Bio-incubator Support Scheme – BISS: In order to foster techno entrepreneurship in biotechnology, BIRAC has initiated a scheme for strengthening and up-gradation of the existing bio-incubators and also to establish new world class bio-incubators in certain strategic locations. These bio incubators will provide the incubation space and other required services to start-

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up companies for their initial growth. Projects initiated: Seven existing bio-incubators across the country have been strengthened and approximately 55,000 square feet of bioincubator space has been created to support start ups. (vi)Technology Transfer and Acquisition: Mapping of both knowledge and technologies in organisations involved in innovation research is essential. For this BIRAC has initiated technology mapping at national and international level. In order to acquire new important technologies either nationally or globally, BIRAC plans to launch a Technology Acquisition Fund. These would be for public good novel and affordable products. BIRAC has so far facilitated discussions on technology transfer of cardiovascular drugs, infant care systems and formalised technology acquisition from Queensland University Australia for bio-fortification of banana etc. BIRAC intends to work closely with those research organisations which are involved in innovative research and help to create technology transfer capacity.

December 16-31, 2012

National Biotechnology Development Strategy was first formulated, DBT has a series of funds at every stage of a company's growth curve: Biotechnology Industry Partnership Programme (BIPP) for existing companies, Small Business Innovation Research Initiative (SBIRI) for smaller companies, Biotech Ignition Grant (BIG) schemes for start ups, facilitating technology validation and development through the Contract Research Scheme (CRS) and creating world class quality incubation space (bio-incubators) for entrepreneurs and start-ups through the BioIncubator Support Scheme (BISS). (See BOX: Schemes under BIRAC) And BIRAC will be the link between all of these companies and DBT. DBT and BIRAC seem to be on the right path. Utkarsh Palnitkar, Executive Director, Centrum Capital, a company that offers customised and integrated financial solutions feels that these schemes instituted by the DBT provide a "life line to budding entrepreneurs". While he feels that

December 16-31, 2012

the sum may not be large and perhaps does not have the capacity to cover the entire gamut, at least a beginning has been made. He stresses that what is required is like a baton exchange where the entrepreneurs move from seed level funding to more mature capital. Navroz Mahudawala, Managing Director, Candle Partners, which offers quality investment banking and consulting services in the midsized deal space, is also skeptical pointing out that while the intention is honourable, he hopes it serves the purpose it is intended for. He recalls that in the past there has been red tapism surrounding these government programmes. He says in order for such programmes to be successful, it’s important that unbiased personnel from the private sector evaluate these proposals and not academicians.

Hurdles in the path But now that the funds are available, there are not enough takers of the caliber required. Swarup says, “Although there are enough

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takers, our success rate is 8-10 per cent. We need to see more high level innovation research coming forward. Also innovation research for production of public good needs to be an emphasis." While there is no denying that there have been success stories, especially under BIPP as this was the first scheme launched in 2008, (BOX: Success stories under BIPP), there is no doubt that industry feels that more needs to be done, not just in terms of funds. Perhaps some aspects of these schemes need to be tweaked. Relating her company's experience when applying for DBT support under the BIPP, Finston says the process is "rigorous and time-consuming". She agrees that DBT funding and related supports play a "critical role" for small companies that are engaged in basic research leading to new types of drugs like Amrita Therapeutics in the absence of meaningful VC and/or angel investors for bio-discovery companies in India. In addition to providing financial support at a very

early stage, she says they have benefitted from the continuing opportunities for discussion and technical exchange with DBT officials under the BIPP programme. Another BIPP beneficiary company, Perfint Healthcare seems to have had a smoother ride. Nandakumar Subburaman, Chief Executive Officer and Founder, Perfint Healthcare, says that the best feature of the DBT schemes would be the absolute transparency and pro activeness demonstrated by the BIPP team. He mentions that Swarup and her team were fully supportive at all the stages. Expanding on the role of DBT, he says that their experience with DBT and other government agencies has been very satisfying when it comes to showing returns on their investment. “We have received all the prompt support from them whenever we required. Having said this, DBT is not passive – through their regular reviews they are very focused on moving things along and providing ample networking. They are

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as engaged as PE’s!”, analyses Subburaman.

Good schemes but ... One of the key challenges for biotech start-ups in India is the issue of fundraising and Finston says that under the current BIPP programme financing agreement that Amrita Therapeutics has signed, there is a 50 per cent matching requirement. While a 50 per cent R&D match is very helpful to support continued R&D outlays by established Indian companies, this can be a considerable burden for a small start-up company that comes out of academic research. Palnitkar says that the Government should focus its resources in the one area where there is a tremendous deficit, which is funding startups as there is plenty of development capital available in India. He reiterates that what is needed is a baton exchange mechanism with the enterprise finding the next level of institutional funding. There are already examples of this happening. Take again the case of Perfint Healthcare which was already a DSIR recognised R&D lab and a SBIRI supported entity. Subburaman muses that this might have helped their case when they applied for funding under BIPP to take their robotic solution for image guided tumour ablations to the next level. In addition, they already had proof of concept so this probably helped swing the decision of the Technical Screening Committee, comprising scientists from across the country, in Perfint Healthcare’s favour. Once the technology qualified for a soft loan, the founders got the confidence

DR RENU SWARUP Adviser, Ministry of Science & Technology, Department of Biotechnology

NANDAKUMAR SUBBURAMAN Chief Executive Officer and Founder Perfint Healthcare

SUSAN FINSTON Chief Executive Officer/Managing Director Amrita Therapeutics

Although there are enough takers, but our success rate is 8-10 per cent. We need to see more high level innovation research coming forward. Also innovation research for production of public good needs to be an emphasis

The best feature as we see it, would be the absolute transparency and proactiveness demonstrated by the Biotechnology Industry Partnership Programme (BIPP) team. Dr Renu Swarup and her team were fully supportive at all stages

DBT funding and related supports play a critical role for small companies that are engaged in basic research leading to new types of drugs like Amrita Therapeutics in the absence of meaningful VC and/or angel investors for bio-discovery companies in India

to go out and invest in the development supported by the soft loan under BIPP. Within 12 months of funding Perfint Healthcare is already out in the market with pilots and soon will be commercialising.

Accordingly, he has to interact with bankers, lawyers, HR professionals etc. As a first time entrepreneur this can prove to be a bewildering process. What instead needs to be done is that feasible plans need to be nurtured up to the break-even point in an environment that encompasses all the elements. “I think the time for an incubation corporation of India has arrived," he advises. Hopefully the BISS scheme and the various services by BIRAC, like the IPR and technology evaluation cells, etc will meet this need. Again comparing the ecosystem created in the US for biotech, Finston says that the Government of India may

need to do more to fund the ‘big visionaries', particularly in the academe, who make up in intellectual capital what they may lack in financial resources. In practical terms, she mentions measures like reducing or eliminating the high tax burden on academic biotech start-ups, providing investment tax credits, and reducing or eliminating matching requirements for start-ups, of course retaining stringent due diligence and maintaining the financial commitment that Amrita Therapeutics made to DBT in the event of successful commercialisation of the technologies. Overall, Finston does express some hope for the future, because the Life

... can be better Palnitkar also makes the point that funding is only one aspect of the incubation process. What is needed, he says, is a more wholesome approach, which includes provision of management bandwidth and mentoring. Typically what happens in India is that a new entrepreneur has to deal with multiple agencies, for concessional lab space, capital, loans etc.

Success stories under BIPP Affordable product development supported under BIPP:

license obtained in India for the age group of >one year to three years and >18 years to <40 years.

● H1N1 pandemic influenza vaccine

● Pneumococcal vaccine

H1N1 pandemic influenza vaccine named PandyfluTM is in the market developed by Panacea Biotech, Delhi. 1,18,480 doses of the vaccine supplied to Government of India in 2011. 11, 50,480 doses of vaccine are in the stock to meet further requirement.

Asia specific 15 valent pneumococcal polysaccharide—CRM 197 protein conjugate vaccine— studies on one India specific serotype completed by Tergene Biotech, Secunderabad.

● Japanese Encephalitis (JE) vaccine

Phase III clinical trials of JE vaccine, successfully concluded by Biological E, Hyderabad. Market

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● Clinical trials

Phase I studies completed for a novel molecule TRC150094 a novel Diiodothyronine (T2) analogue, for the treatment of cardiovascular (CV) risk factors defined by Metabolic Syndrome (MS) aimed at increasing Resting Metabolic Rate (RMR)

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by Torrent Pharmac-euticals, Ahmedabad. Phase-III clinical trial of oral Rota virus vaccine developed by public sector, being implemented by three public sector organisation and coordinated by Bharat Biotech India, Hyderabad Enrollment of subjects completed. ● Diagnostics

A rapid cost-effective point-of-care diagnostic device with microPCR to diagnose multiple diseases like malaria, dengue and typhoid has been developed by Bigtec. Bangalore and is ready for validation.

December 16-31, 2012

Sciences committee of the Planning Commission has started this process to create more opportunities for more biotech discovery companies to take root in India. “That is where the highest potential is for value creation through innovative vaccines, drugs, and combination medical devices,” she feels.

four patents, including two full utility specifications and PCT applications. Last June, at the 2011 Biotechnology Industry Organization (BIO) International Convention, Amrita Therapeutics was named “Buzz of BIO” Winner as a leading innovative bio-discovery company.

According to Finston, this was also the first-ever recognition by the global leading biotech industry association of any Indian bio-pharma company. Similarly, earlier this year Amrita research has been highlighted in international journals including the

Journal of Commercial Biotechnology (January 2012) and ISR Neurology (2012), where the company also acknowledged and thanked DBT for grant support to develop innovative cancer drugs in collaboration with their R&D partners in Portugal at the Instituto

Superior Tecnico (IST). The future for small (early stage) biotech research in India definitely seems a lot more promising today than when Biocon first came on the scene. The fervent hope is that it stays on track. viveka.r@expressindia.com

Beyond DBT But experts know that the industry cannot depend only on government funding. Mahudawala says, “We do not think government funding would ever be sufficient enough to spur innovation and the growth of lifesciences sector in India. It has to be supplemented by sizeable venture capital(VC)/private capital. Frankly, the credit for the growth of the Indian pharma sector and the status it has today should go to the Indian entrepreneur (and success of private enterprise)–the government has had limited role to play. In fact, the reason the success of this sector (like the IT sector) is that government has had limited role to play!!” He cites several Indian companies, pharma and biotech biggies today, like Biocon, Bharat Biotech, Glenmark, Ajanta Pharma, etc. which have benefited sizeably from the VC/PE money they raised in the early stages of evolution. In fact, Technology Development and Information Company of India Ltd. (TDICI) and later Kotak have contributed greatly in nurturing lifesciences talent. Companies from the BIPP stable are no different. For example, Perfint Healthcare has PE funding from IDG Ventures, Accel Partners and Norwest Venture Partners and is reportedly tapping more PEs for funding. Subburaman says that future plans include raising more capital for them to go international. But at the same time, they will work with DBT “in creating ‘appropriate’ technologies for India to improve quality of life of those that are fighting cancer.” Amrita Therapeutics is already proof that high-risk biotech research can be done in India. In terms of an IP portfolio, the company has advanced research through in vitro testing and have filed December 16-31, 2012

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16 - 31 January 2012

ver the years, India has emerged as a major exporter of generic pharmaceutical products, thanks to a strong manufacturing and rich vendor base. The country is also emerging as a hub for contract research, biotechnology, clinical trials and clinical data management. The opportunity presented when branded products go off patent, is sizeable, spanning $58 billion, $48 billion, $39 billion in 2011, 2012 and 2013

respectively) and will no doubt enhance India’s potential to become a leader in export of pharma products to countries like Japan. But while identifying such opportunities is not so difficult, tapping them is tougher. For instance, the fact that some consignments of counterfeit medicines were traced to India in the past contributes to a fear in the minds of Japanese patients. In the wake of this situation, the industry has called for unstinting support from the Japanese Government in the form of policy, infrastructure and financial benefits in the form of special incentive schemes etc. Archana Dubey Mitra, Associate Vice President API and Exports, Bal Pharma stresses, “Today, the pharma industry is moving towards the emerging markets due to less competition and fair good margins compared to the US and Europe. Japan, being one of the highest category regulated market (which is recognised as the second largest in the world), has not been tapped due to its strict regulations, which are now easing out to support Indian players to establish their presence.” Surinder Raina, President —International Marketing, Inventia Healthcare highlights, “The emerging markets are

Table 1: Export performance of Indian drugs, pharma and fine chemicals sector Year

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

Value in $ (million)

4994.52

5939.75

7644.05

8802.64

8878.27

10400.00

(Source: Pharmexcil)

Table 2: Region-wise exports of India’s drugs and fine chemicals for 2009-10 Region

% of contribution

North America

9888.31

24%

European Union

8196.33

19%

Africa

6657.17

16%

Middle East

3559.99

LAC

3274.37

ASEAN

2947.67

CIS

2497.64

Asia (including Middle East)

1909.78

South Asia

1724.30

Other European countries

664.60

Oceania

614.10

Other America

99.62

Unknown

58.04

(Source: Pharmexcil)

Value (` crore)

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expected to grow each year by 15-16 per cent whereas, markets in the US and EU are going to grow by three to five per cent and one to three per cent respectively. Increase in accessibility and affordability in the emerging markets are the growth drivers in the pharma market, which present huge opportunities for the Indian pharma companies. In case of generics market in the EU and the US, there is a tremendous price pressure and as soon as the number of competitors increases to more than six, there is a fast erosion within the market, which does not leave much earnings for the players. The shifting focus in the emerging markets is going to help improve the bottom line of the companies because most of the emerging markets have a branded www.expresspharmaonline.com

generic market, which gives better returns when compared to the generics especially the commodity generics sold in the US and the EU market.” Enumerating his suggestions, NR Munjal, Vice President cum Managing Director, Ind-Swift Laboratories, who was also elected as the Chairman of Pharmexcil says, “The pharma sector is capital intensive. Besides R&D expenditure, regulatory requirements require huge funds. Establishing a large number of bio-equivalence centres through soft funding would lower the costs of bio-equivalence tests and more registrations / exports can happen from India. All quality investments should be treated at par with R&D to provide incentive to the industry (as cost of quality investments is very high in EU).”

Identifying the opportunities Recently, IMS released a listing of 17 emerging markets, which together are expected to have 24 per cent market share in the global pharma market in 2014. China falls into the tier-I category followed by India, Russia and Brazil in the tier-II category. The tier-III category consists of countries such as Poland, Argentina, Indonesia, Vietnam, Thailand, Taiwan, Egypt, Romania, South Africa, Turkey, Mexico, Ukraine and Pakistan. Munjal pointed out that export of drugs and fine chemicals stood at $10.3 billion during 2010-11 with a year-overyear growth of 15.1 per cent. An analysis of the export performance of Indian drugs, pharma and fine chemicals for the last six years (See Table 1: Export performance of Indian drugs, pharma and fine chemicals sector) shows a steady upward track bearing out the potential. Meanwhile, an analysis of region-wise exports of India’s drugs and fine chemicals for the 2009-10 fiscal reveals that the established markets, North America and the EU still make up the bulk (more than 40 per cent) of exports. (See Table 2: Region-wise exports of India’s drugs and fine chemicals for 2009-10). Experts predict that this will balance out and reverse in the years to come.

Readiness to embark Tracking these shifting export patterns come under the purview of the Pharmaceuticals Export

ARCHANA DUBEY MITRA Associate Vice President API and Exports Bal Pharma Today

Today the pharma industry is moving towards the emerging markets due to less competition and fair good margins compared to the US and Europe. Japan, being one of the highest category regulated market (which is recognised as the second largest in the world), has not been tapped due to its strict regulations, which are now easing out to support Promotion Council (Pharmexcil) an autonomous export promotion council (EPC), was set up by the Ministry of Commerce and Industry, Government of India on May 12, 2004. With a focus to take Indian healthcare and pharma products to the global arena, the organisation has taken various initiatives to set up collaborations with associations in other countries. Some of its recent initiatives include an MoU signed between Drug Information Association, India (DIA) and Pharmexcil with the sole objective of functioning as a forum for quality information exchange leading to better medicines and enhanced health and well being. DIA is a professional association having 18,000 members worldwide who are involved in the discovery, development, regulation, surveillance or marketing of pharma or related products, with its headquarters in the US and offices in Switzerland, Japan, China and India. Apart from this, an MoU was signed between Pharmexcil, and The Myanmar Pharmaceutical and Medical Equipment December 16-31, 2012

Table 3: Disbursement of reimbursement of product registration charges Fiscal year

Disbursement amount (` in lakh)

2005-06

13.47

2006-07

57.18

2007-08

4.20

2008-09

646.64

2009-10

45.69

2010-11

156.29

(Source: Pharmexcil)

December 16-31, 2012

Entrepreneurs Association on January 11, 2011 in order to ensure cooperation and to promote the development of pharma trade between India and the Republic of the Union of Myanmar. But these initiatives with overseas partners will not be enough if the Indian government does not put in place adequate supportive policy. Elaborating Munjal says, “To maintain the leadership of Indian pharma research in frontier areas, initiatives need to be taken up through government supported R&D programmes in order to boost innovation especially in the Micro, Small and Medium Enterprises (MSME) sector. One of the major concerns for SSI and SMEs has been their limitations for upgrading their facilities and to achieve compliances for most regulated markets. Ministry of Commerce is looking into various suggestions and models to support SMEs in their endeavour to export to even highly regulated markets. Further, efforts are on to sensitise banks to provide necessary funding support for exports and R&D.” Munjal further adds, “Pharmexcil will take up the matter of availing easy financial assistance especially for SMEs for their growth acceleration ensuring that the units are capable to tap the international markets with competency.” Munjal gives an example of companies incurring huge expenses towards fulfilling statutory requirements in the buyer country including product registration charges. The Indian Government does make this pain somewhat bearable as it currently reimburses 50 per cent of this amount, subject to a ceiling of ` 50 lakh per year for each exporter, under the Market Access Initiatives (MAI) Scheme in accordance with the guidelines set out. Inspite of this, the data of the past six years on product registration reimbursement amounts (See Table 3: Disbursement of reimbursement of product registration charges) shows dips and peaks which could point to the the ebb and flow of Indian pharma exports. Clearly, while the sector has potential, players have been cautious in some years. The heartening fact is that 2010-11 has seen a clear rise over 2009-2010, though it has not yet reach

anywhere near the 2008-09 level.

