...Economic Analysis 7 6) Chapter 2: Industry Analysis 9 * Industry Life Cycle * Porters 5 Forces * SWOT * PESTLE * Correlation 7) Chapter 3: Company Analysis 24 * Company Profiles (10 Companies) * Financial Ratio Analysis * DCF Valuation * Valuation Shares 8) Conclusion 74 9) Bibliography 76 RESEARCH OBJECTIVES Research Project Topic: “Analysis and Valuation of the Indian Pharma Sector” The research objectives of this specialization project are: 1) Identifying the key indicators of the Global Pharma Industry 2) Understand and analyze the Indian Pharma Industry and identify the prominent players. 3) To examine the trends in the pharma industry 4) Fundamental and Technical Analyses of the Top 10 pharma companies in India. The main objective of this study is: 1) Valuation of the Top 10 Pharma companies 2) Finding the correct share price of the company 3) Making investment decision of- Buying, Selling or Holding the stocks of the respective pharma company. EXECUTIVE SUMMARY * Global Pharma Industry is likely to grow at a CAGR of 5% to US $ 1...
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...“The Indian pharmaceutical industry is a success story providing employment for millions and ensuring that essential drugs at affordable prices are available to the vast population of this sub-continent.” Richard Gerster The Indian Pharmaceutical Industry today is in the front rank of India’s science-based industries with wide ranging capabilities in the complex field of drug manufacture and technology. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously. Playing a key role in promoting and sustaining development in the vital field of medicines, Indian Pharma Industry boasts of quality producers and many units approved by regulatory authorities in USA and UK. International companies associated with this sector have stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped to put India on the pharmaceutical map of the world. Growth Scenario in 2010 India's pharmaceutical industry is now the third largest in the world in terms of volume. Its rank is 14th in terms of value. Between September 2008 and September 2009, the total turnover of India's pharmaceuticals industry was US$ 21.04 billion. The domestic market was worth US$ 12.26 billion. This was reported by the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers. As per...
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...Company Name : Abbott India Assignment 2- Overview of the Industry (a) Degree of competitiveness in the industry; The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical companies control 70% of the market with market leader holding nearly 7% of the market share. It is an extremely fragmented market with severe price competition and government price control. The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectibles. There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce the complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations. Following the de-licensing of the pharmaceutical industry, industrial licensing for most of the drugs and pharmaceutical products has been done away with. Manufacturers are free to produce any drug duly approved by the Drug Control Authority. Technologically strong and totally self-reliant, the pharmaceutical industry in India has low costs of production, low R&D costs, innovative scientific...
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...Indian Pharma Industry – an overview April 13, 2012 The demand for pharmaceutical products in India is significant and is driven by low drug penetration, rising middle-class & disposable income, increased government & private spending on healthcare infrastructure, increasing medical insurance penetration etc. The Indian pharmaceutical industry is growing at about 8 to 9 percent annually according to “A Brief Report Pharmaceutical Industry in India,” published in January 2011. The Pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and injectables. There are approximately 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). I. Current Scenario: India's pharmaceutical market grew at 15.7 per cent during December 2011. Globally, Indiaranks third in terms of manufacturing pharma products by volume. According to McKinsey, the Pharmaceutical Market is ranked 14th in the world. By 2015 it is expected to reach top 10 in the world beating Brazil, Mexico, South Korea and Turkey. More importantly, the incremental market growth of US$ 14billion over the next decade is likely to be the third largest among all markets. The US and China are expected to add US$ 200bn and US$ 23bn respectively. McKinsey & Company’s report, “India Pharma 2020:...
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...Industry Snapshot The Indian pharmaceutical industry is highly dynamic and offers great opportunities for both domestic and foreign companies. The industry is estimated to have generated revenue worth US$ 13.1 billion in FY 2011, according to a new Research and Market’s report, “Indian Pharma Sector Forecast 2014.” India will emerge as a leading global player in pharmaceutical industry by 2020, securing a place among the top five major global markets, according to Ikon Marketing Consultant (IMC). Also, Associated Chambers of Commerce and Industry (Assocham) has said it expects the Indian pharmaceutical industry to reach US$ 20 billion by 2015, making it one of the world's top 10 pharmaceuticals markets. India has a strong local manufacturing base and domestic players are developing substantial international presence. Healthcare is also one of the largest service sector industries in India, in terms of revenue and employment. Rising health awareness and increasing government expenditure on healthcare sector is driving growth in the sector. Medical tourism and health insurance are also on a rise, with significant growth in healthcare sector and establishment of large number of hospitals, both public and private. The Indian healthcare industry, estimated at US$ 50 billion, is expected to reach over US$ 75 billion by 2012, and US$ 100 billion by 2015. Talent Challenges While specialised talent is critical for any knowledge industry, it is more so within the pharmaceuticals industry...
