Offshoring Data Management and Statistical Analysis to India
Key Advantages Offered by India
Cost Advantage per FTE
Operating Models in Indian
Potential Risks and Mitigation Plan
Key Abbreviations
List of Case Studies
AMRI extends its R&D Center at Hyderabad, India
Panacea In Licenses Technology
BMS Partners with Syngene
French Company acquires stake in Shantha Biotechnics
Dabur launches first Nano Oncology Drug in India
Indian Biotech Companies Launch Novel Vaccines
Government to introduce 4 more NIPERs
India Seeds Clinical Research Centers
DCGI to weed out clinical trial delays
Learning’s from global biotech
Learning's From Japan, Moving Up The Research Value Chain
GlaxoSimthKline Plc
Matrix Laboratories
Merck-Advinus
AstraZeneca Leverages Indian Formulations Research Expertise
GSK And Tata Consulting Services Enter Into An Outsourcing Deal For Drug Development Support
Accenture Provides Clinical Trial Data Management Support To Wyeth
Introduction
While the Pharma-Biotech R&D opportunity in India is a known story, an often asked question is ‘how long and how much?’ i.e. whether the growth and the projected rates are sustainable and will the growth continue, or has the time of the skeptics arrived? This position paper intends to touch upon this question and provide an answer in two parts, A & B. Part A deals with the overall R&D scenario for India while Part B takes a detailed view of select offshoring options as far as India is concerned.
Our Methodology for Part A
Part A begins by setting up a baseline; it takes a look at the current state of pharmaceutical research in India. In the next chapter the focus is on understanding what have been the drivers for this growth and how strong and relevant are these drivers today. This analysis of the drivers helps in appreciating the reality of the future demand that may exist for the products and services that India pharmaceutical R&D has to offer.
In the next section, the report explores the difference between the baseline (set in chapter 1) with what the demand that the current drivers would create in the future (chapter 2).Once this difference (referred to as opportunity gap) has been established, chapter 4 impresses upon the initiatives which India has to take to ensure that she is able to catch up with the opportunity on offer. Part A concludes with a view on where the Indian Pharmaceutical R&D
sector can reach if India is able to make the right interventions at the right time.
Our Methodology for Part B
Now that India’s significant role in the global pharma-biotech R&D field has been established, it would serve well to provide some examples of established and emerging activities that are looked at by global companies for offshoring. With this intended purpose Part B focuses on select offshoring activities:
Clinical Research
Process Chemistry
Medicinal Chemistry
Formulation R&D
Data Management & Statistical Analysis
Each of the above is then analyzed on the broad parameters like:
Current state in India
India’s Advantage
Operational Models prevalent in India
The discussions in both parts A & B have been grouped with select case-studies throughout to support the inferences and suppositions.
India – Trends in Pharma-Biotech R&D
Strategic Partnerships
An emerging trend is the symbiotic collaboration between international and Indian companies in pharma-biotech research & development capabilities. A step further to cost-based outsourcing, these partnerships reflect increased interest and confidence in India’s research competencies and infrastructure.
The nature of in-licensing deals in India is evolving from being marketing oriented to research driven. Furthermore, early-stage products are increasingly gaining a share of the investment pie, primarily due to their lower valuations.
Outlicensing is also on the rise, driven by small companies with promising candidates or technologies lacking financial muscle to take them through the investment- heavy clinical development and marketing phases.
Case Study: Panacea In Licenses Technology
Cambridge Biostability, the UK's pioneering developer of temperature-stable liquid vaccines, has signed a long-term licensing agreement with Panacea Biotec, a leading vaccine producer in India. Under the agreement, Panacea Biotec is to in-license CBL's stable liquid technology to develop, produce and market a stable liquid version of pentavalent and other combination vaccines for the treatment of diptheria, tetanus, pertussis (whooping cough), hepatitis B and haemophilus influenza B. This product will be unique as it will not require storage under refrigeration or reconstitution before use.
India – Trends in Pharma-Biotech R&D
Collaborative alliances, in which both the stakeholders pursue a high-risk, high-reward strategy, are increasingly appearing on the alliance landscape. These alliances involve joint research agreements and co-development arrangements between companies.
An increasing number of companies from regions with a mature pharma-biotech industry, other than the US, are eyeing India as a potential destination for forging strategic alliances in life sciences. As a powerhouse of biopharmaceutical technologies and products, the interest shown by these companies in India is evidence of the country’s growing significance in the global life sciences space.
Case Study: BMS Partners With Syngene
Syngene, Biocon's subsidiary company, has entered into a research partnership with Bristol-Myers Squibb. Biocon's Syngene will provide research and development (R&D) services for discovery and early drug development. Bristol-Myers Squibb will significantly increase the scope of its existing relationship with Biocon's Syngene to further develop integrated capabilities in India in medicinal chemistry, biology, drug metabolism, and pharmaceutical development. Under the terms of the agreement, Syngene will partner with Bristol-Myers Squibb through a dedicated research facility at Biocon Park in Bangalore, which was opened on March 21, 2007.