Strategy re-look The Indian pharma industry needs to focus on regions having high growth potential against the backdrop of the level of international compliances required for export. Since regulatory procedures and achieving compliance for exports is a long drawn process, which normally takes years, it is better to focus on less regulated markets (the pharmerging markets) for the short-term period. Conscious effort towards achieving the compliances required for markets like EU and the US should be taken into account, which is likely to have a high growth potential in terms of value as seen in Table 2, which charts the region-wise exports of India’s drugs and fine chemicals for 2009-10. Raina says, “As far as global pharma markets for APIs is concerned, the top three markets for APIs are the US, Europe and Asia Pacific. The API market in the Asia-Pacific region witnessed a growth of 6.7 per cent from 2005 - 2010 and is going to see the growth of 9.6 per cent till 2016. The perceptible shift in API manufacturing is being noticed from the western markets to emerging markets like India and China.” In the Asia Pacific Region, Japan and China enjoy the highest market share for API with 42.8 per cent and 20.8 per cent, respectively. India accounts for 10.3 per cent, while South Korea holds 8.1 per cent market share. To avoid price erosion, which is now seen in the US, Indian manufacturers have started exporting more APIs to Japan. This has also been supported by the prevalent trade deficit and subsequent import of Chinese goods, which rose to $43.5 billion in 2010-11 from $17.5 billion in 2006-07 and exports lagged far behind, upto just $19.6 billion from $8.3 billion over the five years. The current bilateral agreement Comprehensive Economic Partnership Agreement (CEPA) between India and Japan will also act as a catalyst to boost pharma export growth to Japan. The agreement will ensure access to a highly developed Japanese market for the pharma sector and for the first time ever, Japan has committed to give the same treatment for Indian generics www.expresspharmaonline.com

SURINDER RAINA

NR MUNJAL

President - International Marketing Inventia Healthcare

Vice President cum Managing Director Ind-Swift Laboratories

The shifting focus in the emerging markets is going to help improve the bottom line of the companies because most of the emerging markets have a branded generic market, which gives better returns when compared to the generics especially the commodity generics sold in the US and the EU market

The need of the hour for India is to create a strategic orbit, where the world would be able to recognise India's pharma sector as authentic, safe and affordable. Moreover, India needs to be recognised as global pharmacy of the world in the highly competitive market

as their domestic industry. Mitra avers, “The shift will boost Indian pharma companies to re-look at their lost business strategy. Chances of building a brand is still high as these countries operate on branded generic model like India. The industry need to work on better margins specially when expenses of a manufacturing unit along with growing regulatory requirements are too high. Though we have good competition from across the world but our quality, technology and rock solid infrastructure will always be in lead.” Munjal further says, “The need of the hour for India is to create a strategic orbit, where the world would be able to recognise India’s pharma sector as authentic, safe and affordable. Moreover, India needs to be recognised as global pharmacy of the world in the highly competitive market.” He informs that this image build up is already underway, with Pharmexcil initiating a brand building project in association with India Brand Equity Foundation (IBEF). On a cautioning note, Munjal says, “It is of paramount importance that the brand promotion efforts synergies with all stakeholders and industry contribution in terms of inputs

and financial contribution.” A successful business strategy is when both buyer and seller benefit equally. For example, the Japanese Government is under tremendous pressure due to an ageing population and resultant increasing healthcare cost. Japan currently has only 19 per cent penetration in generics by volume, compared to 68 per cent in case of the US; one reason for the high cost of healthcare in Japan. Even though it is highly challenging to meet the local regulatory requirements, this government push to reduce healthcare cost by increasing generic penetration makes Japan a very attractive market for Indian generic pharma companies. Experts say similar opportunities, based on evolving demographic and disease profiles exist in South East ASEAN countries, LATAM and CIS where Indian companies already export products in categories spanning NDDS anti-diabetics, GI, CVS and CNS. This shows that Indian pharma companies have made the strategic move from plain vanilla generics to branded generics. Hopefully, with better returns, the industry will evolve to the next level faster. u.sharma@expressindia.com EXPRESS PHARMA

Safer paths to greener pastures With World Environment Day fast approaching, Usha Sharma analyses the pharma industry's measures to preserve the environment and finds that efforts taken to ensure plant safety go a long way in doing so June 1-15, 2012

ccidents can be prevented if a company focuses on the safety issues. To avoid accidents in pharmaceutical facilities, companies needs to consider Quality by Design (QbD) as an important aspect while setting up a pharma unit. Compliance with safety measures is not only important for the finished goods but also for the raw materials since many hazardous chemicals are used in the pharma manufacturing process and they need to be stored safely. Like any other industry, pharma units are connected with many departments on a regular basis. It is also important to get every department involved while setting up a pharma unit so that they can share inputs without any hassles. Alok Ghosh, President, Technical Operations, Lupin highlights the importance of QbD in pharma facilities and says, “QbD is the process to implement the strategies at a planning stage to prevent any quality crises from occurring at a later point. As a concept, it is used across the sectors, in the pharma space. It is especially important as it has the potential to save organisations' massive damages, both in terms of effort and money.” He also explains why companies compromise on QbD even when it is extremely important, “Because at a time when manufacturing costs are rapidly growing in this technology intensive industry, it has become imperative for the pharma companies to invest in substantial resources in the planning of a manufacturing unit.”

R&D department One of the major and crucial departments in the pharma industry is the research and development (R&D), which encompasses chemical research, microbiological research, and pharmacological research. As a result of this diverse nature of pharma R&D, a wide range of chemical and biological laboratory wastes are produced. Ghosh signifies the impor-

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tance of the R&D department in the pharma plant, “Today, most of the drugs are produced by chemical synthesis. And numerous types of chemical reactions, recovery processes, and chemicals are employed in order to produce a wide variety of drug products, each conforming to its own rigid product specification,” Ghosh says. He also informs about the waste streams from chemical synthesis operations that are complex due to the varied operations and reactions employed. The fermentation process generates large volumes of wastes such as the spent aqueous fermentation medium and solid cell debris. Steroids, vitamin B and antibiotics are typically produced using batch fermentation processes. Most processes associated with pharma and research are potentially hazardous for the environment and safeguarding the impact and minimising waste become a critical issue in the industry. The industry itself is trying to overcome such issues.

Safety measures Pharma formulation plant manufactures is the preparation of dosage forms such as tablets, capsules, liquids, parenterals, creams and ointments. The waste generated during these various formulation processes result from cleaning and sterilising equipment, chemical spills, rejected products and the processes themselves. Dr RB Smarta, Managing Director, Interlink Marketing consultancy explains, “Besides manufacturing, manufacturers also should think about waste components which are exposed in the environment. Pharma companies need to consider all actions in such a way that their activities doesn't harm the environment and make legitimate profit and also develop and create talent pools. Hence, it is very essential to care for the environment.”

Storing The safety measuresadopted by a a pharma plant is www.expresspharmaonline.com

similar to any other facilities. All manufacturing sites need to comply with basic safety measures and equipment at finished products, as well as in raw material sites. Special steps should be taken to ensure that solvent handling and storage is compliant. Adequate alarm and evacuation systems should be put in place. Debabrata Gupta, Director and Chief Operating Officer, USV explains the need for a better storage system in the formulation plant, “The most hazardous chemicals are solvents, which tend to be flam-

He says, “There should be no compromise when it comes to properly storing raw materials exercise. Improper storage can be dangerous and have an adverse impact. Cutting corners by improperly handling the material might provide an illusion of saving money, but over time companies with poor safety standards will bear more costs as they stave off lapses. Instead of being reactive, companies should be proactive and implement safety measures and systems, which will ultimately create a better working environment, improve quality and boost

DEBABRATA GUPTA

ALOK GHOSH

Director and Chief Operating Officer USV

President Technical Operations Lupin

The most important initiative is that of training which needs to be provided periodically to all employees as well as the relevant outside personnel who work on a part-time or contract basis within the manufacturing site

Communication becomes even more important as safety initiatives become global in scope due to physical distance, variance in communication technology from country to country, cultural and language differences, and varying regulations

mable and also tend to create vapours. These need to be stored and handled carefully. Environmentally safe (eg. flameproof electricals) are a must for handling these solvents. Apart from these, corrosive materials such as acids, alkalis, if not handled carefully, can lead to accidents. Usage of Personal Protective Equipment (PPEs) is a must and should be made mandatory for all operatives dealing with these chemicals.” Dr Bhaskar Krishna Arumugam, Chief Executive Officer,Granules India, speaks on adverse effects of finished products if not stored properly.

productivity.” He continues, “It is crucial to focus on optimal safety measures while setting up a facility. There might be some additional upfront costs to have strong safety measures in place but the payback period will be short given the benefits a company will bear. Companies need to cultivate a culture of safety and should keep it in mind that safety is the most important aspect in the company and that shortcuts will not be tolerated.” Ghosh simplifies it and says that companies must develop internal processes to facilitate sharing December 16-31, 2012

of information and experience as implementation progresses. Communication becomes even more important as safety initiatives become global in scope due to physical distance, variance in communication technology from country to country, cultural and language differences, and varying regulations. It is important to have a culture of safety within an organisation. A culture of safety needs to be driven from the leadership team and embraced from top management to floor operators. Safety, plant efficiency and quality are interrelated aspects in operations. Companies functioning within a safe working environment will have less deviations which will lead to higher productivity and will reduce the chances of quality issues. Apart from this, robust safety measures will improve product quality and efficiency, which will ultimately benefit the manufacturers. According to Gupta, safe and compliant design should form the first step for a new plant. A hazard and operability (HAZOP) studies, which detail out the different possible hazards are recommended. During the commissioning as well as the operational phase, relevant knowledge is very important.

Environment, Health and Safety The single largest benefit of environment, health and safety (EHS) is that of reducing gas emissions using technological controls. An EHS system also reduces risks, energy consumption, waste, and ensures that the natural resources borrowed from the environment are returned in the similar form and quality. Ghosh emphasises, “EHS auditing is becoming a global practice around the world and develops superior audit standards. Companies from across diverse sectors like power, manufacturing, construction, telecom, are opting for EHS compliance as one of the key mandates and requirements in order to strike an ecological balance and minimise waste. In an effort to comply with the green policies adopted by the Western countries, Indian companies are being especially forthcoming in their adoption of a proper EHS management system. This is indeed the need of the hour, and critical so as to conserve water, December 16-31, 2012

minimise wastage and decelerate global warming as well as depletion of natural resources. More than anything else, EHS is critical to ensure safety and comply with Good Manufacturing Practices (GMP). Along with safer and healthier employees, a strong EHS management system can do wonders in increasing the productivity of an organisation as well.” Krishna says, “Fostering a mindset that safety is paramount is more important the amount of money spent on SHE. Companies can have state-of-the-art facilities and safety systems but it will not bring any benefit if employees do not believe in safety or are willing to cut corners. Instead of viewing SHE as a cost centre or regulatory obligation, companies should view SHE as an opportunity to distinguish themselves.”

DR RB SMARTA Managing Director Interlink Marketing Consultancy

DR BHASKAR KRISHNA ARUMUGAM Chief Executive Officer Granules India

Pharma companies need to consider all actions in such a way that their activities doesn't harm environment and make legitimate profit

Companies need to cultivate a culture of safety and make it known that safety is the most important aspect in the company and that short cuts will not be tolerated

manner and therefore need to be aware of the circumstances and the environment. Knowledge of materials handled as well as process knowledge is critical for employee safety. Usage of PPEs is essential.” He continues, “Usually any manufacturing site needs to have PPEs in place, a fully equipped healthcare centre and environmental care mechanisms, like a effluent treatment plant which should be functional. The most important initiative is training which will be provided periodically to all employees as well as the relevant outside personnel who work on a part-time or contract basis within the manufacturing site.” It is imperative that safety measures are at the top of the list of priorities when the facility is being designed. Safety should be viewed as a way for a company to distinguish itself from competitors. According to Ghosh, for an employee, the most important objective is simply to implement the safety measures that are applicable to him/her. Alignment to the goal of ensuring safety, at the plant, will go a long way in ensuring that no mishaps occur. To prevent such situations, employees must be well acquainted with all the relevant safety measures. In a continuation effort of Lupin, Ghosh reveals, Lupin earns 65 per cent of its revenue from global sales outside India, of which approximately 28 per cent is from

the US. Lupin has a capital expenditure of Rs 450 crore which is spent in maintaining and upgrading facilities, thus making sure that environment, health and safety is taken care of. Ghosh while speaking about his company's initiatives says, “We at Lupin are committed to adhering to the strictest standards of GMP and GLP. Our manufacturing facilities and plants are all certified by numerous regulatory boards, and we strive to ensure that our processes are EHS compliant. As Indian pharma stands at the cusp of a global transformation, it is becoming increasingly important for us to adopt and sincerely follow higher standards of environmental safety, and return to nature its resources in the same form and quality that we utilise them for industrial processing. This will not only increase our business and competitive advantage by allowing us to attract better global partners, but will also protect and secure our employee safety, as well as environmental sanctity.” Almost every pharma company complies with environment safety rule to avoid accidents. A well designed plant restricts and active presence of employees help companies to grow without any obstruction. That's why prevention is always better than restoring process.

Employee safety Customers in many markets have moved beyond solely focusing on product pricing. More customers want to make sure that their partners have strong SHE systems in place. Companies with a strong SHE department are likely to be more dependable and less prone to supply disruptions. In addition, robust SHE systems will improve operational efficiency and product quality since it reduces the chance of variation. Krishna suggests, “All employees should have training with regular updates and they should know that the company takes training seriously. While setting up the facility, there must be regular meetings and forums so that other departments can provide feedback and input. This will eliminate assumptions while setting up the facility and will ensure that unique challenges of every department are addressed. Open communication will result in strong systems and will increase the buy-in from employees, which is critical for a safety system to succeed. Training should not be a onesided conversation; sessions should be an open forum because it is important for employees to understand why tasks need to be done in a certain way. This will reduce the chance of deviations, which is ultimately the reason for the cause of accidents. “ Gupta avers, “Employees must work in a compliant www.expresspharmaonline.com

u.sharma@expressindia.com EXPRESS PHARMA

1 - 15 February 2012

DR CYRUS KARKARIA President Biotechnology Lupin

n spite of India’s minimal revenue share in the global biotechnology sector, there is no doubt of the country’s potential as a future biotech hot spot. While global biotech companies and service providers are flocking to tap these opportunities, it is perhaps high time that the domestic industry seizes the moment and acquires the required momentum.

Areas of interest

From the global perspective, India has a very bright future in terms of the potential from R&D and New Drug Delivery System (NDDS)... It is not about potential anymore, but a question of time

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As per data released by Department of Industrial Policy & Promotion (DIPP), Government of India, the pharmaceutical sector has attracted foreign direct investment (FDI) worth $1.67 billion between April 2000 and March 2010. Different segments of the biotech industry are attractive to different categories of investors. Dr Krishna Ella, CMD, Bharat Biotech informs, “FDI inflow into India during the 10-year period from April 2000 to March 2010 for all the sectors was $197.935 billion and it works out to an annual average FDI of $19.79 billion.

In comparison to this, during the same period, FDI worth $1.67 billion flowed into the drug and pharma sector, amounting to an average annual FDI of $0.167 billion, which is 0.84 per cent of the average annual flow of FDI into all the sectors. Past experience indicates that drugs and pharma sector did not attract maximum investments.” Ella further says, “FDI equity into India during the 10-year period from April 2000 to March 2010 for all the sectors was $132.837 billion and it works out to an average annual FDI equity of $13.28. Mauritius, Singapore, the US, the UK, Netherlands, Japan, Cyprus, Germany, France and the UAE contributed to the FDI equity inflow in 20092011. Only Singapore from the Southern Hemisphere chose to invest in India. There was no contribution to the drugs and pharma sector. However, there was a two per cent inflow into chemicals (other than fertilizers).” According to Ajit Mahadevan, Partner, Ernst & Young, FDI is divided across the value chain with manufacturing (captive and contract) and clinical research driving the inflows. “Recent announcements by Lonza, Sanofi Pasteur, Alexandria confirm growing interest in manufacturing of biologics in India. Major international CROs have established base in India, which underscores the attractiveness of the contract research segment,” opines Mahadevan. Dr Ajaykumar Sharma, Practice Head-Pharma, Healthcare, South Asia and Middle East, Frost & Sullivan, echoes the positive trend. He says, “With acquisitions taking place in the pharma/biopharma segment, most of the direct investment has been in vaccines and formulations manufacturing. Contract research firms have received major investments through VCs.” Dr Cyrus Karkaria, President, Biotechnology Lupin, strongly feels that from the global perspective, India has a very bright future in terms of the potential from R&D and New Drug Delivery System (NDDS). The future is real today even though we are a very small piece in the global R&D pie. He says, “We are setting up processes and systems, which will contribute to www.expresspharmaonline.com

innovations in NDDS — innovations, which will be very competitive and we would be able to do that in a sustained manner. It will take time, but India will take a major leap in this aspect. It is not about potential anymore, but a question of time. We need more investment from the Government to build and ramp up fundamental research capabilities to develop novel products. There is a need for a clear cut directive / direction and focus with objectives and milestones attached to it.” He further adds, “The market for biosimilars or follow-on biologic drugs, globally, is pegged at well over $100 billion. To give you an example of the untapped potential, market reports like IMS Health (July 2009) suggest that in the US alone, about eight major biologic products, say for example, Enbrel (Amgen/J&J), Lovenox (Sanofi-Aventis), Zoladex (AstraZeneca), Mabthera (Roche), Humalog (Eli Lilly) and Novorapid (Novo Nordisk), are expected to go off patent between 2009 to 2013. The sum total of revenues from these drugs alone will be over $15 billion. This throws open immense opportunities for Indian companies working on biosimilar drug development initiatives.”

India, an attractive biotech destination India has always been touted as the land of opportunities. However, opportunities are not just for domestic companies. Even MNCs are all set to generate business out of the lucrative Indian market. In any country, government policies are generally formed keeping in mind the interest of their own people. It will be interesting to analyse the policy effects in India on domestic companies and their overseas competitors. Sharma feels that government policies in India have been very favourable for the development of domestic biotech companies, which has resulted in a spurt of small biotech firms, as well as growth of large players in the past decade. Life sciences companies can leverage the many advantages that the country offers: skilled labour, competent service providers and significant cost arbitrage. Both

domestic and global companies have benefited from the enabling infrastructure put up in biotech parks, SEZs etc. According to Ruchi Malhotra, Manager, Ernst and Young, the present regulatory structure doesn’t require biosimilar manufacturers to follow stringent guidelines, which are otherwise followed in countries where an approval pathway has been established. This makes it relatively easier for domestic manufacturers to access the local market presently. “In case of enforcement of stringent guidelines to conform to EMEA guidelines, the MNCs would be able to further leverage their global experience, ability to invest and access global markets,” cautions Malhotra. If Ella is to be believed, liberalised government policies could benefit MNCs. MNCs could benefit by establishing their manufacturing facilities in low cost locations in India. “Public funded R&D schemes are available from the Ministries of Commerce and Industries, Health and Family Welfare and Agriculture. The life sciences and biotech industries are based on multi-disciplinary science applications and thus have resulted in areas such as general biotech, agriculture biotech, medical biotech, marine biotech, industrial biotech, bioengineering leading to bioindustrial development in the country,” says Ella. He adds, “All these years, the Council of Scientific and Industrial Research (CSIR), Indian Council of Medical Research and Indian Council of Agricultural Research (ICMR), DBT, Technology Development Board (TDB), have nurtured pharma / biotech projects under their dispensation. Human resource for biotech sector requires training and augmentation to meet the skill requirements of the biotech industry. The three ministries, cited above, should constitute an inter-ministerial nodal cell to coordinate the upsurge of industrial biotechnology, rationalise the use of funds, and track the progress of the funded projects on a milestone basis.” Dr Harish Iyer, Chief Executive Officer, Shantha Biotechnics says, “The Indian biotech industry has achieved the status of a world-class hub December 16-31, 2012

DR AJAYKUMAR SHARMA Practice Head-Pharma Healthcare, South Asia and Middle East Frost & Sullivan

known for its manufacturing and research capabilities. The superior R&D facilities, large pool of skilled labour, favourable regulatory environment and significant cost advantages have positioned India as a preferred destination for investment by way of globalisation, M&As and partnerships. This is a positive outcome and has enabled the industry to become one of the fastest growing knowledge-based sectors in the country.” Iyer further adds, “In general, the influx of FDI has allowed India to create stronger research capabilities and enhance existing resources. FDI is especially required in a country like India as it allows huge financial commitments and extensive technical/scientific and regulatory expertise, which is required for developing new pharma/ biotech products on a global level.”

