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Sun Pharma, established in 1983, makes specialty pharmaceuticals and APIs for use in
Chronic therapy areas such as cardiology, psychiatry, neurology, gastroenterology,
diabetes and respiratory conditions, sold in 26 markets worldwide. Sun Pharma enjoys
a good market share in pharmaceutical industry. Sun Pharma is build of four different
companies that are Caraco Pharmaceutical Laboratories, Sun Pharmaceutical
Industries Inc. (SPI), Sun Pharmaceutical (Bangladesh) and Alkaloida Chemical
Company Exclusive Group Ltd.
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INDIAN
PHARMACEUTICA
L INDUSTRIES
2
Introduction to Indian Pharma Industry
India's potential to further boost its already-leading role in global generics production,
as well as an offshore location of choice for multinational drug manufacturers seeking
to curb the increasing costs of their manufacturing, R&D and other support services,
presents an opportunity worth an estimated $48 billion in 2007.
3
Performance of Pharmaceutical Industry:
The Indian Pharmaceutical industry, has shown remarkable progress in areas of
i. Infrastructure development,
ii. Technology base and
iii. Wide range of products.
The Pharmaceutical Industry produces bulk drugs belonging to all major therapeutic
groups requiring complicated manufacturing process and also produces different
dosage forms.
The main plus point of the industry is developing cost effective technologies in the
shortest possible time for drug intermediates and bulk actives without compromising
on quality.
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The Major Indian Pharmaceutical Companies
Cipla 5.2
Lupin 26.8
Glenmark 74.5
Biocon 26.1
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Opportunities
The main opportunities for the Indian pharmaceutical industry are in the areas of:
• Generics (including biotechnology generics)
• Biotechnology
• Outsourcing (including contract manufacturing, information technology (IT)
and R&D outsourcing).
1) Generics
Prescription drugs worth $40 billion in the U.S. and $25 billion in Europe are due to
lose patent protection by 2007-08. Indian firms will likely take around 30 percent of
the increasing global generics market, the Associated Chambers of Commerce and
Industry of India (Assocham) forecast. Currently, the Indian industry is estimated to
account for 22 percent of the generics world market. Low production costs give India
an edge over other generics-producing nations, especially China and Israel. It will be
easier for Indian firms to win larger generics market shares overseas than at home,
particularly in the U.S. and Europe.
Indian drug manufacturers currently export their products to more than 65 countries
worldwide.14 Their largest customer is the U.S., the world's biggest pharmaceutical
market. The use of generic drugs is growing quickly in the U.S. due to cost pressure
by payers and the introduction on January 1 this year of the Medicare Part D
prescription benefit, giving seniors and people with disabilities prescription drug
coverage for the first time. With 74 facilities, India has the largest number of U.S.
Food and Drug Administration (FDA)- approved drug manufacturing facilities outside
the U.S. Indian firms now account for 35 percent of Drug Master File applications and
one in four of all U.S. Abbreviated New Drug Application (ANDA) filings submitted
to the FDA. Analysts at Credit Lyonnais Securities Asia say they expect the number
of generic drug launches by Indian companies in the U.S. to increase from 93 in 2003
to over 250 by 2008.
2) Biotechnology
In 2003-04, biopharmaceuticals accounted for 60 percent of India's total
biotechnology market, which was worth an estimated $709 million-up 39 percent over
the previous period. Investment in the sector was up 26 percent to $137 million-and
exports accounted for 56 percent of industry revenues. The domestic
biopharmaceuticals sector grew 38.5 percent and had the largest local market share, at
76 percent, followed by bioagriculture at 8.4 percent, bioservices at 7.7 percent, and
industrial products at 5.5 percent and bio-informatics at 2.5 percent.
With 200 biotech companies and total revenues of $500 million annually, India's
Biotechnology sector is still in the relatively early stages of development. However, it
is growing fast, with an initial emphasis on vaccines and bioservices. The industry is
situated mainly in Karnataka, although there are operations in Andra Pradesh,
Hyderabad, Kerala, Maharashtra and West Bengal. The top 10 players in terms of
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revenues in 2004 were Biocon, Serum Institute of India, Panacea Biotec, Nicholas
Piramal, Novo Nordisk, Venkateshwara Hatcheries, Wockhardt, GSK, Bharat Serums
& Vaccines, and Eli Lilly & Co, reports Burrill & Co, the U.S.-based life sciences
merchant bank. As is generally the case worldwide, most biotech companies in India
have developed along the contract or collaborative research models.
3) Outsourcing
I. IT Outsourcing
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Challenges
“The three strategic drivers for accelerating growth of the pharmaceutical industry in
India are intellectual property rights-its implementation in letter and spirit; liberal drug
pricing policies; and regulatory (as well as labor) law reforms,”
2) Pricing Issues
The prices of 74 bulk drugs and their formulations, which account for around 40
percent of the retail pharmaceutical market, are controlled by the Drug Price Control
Order (DPCO) of 1995. The government's 2002 Pharmaceutical Policy would have
reduced the numbers of price-controlled drugs still further, but this proposal is
currently under judicial review in the Supreme Court. If it is approved, the number of
price-controlled drugs is expected to drop to 25.