India – Trends in Pharma-Biotech R&D
Mergers & Acquisitions
Mirroring the trend on the global pharma front, India saw a flurry of mergers and acquisitions in 2006 and early 2007. Pharma, healthcare and biotech M&A deals accounted for 12.4% of total M&A deals in India in 2006, second only to the IT/ITeS sector, of which 18% were related to synergies in research and development. Of these, seven were outbound cross border deals.
Case Study: French Company Acquires Stake In Shantha Biotechnics
Merieux Alliance, a French company has strengthened its presence in Asia by acquiring a 60 percent stake in Hyderabad-based Shantha Biotechnics. Merieux's partnership with Shantha Biotechnics corresponds to its aims in developing a global approach in the worldwide fight against infectious diseases. This move has enabled its involvement in all linking areas of the healthcare chain: prevention, diagnostics, prognosis, new therapies and clinical monitoring. The partnership further provides the group with new possibilities with regard to preventive medicine, an area in which Merieux Alliance's companies Silliker, bioMerieux, Transgene and Advanced BioSciences Laboratories are already involved.
Drivers of the Research Opportunity
Decline in R&D Productivity
The waning product pipelines of innovator companies are reflected in the significant drop in NME approval over the years. This is despite the five-fold increase in R&D spending. Pressure to accelerate drug discovery has forced big pharma and established biotech companies to look at alternative avenues of alliances and acquisitions.
Emphasis on Cost Containment
Over US$ 40 billion is spent annually on drug discovery and development. These funds are spent on a complex process that can span as many as 15 years and costs US$ 1Bn for a single drug. Big pharma has responded to this by evolving their business models to one of outsourcing activities across discovery and development process.
The Growth of Biotech
Biotech and biotech based drugs are increasingly finding application within the therapeutic space. The trend in US FDA approvals of biotech based products indicate a more promising pipeline.
Drivers of the Research Opportunity
Summarizing Chapters 1 and 2
Chapter 1 highlighted the current trends in the pharma-biotech R&D sector, capturing the heightened activity on the service and partnership front, and simultaneous foray into research with a competitive advantage. The rationale behind these trends was then touched upon in the following chapter. Hence, the first two chapters served to set the stage for an analysis of future opportunities and the initiatives that need to be taken in order to capitalize on the potential for growth. The following chapters try to answer these very questions,
Opportunity Gaps
Out-Licensing and Alliances
As already noted in the global drivers section, steep decline in innovation levels, combined with the threat from generics and drug recalls is causing concern to several pharmaceutical companies. As a result, pharmaceutical companies are now developing strategic alliances and licensing deals to improve weakening drug pipelines and achieve sustainable revenue growth. In fact, as on date, almost 20 percent of the annual sales of the top 20 pharma are from licensed products.
Further, if we look closely at the trend, late-stage products are the most popular development stage for the big pharma to in-license. In fact ,as evident from the following graphic, the maximum number of inlicensing deals of the big pharma happen in the late stage of development. The high probability of success in the later stage is the primary reason for this trend.
Part B - Introduction
Out-Licensing and Alliances
Part A of the report presented an analysis of the opportunities available for the Indian pharma-biotech R&D sector against the backdrop of current trends in India, and its underlying drivers. Ensuing this is a section on suggested initiatives across certain critical success factors, that need to be taken by key stakeholders in order to sustain the current rapid pace of growth. Finally, the report ends with a view on where India can reach on its current growth trajectory.
Now that India’s significant role in the global pharma-biotech R&D field has been established, it would serve well to provide some examples of established and emerging activities that are looked at by global companies for offshoring. The broad parameters across which the focus areas are
analyzed include:
Current state in India
India’s Advantage
Operational Models prevalent in India
Clinical Research in India
Due to the growing demand for clinical trials, the Indian clinical research market is currently pegged at USD 600 million and is poised to grow to a USD 1 billion industry by the year 2010. Since its introduction of patent protection laws in 2005, the industry has been growing three digits.
A huge patient population, genetically distinct groups, specialty hospitals with state-of-the-art facilities, nearly 700,000 hospital beds and 221 medical colleges, skilled English speaking investigators are India's trump cards.
The cost of conducting phase I trials in India is 50% lower than the $20mn required in the US and 60% lower than the $50mn required for the phase II study.
To make India a preferred destination for drug testing, clinical trials were exempt from service tax in 2006-07 budget. This exemption would attract more clinical trial outsourcing as the pharmaceutical sponsors will heavily benefit on their cash outflows on account of their expenses on CRO fees and other variable pass through
expenses.
In the 1990s, only Eli Lilly, Pfizer and Quintiles were present in India, however, since then there has been an increase in investment, subsequently nearly 100 players have entered the market. They are involved in several outsourcing activities related to clinical research in India. A barrage of both Indian and international pharma firms and clinical research organisations such as Novartis, Ranbaxy, Merck and Astra Zeneca, have stepped up this
investment and have also begun entering the market, realising the potential of this untapped region. A majority of these companies are starting by offering bioequivalence services, then gradually expanding into clinical research using their existing talent pool.