Opportunities

We have seen alliances and acquisitions for drug discovery, diagnostics and clinical research throughout Asia. Such deals will provide mutual advantage to both partners

Opportunities present themselves in different forms. According to Sharma, contract research and bioinformatics are the major opportunities in the biotech and life sciences sector. Apart from a traditional focus on agri-biotech, industrial and vaccines, the initiatives by the government such as Biotechnology Industry Partnership Programme (BIPP) specifical-

AJIT MAHADEVAN

DR KRISHNA ELLA

Partner Ernst & Young

CMD Bharat Biotech

Indian companies lack the necessary financial strength and regulatory maturity is needed to develop a drug and get it approved. Codevelopment and out-licensing deals help them manage these deficiencies

Government of India should consider increasing funding opportunities to innovative R&D novel product development projects, new infrastructure / facility projects for platform technologies

December 16-31, 2012

ly focus on developing basic research in genomics, bioinformatics and stem cell research. Rahul Ambadkar, Consultant, Ernst & Young, feels that vaccines are a significant business opportunity for Indian players. In addition to institutional buying by multilateral agencies, the Indian market offers sizeable domestic opportunity. Manufacturing of equipment and consumables is another area where Indian companies are able to leverage the relative cost advantages. Quoting from Ernst & Young’s Beyond Borders: Global Biotehcnology report, he points out that 48 biologics with estimated sales of $73 billion are going off over the next decade. “This along with the evolving regulatory scenario and government’s preferences for low cost alternates mean substantial opportunities for biosimilars and biobetters in the major markets,” opines Ambadkar. In terms of therapeutic areas, oncology, rheumatoid arthritis and diabetes are segments with high potential opportunities. With the establishment of the approval pathway in the US and establishment of pathway in Europe for (beta interferons and mAbs) the activity in bioservices (CMOs and CROs) is expected to rise manifold. Also, the abbreviated pathways for biosimilars are/will be very different from the Abbreviated New Drug Application (ANDA) pathway for small molecules and will require conduct of clinical trials. Thus there are substantial opportunities for organisations specialising in conducting clinical trials. Impending regulation amendments and policy announcements would have a significant bearing on these opportunities, according to Ambadkar. As already discussed, government policies largely decide the growth and the future direction of the biotech industry. As a bio-entrepreneur, Ella is fairly familiar with government policies and opines that, “India is certainly a land of opportunities for life sciences and biotech investors. There is a perceptible change in the policies of Ministry of Commerce and Industry, Ministry of Health and Family Welfare and Ministry of Agriculture, to www.expresspharmaonline.com

introduce public funded new schemes to make India progress towards supporting new concepts, innovation and R&D. Domestic biotech companies are being benefited through schemes such as Small Business Innovation Research Initiative (SBIRI) and Biotechnology Industrial Partnership Programme (BIPP), Biotechnology Industry Research Assistance Programme of the DBT, Industrial Infrastructure Upgradation Scheme (IIUS), Industrial Park Scheme (IPS) and Scheme for Investment Promotion of the Ministry of Commerce and Industry, National Agricultural Research System of the Indian Council of Agricultural Research (ICAR) and Talent Research Scheme and Extra Mural Project Scheme of the ICMR, New Millennium Indian Technology Leadership Initiative (NMITLI), etc.” In order to motivate start ups, entrepreneurs and small industries to derive benefits from such schemes, government policies for the life sciences sectors should be tailored and implemented in ways that will accelerate its growth in a fast paced manner.

Joint ventures Biotech companies have been observed to favour joint ventures in the past few years. Such moves are meant to benefit all partners of the joint venture. This trend is expected to continue in the coming years as well. One of the most crucial discussion points of these tie ups is how biotech companies from developing nations can benefit into the game plan of MNCs. “We have seen alliances and acquisitions for drug discovery, diagnostics and clinical research throughout Asia. Such deals will provide mutual advantage to both the partners. While the MNCs benefit by replenishing pipelines, addition to product portfolios or establishing a local presence in the emerging markets, the biotech companies gain in technology expertise and much needed funds for research and expansion,” mentions Sharma. According to Mahadevan, JVs and strategic alliances (co-development, co-marketing, licensing deals) combine complementary capabilities or help partners build capabilities. This helps companies position themselves aptly to

fetch maximum benefits from the opportunities present and share risk at the same time. The reasons can be as varied as technology transfer (like Bharat Biotech and Serum Institute licensing technology from institutions in the US, Canada and Netherlands) to low cost advantages (Boehringer Ingelheim partnering with Kemwell for manufacturing). Mahadevan also highlights some of the negative issues associated with Indian players. He elaborates, “Indian companies lack the necessary financial strength and regulatory maturity needed to develop a drug and get it approved. Co-development and out-licensing deals help them manage these deficiencies. On the other hand substantial unmet needs in the developing nations have attracted MNCs to them but they lack suitable product portfolio and necessary reach to serve these needs. They are using co-marketing/distribution and licensing deals to gain ready access to patients and cutting down on investment and time to market simultaneously. Apart from commercialisation, MNCs have entered into sourcing deals with partners in developing nations realising the time and cost benefits.” In the foreseeable future, funding is expected to be strained and emerging markets will act as key contributors to growth. This will make partnering one of the core strategies to build competitive advantage. “JVs with MNCs will benefit from local experience and expertise, introduction and adoption of international norms for manufacture and control, harmonisation of procedures with international guidelines, access of products to regulated markets, strengthening of R&D, compliance with patent regulations and availability of products in the domestic market. Manufacturers and business houses in developed countries are scouting for domestic partners in India to spread their footprint and compete with similar brands. However, developing countries must possess the negotiating capabilities, legal and fiduciary acumen, sound knowledge of intellectual property rights and marketing prowess to conclude a deal with MNCs to benefit both partners,” asserts EXPRESS PHARMA

DR HARISH IYER Chief Executive Officer Shantha Biotechnics

The Indian biotech industry has achieved the status of a world-class hub known for its manufacturing and research capabilities

Ella. Karkaria explains how partnerships function as a risk minimising strategy for members of JVs. Karkaria says, “As rightly pointed out by Ernst & Young in its ‘Beyond Borders 2005 Report’, for biotech companies, partnerships are an important means of mitigating risk, as well as a strategic response to business challenges. Since drug development is an inherently highrisk business, characterised by large R&D investments and relatively small probabilities of success, partnerships will always be an important factor in diversifying and mitigating risk.” According to Karkaria, partnerships are also one of the ways of entering newer potential markets.

Future policies The impact of policy on the future growth of the industry cannot be underestimated. The Government has extended support through biotech parks, funding

schemes etc, but this support needs to be sustained and even augmented. “The Government’s role in the absence of a mature venture capital market can define the fate of the domestic players. It will act as a critical element in defining the part of the value chain where the domestic players would be concentrated. On the part of domestic biopharma players, aligning with the international guidelines and partnering with the regulators in the major markets can help them in capturing a larger share of the global opportunity,” says Ambadkar. According to Ella, Government of India should consider increasing funding opportunities to innovative R&D novel product development projects, new infrastructure / facility projects for platform technologies. These opportunities should support new entrepreneurs and encourage existing companies to conduct high risk research

and development. Ella suggests, “India has a strong and complicated biotech regulatory framework that involves four to five ministries within the government, involving the Drug Controller General of India (DCGI), Review Committee on Genetic Manipulation (RCGM), Genetic Engineering Approval Committee (GEAC), Director General of Foreign Trade (DGFT), etc. These agencies jointly regulate the development, manufacture and supply of biologics making it a very complex regulatory system. All countries, where pharma and biotech industries are very successful, have a single regulatory agency such as the European Medicines Agency (EMA), US FDA, Therapeutic Goods Administration (TGA), Agência Nacional de Vigilância Sanitária (National Health Surveillance Agency Brazil) (ANVISA), etc that oversee and regulate all aspects of the industry. The

Indian Government should consider bringing all these regulatory activities into a single regulatory body, which can bolster biotech industry growth in the country.” The Indian Government can look into varied financial instruments like biotech bonds to increase financial support to biotech firms. Equity support by government bodies can create a new avenue to raise funds. There should also be added incentives to provide impetus to foreign investment into the biotech industry in India. Moreover, allowing VC investments in early stages, like that in advanced markets, will go a long way towards encouraging entrepreneurship and innovation in this space,” says Karkaria. It will be interesting to observe how Indian biotech players leverage this global interest ins a way that serves their long term interests.

at a CAGR of 15 per cent till 2014, one of the fastest in the world, it has always been topmost on the expansion strategy of big pharma. After the big ticket deals that India saw till 2010, including the takeover of Ranbaxy Laboratories by Japan-based Daiichi Sankyo and Piramal Healthcare Solutions Business unit by Abbott Laboratories in the US, the M&A bull run seems to have mellowed down almost giving an impression that it is missing in action (MIA). However, scratch the surface and there are new trends and a cautiously positive outlook despite gloomy figures that convince us otherwise.

three years down 19 per cent from the corresponding period last year, although pharma, biotech and healthcare together accounted for the second highest share of 15 per cent (Source: Dealtracker Pharma, Grant and Thornton). Analysts also point out other reasons, specific to the sector, for the sober performance.

tic companies to get patient capital to invest in R&D and high-risk, high-return areas such as biologics and biosimilars. It also helps ease the pressure on companies which are carrying high-cost debt,” says Mahadevan Narayanamoni, Partner, Corporate Finance, Grant Thornton India.

Regulatory slowdown

From aggression to caution

Towards the end of 2011, a stricter regime for foreign acquisitions was launched requiring existing Indian companies to seek government approval for FDI with all future proposals to be routed through the Foreign Investment Promotion Board (FIPB). This has increased the time length of approval thus making companies approach any deals gingerly. The sentiment is echoed by Karan Singh, Head Asia Healthcare Practice, Bain & Company, “The outlook for inbound M&As remains more cautious owing to the brownfield expansion uncertainty from expansion of price controls, the recent compulsory licensing move and unclear FDI norms.” FDI is required even for domestic consolidation in the form of private equity. “We believe FDI in the industry is necessary as it enables domes-

While regulatory pressures have slowed down inbound deals, Indian companies investing abroad have become cautious. This is a far cry from a few years back when they were aggressive in their pursuits. “Till early 2008, Indian companies, driven by the availability of cheap capital, indulged in international M&A without clear focus on valuations and the strategic-fit of the targets to their business objectives,” pitches in Krishnakumar V, Partner Ernst & Young. “Bulk of these deals were funded by capital raised through FCCBs during the years 2006 and 2007. Indian pharma companies had mobilised around $ 2.3 billion through FCCBs during these two years. Increased market uncertainty, weak capital markets and poor performance of the acquired businesses have helped tone down the frenzy since then, and the handful of

Slow and steady

September 16-30, 2012

EXPRESS PHARMA

&As have for long been the route to faster inorganic growth for companies looking to ramp up their presence in an increasingly competitive market. With the Indian pharma industry expected to grow

Last year saw key outbound acquisitions by Zydus (Nesher Pharma) and Vivimed Labs (Uquifa), and inbound acquisitions by Hikma (Unimark), Akorn (Kilitch), Par Pharma (Edict), Cilag GmBH (JB’s Russian brands) and Aventis (Universal Medicare) along with a few smaller domestic transactions in the formulations space. The most notable transaction was the disposal by Strides Arcolabs of its Australian business to Watson Pharma, for nearly $393 million. However, M&A activity in the first half of 2012 has been the lowest in www.expresspharmaonline.com

sachin.jagdale@expressindia.com

December 16-31, 2012

KARAN SINGH Head, Asia Healthcare Practice Bain & Company

mature buyers left in the Indian pharma market today, are more focused than ever before on strategic fitment of targets – in the form of products, clientele, market-access, technology, IP and regulatoryapprovals."

High valuations

The outlook for inbound M&As remains more cautious owing to the brownfield expansion uncertainty from expansion of price controls, the recent compulsory licensing move and unclear FDI norms

KRISHNAKUMAR V Partner Ernst &Young

Indian pharma companies a r e valuations rich given their strong generic capabilities. Expectations have been high after historic deals such as Ranbaxy (sold at four times its sales), Piramal Healthcare (sold at nine times its sales) and Paras Pharma (eight times its sales). There have not been many deals with promoters wanting excessive valuation / big valuation. However, various small deals with valuation of $ 50-100 million such as Universal Medicare-Sanofi and Biochem PLC- Zydus have taken place recently. Analysts believe that companies genuinely wanting to sell are willing to transact at reasonable valuation.

facilities (which they don't have), the transaction opportunity here is not possibly being maximised.

No product differentiation Most of the Indian companies have grown in size by focussing on a single product. “This leaves only a few handful targets which remain attractive in terms of their product pipelines thus making them ready assets for companies on the look out. With MNCs already having a historical presence in India and similar product offerings of , there is less value a deal offers to a foreign investor,” opines Shiraz Bugwadia, O3 Capital Advisors.

Future Trends According to Narayanmoni, India would continue to be an attractive investment destination for companies since it offers access to good quality manufacturing capacity across the generic pharma spectrum (especially in areas such as injectables, with only a few US FDA approved facilities abroad). Access to a fast growing Indian pharma market, talent and R&D capability / facilities for new product development alongwith domestic consolidation in several sub-sec-

MAHADEVAN NARAYANAMONI

AJAY KUMAR SHARMA

Partner Corporate Finance Grant Thornton India

Associate Director - Pharma & Biotech – Healthcare Practice South Asia & Middle East Frost & Sullivan

We believe FDI in the industry is necessary as it enables domestic companies to get patient capital to invest in R&D and high-risk, high-return areas such as biologics and biosimilars

M&As are giving way to JVs, wherein both partners focus on their core competency while still retaining their identity. It is a win-win partnership for both unlike M&As where the freedom comes with riders

tors (APIs, intermediates and branded generics) would work in its favour, he adds. There are other trends that would define the deals going ahead.

Year

Total Deal Value ($mn)

Total Deal Volume (No.)

First half of 2012 (Jan-Jul)

612

with distribution partners, given an increasingly competitive and regulated domestic pharma market. This helps build up their value, as they in turn would be deemed attractive targets by global pharma companies looking to expand their footprint in these new markets. Japan has historically been the slowest developed market to make a move towards generics, but it looks promising in the coming years.

First half of 2011 (Jan-Jul)

499

Can’t acquire? Partner

First half of 2010 (Jan-Jul)

4,056

Says Krishnakumar of EY, “Globally the pharmaceutical business model is going through the 'perfect storm' and is evolving to one of risksharing partnerships. The number of such partnerships/alliances has doubled to ~300 in the year 2011, up from the level of ~150 per year seen during 2008-2010.” This statement is echoed by Ajaykumar Sharma, Associate Director - Pharma & Biotech – Healthcare Practice, South Asia & Middle East, Frost & Sullivan, “M&As are giving way to JVs, wherein both partners focus on their core competency while still retaining their identity. It is a win-win partnership for both unlike M&As where the freedom comes with riders.” Regulatory reforms, India’s strength in manufacturing and a reluctance of Indian companies to sell off would see foreign partners looking to partic-

Unrealised potential There are a lot of companies with capacity willing to cede controlling stake in the API intermediates space. However, with an increasing demand for US FDA approved

Emerging markets ahoy! Traditionally, Indian companies began by acquiring companies in the US and EU,

Deal value vis-a-vis deal volume

Globally the pharmaceutical business model is going through the 'perfect storm' and is evolving to one of risksharing partnerships. The number of such partnerships /alliances has doubled to ~ 300 in the year 2011, up from the level of ~ 150 per year seen during 20082010

Break up of deals by number First half of the Year

Total Deals by number

Inbound Outboun (No.) d (No.)

Domesti c (No.)

(Both players publicly listed companies)

2012

2011

2010

PE deals by number and volume Year

Total Deal Value ($ million)

Total Deal Volume (No.)

First half of 2012 (Jan-Jul)

First half of 2011 (Jan-Jul)

First half of 2010 (Jan-Jul)

Eight new deals approved n August 25, 2012, the FIPB approved eight FDI proposals worth ` 1,842.55 crore including Pfizer’s ` 800 crore proposal for 'induction of foreign equity in an operating-cum-investing company to carry out the business in pharmaceutical sector', Mumbai-based Arch Pharmalabs’ proposal for inducting ` 372 crore of foreign investment for manufacture and sale of APIs. Others include, Sutures India, Bangalore (` 200 crore), B Braun Singapore, Singapore (` 248.40 crore), Stellence Pharmscience, Bangalore (` 100 crore) and Zim Laboratories, Nagpur (` 50.44 crore).

December 16-31, 2012

www.expresspharmaonline.com

but this is finally giving way to newer, emerging markets with untapped potential, where the outlook for generics is favourable. Several companies are looking at markets such as Indonesia, Latin America and Africa to expand their footprint by aligning or tying up

EXPRESS PHARMA

ipate by alliances.

inking

strategic

Selective acquisitions While a desire to scale up and get market access in emerging markets (irrespective of the product portfolio) would drive mid-scale companies, companies looking to be global players, would rather

look at the specific products in the basket before making the decision. For instance, Abbott bought the domestic formulations business of Piramal Healthcare to gain a leadership position in the segment in the Indian market. There are few companies of their ilk in India who would have such an acquisition strategy and finan-

Deal potential in the coming years ●

● ● ● ●

Smaller domestic pharma companies (in formulations or APIs) are struggling to scale and therefore looking to sell out at reasonable valuations. Injectables and niche APIs remain an attractive sector Companies are becoming available in developed markets at attractive valuations, and with good facilities / product capabilities Entrepreneurs have started realising that valuations that the likes of Piramal secured were exceptional and not the norm in branded generics Branded generics space in the domestic market might see mid-sized companies acquiring smaller companies to gain access to specific geographies or product baskets. PE investments in contract manufacturing and niche API/formulations businesses. At least one mid to large size inbound strategic acquisition in the sector with more clarity on FDI policy.

July 1-15, 2012

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lmost a year after the World Health Organization (WHO) issued a rare 'negative' policy recommendation urging countries to ban the use of antibody-based test kits for active tuberculosis (TB) detection, India's Ministry of Health & Family Welfare became the first – and so far the only - country to issue a notification banning the manufacture, sale, distribution, use and import of such serodiagnostic kits. WHO's recommendation

in July last year came after a year of rigorous analysis of evidence by WHO and global experts. 94 studies were evaluated - 67 for pulmonary TB (TB in the lungs) and 27 for extra-pulmonary TB (TB elsewhere in other organs). Overwhelming evidence showed that the blood tests produced an unacceptable level of wrong results - falsepositives or false-negatives relative to tests endorsed by WHO. For a country saddled with an estimated one fifth of the global burden of TB cases, with some estimates putting a total of 9.2 million new cases and 1.7 million deaths every year, proper TB diagnosis could go a long way to controlling the spread of this highly communicable disease. Thus it is no wonder that TB detection/diagnosis and treatment is top priority of India's Ministry of Health & Family Welfare. In fact, 'universal access to quality TB care for all TB patients' is the objective of the Revised National Tuberculosis Control Programme (RNTCP) which aims at detecting and successfully treating 90 per cent of all TB cases by 2015. This Programme has seen substantial infusion of funds over the past 13 years since its implementation, and there have been success stories as well. A total of ` 1447 crore has been allocated for the 11th Five year plan by the Planning Commission. (See BOX: Vital stats of India's TB control programme) Dr Karin Weyer, www.expresspharmaonline.com

cial bandwidth to execute a mid to large transaction. Companies are also rethinking their strategies after having seen the consequences of the Biocon-Pfizer deal and Dr Reddy’s acquisition of Betapharm and hence they are careful, remarks Sharma.

R&D driven deals While outbound deals would not be R&D driven on account of the historical inability of Indian companies to meet valuation expectations of such targets overseas, there are a limited number of companies that will be attractive to a global pharma player from a pure R&D perspective in India with respect to inbound deals. “We have to understand that R&D is more than just develCoordinator, Diagnostics, Laboratories and Drug Resistance, Stop TB Department, World Health Organization, hopes that this ban will greatly improve patient diagnosis and reduce costs for both patients and health services in India. There are signs that the advisory from WHO was having the desired impact, even before the Government of India (GoI) ban. According to data provided by the Foundation for Innovative New Diagnostics (FIND), orders from India for GeneXpert test modules, one of the WHO recommended tests provided at concessional prices to countries like India with a high TB burden, showed a steady pick up from six modules through Q3 2010 to 96 in Q1 2012. The country clocked a total of 114 test modules for the entire period from Q3 2010 to Q1 2012. The cost of such TB testing kits is expected to drop even further with the executive board of UNITAID recently approving funding of $30 million to scale up access to Xpert MTB/RIF which will further reduce the cost of its use. This test, an automated, cartridge-based nucleic amplification assay for the simultaneous detection of TB and rifampicin resistance directly from sputum in under two hours, is based on the GeneXpert platform. which was developed as a partnership between FIND, Cepheid Inc. and the University of Medicine and Dentistry of New Jersey, with

oping NCEs or NBEs, the product development aspect of R&D is also critical and valuable and can be a key driver for inbound deals going ahead,” asserts Narayanmoni.