3) Regulatory Reforms
The government is now starting to develop an infrastructure for clinical trials in India,
with amendments made recently to Schedule Y of the Drugs and Cosmetics Rules of
1945 to allow for multicenter concurrent clinical trials in India and address the
protection of trial participants, and the integration and quality of data. Among other
developments, Good Clinical Practice guidelines have been published and made
mandatory. The government is now starting to develop an infrastructure for clinical
trials in India, with amendments made recently to Schedule Y of the Drugs and
Cosmetics Rules of 1945 to allow for multicenter concurrent clinical trials in India and
address the protection of trial participants, and the integration and quality of data.
Among other developments, Good Clinical Practice guidelines have been published
and made mandatory.
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Breaking the export barriers
Indian pharmaceutical industry is expected to register a growth rate of 11 percent to
enhance its size to Rs 600 billion by 2007-08, as against Rs 432.90 billion in 2004-05.
According to a study undertaken by the Associated Chambers of Commerce and
Industry of India (ASSOCHAM), this increase will primarily come from generic
pharma exports to regulated markets of US and Europe, where $65 billion worth of
drugs are slated to go off patent. Exports in 2006-07 were Rs 24,600 crore. Indian
pharmaceutical exports have tremendous potential to grow at around 18 percent by
2007-08 to take its total export volume to about Rs300 billion as against Rs182.90
billion in 2004-05.
The Indian pharma industry currently ranks 17th in terms of export value of bulk
actives and dosage. Indian exports cover more than 200 countries including the highly
regulated markets of US, Western Europe, Japan, North America, all the European
Union (EU) countries, Brazil, Australia; as well as semi-regulated markets of South
East Asia, Africa, Eastern Europe, South and Central America.
In last ten years pharma exports have grown multi-fold. The reasons for growth in
regulated/semi-regulated markets would include cost effectiveness of products with
high quality, large number of inspection compliance plans from regulated and semi-
regulated markets and availability of highly qualified and skilled personnel in R&D,
manufacturing, marketing and regulatory areas. Also, India is the most competitive
destination for bulk drugs, formulations, ayurvedic and herbal products with more
than 75 US FDA approved manufacturing plants ensuring quality products. Another
reason for the growth is that, "In terms of regulatory requirements of the countries,
whether it is US or Europe, Indian companies have understood what they need, and
they have complied with the regulatory requirements," says Amar Lulla, Managing
Director, Cipla.
Regulatory authorities in these countries have also inspected Indian facilities are over
a period of time, have come to accept the high standards of the Indian capabilities.
"Cipla was the first company, to get a US FDA approval in 1985 and at that time the
focus was more on APIs. It then gradually moved on to span more dosage forms",
informs Lulla. So it seems that Indian companies have been on the learning curve for
the last few years and are on the road to success.
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The market drivers in both these areas are different
Drivers in the regulated markets Drivers in the semi-regulated
markets
"Growth will happen because there are more products which will go off patent and
these products will start entering new markets, including Middle East, Africa, Western
America, Canada and Mexico," feels Lulla. Even though there has been a decline in
demand with respect to key markets, India's export prospects still remain bright as
new markets open up. As against a global pharma industry of over $300 billion,
India's export sales are in the region of $1.5 billion. The potential for growth is
enormous; a 20 per annual growth in exports is expected over the next five years.
The next five years will witness a spate of patent expiries of blockbuster drugs that
will accord opportunities to supply bulk drugs and formulations to advanced markets.
And India will be a dominant pharma player by 2020 in manufacturing, R&D, CRO
and NDDS (New Drug Delivery System). Espicom's market projections assume stable
market growth of around 7.2 percent, putting the market at $13.4 billion by 2011. It
should be noted, however, that if calls for an end to drug price controls, come to
fruition, short-term market growth is likely to be much higher.
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Research and Development
In Pharmaceutical Industry Research and development is for most and very prime
requirement, because unknown and dangerous dieses are spreding everywhere very
rapidly. A two-tier structure exists to manage the programme, viz., an Apex Executive
Committee at the Secretariat level, chaired by the Secretary, Department of Science &
Technology and an Expert Committee at the operational level. The Department of
Science and Technology has a dedicated programme for promoting R&D in the drugs
and Pharmaceutical sector
A Research and Development is necessary not only to cure from dieses but also to
beat global competitors. So a high level expertise and adequate human resources with
modern facilities are required for drug development, so government gives this
responsibility to Science and Technology programme. .
Accordingly, facilities that are needed urgently and that would need to be created,
namely,
Government has taken several policy initiatives for strengthening Research &
Development in Pharma sector. Some of the initiatives are…
As per information few products are expected to go for clinical trials in the next few
years in the areas of
Anti-infective,
Anti-cancer and,
Life-style segments.