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...INDIAN PHARMACEUTICAL INDUSTRY – AN OVERVIEW 1. Overview The Indian Pharma industry is one of the fastest growing sectors with approximately 20,000 manufacturing units. The industry that is highly price sensitive ranks thirteenth in the global pharmaceutical market in value terms and fourth in volume terms. The country has tremendous export potential in the areas like custom synthesis, R&D, clinical trials, and Bioinformatics. The industry produces 60,000 finished medicines and roughly 400 bulk drugs, which are used in formulations with about 20% of the manufacturers in the bulk drugs segment. India has approximately 1% share of global pharma industry, which is worth US$406 billion. This implies that there is a huge market waiting to be unfolded. The figure below explains the evolution of Indian pharmaceutical industry: Figure 1: Progress Of Indian Pharmaceutical Industry Source: Pharmabiz.com (Article by Dr. Laxman Prasad) 2. Industry Structure and Size 2.1 Industry Structure The Indian Pharma industry is highly fragmented and can broadly be classified in to two categories: organized and unorganized sector. Figure 2: Revenues of Organised vs. Unorganised Sector Source: Secondary Research The organized sector contributes about 70% of the total revenues and consists of 260 units in both manufacturing as well as formulation segment. This sector can further be divided into Indian and multinational companies. The unorganized sector is...
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...1) Pharmaceutical Industry in India: India is the third largest pharmaceutical market in the world in terms of volume. The market is believed to grow at a compound annual growth rage (CAGR) of 14-17 percent in between 2012-16. There has also been a considerable growth in the levels of pharmaceutical exports from India. The industry started picking momentum in the early 1960s, with government actively encouraging the sector with the Patents Act. However, the liberalization of 1991 enabled the industry to become what it is today. Many of the Indian companies principally observe reverse engineering of the new processes for manufacturing drugs at low costs. Although some of the companies have taken baby steps towards innovating newer drugs, the industry as a whole tends to follow this business model. The lack of patent protection, on the other hand, makes India undesirable for multinational companies that have dominated the market. So the pharmaceutical market in India has a tremendous potential for indigenousness. In this context, comparing a global pharmaceutical company with its Indian counterpart becomes evident. GlaxoSmithKline and Ranbaxy: A Comparison GlaxoSmithKline is a British multinational pharmaceutical company also dealing in biologics, vaccines and consumer healthcare. Headquartered at London, it is the world’s sixth largest pharmaceutical company. The company was established in 2000 by the merger of Glaxo Wellcome and SmithKline Beckman Corporation. A giant...
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...ELI LILLY IN INDIA RETHINKING THE JOINT VENTURE STRATEGY Abhay Kishore – 01 Abhishek Kunal – 05 Anil Kumar Jadli – 11 J.Harish – 25 Khushal Malik – 28 Sharad Singh – 49 PHARMACEUTICAL INDUSTRY – Global Trend • • • • Mainly concentrated in the United States, Europe, and Japan Developing a drug from discovery to launch took 10 to 12 years. Cost of development of drug is between $500-$800 million. Drugs were strictly controlled by government agencies: o o o o Food and Drug Administration (FDA) – USA, CPMP – Europe 12% 8% North America Europe 38% 18% Asia Japan MHW – Japan DPCO & Indian Patent Act - India • • Size of industry : USD 960 billion in 2012. Few Firms control entire market (Oligopoly). 24% ROW • 4 Firms – Control 20% , • 20 Firms – 50-60%, • 50 Firms – 65-75% PHARMACEUTICAL INDUSTRY – Global Trend • Covered the chemical substance itself • Offered typically 20 years of protection • Usually a lag time of 1012 years by the time the patent was obtained and the launch date • Covered the method of processing or manufacturing the product • Very little protection because it was easy to slightly modify the process Global Issues in Pharma Sector • Prices in of the drugs varied in developed countries • US & Canada by factor 1.2 to 2.5. • Europe by factor 1.1 to 2.5. Parallel Trade: an outside company sells a patented product in a market not designated to sell the drug. o • Independent firm exploited parallel trade by using the differentials...