Consolidation in domestic formulations Plagued by challenges in competing without scale, pricing pressure in some areas with price control norms and succession planning issues, small to mid-cap companies with revenues ranging from ` 30-150 crore having a specific geographic focus or product portfolio are increasingly looking at selling out. With valuation expectations normalising, this segment will see increasing consolidation. shalini.g@expressindia.com support from the US National Institutes of Health. WHO endorsed the technology in December 2010 and is monitoring the global roll-out of the Xpert MTB/RIF test modules.

A task half done? But will the GoI ban really make a difference? Experts in the field like Dr Madhukar Pai, Professor, Dept of Epidemiology & Biostatistics, McGill University, Montreal, Canada; and Co-chair, Stop TB Partnership’s New Diagnostics Working Group feel that the WHO endorsed tests, such as molecular tests and liquid cultures are quite expensive for India, especially in the private sector. He feels efforts are needed to extend special, reduced prices to the private sector, not just the public sector. Ameera Shah, Managing Director and Chief Executive Officer, Metropolis Healthcare, takes the argument a step ahead. She says that though the GoI has gone ahead and banned the antibody test, it should have also provided an alternative. Of the tests giving more specificity, the sputum-based tests, the culture-based test takes up to six weeks to give results while the alternative test, the molecular biology test, costs around ` 1,500—` 2,000, thanks to a 27 per cent customs duty. This is obviously too expensive for most patients in India. Shah makes the point that if this import duty on the TB molecular biology test is waived, as also the duties on December 16-31, 2012

other imported TB test kits, this ban will serve its purpose of patients having a viable alternative to turn to. And a viable alternative is definitely the need of the hour. Jayant Singh, Industry Manager, Healthcare Practice, South Asia and Middle East, Frost & Sullivan says that the number of tests being done to diagnose TB is about 20 to 22 lakh per year but the fact that most of these tests are

not accurate in terms of sensitivity and specificity, pose even greater problems. Expanding on the problem, Singh says that the microscopy test tends to detect not more than 35 per cent of the cases, a chest Xray is only useful for pulmonary TB and serological tests tend to give a lot of false positive results. With microscopy and chest X-ray, a lot of positive

AMEERA SHAH

DR KARIN WEYER

RAJEEV KUMRIA

Managing Director and CEO Metropolis Healthcare

Coordinator, Diagnostics Laboratories & Drug Resistance Stop TB Department World Health Organization

Head Business Development Transasia Biomedicals

If import duty on the TB molecular biology test is waived, as also the duties on other imported TB test kits, this ban will serve its purpose of patients having a viable alternative to turn to

This ban will greatly improve patient diagnosis and reduce costs for both patients and health services in India

There is a need for doctor education so that doctors can steer the patient towards the right diagnostic and therapeutic solutions

JAYANT SINGH

DR MADHUKAR PAI

DR BR DAS

Industry Manager Healthcare Practice South Asia and Middle East Frost & Sullivan

Professor, McGill University, Canada, Co-chair, Stop TB Partnership’s New Diagnostics Working Group

President- Research & Innovation Super Religare Laboratories

We need to see the bigger picture. A wrong treatment leading to drug resistance TB and spreading it further is more disastrous for society than patients not diagnosed and not treated

WHO endorsed tests such as molecular tests and liquid cultures are quite expensive for India, especially in the private sector. Efforts are needed to extend special, reduced prices to the private sector, not just the public sector

Various clinical studies have demonstrated limited clinical utility of all available TB serology kits but unless more effective diagnostic tools are available, serological assays for difficult-to-diagnose infectious diseases like TB will continue to be used

December 16-31, 2012

www.expresspharmaonline.com

cases are left out (false negatives) and with serological tests, a lot of negative cases are reported as positive (false positives). Both situations are dangerous as in the first case, the infection is not controlled because of undiagnosed and untreated cases while false positives leads to misuse of Anti TB Therapy (ATT) due to which antibiotic resistance sets in leading to the more dangerous form of TB: MDR (Multi Drug Resistant) TB. MDR TB cannot be treated by standard TB drugs and the cost of treatment also goes up, says Singh spelling out a scenario which is already playing out in India. Another factor leading to MDR TB is incomplete course of therapy as patients tend to stop taking the drug after the first three-four months once they get partial relief from the symptoms. “The only and best option is to open as many culture centres as possible and detect TB using the microbiology techniques,” advocates Singh. As Dr BR Das, President—Research & Innovation, Super Religare Laboratories (SRL) points out, various clinical studies have convincingly demonstrated limited clinical utility of all available TB serology kits but unless more effective diagnostic tools are available, serological assays for difficult-to-diagnose infectious diseases like TB will continue to be used.

Physician power The role of the physician in controling TB infection cannot be ignored. ”The role of physicians is primordial”, says Rajeev Kumria, Head Business Development, Transasia Biomedicals, “as it is the physician who makes the decision for choosing diagnostics and therapeutics. The physician guides and counsels patients depending upon the clinical conditions to recommend the right type of diagnostic test subsequently leading to correct therapy.” His observation is that physicians sometimes recommend wrong tests, either due to lack of information on the latest tests or lack of availability of other better alternatives. Therefore he feels there is a need for doctors to be educated on these factors so that they can steer the patient towards the right diagnostic

and therapeutic solutions. Similarly, Das says physicians can counsel patients to provide site specific specimens such as sputum for pulmonary cases instead of blood which invariably is expected to provide incorrect results. So it seems that the GoI ban will not really have the desired results unless physicians stop prescribing the banned tests. Singh warns that we need to see the “bigger” picture — a wrong treatment leading to drug resistance TB and spreading it further is more disastrous for society than patients not diagnosed and not treated. Though either of the scenarios are acceptable, he opines that if forced to make a choice, then not using serological tests is a better choice than using it. What the GoI can do is make the WHO-prescribed tests cheaper and thus more accessible by reducing or scrapping custom duties on imported tests. As Pai says, a good TB test should be considered “life-saving” for duty exemption. It thus goes without saying that import duty exemption on such TB test kits will help prevent thousands of TB related deaths every year. But besides government action, industry too can and must chip in. As Pai points out, diagnostics manufacturers must also realise that most TB patients in India, even those in the private sector, are poor, and unless prices are reduced, good TB tests will remain unaffordable to them. The fact that the advanced test need to be imported also indicates the lack of innovative disease diagnosis kits made in India. Kumria states that the Indian industry is primarily involved in design and manufacturing of cost mass base screening test devices and instruments. Listing the underlying reasons for this sad state of affairs, he says, “The Indian university culture is also not entirely in sync with the global practices which boost innovation and entrepreneurship among qualified students.” Kumria notes that a part of the pharma, biotech, healthcare industry are pure R&D companies which get easy funding to innovate and then get either sold to larger companies or sell/license the EXPRESS PHARMA

technologies. Within this realm are individual innovations from young scientists who are encouraged to innovate and start their own companies straight out of univer-

sity after Ph.D’s. Most of the successful scientists in developed world are also successful entrepreneurs. This is not so in India and it needs to change, urges Kumria.

Hopefully this dismal situation could change soon. Last year, Pai had helped organise the first ever conference on TB diagnostics in India, which focused on the

Vital stats of India's TB control programme

ndia's Revised National Tuberculosis Control Programme (RNTCP) has completed 13 years of its implementation with four years of full nation-wide coverage. Since its inception the programme has initiated over 12.6 million patients on treatment thus saving more than 2.2 million lives. RNTCP has definitely made strong strides towards achieving the Millennium Development Goals of relating to the prevalence and mortality due to TB by 2015 as compared to the 1990 levels. A total of Rs 1,447 crore has been allocated for the 11th Five year plan by the Planning Commission. In 1997, when the programme was initiated, an estimated five lakh deaths occurred due to TB each year in the country, which has reduced to 2.8 lakh in 2010. Population surveys conducted by Tuberculosis Research Centre, Chennai, in a sub-district population in Tamil Nadu, show a 12 per cent annual decline in prevalence of TB disease after implementation of RNTCP services. Since 2007 the programme is achieving the global targets of 70 per cent case detection and 85 per cent cure rates in new smear positive patients. These are encouraging trends for RNTCP as it steadily works towards achieving the Millennium Development Goals (MDGs) by 2015. The ultimate goal of the programme remains a “TB-free India”, and clearly it is a long journey towards this goal. (Source: TB INDIA 2011: Revised National TB Control Programme: Annual Status Report)

need to develop innovative TB diagnostics. He indicates that since the meeting in Bangalore in 2011, Indian companies have begun developing more affordable molecular TB tests, although none are on the market as yet. Pai hopes these tests will be shown to be valid and accurate and can be scaled up within India as a replacement for serological tests. Thus it seems logical that both the government, the diagnostics industry as well as the physician fraternity will need to walk that extra mile if they are really committed to curb the TB epidemic in India. viveka.r@expressindia.com

Dr SM Sapatnekar Medical Director Karmic Lifesciences y first reaction to the draft of the said guidelines is that of welcome. The effort is timely. Also, it has taken important variables into consideration. It can be super fined to adjust for, say, phase of trial or else alternate use of pre-marketed drug. But then, the guidance is meant for use of Ethics Committees. Any complex mathematical model will be intimidating to the members of Institutional Ethics Committee (IEC). For IECs it has given direction, clarity and simplicity. While the proposed compensation

Five scenarios

September 16-30, 2012

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rules have sound moral basis, the draft leaves certain areas nebulous. Definitions of injury, eligibility to seek compensation, authority to decide its quantum and confounding factors (like adverse events with placebo or an approved drug) have not been considered in totality. With such vagaries in rules, insurance premier cost will be heavy, and that may impact the business. I have worked out five scenarios (see table below) and that did not take me more than 40 minutes – that too trying to understand the formula. The multiplier B in the formula is a reproduction of ANNEXURE 6 SCHEDULE IV to Workmen’s Compensation Act, 1923. It is therefore not arbitrary. These are not “Rules” to lay down the tortuous liability in a Civil Court. The intent is to provide a benevolent gesture to anyone participating in clinical trials. Granted that there is implicit “No-fault-liability”. I do not think the industry should be touchy about it, essentially because the maximum amount of compensation can be covered by

Monthly Income `= A

Age

Multiplier = B

Before trial

Trial

Administered

Outcome = D

Risk factor = F

20000

226.38

Healthy

BA/BE

Trial Drug

Death

20000

226.38

Healthy

RCT

Placebo

Death

20000

226.38

Diseased

RCT

NCE

Death

20000

226.38

Healthy

RCT

Comparator

Injury

20000

117.41

Diseased

RCT

NCE

Death

www.expresspharmaonline.com

Disability

40%

December 16-31, 2012

incredibly small premium. Limitation of the formula is that the compensation cannot be worked out if the subject is below 16 years age. Also, if a ceiling on the amount of compensation is not kept, then the hunt will be for poorer subjects. This is not desirable. A large number of volunteers in BA/BE studies are college students. To decide the multiplicand (A in the formula) there needs to be further guidance for such eventualities. I am sure, there will be more gaps to be filled in. The right course for industry now is to provide practical suggestions, before guidance is released. It will be a great step forward if the DCGI convenes a meeting with representation from industry and Insurance Regulatory and Development Authority (IRDA) to consider compulsory insurance for every subject in every clinical trial. My uneducated guess is that the premium will drop drastically. Also, if we hold that a volunteer obliges mankind by participating in a clinical trial, this compulsion ought to be acceptable. I feel, it is now a question of “How to do it”? rather than “Whether to do it? or Why it is wrong!” verall, in spirit and intent, we believe that the guidelines are an extremely important step forward in addressing some of the key concerns and challenges in doing clinical trials in India. There is clear intent to provide clarity,

Suneela Thatte Executive Director Customer Operations Quintiles India introduce governance and provide transparency which is indicative of Central Drugs Standard Control Organization (CDSCO’s) seriousness in moving the December 16-31, 2012

industry forward. What is also important is that what has evolved is as a result of collaborative discussions between the government, regulators, the industry, not for profit organisations and other key stakeholders while ensuring that the interests and safety of patients are kept foremost.

Specifically on each of the guidelines The registration of Ethics Committees is a welcome step given the critical role they play in the oversight of a trial. There are, however, a few areas within the guidelines that need to be addressed, most importantly what one does in the interim period between when a registration is submitted and registration is granted. We also need to understand what happens if registration is declined so that a patient’s safety is not compromised. More clarity as to what constitutes a quorum as also the definition of a lay person and medical scientist is also required. We need more clarity on which guidelines need to be followed as there are references to compliance with both ICMR and Indian GCP guidelines which are not really consistent with each other. While we have never disputed the need to pay compensation, there was a need to develop clear guidelines in determining the quantum of compensation in respect to study-related injuries to ensure fairness to the subject (or their heirs) and consistency for the sponsors/administers of clinical trials. While the CDSCO Guidelines have recommended a system for computing compensation, such a system needs to be robust and must leave no room for ambiguity. For instance, in recommending a scale of zero to 100 to be used in determining the seriousness and severity of the disease, the guidelines leave a lot of room for subjective opinion which could cause confusion and debate, thereby delaying the process of awarding compensation. Similarly, there are no details about who determines the percentage of disability and how this percentage is to be determined or how one determines the risk factor. There is no information either on who deterwww.expresspharmaonline.com

mines whether an injury/death is study related and what formula is to be calculated for those under 16 years or above 65 years. Unless we have fool proof and objective criteria to determine compensation, we will be in a situation where objections and counter objections will set the process back rather than take it forward. So, while we welcome the move to create a formula for determining compensation, it needs to be reviewed and made fool proof. Overall, as we have stated in the beginning, these are initiatives in line with what we at Quintiles are firmly committed to— patient safety, ethics and quality—and we look forward to a more regulated industry that will have patient interests at its core. ast year in October ACRO welcomed the move making registration mandatory for Ethics Committee. 1. Registration of Ethics Committees: This is a necessity and we welcome this. As a matter of fact we helped them collect the names of the IEC names our members work with and have requested all of them to get registered. 2. Composition of Ethics Committee

3. Compensation This is an another welcome step from the regulators. By attempting to clearly direct how the adverse effects from clinical trials are compensated we will be able to respect the life of our people who offer themselves for the betterment of the lives of millions who will benefit from the drugs. This will also clear off the ambiguity and will make everyone accountable for the responsibility they should carry when doing clinical trials. We believe it’s a good draft but there are the following areas which need clarity: a. Suspected unexpected serious adverse reaction (SUSAR) vs current Schedule Y requirement of reporting all unexpected SAEs b. General consideration. Injuries can be physical or psychological/emotional. Psychological/emotional injuries are difficult to define and are likely lead to unnecessary debates / claims. A scale of 0 to 100 shall be used for determining the seriousness and severity of the disease Such a scale is arbitrary and likely to lead to different assumptions by different stakeholders leading to unnecessary debates and delays. c. To determine the compensation in case of trial related injury d. It is percentage disability caused to the subject due to clinical trial. Who will / how to decide percentage? here are several issues with these guidelines. Today, there are several con-

T Apurva Shah, Chairman, ACRO By having a more clear guideline on the following issues a lot of issues can be avoided later (a) Essential to describe quorum requirements as (½ x total number of members) +1 (b) Definition of lay person (d) Certificate of training in areas mentioned in the clause (e) Essential to give definition of basic medical scientist

Dr Arun Bhatt President Clininvent Research EXPRESS PHARMA

cerns about ethics committee functioning. How competent such ethics committee are in deciding compensation? The preamble to the guideline describes injuries as physical or psychological/emotional psychological/emotional injuries are difficult to define and are likely lead to unnecessary debates/claims. In step 4, there is a scale to determine the seriousness and severity of the disease. The compensation is for serious adverse event—permanent injury OR death. Why should severity be

judged to determine compensation? Such a scale is arbitrary and likely to lead to different assumptions by different stakeholders leading to unnecessary debates and delays. To determine the compensation in case of trial related injury, percentage disability is to be determined. Who will/how to decide percentage? This also seems to be arbitrary and will lead to controversies and debates. It seems that proposed quantum compensation guidelines will serve the need but still there are a lot many if and buts prevalence

into it. It is now on the Ethics Committee to present fine tuned guidelines. compensation has to be on the same pattern as is prevalent internationally. Present compensation is inadequate irrespective of whether patient is terminally ill. Lack of proper compensation will always be discouraging patients to go for trials. Ethics committees should play a constructive role in determining the quantum of compensation which should be binding on sponsor.

u.sharma@expressindia.com

Vijay Moza, Chairman, Clinical Research Education and Management Academy (CREMA)

COMPANY WATCH DCGI to be competent national authority to certify API exports to EU Draft guidelines for certification as per Falsified Medicines Directive, to be finalised by Jan 2013 Usha Sharma & Viveka Roychowdhury Mumbai he Drug Controller General (India) will be the competent national authority to certify API exports to EU. As part of this role, the DCGI’s office will need to give a written qualification certifying that the exports meet EU GMP qualifications. It is expected that the Zonal offices of the Central Drugs Standard Control Organization (CDSCO) will also be part of this certifying process. This new level of responsibility has been necessitated to prepare for a new regulation scheduled to go into force in the European Union (EU) from July 2, 2013. Called the Falsified Medicines Directive (2011/62/EU), it mandates that all active pharmaceutical ingredients (APIs) imported into the European Union will need to be certi-

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fied by a designated national authority of the exporting nation that they meet EU GMPs. The Directive was proposed to address the menace of counterfeit medicines entering the EU market and protect patient safety. Speaking on the sidelines of the ongoing industry meet, CPhI India, Rajeev Kher, Additional Secretary, Department of Commerce, indicated that he would be meeting the DCGI to iron out the details of how CDSCO will prepare for this certification process. As it is expected that the Zonal officers of the CDSCO will have to be operationally in tune with the specifications of the EU GMP in order to certify that the export consignments meet these norms, Kher indicated that CDSCO would be putting together a set of guidelines for its Zonal officers to enable this certification. Confirming his role, Dr GN Singh, DCGI, informed that his office would be drafting these guidelines in consultation with major industry players. These conwww.expresspharmaonline.com

sultations are already underway and the DCGI indicated that the draft guidelines will be finalised by January 2013. This is to ensure that Indian pharma exporters as well as the Indian regulators are well prepared for the scheduled July 2013 roll out of the EU Falsified Medicines Directive. Dr PV Appaji, Director General, Pharmexcil applauded this decision and pledged the support of the Council to DCGI/CDSCO. He revealed that Pharmexcil will be organising meetings in Mumbai and Hyderabad so that its members’ views can be channeled to the DCGI and incorporated into these guidelines as required. He expressed his hope that the drafting process will be completed within the next month. “Industry is anxiously awaiting these guidelines as they are crucial to pharma exports to the EU,” explained Appaji. The Directive was initially seen as a trade barrier and pharma exporters from India had concerns that exports to the EU would suffer badly. Singh sought to ally these

concerns saying, “We want to promote Indian pharma exports and to make this possible, the Centre and State regulators are working in close coordination with industry as well as with the Ministry of Commerce. My concern is that the regulator of the importing country should also be involved with the process to certify that the imported medicines do indeed meet their specifications.” Singh’s concerns seem to be reflected by industry associations like the European Fine Chemicals Group (EFCG) who have recently called for mandatory inspections of all global API manufacturing sites via mutual recognition agreements. The EFCG has also gone on record to criticise the Directive, stating that the measures do not adequately address the API quality issues associated and that in reality it does little to improve upon the present Directive (2001/83/EC) with regard to patient safety. viveka.r@expressindia.com / u.sharma@expressindia.com December 16-31, 2012

MANAGEMENT

W H AT ’ S INSIDE

INSIGHT FOR MANAGING PHARMA Patent backlog – A qualitative analysis PG 44 Bribery, corruption key compliance risks to pharma cos: KPMG India Fraud Survey 2012 PG 46

December 16-31, 2012

www.expresspharmaonline.com

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M|A|N|A|G|E|M|E|N|T

With an intention of working and prospering together, way back in the sixties, Indian Prime minister Pandit Jawaharlal Nehru coined the slogan, 'Hindi-Chini bhai bhai'. Though there was a planned strategy behind this slogan, India failed to reap any benefits out of it. On the contrary, 1962 went down in history books as a painful memory for India, as we went to war with China. Five decades since, India’s defeat continues to colour every diplomatic exchange between the two countries. In almost every major field China is still a 'big brother' for India. A few months back, Indian Prime Minister, Dr Manmohan Singh confessed that India is falling behind China in science as well. However, not just science, there is a major imbalance between the trade of these two countries. Again, during the recently held bilateral talks with China in Cambodia, the Indian PM specifically demanded more access for the Indian pharmaceutical sector into the Chinese market.

