R&D expenditure of 25 Indian pharma cos surges by 20.6% in 2013-14
The Research and Development (R&D) spending of 25 leading Indian pharmaceutical companies increased by 20.6 per cent to Rs. 6,103 crore during the year 2013-14 from Rs. 5,060 crore in the previous year. With higher R&D investments, Indian companies secured 81 ANDA approvals from US FDA during the first eight months i.e. January-August 2014 which worked out to almost 31 per cent of total ANDA approved during this period. For the last three years the R&D investment as percentage of net sales of Pharmabiz sample of 25 pharmaceutical companies worked out to over 7 per cent despite higher growth in net sales.
Though, this R&D expenditure is negligible as compared to spending by international giants, the Indian companies have able to introduce several new products with exclusivity period in regulated markets. The investment in R&D has assisted well to overcome stiff competition by launching affordable new products in international market.
During last 10 years i.e. 2004-05 to 2013-14, the major 20 Indian pharmaceutical companies spent aggregate amount of Rs. 32,495 crore on R&D activities on standalone basis and these companies generated aggregate net sales of Rs. 4,24,220 crore. However, these companies failed to produce any single blockbuster new drug during last ten years. The Indian companies are basically focusing on new generics. Dr Reddy's Laboratories incurred aggregate R&D expenditure of Rs. 5,070 crore during last 10 years and remained on top among the 20 companies, followed by Ranbaxy (Rs. 4,877 crore), Lupin (Rs. 4,589 crore) Cipla (Rs. 2,716 crore) and Cadila Healthcare (Rs. 2,608 crore).
Indian players are well set to tap up-coming opportunities from patent expiration. Modern R&D centres, scientists pool, ability to undertake complex developmental research projects, clinical trials, entry into biotechnology, tie-ups with international giants & universities and upgradation of technology assisted well. Investments in R&D offered higher approval from US FDA, EDQM, MHRA, TGA, ANVISA, WHO and other regulatory bodies. These companies developed strong product pipeline for future introduction.
During the fiscal year ended March 2014, Dr Reddy's Laboratories (DRL) remained as top R&D spender at Rs. 1,071 crore (standalone) followed by Lupin Rs. 958 crore (consolidated), Ranbaxy Laboratories Rs. 528 crore (for 15 months period), Cipla Rs. 518 crore and Cadila Helathcare Rs. 445 crore. Dr Reddy's R&D expenditure as percentage of net sales worked out to 11.1 per cent. Lupin, Cadila Healthcare, Sun Pharmaceutical, Piramal Healthcare, Wockhardt, Sun Pharma Advance Research Co (SPARC) and Panacea Biotec invested significant higher amount in R&D and their R&D investment as percentage of net sales worked out to over 10 per cent during 2013-14.
DRL has set up eight R&D, product and technology development centers across globe which empowered it to deliver solutions across therapeutic areas. It has filed 13 product in the USA and its cumulatively, 62 ANDAs are pending for approval from US FDA. Of these, 39 are Para IVs – out of which nearly nine have 'First to File' status. Its revenue in North America increased by 46 per cent to Rs. 5,530 crore during 2013-14. DRL entered into an alliance with Merck Serono, a division of Merck KGaA, Germany, in 2012 to co-develop a portfolio of biosimilar compounds in oncology. The company is developing more than 15 proprietary products with lower risk. It acquired OctoPlus, a specialty research facility, in the Netherlands during 2013.
R&D expenditure as percentage of net sales of SPARC, a separate research and development arm of Sun Pharmaceutical, worked out to 81.5 per cent. After planned merger of Ranbaxy with Sun Pharmaceutical, the aggregate R&D spending of Sun Pharma will go up significantly to the level ofRs. 1,000 crore with more regulatory filings.
Sun Pharma's sales in the US increased by 59 per cent mainly due to complex generics and contribution from the 180-day exclusivity for generic Prandin. Sun Pharma received a total 26 ANDA approvals from the US FDA during 2013-14 and it has 134 ANDAs pending approval. This pipeline is expected to be one of the key drivers of future growth. Its patent filing reached at 573 numbers and patent granted worked out to 346 numbers as at the end of March 2014. It also filed 15 DMF/CEPs.
Lupin's consolidated R&D expenditure increased by 24.4 per cent to Rs. 958 crore in 2013-14 and it received 45 approvals in key advanced markets including 22 and one supplemental NDA in the US, 10 in EU, 6 in Australia, 5 in Canada and 2 in Japan. It also filed 19 ANDAs with US and 4 MAAs with European regulatory authorities. Its cumulative ANDA filings with US FDA stood at 192 with 99 approvals. It has 30 confirmed first-to-file including 15 exclusive ones. Its ADDS programme received further project milestone payments aggregating US$ 8.8 million.
Lupin acquired Nanomi BV in the Netherlands for its patented technology platforms that it plans to leverage to develop complex injectable products. It is setting up two dedicated centres of excellence for research in inhalation and complex injectables in Florida and Maryland in the US. It has setup joint venture with Yoshindo Inc, Japan for conducting clinical development of certain biosimilars.
Wockhardt's standalone R&D expenditure moved up to Rs. 242 crore from Rs. 219 crore in the previous year. However, its consolidated R&D spending increased to Rs. 450 crore from Rs. 376 crore and worked out to 9.7 per cent of total sales. Wockhardt established R&D centres in India, US and Europe to cater to the technological needs of the products. It is focusing on biotechnology programme in developing biosimilars of insulin and its analogs.
Biocon entered into exclusive and collaborative research and marketing agreements to develop and commercialise a basket of molecules globally. The company has collaborated with Bristol-Myers Squibb for oral insulin project IN-105. Recently, it entered into strategic R&D tie-ups with Advaxis and Quark Pharma. Syngene, a research services company, and Clinigene, a clinical research arm, are focusing on end-to-end biopharma expertise. Syngene inaugurated Baxter's Global Research Center during 2013-14.
Aurobindo's standalone R&D spending increased to Rs. 271 crore during 2013-14 from Rs. 233 crore in the previous year. Aurobindo filed 78 ANDAs with US FDA during 2013-14 and cumulative filing reached at 336 ANDAs with approval of 195 ANDAs. It also filed 18 DMFs and cumulative filing of DMFs reached at 190.
The Indian companies' investment in R&D will play important role when the returns from R&D investments by international giants is diminishing. For several years major international players have not brought any block buster drug despite huge investment in R&D activities. Thus, on one hand, the outcome from investment in R&D is diminishing and on the other hand several new products are creating new competition for old products. The indigenous developed manufacturing process & technologies and availability of talent pool offered competitiveness to Indian players.
Indian companies received final approval for 154 ANDAs during the year 2013 from US FDA and 38 tentative ANDAs approval. The US FDA has approved a total 400 final ANDAs during the year 2013 as against 476 in the previous year and it approved total 86 tentative ANDAs during 2013 as against 94 during 2012.
During the first eight months ended January-August 2014, Sun Pharmaceutical and its subsidiaries, viz., Caraco Pharma and Taro Pharma, secured 14 ANDA approvals from US FDA, followed by Zydus Healthcare 11, Lupin 9 and Strides Arcolab 6. Similarly, Aurobindo Pharma, DRL, Emcure Pharma and Macleods Pharma got 5 ANDA approvals each. These approval with higher investment in R&D will play key role in the future growth.
R&D expenditure of 25 Indian pharma cos surges by 20.6% in 2013-14