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THE GROWTH SCENARIO
India's US$ 5.5 billion Pharmaceutical industry is growing at the rate of 14 percent per
year. It is one of the largest and most advanced among the developing countries. Over
20,000 registered Pharmaceutical manufacturers exist in the country. The domestic
Pharmaceuticals industry output is expected to exceed Rs260 billion in the financial
year 2008, which accounts for merely 1.3% of the global Pharmaceutical sector. Of
this, bulk drugs will account for Rs 54 bn (21%) and formulations, the remaining Rs
210 bn (79%). In financial year 2007, imports were Rs 20 bn while exports were Rs87
bn.
Financial Strength:
Indian market has full financial strength not only that but finance is also available at
low rate of interest and credibility is also high.
Human Capital:
India has a pool of personnel with high managerial and technical competence as also
skilled workforce. It has an educated work force and English is commonly used.
Professional services are easily available.
Globalization:
After 1994 Government has adopted new policy of globalization in which country is
committed to a free market economy and above all, it has a 70 million middle class
market, which is continuously growing and expanding.
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Consolidation:
For the first time in many years, the international Pharmaceutical industry is finding
great opportunities in India. The process of consolidation, which has become a
generalized phenomenon in the world Pharmaceutical industry, has started taking
place in India.
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Analysis to Indian Pharma Industry
The industry now produces bulk drugs belonging to all major therapeutic groups. The
Indian Pharmaceutical industry has shown tremendous progress in terms of
infrastructure development, technology base creation and a wide range of production.
Today, India is not just looking at seeking technology but is a potential exporter of
products and technology and so an international exhibition will help the industry
showcase its strengths. The Pharmaceutical industry in India has undoubtedly created
ripples. The success of this industry is quite crucial for the well being of the nation.
The Union government too realizes the importance of the Pharmaceutical industry.
The basic objectives of Government's Policy relating to the drugs and Pharmaceutical
sector were enumerated in the Drug Policy of 1986. These basic objectives still remain
largely valid. However, the drug and Pharmaceutical industry in the country today
faces new challenges on account of liberalization of the Indian economy.
The need for radically improving the policy framework for knowledge-based industry
has also been acknowledged by the Government. The Prime Minister's Advisory
Council on Trade and Industry has made important recommendations regarding
knowledge-based industry. So that policy inputs are directed more towards promoting
accelerated growth of the Pharmaceutical industry and towards making it more
internationally competitive.
The Pharmaceutical industry has been identified as one of the most important
knowledge based industries in which India has a comparative advantage. Therefore
government announces some provision in this regards as…
• Reservation of 5 drugs for manufacture by the public sector only was abolished
in Feb. 1999.
• Foreign investment through automatic route was raised from 51% to 74% in
March 2000 and the same has been raised to 100%.
• Automatic approval for Foreign Technology Agreements is being given in the
case of all bulk drugs.
The Pharmaceutical industry in India has achieved global recognition as a low cost
producer and supplier of quality bulk drugs and formulations to the world.
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Indian Pharma Industry: SWOT analysis
It is often said that the pharma sector has no cyclical factor attached to it. Irrespective
of whether the economy is in a downturn or in an upturn, the general belief is that
demand for drugs is likely to grow steadily over the long-term. True in some sense.
But are there risks? The Industry is a largely fragmented and highly competitive with
a large number of players having interest in it.
The SWOT analysis of the industry reveals the position of the Indian pharma industry
in respect to its internal and external environment.
Strengths:
2. The growth of middle class in the country has resulted in fast changing
lifestyles in urban and to some extent rural centers. This opens a huge market
for lifestyle drugs, which has a very low contribution in the Indian markets.
3. Indian manufacturers are one of the lowest cost producers of drugs in the
world. With a scalable labor force, Indian manufactures can produce drugs at
40% to 50% of the cost to the rest of the world. In some cases, this cost is as
low as 90%.
Weakness:
1. The Indian pharma companies are marred by the price regulation. The
companies, which are lowest cost producers, are at advantage while those who
cannot produce have either to stop production or bear losses.
2. Indian pharma sector has been marred by lack of product patent, which
prevents global pharma companies to introduce new drugs in the country and
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discourages innovation and drug discovery. But this has provided an upper
hand to the Indian pharma companies.
3. Indian pharma market is one of the least penetrated in the world. However,
growth has been slow to come by. As a result, Indian majors are relying on
exports for growth. To put things in to perspective, India accounts for almost
16% of the world population while the total size of industry is just 1% of the
global pharma industry.
4. Due to very low barriers to entry, Indian pharma industry is highly fragmented
with about 300 large manufacturing units and about 18,000 small units spread
across the country. This makes Indian pharma market increasingly competitive.
The industry witnesses price competition, which reduces the growth of the
industry in value term.
Opportunities
4. Being the lowest cost producer combined with FDA approved plants,
Indian companies can become a global outsourcing hub for
pharmaceutical products.
Threats:
1. There are certain concerns over the patent regime regarding its current
structure. It might be possible that the new government may change certain
provisions of the patent act formulated by the preceding government.
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2. Threats from other low cost countries like China and Israel exist. However, on
the quality front, India is better placed relative to China. So, differentiation in
the contract manufacturing side may wane.
3. The short-term threat for the pharma industry is the uncertainty regarding the
implementation of VAT. Though this is likely to have a negative impact in the
short-term, the implications over the long-term are positive for the industry.