Transparent trade This is not the first time that India has requested China to work towards balancing the trade equation. Currently besides being a largest API manufacturer, along with India, China is also the cheapest manufacturer of medicines in the world. There is a lot of scope for India and China to increase pharma trade. However, the agony is that despite repeated requests, China seems to have turned a deaf ear to its neighbour's concerns. “It’s over two years since China has been ignoring India's demand for liberal market access. Strangely, the ground reality goes far beyond what meets the eye. Indian pharma companies continue to face serious stumbling blocks in the process of official registration and in getting Chinese companies to buy our services and products. In fact Indian pharma firms are quite

EXPRESS PHARMA

cagey of the cutthroat pricing in China and are encountering a series impediments in meeting the system’s requirements, which is largely monopolised by staterun health institutions. The Chinese economy is largely statecontrolled and the prices of various inputs are not market determined,” says Pravin Herlekar, CMD, Omkar Chemicals. He adds, “Indian pharma companies have been thwarted by regulatory hurdles. Registering new drugs can take three to four years in China, as compared to 10 months in India. Moreover, China's regulators often compel Indian pharma companies to conduct clinical trials within the country, which is quite ominous. What India requires is that the process should to be curtailed to one year and not more to help build conducive bilateral trade ties between two countries.” According to reports, China and India have set up a panel to examine ways to balance bilateral trade. But it offers little towards putting an end to the widening trade imbalance between the Asian neighbours as the panel has done very little to fix the issue. Dr Ashok Kumar, President – Centre for R&D, Ipca Laboratories, says, “The Indian pharma industry is fraught with several non-tariff barriers that need to be done away with so that it can make a significant impact in the Chinese market.” While adding to the issues raised by Herlekar, Kumar says, “Process of company registration, procurement of drug license, long

customs procedure, banking and foreign exchange remittance procedures, lack of IP standards and lack of transparency in information about local markets are among the major non-tariff barriers the Indian pharma companies face today while trying to enter the Chinese market. The process of product and company registration and procuring import drug license are expensive and time consuming. It may take 18 months to three years to procure an import drug licence.” On the clinical trial side Kumar says that since China is not a member of the Organisation of Economic Co-operation and Development (OECD) yet, acceptability of clinical trials’ data from other countries is non-existent. Dr P V Appaji, Director General, Pharmexcil, says, “We want Chinese Government to reduce approval processing time for the Indian pharma companies. In India, approval processing may not last for more than a few months whereas, in China it takes a few years to get all the required approvals for the Indian pharma companies. Moreover, in China, Indian pharma companies are charged heavily whereas, charges for their Chinese counterparts are nominal. Such disparity should be addressed as soon as possible.” He adds, “Both the Indian and the Chinese Governments are working towards balancing the pharma trade. However, despite these efforts, things are not improving as expected by the Indian pharma industry. The Indian Government is very proac-

tive in assisting foreign pharma companies. I think, even other countries should extend same facilities to the Indian pharma industry.”

PRAVIN HERLEKAR

SV KRISHNA PRASAD

DR P V APPAJI,

CMD Omkar Chemicals

CEO and Director Cito Healthcare

Director General Pharmexcil

Indian pharma companies continue to face serious stumbling blocks in the process of official registration and in getting Chinese companies to buy our services and products

Any one in business with the same, similar product/service basket any day, is going to be a competitor and hence would be regarded as a threat for sure

Both the Indian and the Chinese Governments are working towards balancing the pharma trade. However, despite these efforts, things are not improving as expected by the Indian pharma industry

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Indian pharma: a threat to Chinese pharma? China is well aware of the fact that in Asia, as far as the pharma sector is concerned, India would be its biggest competitor. As both India and China offer the cheapest and quality medicines, entry of India into the Chinese market would obviously be considered as a threat by Chinese pharma industry. However, according to industry experts, this approach is not just surprising but also selfish. China enjoys seeing 'Made in China' brands in India, however, it does not seem to extend the same courtesy to Indian counterparts. “There are two angles to this case. One is the positive. The Chinese pharma companies could always look at complementing the growth factors by aligning with the Indian efforts and thereby becoming one of the strongest forces outside of US and EU to run the pharma manufacturing and healthcare industry. The flip side is that any one in business with the same or similar product/service basket could become a competitor and hence would be regarded as a threat for sure,” opines S V Krishna Prasad, CEO and Director, Cito Healthcare. He adds, “In terms of language proficiency, scientific manpower, pharma quality control and assurance systems, regulatory

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M|A|N|A|G|E|M|E|N|T affairs management system, India stands out. But certain amount of lack of dedication and easy going attitude is making the hard working Chinese score over Indians when it matters.” On a positive note, Kumar says, “Many Chinese companies are aiming to go overseas for their next growth opportunities and in a bid to build brand awareness and a trusted image, continued partnerships with Indian companies would offer them better insight into the workings of the international pharma markets and access to advanced technology and resources.” However Kumar also points out that given the monopoly that the domestic Chinese manufacturers currently hold over the pharma market in their country, the entry of Indian pharma companies would obviously be perceived as a threat. According to Herlekar, as per government statistics, China has emerged as India's largest source of imports, moving up from being the seventh largest in just over a decade by overtaking the US, Germany and Japan. He explains, “For example, Indian pharma companies are leading suppliers of low-cost generic drugs to countries such as the US, UK and Germany, but this does not impact China in any way. Some blame the cutthroat pricing in China and a cumbersome system of state-run health institutions for this. For China, another concern is the potential greater market opening in India.” Herlekar asserts, “It’s high time that New Delhi seriously looks at encouraging investments like Chinese companies setting up manufacturing bases in India and Indian companies contributing and investing in manufacturing in China.”

Hesitant Chinese pharma? Time and again, the Indian Government has taken up issues related to pharma bilateral trade with Chinese Government. Various organisations representing Indian pharma companies, have too tried to make space for Indian pharma industry in the Chinese market. However, somehow, the Chinese Government seems reluctant to open gates for Indian pharma industry. Is it due to pressure from the Chinese pharma industry? Kumar informs, “Comparatively, India is currently able to make almost all types of dosage forms with a total of more than 60,000 medicines. Attracted by their capabilities in formulation, a number of major pharma companies have collaborated with Indian companies on co development of generic drugs or licensed the sales rights to them.” He adds, “In conclusion, China’s current strengths reside in its better industrial infrastructure, large-scale manufacturing capabilities of raw materials, and relatively December 16-31, 2012

low labour and material costs whereas India’s current strengths include its stronger capabilities in process development, drug formulation, dosage form manufacturing, and marketing in well regulated markets, and a closer association will be of great help to Chinese pharma companies to go up in the value chain.” According to Herlekar, the growth of the pharma market in China has added newer complexity and also provided opportunity in every facet of the pharma business. Understanding Chinese legislations and regulations for pricing and distribution is of paramount importance for the Indian companies to gain a foothold in the market. “Any strategy to enter the Chinese market should be undertaken with the understanding that the government will be involved directly or indirectly at any time. While change will be constant in the Chinese pharma market, Indian companies need to have a firm grasp of the culture, business opportunity and risk before foraying into the region. Cumulatively, the answer lies in actively engaging both China’s Central Government and the local leaders to make sure that the portfolio of pharmaceuticals being offered and the pricing strategy adopted complies with how the local leadership believes it can best bridge the gap between policy mandates from Beijing,” says Herlekar. According to Kumar, since new drug licenses are difficult to acquire, acquisitions or partnerships would be the pragmatic approach for Indian companies to adopt trying to enter the Chinese drug market. Gaining better access to the market may also call for setting up local manufacturing ability in the country itself. Kumar cautions, “The pharma industry in China offers many avenues for Indian drug manufacturers. It remains to be seen whether they can achieve the level of phenomenal success companies like General Motors have managed to achieve in automobile segment. However, companies entering the Chinese drug market may very well face a backlash from Chinese drug manufacturers if they do not tread carefully enough.”

Advantage for aggressive Globally, China is known for its aggressive policies. Every country has the right to safeguard interests of its indigenous industries. However, It should be a give and take. As far as trade between India and China is concerned, India has predominantly been a giver. This disparity should end. There is nothing wrong if India also gets aggressive to achieve its targets. The dove approach will not work when the Chinese dragon is breathing fire. sachin.jagdale@expressindia.com www.expresspharmaonline.com

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LEGAL EAGLE Patent backlog â&#x20AC;&#x201C; A qualitative analysis pseudo-submarine patents and related benefits. To Economy: Negative effects of monopoly would be felt for shorter period.

The patent backlog has assumed worrying proportions in both developed and developing nations. This legal uncertainty adds to the complexity of applications as well as is a drain of tax payer funds. Milind Sathe, Deputy General Manager, Projects, Unichem Laboratories explains the present scenario in developed and developing countries with its pros and cons atent backlog (PB) is a common phenomenon observed across the globe. It is observed in developed countries too. It is more pronounced in Developing Countries (DCs) and Least Developed Countries (LDCs) than in developed world, in terms of its future impact. In DCs and LDCs it is primarily due rise in applications by foreign nationals / entities. DCs and LDCs witnessed PB after they became signatory to TRIPs.

What is PB? PB is stock of accumulated patent applications filed and undecided, unexamined. PB is present in Intellectual Property (IP) offices of all nations, including developed nations. It consists of applications in diverse states.

Why is there a PB? Post TRIPs, IP offices have experienced a dramatic increase in the number of applications. The reason for PB is, applicants do not seek the examination of their applications for various reasons and do not take the application to its logical end. IP offices will always have some applications pending examination. However when the available resources, structures and legal frameworkis inadequate to keep them within manageable levels, resulting into appreciable delay, the situation is alarming. Applicants and IP offices have to review themselves if the PB is to be reduced. A study of number of applications received and cleared in unit time may provide a dependable measure to assess adequacy of installed resources. But it will not say anything about tendencies of applicants. Developed countries with robust economies experienced a PB because even these countries could

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not provide adequate funds for their IP offices. One can imagine the situation in DCs and LDCs which have fragile economies. Advancement in technologies and expansion of the scientific field has elevated the level of text, content of patent applications and has made it more complicated. Standards of obviousness are continuously undergoing refinement. There is a trend to draft broader claims which are subsequently narrowed. There is lack of alignment of public domain, arrangement of freely accessible global knowledge into arranged usable databases that are available to IP offices and public too. It requires upgradation of hardware and possibly development of new user friendly software packages. A fleet of new trained examiners who are able to clear the PB while following law of the land is required. These are capital intensive and complex jobs which cannot be installed overnight. Rapidly growing industries and economies of Asia, increased rate of innovation, multiplicity of commercialisable scientific fields and diverse technologies (individual and combination), rise in number of R&D firms in diverse and increased fields and rise of new business models, rise of TRIPs, TRIPs+ Free Trade Agreements (FTAs) / Regional Trade Agreements (RTAs), globalisation and rise in adopting a strategy to protect invention in multiple countries, rise in possibility of licensing out and of raising funds from IP based on undecided patent applications have contributed to an unprecedented rise in the number of patent applications received by IP offices in all nations. www.expresspharmaonline.com

Is PB bad? For applicant

Applicants have learned from the developed world that keeping applications in an undecided state has a deterrent effect on competition, as well as increases opportunities of licensing. As a result keeping applications pending has a clear potential to raise business revenue . Applicants do not opt for fast track processing and take full benefit of periods for request for examination which is four years in India, but is as high as seven years in some countries. It means applications will be accumulated for these years. Although the percentage rise in number of examiners over the years may exceed the percentage rise in number of applications received and examined, PB continues to increase. It indicates the tendency of applicants to keep the application in a pending state and probably complexity of applications. The applicant has to prosecute his application in at least relevant IP office to take advantage of Patent Prosecution Highway (PPH) or to enable him to provide the relevant information to another IP office where it is required. If applicants opt to take full advantage of request for examination period, PB will continue to rise.

Is PB good? To applicants, keeping applications pending has I) licensing potential, ii) It demotivates competitors iii) Increases hopes to raise funds iv) Potential to create

1) Though keeping applications pending creates licensing potential, demotivates competitors and raises hopes to raise funds, it may not actually ensure funding and can delay his plans. 2) In some countries there is a requirement of payment of maintenance fees albeit the application is undecided.

For the corporate world and industry Business has to be conducted under threat of pseudo-submarine patents. Secondly, if a monopoly is cashed after grant, effective period of monopoly is shorter. And lastly, ahere will always be apprehension of infringement and litigations creating internal resistance to adopt newer technologies.

To subject population of the nation: People may not get improved, more user friendly goods and may deny opportunities to more comfortable life.

To nation: The impact on quality of granted patents may lead to rise in litigations and its cost shall be paid through tax payer funds. The administration and judiciary which otherwise would have attended to other cases will have to spend their resources in deciding these added burdens. It will increase the social, opportunity and administrative costs creating scarcity of resources for deserving priorities. Truly speaking, a strong sovereign shall not be affected by pending status of applications if it wants to use any of the applications or grants as that is allowed by law of the land in many countries and by TRIPs.

What is the effect of PB? PB results into legal uncertainty. Its counterproductive impact on innovation, econoDecember 16-31, 2012

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my and on rate of industrialisation will vary from nation to nation. It may impact generation of employment opportunities, distribution and redistribution of wealth within the nation. Absence of patent may mean no investment, no start of new activities and hence no business. No business means no opportunities to produce new articles, no new jobs, loss of opportunity to use newer technologies, loss of opportunity to use available resources in more economic manner. It is a drain on scare resources. It is said that the undecided fate of applications may provide disincentive to inventors or applicants, diminishes incentive to innovation. But it fails to explain why there is continuous rise in PB over the years. PB pressures and inadequate staff may also result in grants which otherwise do not deserve patents. It will lead to rise in oppositions / litigations which is again a drain on tax payer's money. PB creates tendency to apply for trivial and possibly non-patentable inventions to capitalise on the deterrent effect of

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Pharma HEAD OFFICE MUMBAI Rajesh Bhatkal Business Publications Division, The Indian Express Limited., 1st Floor, Express Towers, Nariman Point, Mumbai-400021. India Tel: 67440503 / 02 Fax: 022-22885831 Mobile: 98213 13017 E-mail : rajesh.bhatkal@expressindia.com Branch Offices NEW DELHI Ambuj Kumar Business Publications Division, The Indian Express Limited, Basement, Express Building, 9 & 10 Bahadur Shah Zafar Marg, New Delhi, 110 002 Direct Line: 011-2346 5727 Board Line: 011-2370 2100-107 Ext-727 Mobile: 09999070900 E-mail: ambuj.kumar@expressindia.com CHENNAI Dr Raghu Pillai The Indian Express Limited, Business Publications Division, New No.37/C (Old No.16/C) 2nd Floor, Whites Road, Royapettah, Chennai - 600 014

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pending application status.

How to overcome PB? The most effective solution that will eliminate rising PB is rigorous and punctual implementation of provisions related to non-worked patents. Each nation should by default declare patents open for compulsory licensing if it is found that the patent has not been worked for three years after the grant. This will create a deterrent impact and will demotivate applicants who want to keep their applications in an undecided state for long. Recruitment of many adequately trained examiners and diversion of national resources from existing priority areas to this area may resolve PB. Patent systems should be reviewed to ensure the main objective of commercialisation of inventions. A thorough scrutiny of grants will reveal the extent to which the granted patents are worked. This will reveal if providing incentive to innovation, development and inducing enabling disclosure of an invention are benefits in reality or only philosophi-

Tel: Board: 28543031/28543032/ 28543033/28543034 Fax: 28543035 E-mail: raghu.pillai@expressindia.com BANGALORE Khaja Ali Business Publications Division, The Indian Express Ltd. 5th Floor, Devatha Plaza 131, Residency RoadBangalore - 560 025, INDIA Tel: 22231923/24/41/60 Fax: 22231925 Cell: 09741100008 E-mail: khaja.ali@expressindia.com HYDERABAD E. Mujahid The Indian Express Ltd. Business Publications Division, 6-3-885/7/B, Ground floor, V.V. Mansion, Somaji Guda, Hyderabad - 500082 Tel: 040 - 23418673/ 23418674/ 66631457 Telefax: 040 - 23418675 Mob: 09849039936 Email: e.mujahid@expressindia.com

cal theories with no practical relevance. It is working of the patent that ensures orderly development and not the non-worked patents. More and more IP offices should collaborate in PPH kind of arrangement. In a knowledge economy, IP offices should be structured to be self supporting. DCs and LDCs should seriously review fee structure as in DCs and LDCs, funds are diverted from more important sectors such as agriculture, health, infrastructure and education to IP offices. DCs and LDCs may have to raise IP office fee structure. Internal reforms, increased transparency may be able to combat rising PB. If some examination requests are remaining unattended due to shortage of examiners, may be there is a solution. May be establishing relationship of number of applications examined per unit time per examiner may provide suitable indication to either increase or decrease the number of examiners. This is applicable assuming all examination requests are to be cleared. This will necessitate flexible

2231 8879 / 80 Fax: +91-33-22138582 Cell: 09830130965 / 09831182580 Email: prasenjit.basu@expressindia.com ajanta.sengupta@expressindia.com KOCHI Dr Raghu Pillai Business Publications Division, The Indian Express Limited, Sankoorikal Building, 36/2248, Kaloor,Kadavanthara Road, Opp. Kaloor Private Bus Stand, Kaloor - 682 017 Tel: (0484) 2343152, 2343328 Fax: 2343153 E-mail: Kochi.bpd@expressindia.com raghu.pillai@expressindia.com COIMBATORE The Indian Express Limited, Business Publications Division, 1st Floor, 731, Avinashi Road, Opp. PRS Grounds, Coimbatore-641 018 Tel: 2212157/2216718/2216732

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employment policies.

Will PB be there forever? PB will always be there. There is nothing wrong about it till it reaches threatening magnitude resulting into inordinate delay of grant, for no fault of applicant. The trends of change in industry / in technology and applicants behavior cannot be visualised in advance to perfection.

Is an international patent a solution? There is nothing like an international patent. Each application has to undergo examination in each country where it is applied. Different nations inherently differ from each other. Secondly sovereign priorities, regional values and identities of nations cannot be compromised. National jurisdiction should never be compromised. Inventors and industrial entities may opt for different form of IP protection, may be trade secrets. (The views expressed here are those of the author and do not necessarily reflect the views of his employers, past or current.)

E-mail: bpdcbe@vsnl.in JAIPUR The Indian Express Limited, C-7, Dwarika Puri, Jamna Lal Bajaj Marg, C-Scheme, Jaipur - 302001 Tel: 0141-370002/371272 Telefax: 91-141-376606 BHOPAL The Indian Express Limited, 6, Vidya Vihar, Professors Colony, Bhopal - 462002, Madhya Pradesh Tel: 0755-2661988 AHMEDABAD Rajesh Bhatkal The Indian Express Limited, 3rd Floor, Sambhav House, Nr. Judges Bunglow Bodakdev, Ahmedabad - 380 015. Tel: (91-79) 26872481 / 82 / 83 Fax: (91-79) 26873950 Mobile: 98213 13017 E-mail : rajesh.bhatkal@expressindia.com

IMPORTANT Whilst care is taken prior to acceptance of advertising copy, it is not possible to verify its contents. The Indian Express Limited. cannot be held responsible for such contents, nor for any loss or damages incurred as a result of transactions with companies, associations or individuals advertising in its newspapers or publications. We therefore recommend that readers make necessary inquiries before sending any monies or entering into any agreements with advertisers or otherwise acting on an advertisement in any manner whatsoever.

