Drug Discovery

1
Drug Discovery Development for the World
Market from India How Real
GV Prasad Vice Chairman CEO, Dr. Reddys
Laboratories 1 NOV 2007
1
2
Indian Pharma Industry Poised for Transformation
3
Indian Pharma Industry BackdropIndian Pharma to
dominate Global generic industry
CAPEX BY INDIAN COMPANIES
SHARE OF THE GLOBAL GENERICS PIE
Source Capex of Top 15 companies Annual
reports, Analyst reports
Source International revenues of 13 Indian
companies Annual reports, Analyst/Industry
reports
ANDA FILINGS FROM INDIA
DMF FILINGS FROM INDIA
Source Annual reports, Analyst reports
Source USFDA website
4
Indian Pharma Industry BackdropHome Market also
Poised for Transformation!!

• Growth in disposable incomes the number of
  middle-class households
• Expansion of medical infrastructure
• Greater penetration of health insurance
• Rising prevalence of chronic diseases
• Adoption of product patents
• Aggressive market penetration
• Debut of organized retail chains

RETAIL PHARMACEUTICAL MARKET IN INDIA
US billion
Source India Pharma 2015, McKinsey Co
5
Innovation Opportunity for India
6
Innovation Capacity ? Unmet Needs
7
Innovation Capacity ? Unmet NeedsWhy Is It
Important?
4
1980
1985
1990
1995
2000
02
03
Though the RD spend is increasing, success is
decreasing
8
Innovation Capacity ? Unmet NeedsWhy Is It
Important?
4
1980
1985
1990
1995
2000
02
03
Though the RD spend is increasing, success is
decreasing
9
Innovation Capacity ? Unmet NeedsWhy Is It
Important?
4
1980
1985
1990
1995
2000
02
03
Though the RD spend is increasing, success is
decreasing
10
Innovation Capacity ? Unmet NeedsIndias Cost
Structure Key Advantage

• Western companies able to obtain a step down of
  30-40 in cost by a mere site transfer to India
• Companies in India able to reduce the upfront
  capital cost of setting up a project by 25-50
• Outsourced services to India significantly
  reduces the cost and time of clinical trials
• Indias huge resource of skilled scientists,
  available at a fraction of the cost in developed
  countries
• Scientists of Indian origin retuning provide a
  strong talent pool

Cost Leadership (in High Risk Game)
Source IBEF, EY Analysis
11
Global Pharmas ChallengeCreating Opportunities
for Indian Pharmacos

• Improving RD productivity, a high priority for
  innovator pharma companies
• Exploring opportunities for expanding pipeline
  while addressing costs as well
• Testing the waters Outsourcing of non-core
  activities on an experimental basis
• Expanding partnerships Drug discovery
  experimental programs in various countries
• Indian companies are setting up internal drug
  discovery programs as well as exploring
  partnerships with large medium innovator
  companies

12
Innovation in India Current Status
13
Current status of Discovery Development in India
Internal Programs
Services Model
MNC Outposts
Partnerships

• Dr. Reddys
• Glenmark
• Ranbaxy
• Cadila
• Torrent
• Sun Pharma
• Biocon
• Wockhardt
• Nicholas Piramal

• Aurigene, Advinus, GVK Lifesciences
• Dr. Reddys, Discman, Nicholas, Jubilant, Shasun,
  Divis, Suven
• GVK Bio, Vimta, Lambda, Lotus, Accutest
• Siro Clinpharm, iGate Clinical Research, Asian
  Clinical
• Quintiles, ClinTec

• Drug Discovery
• AstraZeneca
• Altana
• Clinical trials data management
• Pfizer
• Eli Lilly
• Novartis
• GSK

• GSK Ranbaxy
• Eli Lilly Jubilant, Suven
• Zydus BI, Onconova,
• Dr. Reddys Rheoscience, Argenta, ClinTec
• Aurigene Merck/ Serono, Forest Labs,
  Rheoscience
• Merck Co. Advinus Therapeutics
• AstraZeneca Torrent
• Wyeth GVK
• Nicholas Morvus, Connexios, Biosynth
• Syngene - Innate

Source Company news, industry reports
14
Headlines Today

• More than three-quarters of the Top 50 pharma
  companies conduct clinical development in
  India(1)
• Outsourced manufacturing activity in India at
  100 million(2)
• Outsourced clinical trial activity in India at
  75 million in 2005(3)
• 40 50 NCEs under development by Indian pharma
  companies

When will the first indigenously developed drug
be launched from India?
(1,2) Motilal Oswal Report (3) Frost Sullivan
15
NCE Pipeline of Indian Companies What would be
the timeframe when innovative product from India
will hit the market
At least 3-4 years away from launch
Source Analyst reports, company presentations
16
NCE Programs focused on Metabolic Disorders
Source Analyst reports
17
Building a sustainable Innovation-led business
Key Challenges
18
Key Challenges

• Target Selection
• Precedent targets vs Unprecedented targets
• Translatability of in vivo disease models to
  humans
• Length and Cost of meaningful human proof of
  concept studies
• Increasingly crowded research makes selection of
  clinically differentiated products difficult

19
Key Challenges

• Challenges operating out of India
• Not yet part of the innovation eco system of
  venture capital, academic research biotech
• Lack of talent in critical functions
• Access to thought leadership
• Funding
• PL driven valuation
• Lack of patient capital
• Regulatory Frameworks for timely approvals
• Regulatory frameworks/expertise not in place
• Pace of approvals not satisfactory

20
Closing Thoughts

• Indian Pharmaceutical Industry has the potential
  to
• Bring Affordability and Accessibility of Drugs to
  the Masses
• Increase Global Pharma Industrys Innovation
  Capacity to Meet Unmet Needs
• But needs to get the basics right

We try never to forget that medicine is for the
people. It is not for the profits. The profits
follow, and if we have remembered that, they have
never failed to appear. The better we have
remembered that, the larger they have been. --
George W. Merck