4. Increase in over the counter medicines also create problem for medicines
because people will buy it directly from market.
Political Factors:
2. DPCO which is the bible for the industry has in effect worked contrary
to the stated objectives. DPCO nullifies the market forces from
encouraging competitive pricing of goods dictated by the market. Now
the pricing is determined by the Government based on the approved
costs irrespective of the real costs.
3. Effective January, 2005 the country goes in for the IPR (Intellectual
Property Rights) regime, popularly known as the Patent Act. This Act
will impact the Pharmaceutical Industry the most. Thus far an Indian
company could escape paying a patent fee to the inventor of a drug by
manufacturing it using a different chemical route. Indian companies
exploited this law and used the reverse-engineering route to invent a lot
of alternate manufacturing methods. A lot of money was saved this
way. This also encouraged competing company to market their versions
of the same drug.
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4. In Pharma industry there is a huge PSU segment which is chronically
sick and highly inefficient. The Government puts the surpluses
generated by efficient units into the price equalization account of
inefficient units thereby unduly subsidizing them. On a long term basis
this has made practically everybody inefficient.
5. Effective the January, 2005 the Government has shifted from charging
the Excise Duty on the cost of manufacturing to the MRP thereby making
the finished products more costly. Just for a few extra bucks the current
government has made many a life saving drugs unaffordable to the poor.
Economic Factors:
3. The incidence of Taxes are very high. There is Excise Duty ( State &
Central), Custom Duty, Service Tax, Profession Tax, License Fees,
Royalty, Pollution Clearance Tax, Hazardous substance (Storage &
Handling) license, income tax, Stamp Duty and a host of other levies
and charges to be paid. On an average it amounts to no less than 40-
45% of the costs.
5. There are only 50,00,000 Medical shops. Again this affects adversely
the distribution of medicines and also adds to the distribution costs.
6. India is a high interest rate regime. Therefore the cost of funds is double
that in America. This adds to the cost of goods.
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7. India has poor roads and rail network. Therefore, the transportation time
is higher. This calls for higher inventory carrying costs and longer
delivery time. All this adds to the invisible costs. Its only during the last
couple of years that good quality highways have been constructed.
Socio-cultural Factors:
2. Poor Sanitation and polluted water sources prematurely end the life of
about 1 million children under the age of five every year.
9. Early child bearing affects the health standards of women and children.
11. People don’t go in for vaccination due superstitious beliefs and any sort
of ailment is considered as a curse from God for sins committed.
Technological Factors:
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3. Newer medication, molecules and active ingredients are being
discovered. As of January 2005, the Government of India has more than
10,000 substances for patenting.
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SUN
PHARMACEUTICAL
INDUSTRIES LTD.
21
PROFILE
Sun Pharma makes specialty pharmaceuticals and active pharmaceutical ingredients.
The brands are prescribed in chronic therapy areas like cardiology, psychiatry,
neurology, gastroenterology, diabetology and respiratory.
Sun Pharma has the same drive for growth that marked our early days. Sun Pharma
came into existence as a startup with just 5 products in 1983. In the time since, Sun
Pharma have crossed several milestones to emerge as a leading pharma company in
India, a rank that we have now been at for more than 5 years. (IMS-ORG Retail Store
Audit, March 2006)
Sun Pharma has reached leadership in each of the therapy areas that we operate in, and
are rated among the leading companies by key customers. Strengthening market share
and keeping this customer focus remains a high priority area for the company.
In the post 1996 years, Sun Pharma used a combination of internal growth and
acquisitions to drive growth; important mergers were those of the US, Detroit based
Caraco Pharm Labs and that of the plant at Halol which is now UKMHRA and
USFDA approved.
Under a recent corporate development, the areas related to new molecular entities and
drug delivery systems are proposed to be demerged into a separate company.
HISTORY
Sun Pharma began in 1983 with just 5 products to treat psychiatry ailments. Sales
were initially limited to 2 states - West Bengal and Bihar. Sales were rolled out
nationally in 1985. Products that are used in cardiology were introduced in 1987, and
Monotrate, one of the first products launched at that time has since become one of our
largest selling products. Important products in Cardiology were then added; several of
these were introduced for the first time in India.
Realizing the fact that research is a critical growth driver, it established its research
center SPARC in 1993 and this created a base of strong product and process
development skills.
Sun Pharma was listed on the main stock exchanges in India in 1994; and the Rs. 55
crore issue of a Rs. 10 face value equity share at a premium of Rs. 140/- was
oversubscribed 55 times. The minimum 25% that was required under the regulations
then for listing was offered to the public, the owner family continues to hold a
majority stake in Sun Pharma. It used this money to build a greenfield site for API
manufacture, as well as for acquisitions. For the acquisitions, typically companies or
assets that could be turned around and brought on track were identified.
Its first API manufacturing plant was built in Panoli in 1995, for access to high quality
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actives ahead of competition, and to tap the vast international opportunity for
speciality APIs.