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Bribery, corruption key compliance risks to pharma cos: KPMG India Fraud Survey 2012 Procurement, sales and distribution and inventory amongst top three most vulnerable processes to fraud risks in the sector orporate India’s unwillingness to see fraud as a strategic risk poses a grave threat to firms as they start experiencing frauds of the future indicates the KPMG India Fraud Survey 2012 launched in New Delhi. Cyber crime, intellectual property fraud including counterfeiting and piracy, and identity theft were rated as the top fraud concerns for the future by survey respondents across all sectors. This underlines a shift in the fraud landscape with fraudsters increasingly targeting organisational knowledge (data, code etc) and not physical assets to defraud companies. 70 per cent of the companies surveyed have no effective mechanism to tackle these futuristic frauds, with 71 per cent respondents believing that it is inevitable cost of business. Compounding the situation, the industry is reluctant to discuss bribery and corruption. In the pharmaceutical sector, bribery and corruption emerged one of the key compliance risks to pharma companies. This is due to situations ranging from the fact that procurement teams at hospitals in India can manipulate prices in return for kickbacks from pharma companies. So also, medical practitioners have been accused of accepting gifts from pharma companies in return for promoting drugs made by them. Independence of regional regulatory bodies can be compromised to provide favourable reports overlooking malpractices. Moreover, about 50 per cent of respondents from the industrial markets sector believe that their organisations have experienced frauds in the last two years. Procurement, sales and distribution and inventory are amongst the top three most vulnerable processes to fraud risks in the pharma sector. “Over the last decade

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knowledge has emerged as a key organisational asset. It is only natural that fraudsters will target these assets, as they are much more valuable to companies today,” said Rohit Mahajan, Partner and co-Head, Forensic Services, KPMG in India. The futuristic frauds identified rely on technology and allow fraudsters to work in groups to leverage their full might. Irrespective of size, sector and operations, every company was vulnerable, said Mahajan. “Technology is changing the fraud landscape and challenging the boundaries of fraud risk management. By misusing technology even relatively simple frauds like those in procurement, can

sharing, social engineering or malwares) and yet did not have a policy to mitigate these incidences. There was high reliance on internal mechanisms such as general process controls and compliance frameworks to detect and prevent futuristic frauds, the survey noted. While whistleblower hotlines were identified as an efficient method to uncover fraud or misconduct within organisations, only 50 per cent of respondents said they had established such a hotline in their organisation. Further, only half of the respondents said they had implemented process specific controls, employee and third party due diligence, whistle-

MEDICAL PRACTITIONERS HAVE BEEN ACCUSED OF ACCEPTING GIFTS FROM PHARMA COMPANIES IN RETURN FOR PROMOTING DRUGS. INDEPENDENCE OF REGIONAL REGULATORY BODIES CAN ALSO BE COMPROMISED become sophisticated and difficult to detect. The frameworks that were sufficient to mitigate simple frauds are no longer effective against these sophisticated frauds”, he said. This is evidenced by over 70 per cent of survey respondents claiming they had no effective mechanism in place to mitigate risks from futuristic frauds. Highlighting the underpreparedness among companies to tackle futuristic fraud, the survey noted that nearly 78 per cent of respondents were unaware of the risks associated with intellectual property infringement, counterfeiting or piracy. In case of cyber crime, while over 80 per cent respondents had policies on accessing external websites and social media from their office networks, 40 per cent said their companies did not have specific guidelines on the kind of information that could be shared on social media. Around 53 per cent of respondents said they had faced identity theft (either by way of password www.expresspharmaonline.com

blower hotline, and a framework to monitor compliance with the Code of Conduct/ Code of Ethics. Apart from challenging business processes to unearth gaps in existing controls, and forming internal teams to research on emerging frauds, there was little that companies were doing to tackle these frauds, the survey revealed. “A one-size-fits-all framework cannot help mitigate emerging fraud risks. This is because each risk manifests itself uniquely. Companies need to be aware of the various possible modus operandi, perpetrators and gaps in internal controls. Only then can they develop an effective risk mitigation framework,” said Mahajan. He cited comprehensive information security measures, protection of personal information, physical security measures, and robust access protocols, along with periodic reviews as some measures that could be adopted to tackle futuristic frauds holistically. Although a majority of

respondents were impacted by various types of futuristic frauds, around 71 per cent felt fraud (of any type) was an inevitable cost of doing business, implying that fraud mitigation and risk management ranked low on their board level agenda. This attitude, to some extent, was supported by various survey findings – Increase in the number of frauds discovered (making one believe that no amount of risk management could help); the tendency among companies to undermine the threat of employee fraud; inadequate fraud risk management controls to tackle futuristic fraud; reluctance to rely on external experts during an investigation and a high degree of tolerance for well known forms of fraud such as bribery and corruption. Financial services and information and entertainment were identified as sectors most prone to frauds, owing to their high dependence on technology, large transactional data in electronic form, as well as the confidential information they held. Bribery and corruption continues to be an issue the industry is reluctant to discuss and close to 70 per cent of respondents said they faced no significant threat from it. Around 72 per cent of respondents said their organisation had a mechanism to address bribery and corruption, however, only few respondents chose to answer questions pertaining to such a mechanism, indicating high levels of organisational tolerance to bribery and corruption.

Survey methodology The KPMG fraud survey was conducted by circulating an online questionnaire and received responses from 293 CXOs from varied industries across financial services, information and entertainment, industrial markets, real estate and infrastructure, consumer markets, telecom, travel tourism and leisure, healthcare and social sector. The respondents represent both Indian and multinational firms with an annual turnover in the range of ` 500 crore – ` 10,000 crore. EP News Bureau- Mumbai December 16-31, 2012

RESEARCH EXPERTISE FOR DRUG DEVELOPMENT

The bigger menace

Maolraria dengue? Recent outbreaks of dengue in India have proved that it is no way less harmful than malaria. Sachin Jagdale provides comparative studies of both these diseases ndia, being a tropical country, has always remained a fertile ground for malaria. Not just India but many parts of the world have at some time or the other faced the ire of a malarial outbreak. Historical accounts too state that malaria was the reason behind the decline of the Roman empire. So much so that, fever linked to malaria is normally referred to as 'Roman fever'. Decades passed but malaria continued to dictate terms. In recent years one more mosquito born diseases has joined the league of malaria i.e dengue. This disease has shown every promise of dethroning malaria as far as it's nuisance value is concerned. However,

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unlike malaria, dengue does not have a well defined medicine for treatment and this perhaps makes it deadlier than malaria. Besides the knowledge of both being mosquito born diseases, there is still not enough understanding over the differences between the symptoms of both these diseases and care that is to be taken.

Symptoms Dr Vivek Nangia, Director and Head, Fortis Lung Centre, describes the symptoms associated with malaria and dengue, saying, â&#x20AC;&#x153;Malaria is an illness caused by Plasmodium species which is transmitted by a mosquito bite. Initial symptoms are

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PHARMA ALLY 49 PHARMA LIFE 72 EXPRESS PHARMA

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non specific like fatigue, headache, cough, nausea, vomiting loss of appetite lasting a day or two followed by the classical moderate to high grade intermittent fever associated with chills and rigours. Conventionally, it is divided into three stages- a cold stage, when the patient shivers, a hot stage, when the patient experiences rise in body temperature and a wet stage, when the fever comes down and is accompanied by profuse sweating.” He adds, “Symptomatic dengue virus infections can be divided into three categoriesundifferentiated fever, dengue fever (DF) and dengue haemorrhagic fever (DHF). DHF was further classified into four severity grades – grades I to IV. DHF grades III – IV are labeled as dengue shock syndrome (DSS). Dengue illness has different clinical presentations and often with unpredictable clinical evolution and outcome. The usual signs and symptoms are, high fever (3-7 days), intense headache, painful joints and muscles, pain behind eyes and often a rash which may appear as fever reduces. Dangerous complications that can occur are haemorrhagic or shock syndrome.”

DENV-3 or DENV-2, then too there is a risk of severe disease as there is not much of an antigenic relation between the serotypes. This had posed a challenge to the researchers for producing a vaccine against dengue.”

Problem of many

Menacing mutations

Recent findings have shown the presence of more than one malarial strain in a patient's body. According to scientists, finding a combination of different malarial strains has added to patients' and scientists' woes. The dengue virus has different strains. Will the combinations of different dengue strains prove even more fatal than malarial strains? Dr Manju Phadke, Microbiologist and Lecturer, South Indian Education Society (SIES), explains, “The dengue fever virus is an RNA virus belonging to family Flaviviridiae genus Flavivirus. It is transmitted by arthropods. There are four strains of the virus which are called serotypes, namely DENV -1, DENV-2, DENV-3, DENV-4. Each serotype is capable of causing a full blown disease. Infection with one serotype can produce lifelong immunity to that particular serotype alone, but it will offer little immune protection against the other three serotypes. If a patient primarily suffering from say DENV -1 is exposed to a secondary infection by

Mutation can result in several types of genomic changes in DNA or RNA of the bacteria or the virus. For example, continuous mutation in of Human Immuno Deficiency Virus (HIV) is a major obstacle in the way of developing a final remedy to treat HIV infection. Over the years malarial strains have developed resistance to many drugs. What if dengue virus undergoes mutation when we already don't have enough potent medicines to treat it? According Nangia, there are some reports of the dengue virus undergoing mutation. However, it has not resulted in the change of symptomatology or severity but it serves as a limitation in the development of vaccines against dengue. Phadke provides technical details associated with mutations. She says, “The genome of the dengue virus contains about 11,000 nucleotides which code for three core proteins that form the virus particle and seven types of proteins which are produced in the host cell and cause the infection. As of now, to the best of

DR VIVEK NANGIA Director and Head, Fortis Lung Centre

There are some reports of virus undergoing mutation. However, it has not resulted in the change of symptomatology or severity but it serves as a limitation in the development of vaccines against dengue

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acquiring the infection. Severe disease is more common in babies and young children. Individuals who are immuno-compromised are at a higher risk of acquiring the infection,” opines Phadke. According to Nangia, individual risk factors determine the severity of disease and include secondary infection, age, ethnicity and possibly chronic diseases (bronchial asthma, sickle cell anaemia and diabetes mellitus). Young children are more prone to having a more severe form of the infection. He adds, “Host Mutations are genetics may influence the random events that clinical outcome of infection occur in all organisms in response to a though most studies have failed to establish this. Yet, change in the envistudies in the American region ronmental condishow the rates of severe tions; so sooner or dengue to be lower in Africolater mutant strains Americans as compared to of the dengue virus other ethnic groups.” Unfortunately, there is no may crop up like the mutant strains of the specific anti-viral drug available to treat dengue. Hence, Polio virus have the treatment is only supportemerged ive. Nangia informs, “Patients are advised to maintain good my knowledge, no mutant oral intake and adequate strains are reported . However hydration. Fever and body mutations are random events aches should be managed that occur in all organisms in with paracetamol or acetaminresponse to a change in the ophen. Aspirin or non anti-inflammatory environmental conditions; so steroidal sooner or later mutant strains agents are to be avoided comof the dengue virus may crop pletely. Platelet transfusions up like the mutant strains of have not been shown to be the Polio virus have emerged.” effective at preventing or controlling bleeding. But may be warranted in patients with Gene pool People in different parts of very low platelet counts the world show susceptibility (<10,000/mm3).” Contrary to dengue, for to different kinds of diseases. Very often, diseases dominant malaria specific anti malarial in the Western world were drugs are available. As far as proved less menacing in other India is concerned, dengue is parts of the world. Differences coming close to acquiring the in the responses to particular same fear factor as malaria. disease has largely been The similarities between the attributed to the varying two often add to the confugenetic constitution of world sion. Both are mosquito born population. The distribution diseases, by different species of malaria and dengue inci- of mosquitos. Strategies to dence is also not even across prevent malaria and dengue involve some the different continents. outbreaks Besides environmental factors attempts by civic authorities to varying gene pool does deter- control the responsible vector mine the severity of these populations. For instance, guppy fish eat mosquito larvae infections. “The dengue virus is responsible for malaria (genus endemic to certain parts of the Anopheles) and according to world, largely the tropical recent studies done in countries and the equatorial Vietnam and Quba, mesocyregions. Earlier each strain clops, a type of crustacean, was endemic to a particular preys on dengue mosquito lararea, but due to global travel, vae (genus Aedes). Its up to researchers to growing population etc, there are no territorial boundaries develop more effective mediknown for the different strains cines to treat them. However, of the virus. People living in for the people, awareness areas that are endemic to about such diseases will dengue or those who are trav- always remain a first line of eling to and from the endemic defense. areas are at a higher risk of sachin.jagdale@expressindia.com

DR MANJU PHADKE

Microbiologist and Lecturer, South Indian Education Society (SIES)

December 16-31, 2012

PHARMA ALLY VENDOR NEWS ACG Worldwide to invest ` 400 cr to set up mfg plant at Pithampur Targets to touch turnover of ` 2000 cr over next three years Usha Sharma Mumbai he Mumbai based leading packaging solution provider ACG Worldwide has chalked out robust expansion plans. The company is investing ` 400 crore to set up a new manufacturing plant at Pithampur, Indore in a phased manner. It is targeted to commence phase I and phase II productions from July 2013 and May—June 2014 respectively. The company has arranged funds from internal accruals.

Sharing expansion details with Express Pharma, S M J Noronha, President and CEO, ACG Associated Capsules said, “We are setting up our new manufacturing site at Pithampur in a phased manner. The construction work of the phase I is almost ready and we are expecting to begin production from July 2013. We are investing ` 400 crore and targeting to touch a turnover of ` 400 crore from this facility itself in the next three years.” The company is installing 24 new high

speed capsule filling machines and for the phase I there will be three to four machines will get installed in the facility. The company is bringing global technology to the Indian market which has a capacity of producing five million capsules per day. As the company has robust plans it will also need manpower to carry this forward. For the phase I it plans to hire 160 people and will be adding 120 people in phase II .Commenting on the targeted turnover from the new facility in the first

year, Noronha replied, “It is too early to comment on this. Still I would like to mention that from the first year of our new upcoming facility we are targeting to touch the turnover Rs 4050 crore.” He continued, “We will be able to see the actual outcome only in the third and fourth production year . We are projecting to touch a turnover of ` 400 crore by 2015.” While the current overall turnover of the group is ` 1000 crore. Noronha says that the company is aiming to touch Rs 2000 crore in the next three years.

W H AT ’ S INSIDE

SCHOTT announces major expansion of pharma packaging manufacturing in Russia PG 50 Dow unveils new API solution at CPhI India PG 51 Products PG 52 Machine vision to keep India’s manufacturing industry globally competitive PG 53 Regulatory norms for pharmaceutical water systems PG 54

u.sharma@expressindia.com

DSM opens service centre in Hyderabad Plans to ramp up employee strength from 75 to 250 by 2015 oyal DSM recently expanded its footprint in India by announcing the launch of its shared services center in Hyderabad to support all its global business units besides creating a more diverse and inclusive workforce. Ponnala Lakshmaiah, State Minister for Information Technology and Communications inaugurated the center in presence of Dutch Ambassador to India, his excellency, Alphonsus Stoelinga along with RolfDieter Schwalb, Chief Financial Officer, DSM. On the occasion, Ponnala Lakshmaiah, State Minister for Information Technology and Communications said, “Andhra Pradesh offers a favourable business environment, availability of skilled workforce and a geographical advantage for back-office shared services. The State Government will continue to support initiatives of domestic and international companies for promoting emerging

December 16-31, 2012

technologies that create new jobs while adopting best global practices.” The Minister added that the benefits of new technologies should percolate down to the masses for equitable growth across the country. On the other hand, Ambassador Stoelinga, Dutch Ambassador to India, said that the recent reforms in Indian retailing and other sectors could provide an opportunity for Dutch companies in supply chain management. Schwalb said, “DSM will strive to improve efficiencies by streamlining processes and cost optimisation at the new captive center. We will follow functional excellence and a process-driven approach. The support center with a flexible business model will enable our business groups to focus on their core activities.” He continued, “This initiative will allow seamless services within DSM units, ensuring that key transactional activi-

ties are managed on their behalf in a professional, costeffective and compliant manner. The number of employees will expand from 75 initially to about 250 in the next three years.” He further continued, "Hyderabad has ample world-class office space and is well-connected internationally. The Indian talent is recognised worldwide. The new center will help DSM create new capabilities and achieve operational excellence to provide broader support to a growing customer base across the globe. The launch coincides with a refreshment of DSM’s Culture Agenda. We realise the wealth of experience on shared services globally and especially India. Therefore, we have selected Genpact as key partner in the process.” DSM India plans to appoint fresh graduates from local educational institutions, MBAs, chartered www.expresspharmaonline.com

accountants and finance graduates with four to five years of experience for middle-level managerial positions. Bharath Sesha, President, DSM India, described the new Shared Services Center of DSM in Hyderabad as an “important milestone for DSM in India.” He mentioned, “India plays an important role in the DSM strategy of expanding our involvement in high growth economies. DSM would continue its growth path in India while addressing the issues of importance to India, like health, well-being and sustainability.” The center will initially manage back-office finance and accounting activities and later potentially expanding into services like transactional procurement, human resources and IT operations. The services will be performed on behalf of various related business and service units of DSM globally with an effort to remain focused on value addition. EP News Bureau-Mumbai EXPRESS PHARMA

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Industry conducts a meeting with ministry on 2D implementation Industry and Government Usha Sharma are trying to do their best Mumbai to meet the deadline and mplementation of 2D technology in the secondary tackle this issue

packaging requires advanced resources and is an economic burden to the industry. So, to discuss this issue and find a way out, the pharma industry and Pharmaceuticals Export Promotion Council of India (Pharmexcil) had a meeting with the Ministry of Commerce on November 23, which was set to continue on December 11. Pharmexcil had issued a letter to the Ministry of Commerce a week back to consider 1D implementation in the secondary packaging line instead of 2D. The revised deadline of implementing track and trace technology in secondary level packaging is January 2013. Both, industry as well as the Government, are trying to do their best to meet the dead-

line and tackle this issue effectively. NR Munjal, ViceChairman cum Managing Director, Ind Swift Laboratories and Vice

and medium size pharma companies. He also informed, “To address this issue in more detail, we are having series of meetings with the Ministry of Commerce. The Government

REVISED DEADLINE TO IMPLEMENT THIS TECHNOLOGY AT THE SECONDARY LEVEL PACKAGING IS JANUARY 2013 Chairman of Pharmexcil said, “It is difficult to print 2D on ampule and many other medicines because it requires advanced technology which should be fully automated and to comply with all these features requires high end investment. Also printing 2D on ampule is difficult as already there is less space to print anything.” He continued that all these requires huge investment which he believes would be difficult for small

is pressuring the industry to implement 2D in secondary packaging line and my suggestion to the ministry is to first give the green signal to 1D and later on, considering its pros and cons, take a step towards implementing 2D in the secondary level packaging line.“ The entire trace and track system implementation technology was introduced by the Government to detect and reduce the number of counterfeit medicines in the phar-

ma supply chain. As per its directive issued on June 30, 2011, it is compulsory for the exporters of the pharma companies to adopt a trace and track system which have been set in three different phases of implementation. According to June 2011 directive, secondary level packaging line which was supposed to get implemented from January 1, 2012 got delayed and the deadline was pushed to January 1, 2013. Dr PV Appaji, Director General, Pharmexcil commented, “We are in continuous discussion with the Ministry and trying to find a solution as current uncertainty may trouble the pharma exports. To address the counterfeit issues more seriously we have already launched Brand India Pharma campaign and are spreading the message to the world that Indian pharma drugs are affordable without compromising on qualities.” u.sharma@expressindia.com