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...08-081 November 4, 2008 Biocon India Group Archana Kalegaonkar, Richard Locke, Jonathan Lehrich “Earn as you learn.” For 25 years this unofficial philosophy had served Biocon well. Starting out in the enzyme business in 1978, the Bangalore-based firm had gradually expanded into the pharmaceutical industry. Expertise in manufacturing enzymes led to mass production of generic drugs, which in turn gave Biocon the experience to establish Syngene, a subsidiary contract research organization (CRO) serving the global pharmaceutical market. At each stage Biocon had built on both its recently developed capabilities and the political, biological, intellectual, and financial benefits of the Indian environment to move into new areas of opportunity. By early 2003, Biocon had parlayed earning and learning into a firm that boasted 800 employees and annual revenues of US$75 million. Yet the time had come to consider whether this growth model was reaching its limits. In the eyes of Biocon India Group’s Managing Director, Kiran Mazumdar-Shaw, Biocon’s newest subsidiary, Clinigene, seemed an ideal way to capitalize on the company’s technical strengths by offering services in clinical trials. There was concern, however, that Clinigene could also be an enormous distraction, consuming precious resources in an area in which Biocon had little direct experience. Moreover, if Clinigene did prove profitable, its very success could be a Pyrrhic victory: the subsidiary could rapidly...
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...UNIFORM CODE OF PHARMACEUTICAL MARKETING PRACTICES The Indian Pharmaceutical Industry is one of the most rapidly growing science based industries in terms of remarkable capabilities in both the manufacture and technology. India being among one of the five pharmaceutical emerging markets has an average annual growth of 8-9 percent with an approximate worth of $ 4.5 billion. With more new drug launches, new drug applications, phase II clinical trials taking place this year the growth can be expected to be 13-14 percent in the future. Considering the rise in the pharmaceutical sector and to bring about uniformity in the marketing of these drugs, a Code has been introduced by the Department of Pharmaceuticals (DoP), Government of India. This code named as Uniform Code of Pharmaceutical Marketing Practices (UCPMP) was introduced on December 12, 2014 and became effective from January 01, 2015. UCPMP initially set to be a voluntary code for the Pharmaceutical Industries was then decided to be made as statutory Code when DoP was urged by the Organization of Pharmaceutical Producers of India (OPPI). UCPMP is expected to facilitate good marketing practices, increased levels of transparency and accountability across healthcare industry and remove ambiguity on all aspects of marketing by the pharmaceutical industries. The code covers various parameters like the general points to be followed by the industry, claims and comparisons related to other products, textual and audiovisual...
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...The Indian pharmaceutical market is highly competitive and remains dominated by low priced, domestically-produced generics. In value terms, India accounts for less than 4% of the world market and per capita expenditure on pharmaceuticals is relatively low. By 2010 end, the domestic Pharma market in India is expected to be US$ 13.76 billion and this is likely to increase at a compound annual growth rate of 9.5-10 per cent till the year 2015. The success and failure of any project in this industry is largely dominated by R&D spending. R&D spending of the large firms is almost as high as 10 percent of the total earnings. The aim of our study is to find out what effect R&D spending has on the market capitalisation as well as on the share prices of the firms. The regression technique along with the Booz-Allan-Hamilton approach has been used in finding out this relation. The Indian Pharmaceutical Market- A review India has a huge population in excess of one billion people and a growing middle class with access to high quality healthcare. The Indian pharmaceutical market is highly competitive and remains dominated by low priced, domestically-produced generics. In value terms, India accounts for less than 4% of the world market and per capita expenditure on pharmaceuticals is relatively low. The pharmaceutical sector is currently experiencing double digit growth and this is expected to continue, driven by the vaccines market. Continued growth is also expected in the diagnostic...