Another API plant, its Ahmednagar plant, was acquired from the multinational Knoll
Pharmaceuticals in 1996, and upgraded for approvals from regulated markets, with
substantial capacity addition over the years. This was the first of several sensibly
priced acquisitions, each of which would bring important parts to the long-term
strategy.
By 1997, its headquarters were shifted to Mumbai, the commercial capital of the
country. Sun Pharma began on the first of its international acquisitions with an initial
$7.5 million investment in Caraco Pharm Labs, Detroit. By 2000, it had completed 8
acquisitions, each such move adding new therapy areas or offering an entry to
important international markets. A new research center was set up in Mumbai for
generic product development for the US market. In India, as new therapy areas were
entered into post acquisition; customer attention, product selection and focused
marketing helped us gain a foothold in areas like orthopedics, gynecology, oncology,
etc. From a ranking at 38th in 1994, by 2000 it was ranked 5th with a leadership in 8 of
the 11 therapy areas that it is present in. The year 2000 was the year of turnaround at
the US subsidiary, Caraco, as it began to receive approvals after successful inspection
by the USFDA. In December 2004, a research center spread over 16 acres was
inaugurated by the President of India, with special lab space for drug discovery and
innovation. The post 2005 years have witnessed important acquisitions to strengthen
our US business- the purchase of manufacturing assets for controlled substances in
Cranbury,NJ; that of a site to make creams and lotions in Bryan, that of Alkaloida, a
Hungary based API and dosage form manufacturer , and recently, Chattem Ltd., a
Tennessee-based controlled substance API manufacturer.
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SHAREHOLDING PATTERN
The company has share capital base of Rs.15.4 crore. The number of total
outstanding shares is 1.54 crore. The face value per share is Rs. 10. The
share is currently trading at Rs. 625, as on 16th May, 2001. The market
capitalization of the company is Rs. 962.5 crore. The free float available is
11% and the promoters hold 73% stake in the company.Shareholding
BOARD OF DIRECTORS
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GROUP COMPANIES
Caraco's manufacturing facility and executive offices were constructed in 1991, after a
$9.1 million loan from the Economic Development Corporation of the city of Detroit.
Since August 1997, capital infusions and loans have primarily come from Sun
Pharma.
Sun Pharma's investment in and support of Caraco has resulted in, since the second
quarter of 2002, Caraco achieving the sales to support its operations. As on March
2008, Sun Pharma owns approx 76% on a diluted basis of the outstanding common
shares of Caraco. Sun Pharma has two R&D centers in Baroda and Mumbai, where
development work for generics is done.
In the second half of 2004, Sun Pharma acquired the trademarks, manufacturing
know-how and other intellectual property of certain pharmaceutical products from
Women's First Healthcare, Inc, which was under bankruptcy proceedings. On
completion of the acquisition in December 2004, these products were assigned to Sun
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Pharma Inc.
In December 2005, Sun Pharma Inc completed the purchase of dosage form
manufacturing operations of Able Labs in the US for USD 23.15 million from the US
Bankruptcy Court of the District of New Jersey, Trenton. A plant spread over 35,000
sq ft, in Bryan, Ohio, manufactures liquids, creams, and ointments. This plant was
purchased from Valeant Pharma.
The Ohio plant is now approved by the USFDA and the Cranbury plant expects to
receive approval shortly.
In January 2005, the company entered into a distribution and sale agreement with
Caraco. Under the agreement, Caraco distributes and sells SPI’s products using its
business organization, management personnel, and distribution set up.
ICN Hungary, purchased from Valeant Pharmaceuticals in 2005, is one of the few
units worldwide, authorized to make controlled substances. ICN Hungary has now
been renamed Alkaloida Chemical Company. This 170 acre site has facilities spread
over 1,75,000 sq ft for the manufacture of bulk actives, with 500 KL capacity and
designated areas to make controlled substances. It has a 150,000 sq ft facility for
different dosage forms such as film coated and effervescent tablets, capsules, etc. A
large 65,000 sq ft research center has labs across synthetic chemistry, instrumentation
analytical and structural elucidation. The site is operational with 450 people and
additional recruitments are planned over time.
MANUFACTURING
With worldclass technology and a team of strong professionals, we have built sites
and systems that meet the most stringent international manufacturing standards.
Expert quality teams ensure that systems and processes remain in compliance with the
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latest standards. A number of our plants hold approvals from the USFDA and the UK
MHRA. APIs and Dosage forms are made in 19 sites across India, US, Hungary and
Bangladesh.
Formulation
Sun Pharma makes speciality formulations across a range of dosage
forms- oral, injectable and delivery system based.
Quality Policy
Regularly updated system, procedures and an expert team support a stringent
quality policy.
Environmental Policy
At Sun pharma, a concern for safety and the environment is part of our plan.
LOOKING AHEAD
Over the last few years, we have been moving towards a profile that is much more
international and formulation-driven.
The Sun Pharma of tomorrow will have brands registered in major markets of the
world, and in most markets, promoted by a high quality field force. In India, we
expect to retain our position of market leadership in our key therapy areas, and reach
leadership in newer therapy areas that we entered after 1997. In key international
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markets across Asia, South East Asia, Russia, China, the Middle East, Latam and
Africa we would be a strong speciality company with prescription driven sales. With a
strong network and established company equity, we would be an excellent partner for
a company seeking to license out products across markets.