SCHOTT announces major expansion of pharma packaging manufacturing in Russia Capacity to expand by S more than 50 per cent CHOTT Pharmaceutical Packaging continues to experience growth in Russia and now plans to increase the production capacities at its plant in in Zavolzhe by more than 50 per cent, according to a company announcment at the recent Pharmtech trade fair in Moscow. “Expanding our presence in Russia represents an important strategic step for the benefit of our customers,” emphasised Dr Jürgen Sackhoff, responsible for the Pharmaceutical Systems division of SCHOTT AG. “We are seeing contin-

ued growth in demand for locally manufactured primary packaging that also meets all of the international standards for quality. This will result in shorter delivery routes and better export opportunities for our customers. In other words, by pursuing a consistent investment strategy, we will be helping our customers in the Russian pharmaceutical industry to achieve their own growth and quality objectives,” he adds. The Russian pharma industry has experienced double-digit growth in recent years. State initiatives like the

government’s “Pharma 2020” strategy that seeks to encourage local manufacturing of high-quality medications according to the GMP standard will continue this development. SCHOTT became the first international manufacturer in Russia to open a new GMPcompliant pharma packaging plant in the spring of 2011 and now the order situation has made it necessary to expand capacities earlier than expected. “Thanks to our many years of experience and high international standards for quality, SCHOTT is

the right partner for the ambitious and growing Russian pharma industry,” Sackhoff adds. Referring to the growing quality requirements of the Russian pharma industry. he concluded, “GMP will be required by law for all companies that manufacture in Russia starting in 2014 and SCHOTT has the necessary know-how on helping its customers to establish GMP-certified manufacturing thanks to its 125 years of experience and global manufacturing network.” EP News Bureau-Mumbai

Jean-Marc Pardonge is new President, Aptar Pharma Prescription division ean-Marc Pardonge has been appointed as the new President of Aptar Pharma’s Prescription Division, leaders in the development and manufacturing of nasal and pulmonary drug delivery devices. Pardonge succeeds Salim Haffar, and also becomes the new General Manager of

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Aptar Stelmi (the Stelmi company was recently acquired by Aptargroup). After graduating from the French ENSAM engineering school (Ecole Nationale Supérieure d’Arts et Métiers), Pardonge joined Aptar Pharma Prescription Division in 2000 as R&D Manager. He was promoted to the position of Vice President www.expresspharmaonline.com

R&D in 2003. In January 2010, he became President of Global Market Development (GMD) of Aptar Pharma’s Prescription Division. In this role, he managed and coordinated worldwide activities which included Scientific and Regulatory Affairs, Business Development, Communication, Engineering,

Innovation, Marketing, Projects, and R&D. Aptar Pharma’s Prescription Division will leverage Pardonge’s in-depth knowledge of both the pharmaceutical market and the Division’s customers to take full advantage of market opportunities for growth. EP News Bureau-Mumbai December 16-31, 2012

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Dow unveils new API solution at CPhI India New product designed to meet the poor aqueous solubility of APIs

ow Wolff Cellulosics, a business unit of The Dow Chemical Company, kicked off its presence at CPhI India 2013 in Mumbai by unveiling a new product designed to meet one of the most pressing needs of the pharmaceutical industry, the solubilisation of active pharmaceutical ingredients (APIs). Trends in drug characteristics increasingly call for greater degrees of lipophilicity, higher molecular weight, greater physical form complexity and significantly lower aqueous solubility of APIs. Dow Wolff Celllulosics estimates that 40 per cent of

new molecular entities now suffer from poor aqueous solubility. “This presents a huge challenge for therapeutically relevant oral delivery drug products,” said Dago Caceres, Global Strategic Marketing Leader for Dow Wolff Cellulosics “Formulation scientists are increasingly in need of reliable and robust technology solutions to overcome this critical drug delivery issue.” Dow, through its Dow Wolff Cellulosics’ business unit, contributes to solving this unmet and pressing need through rigorous science and a selection of enabling poly-

mers. It is collaborating with US CRO Bend Research to develop effective spray-dried dispersion solutions and a selection of enabling cellulosics polymers to address the challenge of formulating poorly soluble drugs. To Dow, solution is not only about solving technical problems, but also innovating and delivering new technologies that help customers improve efficiency and productivity, all while managing the total cost of ownership without impacting product quality.“Formulation development economics have gone beyond simply using inexpensive raw materials,” said

Caceres, “They now require cost assessments for development, scale up and manufacturing.” “In India, the scientifically-advanced Customer Application Development Center at Mumbai of Dow Chemical International, is at our customers’ support in the areas of Controlled Release and Immediate Release Technology,” he said, “We’re committed to discovering new approaches for drug delivery in the region that help our customers create high-value products which brings people healthier lives.” EP News Bureau-Mumbai

Praj flags off its industrial biobased product facility Commences production and supply of Livestock Health & Nutrition Products s part of its strategy of extending its expertise in biotechnology combined with its experience in agri processes, Praj Industries, the global leader in ethanol technology has launched its next set of biobased products – the livestock health & nutrition range (LHN). The main driver is the increased consumption of animal proteins in the emerging economies. The LHN products are derived from agro materials and produced by complex fermentation/enzyme based processes. LHN products provide solutions to a variety of health and productivity improvement opportunities in the dairy, poultry and aqua segments in a natural way, as

specialty feed supplements. The product concept originated from the knowledge of distillery/brewery co-products and understanding of vital nutrition biochemistry and microbiology of livestock segment. The current product portfolio covers amino acids, vitamins and other biomolecules and prophylactic disease controlling friendly microbes with immunity modulators. The market for LHN products is estimated to be at over ` 10000 crore in South and South East Asia which is slated to grow at CAGR of 10 per cent. Major segments are vital nutrition, pre and probiotics, enzymes and disease preventing products. In the first phase Praj will target the Indian market followed by growing markets overseas.

Praj Matrix, the innovation center developed the special microbes and molecules after extensive research. This was followed by intense field testing by Industrial Biobased Processes & Products (IBPP) group to establish the product effectiveness. The IBPP group has been formed to take the biobased products and processes, developed by Praj Matrix-the R&D center, to the market. Biochemicals, Health & Wellness, Agri-inputs are some of the other areas where IBPP will be taking products and processes towards commercialisation. “Worldwide, bio-based products in health and wellness and chemicals/plastic sectors are finding a growing acceptability due to environmental and health concerns. The sheer growth potential

globally gives us confidence that we have entered into this area at the right time. Praj Matrix, the R & D facility is mandated to develop processes of unique products which will address this growing market. These products are fast attaining viability and competitiveness.”, said Pramod Chaudhari, Executive Chairman, Praj. A 65,000 sq. ft production facility has commenced production of performance enhancers for distilleries and will now take on production of LHN products. The factory, located in the industrial zone near Pune, is designed to world class standards in hygiene The facility can be expanded four fold. It will see further ramp up once success of this phase is established. EP News Bureau-Mumbai

Hiroshima University first to install Malvern Instruments’ new Zetasizer Nano ZSP To be used in the evaluation of rare earth-free functional materials

December 16-31, 2012

r Kikuo Okuyama of the Department of Chemical Engineering at the Graduate School of Engineering, Hiroshima University in Japan, was the first customer to take delivery of a Zetasizer Nano ZSP, the new top-of-therange dynamic light scattering system from Malvern Instruments. In Okuyama’s work the objective is to find alternative materials for rare earths and to develop rare earth-free functional materials. This involves research into the

composition and structure of functional fine particles and the Zetasizer Nano ZSP will be used in the evaluation of nano particle size, dispersion and surface chemistry. “Our existing Malvern system for nanoparticle sizing was in frequent use, so we made the decision to buy an additional instrument,” said Okuyama. The high sensitivity of the new Zetasizer Nano ZSP for zeta potential measurement was a deciding factor in our decision to purchase.” “The Zetasizer Nano ZSP www.expresspharmaonline.com

will be used for the evaluation of nano particle size, dispersion and surface chemistry. Size and zeta potential will be measured when particles are produced and the data will be used to confirm the effect of changes in the chemistry of particles,” continued Okuyama. Like other systems in the Zetasizer range, the Zetasizer Nano ZSP is a single, compact unit. It shares the simplicity and ease of use that have made Zetasizer Nano systems a firm favourite in industry

and academia for almost a decade. Where the Zetasizer Nano ZSP stands apart, however, is in its unique performance specifications for both size and zeta potential measurement. It incorporates a two angle particle and molecular size analyser for the enhanced detection of aggregates and measurement of small or dilute samples, and samples at very low or high concentration using dynamic light scattering with ‘NIBS’ optics. EP News Bureau-Mumbai EXPRESS PHARMA

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PRODUCTS Essae-Teraoka's GPS synchronised clock ime and timing are of high significance in achieving high productivity and manufacturing efficiency in pharmaceutical industry. It is extremely important for all pharma industries to have unique, accurate and common reference of time across all functional processes within the facility. In the present scenario, awareness about this innovative and unique solution is extremely low in the pharma industry. Essae launched the GPS synchronised clock solution exclusively to achieve this objective by providing an unique and error-free timing solution for the entire facili-

ty. The key feature benefits of the GPS synchronised clock are: GPS satellite synchronised time with no need of manual setting / adjustment; uniform and accurate time across the facility; wide range of LED display sizes (20mm to 200mm) and colours (red, green or white) to work in any environment; completely wireless solution, thereby eliminating expensive cabling costs and significantly reducing the installation time; stainless steel ( SS-304) housing and flame-proof enclosures available for hazardous areas; choice of mounting options such as table-top, wall-mount or hanging type;

32 time-zones and automatic day-light savings adjustment; ensures compliance to statutory guidelines. Essae-Teraoka is an ISO9001 certified IndoJapanese joint venture actively engaged in designing, manufacturing and marketing a wide range of solutions addressing electronic weighing systems, point of sale systems, self-service KIOSK and GPS synchronised clock for a spectrum of clients in the manufacturing, services and retail sectors. The company has also been exporting weighing scales for the Japanese market for the last 10 years. World class quality, good

ethics and values validated by its customer is what drives the organisation ahead. Prabhu Chandran is the Managing Director of EssaeTeraoka, a multi-verticalproduct company with an in-house strength of product design to manufacturing capabilities. He is also the Managing Director of Essae Electronics. It is a leading EMS company engaged in the design and manufacture of electronic PCB assemblies for the consumer durables and instrumentation market. Chandran spearheaded the project on the indigenously developed GPS synchronised clock.

Aptar Pharma Landmark dose indicator chosen for new asthma combination therapy moterol), a long-acting beta2agonist (LABA). It is indicated for the maintenance treatment of asthma in patients aged 12 years and over (50/5ìg and 125/5ìg strengths) and in adults (250/10ìg strength) whose symptoms are not adequately controlled on an ICS and an as-required inhaled short-acting beta2-agonist (SABA), and in those patients who are already receiving treatment with both an ICS and LABA. Flutiform is now available in several countries including Germany and the UK, and EU marketing authorizations have been granted in a number of other European countries.

ptar Pharma developer and manufacturer of nasal and pulmonary drug delivery devices has developed a unique customised dose indicator for Flutiform. Flutiform, which uses an Aptar Pharma Landmark dose indicator and metering valve, is now available in Germany and the UK. Flutiform, a SkyePharma product, is licensed to Mundipharma International Corporation Limited in Europe. Flutiform, a novel asthma treatment in a single aerosol inhaler. Flutiform is a novel combination of fluticasone propionate (fluticasone), an inhaled corticosteroid (ICS), and formoterol fumarate (for-

In-line homogeniser system from Cole-Parmer ole-Parmer offers the Inline Homogeniser System – the Magic LAB® System which allows smooth changeover from laboratory to production plant. The versatile Magic LAB® allows the user to select from seven different mixing technologies using a variety of available mixing heads, all with programmable speed control to determine the best mixing function for the process. This laboratory machine offers a great variety of applications for many different mixing and particle size

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reduction processes. It eliminates the need to purchase separate mixers – operates as both a batch mixer and in-line mixer. The system consists of a base unit and a single-stage inline dispersing mixing head; a country-specific plug must be selected separately for operation. By simply pushing buttons on the info center’s display screen, the user can easily adjust speed ranges, set nominal values, and choose the specific language readout (English, Spanish, French, German, or Italian). www.expresspharmaonline.com

Depending on the application, the base unit can be modified quickly with optional mixing heads and generators. The modification is simple and does not require any special training or tools (all required tools for standard operation are included). The compact, tabletop design minimizes space requirements. This dispersing and mixing system was developed to meet the needs of research scientists and mixing specialists within the pharmaceutical, cosmetics, chemical, and food industries who need to use the

same methods from initial formulation to mass production. For more information, contact Cole-Parmer Application Specialists: Cole-Parmer India 403-404, B-Wing, Delphi, Hiranandani Business Park, Powai Mumbai - 400 076, India Tel: +91-22-67162224 / 2222 Fax: +91-22-67162211 E-Mail id: response@coleparmer.in Website: www.coleparmer.in December 16-31, 2012

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VALUE ADD Machine vision to keep India’s manufacturing industry globally competitive India is ranked as one of the fastest growing markets and has seen an upsurge in the number of manufacturing facilities across the country. Despite this, it remains grossly under-invested in factory automation – necessary for long-term competitive success in both domestic and foreign markets. Peter Neve, Vice President, Global Marketing, Cognex explains how Cognex’s products have helped Indian manufacturing companies reduce costs while improving throughput and quality uring the past decade, India has emerged as one of the key manufacturing hubs for global manufacturing companies in the automotive, pharmaceutical, packaging, food processing, and textiles industries. In 2010, Deloitte Touche Tohmatsu ranked India as offering the second best global manufacturing platform in the world, above traditional manufacturing countries such as the US, Germany, and Japan. Innovation combined with a talent pool of scientists, researchers and engineers is more critical to manufacturing growth on the global stage rather than low cost energy, labour and regulations, it stated. Within the country, the domestic manufacturing sector accounts for nearly 17 per cent of India’s total GDP and employs nearly 100 million people (as per ASSOCHAM estimates). Frost & Sullivan’s IPC Practice predicts that by 2020, this would generate 25 per cent of the country’s GDP. However, Frost & Sullivan analysts add that this growth will only be realised through adoption of factory automation that enable greater efficiency, productivity, sustainability, global competitiveness and standards compliance.

Cognex’s machine vision enhance factory automation Cognex Corporation is a leading supplier of machine vision systems. It’s ID and vision systems address all three critical areas in the manufacturing process: inspection, identification and guidance for industries including automotive, electronics, pharma, food processing & packaging, and December 16-31, 2012

consumer goods, Cognex’s image-based ID systems can meet all the 1-D barcode and 2-D code-reading requirements. Since its inception in 1981, Cognex has shipped more than 500,000 machine vision systems representing more than $2.5 billion in cumulative revenue. Despite all this, the domestic manufacturing industry is facing competition from emerging manufacturing hubs in Asia and South America. Increasing material and labour costs coupled with process inefficiencies are dulling Indian’s competitive edge. India’s future depends on adopting appropriate automation, innovation, technology and empowers its talented, English-speaking workforce.

India, automation, and global competition Automation in India has always been a shop floor tool rather than a “business performance enabler.” When it comes to core manufacturing processes, manufacturers rely on labour-intensive methods. Even with factory automation in place, the technology threshold is fairly low, when compared to world standards, due to lack of knowledge and awareness. Based on their prior experience, significant investment is being done by established manufacturing hubs in the US and Japan in India to increase efficiency and flexibility of their supply chains while improving upon product features and quality in the automotive, pharmaceutical and food processing industries. An increase in the demand for such solutions is already being witnessed in the Asian region. Automation technology providers offer variety of factory automation technologies, including machine vision. Manufacturing equipment and robotics “make” products, while machine vision provides quality assurance, product tracking and documentation for standards compliance.

Machine vision: Key to improving quality, productivity Machine vision systems www.expresspharmaonline.com

address three critical areas in the manufacturing process: identification, inspection, and guidance. Identification refers to tracking and tracing raw materials, components, and products throughout the entire production cycle. It tracks any industrial code, including engraved or embossed serial numbers placed on a product, tells manufacturer how, when, and where it was produced and raw materials used to manufacture the product, supplier identification, and any number of other important production data. Inspection refers to presence or absence checking and dimensional checking where manufacturers make sure that a part is manufactured to critical dimension. Guidance is the use of vision to locate a part, feature, or pattern to automate the mechanical handling of that part during assembly, material handling, and packaging processes. Machine vision systems can be broadly categorized into two different types of systems that use the same underlying technology: Identification (ID) Systems: When used separately or together help manufacturers improve their manufacturing process and cut costs. Create total visibility and measurement by automatically retrieving codes and other identifying marks on raw materials, components, and products as they move through the manufacturing supply chain. Enable accurate, timely information about a specific item, which can be stored, retrieved, and analysed in easy-to-use manufacturing databases that, in turn, help manufacturers with: Removing hidden inefficiencies in material handling productivity

Tracking the flow of operations One such company is Proteck, a Chennai-based leading manufacturer of printing equipment. Its printing operations use a variety

of printing presses from different manufacturers, each with its own unique set-up and quality needs. To streamline operations Proteck installed two Cognex In-Sight Micro cameras to detect registration marks on printing plates and automate the set-up process. Cognex’s PatMax and InSight Explorer software handled different positioning requirements in the same machine, while Vision View terminal provided a way to view information such as plate positions, before-andafter position correction and the presses’ operating status. At P&G India, Cognex’s In-Sight Vision System verified that right packaging and manufacturer’s recommended price (MRP) were used for 50 detergent variants, each with similar color and features. Previously, quality checks for the detergent packaging, was done manually in two separate rounds of inspection and verification. After deploying Cognex In- Sight Vision System along its packaging line, P&G has increased the line speed and bottom line as both inspection and verification are done simultaneously, eliminating packaging errors. These show how Cognex’s products helped Indian manufacturing companies reduce costs while improving throughput and quality. For more information, visit www. cognex.com.

About the author Neve is responsible for Cognex worldwide marketing and training activities. These include positioning Cognex as the number one supplier of machine vision and industrial ID systems in all markets, running a lead generation engine to identify new projects at all major manufacturing companies and providing product training to the evergrowing customer base. Neve has a great depth of experience, having been with Cognex for over 10 years and has worked in the machine vision industry for more than 20 years. EXPRESS PHARMA

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Regulatory norms for pharmaceutical water systems In the third part of a series, Kishor Datar, Chief Technical Officer, Technolutions Projects, reviews the regulations and norms dealing with types of pharmaceutical water systems From the earlier chapters we know that, ● water contains contami-

nants. ● Contaminants depends on source of water ● Level of contamination also depends on physical properties of water like pH, temperature etc. ● It is an important compound used by all industries as well as is important for life. With above synopsis it is clear that if the water is to be used in industry or for drinking purposes, there has to be some guideline for control over the contaminants. Moreover in pharmaceutical manufacturing units, water is used as, ● Raw material ● Cleaning agent Is it OK to accept available water specially when used as raw material or cleaning agent in the pharma industry? Let us take few examples,

Example 1: Source water available is used to prepare a batch of liquid injectables. The source water is available from nearest river / dam.

Consequences: As we learned, surface water will have a high degree of bacterial / organic contamination. Since the injectable is administered via blood and is used when the human is ill, if this water is used, along with the medicine, contaminants in water will also get injected into the human body.

Example 2: For the cleaning of above manufacturing tank, source water is used available from bore well.

Consequences: As we learned, bore well water will have a high degree of contamination with dissolved solids. Higher contamination of dissolved solids may result in residue left behind on surface of manufacturing tank and the same will get dissolved when the next batch is manufactured. These contaminants will

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become a part of the solution prepared and some of the contaminants can pose a risk to patients. The above examples make it clear that, it is essential to have some guidelines for the quality or parameters of water to be used for various purposes in the pharma industry. To overcome this issue, almost all regulatory agencies have addressed this issue in the form of types of water and respective quality attributes.

