Beruflich Dokumente
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Pharma
Formulations
Formulations
Patented
Patented
Generics generics Branded generics
Generics generics Branded generics
Industry Analysis – Porters 5 Forces Model
SUPPLIER POWER
Low to Moderate
• High no of suppliers
• At times, use of single supplier as sole source for
particular material
• Delay in supplying materials hampers their ability to
deliver products
BARRIERS TO ENTRY
Moderate to High THREAT OF SUBSTITUTES AND
• High no. Of legal procedures and COMPETITION COMPLEMENTS
licences Very High – Generics , Very Low - R&D Intensive Moderate to High
• High capital requirement for mfg, • For R&D intensive drugs threat
• High competition across companies for generics
supply chain & R&D is moderate
• Low success ratio in R&D • Very less differentiation points in generics
• For generics and off patent
• Patent issues • Price discounting and margin pressures in
drugs threat is very high
• Barriers are moderate in case of generics
• Alternative medicines like
generics as R&D expenses are low • For patented drugs it acts almost as monopoly
• Exports require high regulatory auyrveda, Unani posing threat
clearances
BUYER POWER
Moderate to High
• For generics and OTC drugs its high
• Need to keep buyer’s satisfied otherwise will risk to
lose to competitors
• For some of the patented and Life saving drugs
buyer power will be moderate
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Generics Overview
• Marketing off patent drugs
• Major players – Sun Pharma, Ranbxy, Dr Reddy’s, Cadilla, Cipla
• India to become 10th largest market by 2015 with market size
of US$ 20 bn
Increasing Genericisation Value of Drugs going off patent
US$bn US$bn
~ US$90bn
~ US$50bn
Generics Continued
• Key growth drivers
– Significant patents expires through 2011
– Government priority to rationalize healthcare
costs
– Cost Competitiveness
• Key Challenges
– Foreign currency fluctuations
– Incresaing costs and cost of capital
Bulk Drugs (APIs)
• Major players : Ranbaxy, Cipla, Dr Reddy’s,
Lupin, IPCA Labs
BUYER POWER
Moderate to High
• For generics and OTC drugs its high
• Need to keep buyer’s satisfied otherwise will risk to
lose to competitors
• For some of the patented and Life saving drugs
buyer power will be moderate
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STRATEGIC GROUPS IN THE INDIAN PHARMA INDUSTRY
Domestic
Formulation
Glaxo
Generics Smithkline
TORRENT SANOFI-AVENTIS
Torrent
Local
Branding CIPLACIPLA International
Formulation
India
17%
North America North America
35% Russia & CIS
Others EU
11% Others
India
The company’s net profit in first quarter of 2008 was US$ 39 million.
Cipla’s products are bought by over 170 countries across all the continents
Over 100 Drug Master File (DMF) registrations in the US and over 85 in
Europe
Net sales of the pharmaceuticals business segment was US$ 326 million,
which constitutes 92 per cent of the company’s total sales
Two R&D centers which are approved by the Department of Scientific and
Industrial Research, Government of India
3000 15.0%
%age
11.9%
1892
2000 10.0%
1000 5.0%
0 0.0%
Dr Reddys Cipla Ranbaxy GSK Dr Reddys Cipla Ranbaxy GSK
D/E Ratio
0.5
15000
0.4
10000 0.3
0.2
5000 0.1 0.1
0.1
0
0 0
Dr Reddys Cipla Ranbaxy GSK Dr Reddys Cipla Ranbaxy GSK
SWOT Analysis
Strengths Weaknesses
Partnerships with key Over-reliance on partnerships
players in the market keeps Lack of resources similar to US
its cost base down and Europe based competitors
Research Driven & Global to develop a drug to marketing
Opportunities
Threats
Take a drug all the way to market
Needs to gain FDA approval for all
Take a molecule from its pipeline all
sources and products
the way to the market place cost-
Products have to pass strict FDA
effectively market
trials before going to market, which
Increase domestic footprint in
can be costly and time consuming
generics
Management Discussion Analysis
FY 11 Guidance : RoCE of 18 – 22%. FY13 Goal : Revenues $3 bn & RoCE of
25%
Active
Pharmaceuti Global
cal Generics
Ingredients
Proprietary
Products
APIs
Active Pharmaceutical Ingredients
Acquisitions in Mexico and UK
Services
Process research
Product development
Pilot scale manufacture
Product regulatory support
350
300
250
408 413 430
404
200
150
216
100 161
50
0
FY 05 FY 06 FY 07 FY 08 FY 09 FY 10
Revenue ($ Mn)
Global Generics
Global Generics
Deepening market presence
350 Growth
of 53%
300
250
200
301
150 272
199
100
109
50
37
0
FY 06 FY 07 FY 08 FY 09 FY 10
Global Generics - Germany
Acquisition of Betapharm in 2006
160
140
120
100
Revenue (Euro Mn)
80 144 151
138
60 109
40
20
0
FY 07 FY 08 FY 09 FY 10
Global Generics - Russia
Portfolio of 22 brands
Market Rank
Pharma – 16th
Genrics – 7th
Global Generics - Russia
Russia - Revenue in USD Mn
160 Growth
of 20.8%
140
120
100
Revenue in USD Mn
80 152
125
60
101
40 79
60
48
20
0
FY 05 FY 06 FY 07 FY 08 FY 09 FY 10
Global Generics - Russia
Improve Coverage
Improve market share in Moscow & St Petersburg
Portfolio
Focus on cardiovascular & oncology
35
30
25
Profitability
20 OPM (%)
NPM (%)
15
10
0
2006 2007 2008 2009 2010
Financial Year
Emerging Markets in next decade
Strategic Issues &
Recommendations
Strategic Issues
Betapharm (Germany) needs to turn profitable
• http://www.drreddys.com
• http://www.ibef.org/economy/ruralmarket.aspx