In the high value generic markets of the US we expect to become a respected generic
company, with a portfolio comprising both of complex and simple-to-file generics,
building an edge with technology and the cost advantage of vertical integration. While
we have recently completed our fourth acquisition in the US, we believe there are
excellent opportunities in the US generic space, where we can affect a turnaround and
add value to a business. We have about $400 million earmarked for acquisitions in the
US generic/drug discovery space.
Its innovation-based R&D programs were recently demerged into a separate company.
The new R&D company will have projects covering new molecule and novel drug
delivery in late phase human trials over the next few years, which it may seek to
license out.
BUSINESS DEVELOPMENT
Sun Pharma is an international speciality pharma company. We have a significant
presence in the US through our subsidiary Caraco. In the rest of world markets, we
have a strong ground network of 400 committed field force in 30 countries, with a
pipeline of over 2600 products of which 1600 are registered and marketed. We have
2500-person strong sales team in India distributing through 2000 stockists, We are
now at a stage of rapid growth across geographies spanning Russia and CIS countries,
China and South east Asia, Africa and Latin America, where we are rapidly emerging
as a branded generic company of choice.
In India, we are among the largest pharmaceutical companies and command a 3.6%
market share (ORG IMS Stockist Audit, Aug 2009). In India, we market over 500
products through 18 speciality marketing divisions that are built around chronic
therapy areas. Typically, every year we introduce 25-30 new products. All of these are
developed in-house supported by strong bulk synthesis, formulation development,
bioequivalence and regulatory teams. CMARC (A prescription audit agency) has
ranked us as No.1 in key chronic therapy areas of Neuropsychiatry, Cardiology,
Orthopedics and Ophthalmology. We rank among the top 5 companies for
Diabetology, Respiratory, Pain, Cancer and Gynecology.
In-Licensing
We look at partnering and collaborating as an important strategic approach that will
complement our growth in India and international markets. Our constant need is to add to our
speciality product portfolio for prescription leadership in India. We also seek to strengthen
our presence, with a complete basket of specialty products, in Russia and CIS countries,
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China and South East Asia, Africa, Brazil and Mexico.
We are currently interested in in-licensing products that are already marketed or are in late
stage clinical development in our key therapy areas. We seek products that leverage our core
strengths and complement our existing product portfolio in the following therapy areas:
CNS disorders
Cardiology
Diabetes and Metabolic disorders
Gastroenterology
Ophthalmology
Oncology
Pain
Allergy, Asthma and Inflammation
Gynecologicals
We also have strategic interest in licensing biosimilar products and new products based on
recombinant/humanized monoclonal antibody technology that find use in these therapy areas
Out-licensing
We offer a range of dosage forms for oral, injectable, topical and transdermal routes
developed through non-infringing routes and/or patented routes.
Our Organic synthesis team develops highly complex bulk actives like Peptides,
Hormones, Steroids, Anticancer drugs and Cephalosporins through non-infringing
routes and/or patented routes. We offer over 150 bulk actives manufactured at
USFDA/UK MHRA approved sites.
We seek out-licensing opportunities for our speciality generics, super generics, and
bulk drugs for global markets.
C
V
S
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CNS
Pain
Cancer
Gynecologicals
Allergy, Asthma other respiratory diseases
Our Organic synthesis team develops highly complex bulk actives like Peptides, Hormones,
Steroids, Anticancer drugs and Cephalosporins through non-infringing routes and/or
patented routes. We offer over 150 bulk actives manufactured at USFDA/UK MHRA
approved sites.
We seek out-licensing opportunities for our speciality generics, super generics, and bulk
drugs for global markets.
API
Our API (Active Pharmaceutical Ingredients) program began in 1995 with a simple
objective - facilitating the manufacture of complex formulations, for which, sourcing
the API would restrict entry. Over time, we have been able to take the benefits of
vertical integration to international markets and our US generic subsidiary, Caraco,
has been able to source the active of several key products to its advantage.
Starting with 2 actives in 1995, our API list has since expanded to over 150, and this
includes a number of APIs with regulated market approvals such as US and European
drug master files (DMFs), filed out of Indian plants that hold international regulatory
approval and one plant in Hungary. At our 8 world-class locations, all of which are
ISO 14001 and ISO 9002 approved, besides being approved by the respective foreign
regulatory authorities, every year we scale up about 30 APIs, and make a large
number of filings, the technology for all of which is developed at our research centre.
Currently this list addresses customers-both innovator companies and generic
companies, in markets across Europe , Latam and the US .
A range of APIs including complex actives like anticancer, steroids, peptides and
hormones are manufactured in dedicated areas that follow international norms for
systems and processes. Our buyout, in 2005, of ICN Hungary (Alkaloida) has enabled
us to enter the controlled substance API manufacturing space, one of the few sites in
the world to hold these approvals.
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acres in Chattanooga, Tennessee, where it manufactures a variety of APIs with a focus
on controlled substances.