USFDA defines 8 grades of water: 1. Non-potable 2. Potable (drinkable) water 3. USP purified water 4. USP water for injection (WFI) There are no monographs in the USP on potable water and non-potable water. 5. USP sterile water for injection 6. USP sterile water for inhalation 7. USP bacteriostatic water for injection 8. USP sterile water for irrigation The last four types of water are "finished" products that are packaged and labeled as such. Hence they are considered as “Finished Products” and not as Raw Material/Cleaning Agents. The USP purified water and the USP WFI are components or “Raw / Ingredient materials" as they are termed by the USP, intended to be used in the production of drug products. In the pharma industry, “Clean Steam” is also used in injectable facilities and same is not referred by any regulatory agencies. However, cGMP for LVP (1976) indicates that “feed water for boilers supplying steam that contacts components, drug products and drug product contact surfaces shall not contain volatile additives such as amines or hydrazine”. Normally to produce “Clean Steam”, Purified Water is used as feed water and converted to steam in a special boiler.

EU specifies following types of water, ● Purified water ● Highly purified Wwater ● Water for injection www.expresspharmaonline.com

Parameters for different types of water Sterile products Product

Min. acceptable type

Parenteral

WFI

Ophthalmic

PUW

Haemo-filtration Soln.

WFI

Haemo-diafiltration Soln.

WFI

Peritoneal Dialysis

WFI

Irrigation Solution

WFI

Nasal/Ear preparations

PUW

Cutaneous preparation

PUW

Non sterile products Product

Min acceptable type

Oral

PUW

Nebuliser

PUW

Cutaneous Preparations

PUW

Nasal/Ear preparations

PUW

Rectal/Vaginal

PUW

Minimum Specifications: Microbiological (For reference ONLY) Microbiological specs Type of water Alert limit

Action limit

Potable

—

500 cfu / ml

Purified

50 cfu / ml

100 cfu / ml

Water for injection 5 cfu / 100 ml

10 cfu/100ml

Clean steam

—

Further to this EU specifies the water quality required based on the intended use of water. Reference to US FDA / EU guidelines it is clear that regulatory agencies have specified the type of water and quality of type of water to be used in pharma manufacturing. Parameters furnished by regulatory agencies for these types of water is in the accompanying tables.

Conductivity PUW/WFI1.2μS/cm at 25° C From the last two articles and this article it is clear that being a universal solvent and also a sustainer of life, source water, irrespective of the source, will carry some contaminants with it. These contaminants will vary with the sources of

water / geological location, personal hygiene being followed etc. However it is clear that irrespective of above fact, the regulatory guidelines expect to have consistency of water quality when used as a raw material or as a cleaning agent in a pharma manufacturing unit. Thus it is evident that with respect to regulatory and safety aspects source water requires to be treated before it can be used in pharma manufacturing units. We will see major such treatments being used, few since many decades, few in past few years, in next few articles to come, hence keep reading these articles regularly. (The author can be contact at kd.datar@tppl.net.in) December 16-31, 2012

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GOA ANTIBIOTICS & PHARMACEUTICALS LTD (Goa Government Enterprise)

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Registered Office & Factory: Near Tuem Industrial Estate, Tuem, Pernem, Goa â&#x20AC;&#x201C; 403 512. REQUIRES INSTITUTIONAL DISTRIBUTORS/LIAISON AGENTS. GAPL, a well known reputed Public Sector Enterprise of Government of Goa, manufacturing and marketing wide range of Antibiotics & other therapeutic range of Medicines & Drugs. The Company intends to widen its Marketing activities under Institutional segment in the States of Uttaranchal, Uttar Pradesh, Jammu & Kashmir, Madhya Pradesh, Chattisgarh, Chandigarh, Himachal Pradesh and Punjab. Parties having sound financial background and experience in the above segment may forwards their expression of interest (E.O.I) enclosing detailed profile (as per the format available at marketing folder on the website) to the Managing Director on the above address within 15 days.

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CONTEC AIR FLOW PROJECTS PVT . LTD. Building No-6 , Gala No - 138, Mittal Industrial Estate, Andheri Kurla Road, Andheri East, Mumbai- 400 059. Tel - 022- 2859 8231/39 Mob - +91 9320 255 124 Fax- 022 - 2859 8229 Email : mks1_contec@yahoo.co.in. info@contecair.com. Website - www.contecair.com

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Alok Industries Limited (Alok) is the largest diversified and integrated textile manufacturer in India. Alok's state-of-the art Packaging Division, amongst the largest in the country, has purchased the licence to produce UNIPAL corrugated pallets in India under the brand name, "Alok Unipal". â&#x20AC;&#x153;Alok Unipal" is a modular system to manufacture corrugated pallets. UNIPAL currently operates in more than 10 countries across the world and is known to outperform all other corrugated pallets in the market today. An "Alok Unipal" Corrugated pallet is a patented, innovative system with flexible construction, high strength characteristics made of water resistant Kraft paper which does not require any fumigation for Export Purposes .By choosing "Alok Unipal" you will be choosing an environmentally friendly way of doing business.

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Express Pharma Business Avenues “ The 1st Indian Silicone Rubber Product Mfg. co, certified with Clean Room of class 10000” SILICONE RUBBER PRODUCT G Silicone Transparent Tubing's (USP / FDA Grade) G Silicone Transparent Braided Hose (USP / FDA Grade) G FBD Inflatable Gaskets in Silicone Transparent G Rubber and also in Food Grade Neoprene Rubber

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Ami Polymer Pvt. Ltd. (The Sealing Expert in Silicone Rubber)An ISO : 2008 Certified Co.) 15 & 303, Mahesh Industrial Estate,Opp.Silver Park, Mira Bhayandar Rd.,Mira Road (E), Dist. Thane, Mumbai-401 104 Tel.: 91-22-28555107/ 28555631/ 28555914 Fax : 91-22-28555378 Email :amipolymer@vsnl.com Url : www. amipolymer.com BRANCHES

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Glenn Saldanha honoured with ‘Swiss Ambassador’s Award for Exceptional Innovation’ AWARDS

Company's Swiss research centre hailed as an example of innovation-based Indo-Swiss partnership

wiss Ambassador Dr Linus von Castelmur honoured Glenn Saldanha, Chairman and Managing Director, Glenmark Pharmaceuticals with ‘Swiss Ambassador’s Award for Exceptional Innovation’ for his outstanding innovationdriven leadership on November 29, 2012 at an event organised at the Embassy of Switzerland in New Delhi. Acknowledging Saldanha’s contributions in the area of innovation Ambassador Dr Linus von Castelmur said, “Innovation has become the new driving force of IndoSwiss Partnership and Glenmark is a very good case in point. Glenmark Pharmaceuticals was the first Indian life science enterprise to establish a research and development facility outside India in 2006. Glenmark’s 3’000 sq mtr state of the art laboratory in La Chaux-de-Fonds employs 60 highly qualified scientists.” In his acceptance speech Saldanha said, “I am deeply honoured to receive the Swiss Ambassador’s Award for exceptional innovation.

R-L: Swiss Ambassador Dr Linus von Castelmur conferring the ‘Swiss Ambassador’s Award for Exceptional Innovation’ to Glenn Saldanha on November 29 in New Delhi This award is even more meaningful because it’s being presented by a country which is one of the leading innovation research destinations for the pharma industry, offering the best combination of infrastructure and talent for new drug discovery research. This has been demonstrated by the success achieved by Glenmark in Switzerland.” Saldanha added, “Glenmark’s novel Biologics Research Centre at Neuchatel, Switzerland has been doing some cutting edge research work in the

area of novel biologics which resulted in our company signing a landmark agreement with Sanofi of France. This was the first outlicencing deal executed by an Indian company and the largest deal across emerging markets in the area of novel biologics. Innovation leading to new drugs is critical to meeting the global unmet medical need and recognitions like these inspire us to continue our work in the area of innovation or drug discovery research.” Earlier in his laudatory

speech Ranjit Shahani, President of Organisation of Pharmaceutical Producers of India (OPPI) expressed that it has been Saldanha’s endeavour to serve people with lowcost medication. He has personally focused his energies on research in therapeutic areas such as pain, inflammation and oncology. He remarked that Glenmark is one of the few Indian companies to have developed and licensed out six molecules to what is popularly known as Big Pharma. The Swiss Ambassador’s Award recognises individuals who have contributed to the promotion of Indo-Swiss bilateral relations or have stood out for their exceptional role in the society and industry. Swiss Ambassador’s Award 2011 for exceptional leadership was conferred on Ratan Tata, Chairman, Tata Group and the award for the year 2010 was presented to Yash Chopra for his remarkable contribution to Indo- Swiss people to people relations through his movies. EP News Bureau-Mumbai

Dr Huzaifa Khorakiwala awarded ‘CSR Visionary Leader Award’ D r Huzaifa Khorakiwala, Trustee and CEO, Wockhardt Foundation was awarded the ‘CSR Visionary Leader Award’ by Institute of Public Enterprise (IPE) and endorsed by World CSR Congress, World CSR Day, CMO Asia and Asian Confederation of Business. The award was received by Khorakiwala at a glittering gala awards ceremony in Mumbai on November 24, 2012. In furthermore of its vision of sustainable growth, Institute of Public Enterprise founded “CSR Corporate Governance Awards”, a unique platform designed to recognise contributions made by an organisation which have made a differ-

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ence to the people and the community and played a role of responsible citizen. Wockhardt Foundation is a national, secular, not for profit organisation engaged www.expresspharmaonline.com

in social service and human welfare activities. The Foundation operates 14 programmes for social development specially targeted towards the underprivileged.

Dr Huzaifa Khorakiwala, CEO, Wockhardt Foundation stated, "Through our special initiatives in rural and urban areas, Wockhardt Foundation is making strong efforts to help and support the poor, weak and needy. The CSR Visionary Leader Award is a testimony of our meticulous planning and professional execution. I dedicate this award to all our Warriors who work tirelessly each day at the grass root level to help create a healthier and happier India." The IPE CSR Corporate Governance Awards attempts to recognise the best practices in CSR. These awards are research based and decided by an independent jury. EP News Bureau-Mumbai December 16-31, 2012

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DBT, Cipla, TCS, Indian Institute of Science bag innovation awards homson Reuters India Innovation Awards 2012 recognise innovation in research and development In the recently held Thomson Reuters India Innovation Awards 2012 ceremony four Indian organisations were recognised for their expert contribution to their respective areas. The Department of Biotechnology, Ministry of Science and Technology

received the award in the category of pharma academia and government, while Cipla bagged the award in the pharma corporate category. Tata Consultancy Services have been recognised as India’s most innovative hi-tech corporate while the Indian Institute of Science received it in the academic institutions category. The awards were present-

ed by Guest of Honour, Harkesh Kumar Mittal, Adviser, Member Secretary of the National Science and Technology Entrepreneurship Development Board (NSTEDB) and Secretary of the Technology Development Board (TDB), across four different industrial sectors. The ceremony was attended by more than 150 guests comprised of researchers, scientists and heads of pharma-

ceutical and technology companies, academics, intellectual property (IP) analysts and searchers, and patent examiners. First established in 2007, the awards recognise the most innovative academic institutions and commercial enterprises headquartered in India for their spirit of innovation in research and development. EP News Bureau-Mumbai

Sudar Industries wins International quality award umbai-based Sudar Industries won the prestigious International Award for Quality at Madrid Spain at a glittering ceremony attended by global business community. The International Quality Award for Excellence sponsored By European Think Tank NGO Global Business Trade Based out of Madrid Spain are a series of recognition awards given to entrepreneurs and companies who have made landmark contributions in their chosen fields of endeavor and shown outstanding performance and tenacity in developing successful businesses. Sudar Industries is engaged in exports worldwide manufacturing niche

pharmaceutical intermediates CRAMS and agrochemicals and derive 50 per cent of their revenues from exports across multiple countries Commenting on receiving the Award Murugan Thevar, Chairman and Managing Director of Sudar Industries , said that "The International Quality award provides us the opportunity to celebrate the growth of our sector and the company. This recognition will help us to enhance the confidence of our investors, customers and also our employees in the internal functioning of the company. It further reinforces our vision to become the leading professionally run global pharma company setting

standards across the pharma value chain.” We are thrilled to honour Murugan Thevar for his outstanding achievements in business innovation," said Ricardo Lopez, Executive Director, of Global Trade Leaders while presenting the Awards. "Innovation is core to Sudar's business and is an important tool for all businesses looking to grow and excel in any market. Murugan Thevar's ability to capture a global market, through his unique approach to business and innovative use of technology, demonstrates the powerful potential of innovation." The International Quality award recipients serve as role

models for other organisations and help organisations assess their improvement efforts, diagnose their overall performance management system, and identify their strengths and opportunities for improvement. improving organisational performance practices, capabilities, and results It also provide organisations with an integrated approach to performance management that results in delivery of ever-improving value to customers and stakeholders, contributing to organizational sustainability, improved organisational effectiveness and capabilities, organisational and personal learning. EP News Bureau-Mumbai

I A Modi, Cadila Pharmaceuticals no more OBITUARY

Leaves behind his mark on Indian pharma industry

December 16-31, 2012

ndravadan A Modi, founder and chairman, Cadila Pharmaceuticals passed away on November 26, aged 87, after a brief illness. Considered a legend in the Indian pharmaceutical industry, Modi championed the Indian Patents Act, 1970 and also played a major role in giving shape to the 1986 Drug Policy of Government of India. He represented the National Working Group on Patent Laws, India (NWGPL) and Indian Drug Manufacturers’ Association (IDMA) on the subject “Patent Regime” proposed in the Uruguay Round at Delhi 1993. Modi launched Cadila Laboratories in 1951 as a partnership with school friend Ramanbhai B Patel. There was a parting of ways in 1995 and Cadila Pharmaceuticals came into

MODI WAS ALSO ONE OF THE KEY PROMOTERS OF THE BV PATEL PHARMACEUTICAL EDUCATION AND RESEARCH DEVELOPMENT CENTRE (PERD), AHMEDABAD WHICH HAS GROWN TO BE A FORUM FOR INDUSTRY-ACADEMIA INTERACTION, OFFERING A COMBINATION OF PHARMA EDUCATION,TRAINING AND RESEARCH www.expresspharmaonline.com

being, while Patel went on to form Zydus. Today, a ` 1,000-crore closely held entity, Cadila Pharmaceuticals' many milestones include Rabeprazole in IV form for upper GI bleeding, Polycap for prevention of cardiovascular diseases, Risorine with booted Rifampicin for the treatment of tuberculosis. Modi was also one of the key promoters of the BV Patel Pharmaceutical Education and Research Development Centre (PERD), Ahmedabad which has grown to be a forum for industry-academia interaction, offering a combination of pharma education, training and research. Modi is survived by his wife, son (Dr Rajeev Modi, currently Managing Director of the company), daughterin-law and grandson. EP News Bureau-Mumbai EXPRESS PHARMA

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Quintiles bags double honours at SCRIP Awards Founder received Lifetime Achievement Award while company named CRO of the Year uintiles founder Dr Dennis Gillings, CBE, has received the SCRIP Lifetime Achievement Award and the company he started has been named “CRO of the Year” at the 2012 SCRIP Awards in London. The SCRIP Awards acknowledge excellence in the biopharmaceutical industry, based on judging by an independent panel of 16 life sciences experts. The eighth annual awards ceremony, held on November 28 at The Lancaster hotel in London. Being named CRO of the Year by SCRIP is a prestigious

honour for Quintiles, the world’s leading provider of biopharmaceutical services. It has received it three times in the past four years. Likewise, Gillings’ lifetime achievement award is equally celebrated. Mike Ward Chief Content Officer for Datamonitor Healthcare and Scrip Intelligence said, “Scrip’s Lifetime Achievement Award is reserved for an individual who has made an outstanding contribution to the pharmaceutical/biotech industry. In founding Quintiles, Gillings made an indelible impact on drug development by pioneering the CRO industry, revolutionising the field to the extent that

clinical trials expertise now rests with these companies. The CRO sector is still fast growing and plays a crucial role in drug development.” “I am honoured to receive this award,” said Gillings. “It is humbling to be recognised by this prestigious panel, and I share this with Quintiles’ employees, past and present, around the world who make our company what it is today. During these past three decades, many diseases have gone from being life threatening to manageable thanks to the work we have done with our biopharmaceutical customers. “As we look ahead, I believe we on are on the cusp

of many new discoveries which will further transform healthcare. It is my goal to ensure that Quintiles can help enable that innovation to make a difference to patients around the world.” Gillings has invested his 40-plus year career working to improve health around the world, beginning in 1971 as a professor of biostatistics at the University of North Carolina. In April 2012, he stepped away from the day-to-day operations of Quintiles and he continues to serve as executive chairman. Today, Quintiles is the largest global provider of services to the pharma and biotech industry. EP News Bureau-Mumbai

NSF International expands health sciences div with 3 key appointments The three new appointees bring 70 cumulative years of global pharma and biotech expertise to NSF

APPOINTMENTS

Stephen Engels

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SF International, a global independent public health organisation that writes standards, and tests and certifies products for the health sciences, water, food, and consumer goods industries, has welcomed three leading pharmaceutical and biotechnology experts to its Health Sciences Division. Janeen Skutnik joins as a Partner with the Bostonbased US team of NSF-DBA, an NSF International company with over 25 years of experience delivering training, auditing and consulting to the pharma and medical device industries. Stephen Engels joins NSF-DBA as a Principal Consultant, overseeing operations in Switzerland, Italy, Germany and Austria while Peter Langlais joins as Business Development Director for the entire NSF International Health Sciences Division. The NSF International Health Sciences Division offers training and education, consulting, auditing, GMP and GLP testing, certification, R&D and regulatory guidance to the pharma, biotech, medical device, over-the-counter and dietary supplement industries throughout the product lifecycle. NSF-DBA US as regulato-

ry agencies worldwide have increased their focus on pharma quality and supply chain practices in the face of globalisation, there is an even greater emphasis on quality systems and training. In her new role as a Partner at NSF-DBA US, Skutnik will address these

Engels’s career in pharma quality and compliance spans more than 25 years. He is a quality management systems expert with experience in supplier management, auditor development and regulatory compliance, including leading quality assurance roles at Merck

Janeen Skutnik

Peter Langlais

and other issues by providing high quality training and consulting to leading pharma, biotech, medical device and dietary supplement companies. Her expertise in the area of excipients and OTC products will assist NSF-DBA customers in complying with new and emerging quality regulations and global supply chain best practices. Working closely with Skutnik, Engels will head quality management systems consulting, auditing and training activities.

Serono in Switzerland and Italy where he developed and implemented a global auditor qualification and training programme as Head of its Quality Programmes and Systems Development. Langlais joins as Business Development Director for the NSF Health Sciences Division, which includes NSF-DBA, NSF Pharmalytica, NSF Becker, NSF Reference Standards and NSF’s Dietary Supplements group. Langlais has more than 24 years of sales and marketing

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experience with suppliers to major pharma and biotech firms. In his new role, he will help expand NSF’s services in biotech, pharma, reference standards, medical device and dietary supplement markets. “Engels and Skutnik’s innovative approach to quality assurance in the pharma and biotech sectors has made them both a widely sought resource for government officials and global pharma companies, and Langlais' experience working with global pharma and biotech companies will help NSF Health Sciences expand our services to new areas,” said Lori Bestervelt, Chief Science Officer and Senior Vice President, NSF International. “All three are valuable additions to the NSF Health Sciences team. Together, their combined 70 years of experience in pharma quality systems and global supply chain best practices will help NSF assist companies in meet their quality and compliance goals.” Based in Ann Arbor, Michigan, US, and established in 1944, NSF is committed to protecting human health and safety worldwide and operates in more than 150 countries. NSF is a World Health Organization Collaborating Centre for Food and Water Safety and Indoor Environment. EP News Bureau-Mumbai December 16-31, 2012

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