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...The Pharmaceutical industry in India is the world's third-largest in terms of volume and stands 14th in terms of value. The Indian pharmaceutical industry has become the third largest producer in the world and is poised to grow into an industry of $ 20 billion in 2015 from the current turnover of $ 12 billion The government started to encourage the growth of drug manufacturing by Indian companies in the early 1960s, and with the Patents Act in 1970.[5] However, economic liberalization in 90s by the former Prime Minister P.V. Narasimha Rao and the thenFinance Minister, Dr. Manmohan Singh enabled the industry to become what it is today. The lack of patent protection made the Indian market undesirable to the multinational companies that had dominated the market, and while they streamed out. Indian companies carved a niche in both the Indian and world markets with their expertise in reverse-engineering new processes for manufacturing drugs at low costs. Although some of the larger companies have taken baby steps towards drug innovation, the industry as a whole has been following this business model until the present. The number of purely Indian pharma companies is fairly low. Indian pharma industry is mainly operated as well as controlled by dominant foreign companies having subsidiaries in India due to availability of cheap labour in India at lowest cost. In 2002, over 20,000 registered drug manufacturers in India sold $9 billion worth of formulations and bulk drugs. 85% of...
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...2012 STRATEGIC MANAGEMENT TERM PAPER ALOK KEJARIWAL 1PI11MBA13 INTRODUCTION Industry Biotechnology Founded 1978 Founder(s) Kiran Mazumdar-Shaw Headquarters Bangalore, India Biocon Limited (BSE: 532523) is a global biopharmaceutical company with products and research services ranging from pre-clinical to clinical development through to commercialization.[ref 1] Within biopharmaceuticals, the Company manufactures generic active pharmaceutical ingredients (APIs) like Statins and Immunosuppressants that are sold in the developed markets of the United States and Europe. It also manufactures biosimilar Insulins, which are sold in India as branded formulations and in both bulk and formulation forms. Located with R & D in Bangalore and API unit in Hyderabad, India, Biocon has two subsidiaries— Syngene, a custom research organization, and Clinigene, a clinical research organization. Biocon’s presence straddles four main therapeutic areas—Diabetology, Cardiology, Nephrology and Oncology. History Biocon is a fully integrated healthcare company that delivers innovative biopharmaceutical solutions. November 29, 1978 Biocon India is incorporated as a joint venture between Biocon Biochemicals Ltd. of Ireland and an Indian entrepreneur, Kiran Mazumdar-Shaw. 1979—Becomes the first Indian company to manufacture and export enzymes to USA and Europe. 1989—Unilever plc. acquires Biocon Biochemicals Ltd. in Ireland and merges it with...
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...Strategy Formulation & Implementation Ranbaxy Laboratories Ltd 1. Summary: Indian pharmaceutical industry is estimated at $8 billion in 2013 and had been growing at an average rate of 8–9 %. The industry was highly fragmented with more than 1000 players out of which 30% of market was controlled by top ten companies and the rest of 70% by small companies. The Global pharmaceutical industry was estimated at $ 600 billion in 2013. Indian pharmaceutical industry has become more innovative and enterprising with more investment in R&D especially since the WTO agreement was signed. Indian drug makers command 10 per cent share in the USD 30 billion US generic drug market and also has the highest (over 150) US Foods & Drug Administration (FDA) approved facilities. US accounts for one-fourth of the Indian drug exports. The share of Indian pharma companies in the total approvals for generic drugs called Abbreviated New Drug Application (ANDA) has risen steadily. From 32 per cent in 2009, it went up to 38.5 per cent in 2013. Increasing share of Indian companies in total ANDAs approved by the USFDA can be attributed to increase spending by them for research and development (R&D) activities. As per CMIE’s database, the industry’s R&D expenses to sales ratio jumped to around five per cent in 2012-13 from around three per cent in 2003-04. The export of drugs from India is expected to grow by 4.2 per cent to USD 15.2 billion in 2013-14. Around USD 16.3 billion of drugs are likely to be...
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...Repositioning Strategy for Indian Pharmaceutical Companies in Global Context Submitted to PROFESSOR MURALI PATIBANDLA (FACULTY,CORPORATE STRATEGY AND POLICY) Submitted By Ravela Madhurika- 1211132 Tanveer Mohd Ansari-1211151 Contents Introduction .................................................................................................................................................. 3 Global Pharma Industry ............................................................................................................................ 3 Major players of the world pharmaceutical industry ................................................................................... 5 Major Players ............................................................................................................................................ 6 Pfizer Inc................................................................................................................................................ 6 GlaxoSmithKline .................................................................................................................................... 6 Sanofi-Aventis ....................................................................................................................................... 6 Novartis ................................................................................................................................................. 6 Indian Pharma Industry.....................
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