Complex APIs, controlled substances, APIs for the regulated markets - all of these are
expected to power our API strategy going ahead.
In addition to a wells stocked library and conference areas, spacious and well
equipped labs are in place for process chemistry for API development, formulation
development for conventional dosage forms and complex delivery systems.
A second research center in Mumbai, spread over 50,000 sq ft of floor area, develops
generics for the developed markets. This center has developed products for Caraco-
most of the products that are marketed by our US subsidiary were developed by this
team. This lab works with tight timeframes to support Caraco's new product pipeline.
Our research commitment for 2009-10 is between 7-8% of the company's turnover
and we've put in a total of Rs. 15 billion for research since 1993. Our approach to
research has been incremental starting with the simple and moving on to the more
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complex. We began with simpler dosage forms, then moved on to novel drug delivery
systems and complex API. Across areas, 76 patents have been received of 233 patents
filed. Every year, we typically bring about 40 new products to the Indian market, scale
up 25 API, develop and file for 30 plus ANDAs for the US and 8-10 DMFs for US /
Europe .
Dedicated labs for formulation development are similar to facilities at the plants and
this facilitates easier scale up.
Facilities
Solid oral dosage form labs
Semisolid lab
Nanotechnology/liposome lab
Sterile lab for parenterals
Aerosol area
Packaging development lab
Stability testing labs
SWOT ANALYSIS
Strengths:
Sun Pharma is highly regarded for its ability to launch new products
with a great amount of speed and consistency.
The company has only 20% exposure to the DPCO.
he past growth rate of the company has always been double that of
the industry as a whole.
Weaknesses:
32
The profit margins are declining for the company.
Opportunities:
The relaxation of DPCO will be a big boost for the company and this
might marginally improve the profit margin.
The company has already made ANDAs (Abbreviated new drug
application) in USA and it provides a great opportunity for growth
for the company.
The company has entered the US market through its subsidiary
Caraco Pharma. This provides a great opportunity for the company to
make the most out of the expiring patents in USA.
Threats:
The entry of foreign players will pose a major threat to the company.
The company is more into acquisition based growth and this might
lead to a stage of financial crunch as it has already happened in the
case of Caraco pharma. Sun pharma provided debt to Caraco and is
facing problems due to the continuous losses made by the latter.
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Sun Pharma Product List
34
[$,*]
Fluvoxamine Maleate Antidepressant BP / EP [61718-82-9]
[$]
Fosphenytoin Sodium Antiepileptic USP [92134-98-0]
[$]
Gabapentin [$, #] Antiepileptic USP [60142-96-3]
Gemcitabine Hcl [$,#] Anticancer EP / USP [122111-03-9]
Glimepiride [$] Antidiabetic EP / USP [93479-97-1]
Granisetron Hcl [$] Antiemetic EP [107007-99-8]
Ibandronate Sodium Bone Resorption Inhibitor PN [138926-19-9]
Imatinib Mesylate [$] Anticancer PN [220127-57-1]
Irbesartan Antihypertensive PN [138402-11-6]
Irinotecan Hcl Anticancer PN [100286-90-6]
Isradipine [$] Antihypertensive USP [75695-93-1]
Lamotrigine [$] Antiepileptic PN [84057-84-1]
Lercanidipine Hcl Antihypertensive PN [132866-11-6]
Letrozole Anticancer EP [112809-51-5]
Losartan Potassium [#] Antihypertensive USP [124750-99-8]
Loteprednol Etabonate Antiinflammatory PN [82034-46-6]
Magnesium Valproate Antiepileptic PN [62959-43-7]
Meloxicam [#] Antiinflammatory BP / EP [71125-38-7]
Memantine Hcl Antiparkinsons PN [41100-52-1]
Mesalazine [$,*] Antiinflammatory EP / USP [89-57-6]
Metamizol Magnesium Antispasmodic PN [6150-97-6]
Metaxalone Muscle Relaxant PN [1665-48-1]
Metformin Hcl [$,*] Antidiabetic BP / EP / USP [1115-70-4]
Methylphenidate Hcl CNS Stimulant USP [298-59-9]
Metoprolol Succinate Antihypertensive/Antianginal BP / EP / USP [98418-47-4]
[*]
Metoprolol Tartrate Cardiovascular BP / EP / USP [56392-17-7]
[$,*]
Mifepristone Abortifacient PN [84371-65-3]
Mirtazapine [$] Antidepressant USP [61337-67-5]
Modafinil [$] CNS Stimulant USP [68693-11-8]
Mometasone Furoate Antiinflammatory Steroid USP [83919-23-7]
Naltrexone Hcl Narcotic Antagonist USP [16676-29-2]
Netaglinide Antidiabetic PN [105816-04-4]
Octreotide Acetate [$,#] Somatostatin Analologue PN [79517-01-4]
Olanzapine Antipsychotic PN [132539-06-1]
Ondansetron Base [$] Antiemetic EP / USP [116002-70-1]
Ondansetron Hcl [$,*] Antiemetic EP / USP [103639-04-9]
Oxaliplatin [$] Anticancer EP [61825-94-3]
Oxcarbazepine [$] Antiepileptic PN [28721-07-5]
35
Oxethazaine Local Anaesthetic BP / EP [126-27-2]
Pamidronate Disodium Antiosteoporosis BP [109552-15-0]
[$,#]
Pentoxifylline [$,*] Peripheral Vasodialotor BP / EP / USP [6493-05-6]
Perindopril Calcium Channel Blocker BP / EP [107133-36-8]
Pioglitazone Antidiabetic PN [105355-27-9]
Piroxicam Antiinflammatory PN [96684-40-1]
Betacyclodextrine
Raloxifene Hcl Antiosteoporosis PN [82640-04-8]
Repaglinide [$] Antidiabetic USP [135062-02-1]
Rivastigmine Tartrate Acetylcholinesterase inhibitors, PN [129101-54-8]
[$] Cognition-enhancing drugs
Ropinirole Antiparkinsons PN [91374-21-9]
Sertraline Hcl [$] Antidepressant PN [79559-97-0]
Sodium Valproate [$,*] Antiepileptic BP / EP / USP [1069-66-5]
Sumatriptan Succinate Antimigraine BP / EP [103628-48-4]
[$]
Temozolomide Anticancer PN [85622-93-1]
Terlipressin Vasopressor Analogue PN [14636-12-5]
Testosterone Androgen Derivative USP [58-22-0]
Tiagabine Hcl [$] Antiepileptic USP [145821-59-6]
Tizanidine Hcl [$] Muscle Relaxant USP [64461-82-1]
Topiramate [$,#] Antiepileptic USP [97240-79-4]
Tramadol Hcl [$,*] Analgesic EP [36282-47-0]
Valproic Acid Antiepileptic BP / EP / USP [99-66-1]
Venlafaxine Hcl Antidepressant EP [99300-78-4]
Ziprasidone Hcl Antipsychotic PN [138982-67-9]
Zoledronic Acid Bone Resorption Inhibitor PN [165800-06-6]
Zolpidem Tartrate [$,*] Hypnotic BP / EP [99294-93-6]
Zonisamide [$] Antiepileptic USP [68291-97-4]
Intermediates available on request for above Active Pharmaceutical Ingredients. All transactions are carried out in
conformity with patent laws applicable in the user country. Responsibility with respect to third party’s patent rights in a
specific country lies exclusively with the buyer.
36
Buspirone base [$, #] Anxiolytics PN [36505-84-7]
Buspirone HCl [$, #] Anxiolytics EP / USP [33386-08-2]
Codeine base Analgesic,Antitussive BP / EP / USP [76-57-3]
Codeine HCl Analgesic,Antitussive BP / EP [1422-07-7]
Codeine phosphate Analgesic,Antitussive BP / EP / USP [41444-62-6]
hemihydrate [*]
Concentrate of poppy Intermediate PN [57-27-2]
straw (CPS)
Dihydrocodeine Analgesic,Antitussive BP / EP [5965-13-9]
hydrogentartrate
Ethylmorphine HCl Analgesic,Antitussive BP / EP [125-30-4]
Glibornuride [#] Antidiabetic PN [26944-48-9]
Hydroxychloroquine Antimalarias,Antirheumatic BP / USP [747-36-4]
sulphate [$]
Morphine HCl Analgesic BP / EP [52-26-6]
Morphine sulphate Narcotic analgesic BP / EP / USP [64-31-3]
Noroxymorphone Intermediate PN [33522-95-1]
Noscapine base Antitussive BP / EP / USP [128-62-1]
Noscapine HCl Antitussive BP / EP [912-60-7]
Oxycodone Intermediate PN [76-42-6]
Oxymorphone Intermediate PN [76-41-5]
Phenobarbital acid [$, #] Antiepileptic BP / EP / USP [50-06-6]
Phenobarbital sodium Antiepileptic BP / EP [57-30-7]
Pholcodine Antitussive BP / EP [509-67-1]
Sennoside A+B Laxative PN [128-57-4] &
[517-43-1]
Thebaine Intermediate PN [115-37-7]
Topiramate [$] Anticonvulsants PN [97240-79-4]
Intermediates available on request for above Active Pharmaceutical Ingredients. All transactions are carried out in
conformity with patent laws applicable in the user country. Responsibility with respect to third party’s patent rights in a
specific country lies exclusively with the buyer.
37
BIBLIOGRAPHY
1) http://www.sunpharma.com/index.php
2) en.wikipedia.org/wiki/Sun_Pharmaceutical
3) connect.in.com/sun-pharma/profile-311528.html
4) portfolio.rediff.com/quotes/sun+pharmaceutical+industries+ltd
5) www.business-standard.com/stockpage/stock_details.php?bs.
6) www.pharmaceutical-drug-manufacturers.com/pharmaceutical-industry/
7) www.in.kpmg.com/pdf/Indian%20pharma%20outlook.pdf
8) en.wikipedia.org/wiki/Pharmaceuticals_in_India
9) www.espicom.com/prodcat.nsf/Product_ID.../00001851?...
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