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Avendus Pharmaworld Jan 11 PDF
Avendus Pharmaworld Jan 11 PDF
JANUARY 2011
Avendus Pharmaworld
Dear Reader,
The year 2011 took off to a slow start for the global pharma and healthcare dealscape,
with M&A deals worth only ~ USD 3.85 bn being announced. The largest M&A deal was
the USD 644 million acquisition of International Dialysis Centers (IDC), Euromedic
CONTENTS
International’s “non-core” dialysis services business, by Germany-based Fresenius Kabi.
The acquisition gives Fresenius Medical Care access to IDC’s 8,200 hemodialysis patients
Regulatory Animal Tox: The Next “Big Thing”? Pg 2 treated through a network of 70 clinics in nine countries in CEE. Fresenius Medical Care,
the world leader in renal therapy, currently serves more than 210,000 patients globally
Valuation snapshot Pg 8 and more than 17,000 patients in Eastern Europe. The second largest deal was the USD
Newsline Pg 9 540 million (USD 445 mn net of tax benefits) acquisition of Paddock Labs Inc. by Perrigo
Inc. Paddock is a privately held manufacturer and marketer of generic drugs and this
acquisition is in line with Perrigo’s long term strategy of strengthening its generics
portfolio. It also solidifies Perrigo’s leading position in the extended topical market.
The global healthcare private equity space saw a couple of buyouts. The largest was
Advent’s buyout of the Priory Group, Europe’s leading provider of acute mental
healthcare for ~ USD 1.5 bn. In another large transaction, CVC bought out the European
hospital chain Capio’s Spanish division for ~ USD 1.2 bn.
There were only 3 small M&A transactions closed in India. Fortis bought out Lifeline
Hospitals, a 100-bed hospital located in Alwar, Rajasthan. This marks Fortis’ third
acquisition in a tier II city within the last two months. In another deal, Transasia
Diagnostics acquired Diasis Diagnostic systems, a Turskish in-vitro diagnostics player for
an undisclosed amount. Then, Aurobindo Pharma sold 51% stake in its Chinese subsidiary
Aurobindo (Datong) BioPharma to Sinopharm. Post deal, Sinopharm will infuse funds into
the company to up its stake to 80.50%, thereby reducing Aurobindo’s stake to 19.5%.
In one of the largest private-equity buy-outs in the Indian Healthcare space till date,
Halcyon Finance and Capital Advisors, a turnaround specialist, completed its USD 44
million acquisition of hospital management services firm Integrated Health and
Healthcare Services India Pvt. Ltd. (IHHS India). IHHS India is owned by Mauritius-based
Integrated Health and Healthcare Services, and is in the business of developing/
redeveloping, managing and operating healthcare facilities in India. IHHS India currently
manages Delhi-based Dr BL Kapur Memorial Hospital and had equity capital worth Rs.
185 crore on its Balance Sheet as on Mar 31, 2010. IHHS India had reported revenues of
Disclaimer: The news articles contained herein are Rs. 1.63 lakh and total expenses of Rs. 34.4 lakh for the fiscal year ended Mar 31, 2010.
only a part of the original articles from the source Halcyon Capital founders Abhay Soi and Narayan Seshadri were appointed as Directors on
mentioned and therefore are not complete. In case the Board of IHHS India in Sep 2010.
you need complete articles, please contact us on the In this edition of the Avendus Knowledge Series, we decided to take a closer look at the
e-mail addresses provided above. safety issues plaguing the global pharma industry. The pace of withdrawals of
The news contained herein has been taken from commercialized blockbuster drugs on account of safety issues has been accelerating since
published sources as indicated under each item. 2004, to a level that has become worrisome. The latest debacles in this series are GSK’s
Avendus will not be held liable for any erroneous Avandia and Abbott’s Reductil/ Meridia. Such high-profile drug withdrawals have created
data as published in the source indicated. Avendus pressure on pharma regulators to “raise the bar” for safety assessment studies in
also does not take any responsibility for any errors animals. We expect this new-found “sense of purpose” to provide a sharp impetus to the
or omissions or results of any actions based upon market for outsourced GLP animal toxicology services. Indian toxicology services
this information. providers have significant gains to be realized from this global trend, given India’s cost
advantages and the provision to use Dogs as the second-species in lieu of Non-Human
Primates. We bring you a feature on the Toxicology-focused CROs in India and the global
opportunities in store for them.
1
Regulatory Animal Toxicology: The Next “Big Thing”?
Majority of the toxicological tests are carried out in the preclinical development phase. The standard battery of tests for pre-
IND safety evaluation, and for NDA submissions are more or less defined in the regulatory guidelines. Preclinical tests used in
IND filings include preliminary short term studies like in-vitro tests, acute toxicity tests (typically 14 days), sub acute toxicity
tests (14-28 days), immunotoxicity, basic genotoxicity and safety pharmacology. Long term studies like sub chronic/chronic
toxicity (30 days to 2 years), carcinogenicity (>12 months), additional genotoxicity and reproductive toxicity, that span the
entire lifecycle of the drug development are used primarily for NDA submissions. Typically, over 25 toxicity tests are required
to bring a new drug to the market. The various types of toxicology studies required over the development life-cycle of a drug
candidate are depicted in Exhibit 1 below.
Exhibit 1: Types of toxicology studies conducted over the development life-cycle of a drug candidate
In-vitro model culture and optimization, Ames study, in-vitro cellular toxicity assay 3-4 studies
General toxicity studies (Including acute, sub-chronic, and chronic studies) 5-7 studies
Specialized tox studies (drug interaction studies, focused studies indicated by prior 2-4 studies
results)
Other (nontypical, but specialized tox studies) 2 studies
The primary objective of safety assessment studies is to identify circumstances under which the candidate drugs produce
toxic effects. It also establishes the thin line between a toxic dose and a safe dose, target organs of toxicity, onset, duration
and reversibility. These studies help select safe doses for clinical trials and subsequently aid in determining therapeutic doses.
The design of the studies, dose selection, number and age of samples are critical issues and the role of toxicologist together
with pathologist, becomes very important in determining the progress of the new drug candidate.
Just like any other step in drug development, adherence to safety guidelines is imperative to carry out toxicology studies. In
1979, the USFDA and later on in 1981, the OECD countries formalized a set of GLP guidelines to bring about uniformity in
toxicity testing methods. Stringent rules and test guidelines were established to carry out preclinical toxicology evaluation of
new drugs. Today, GLP guidelines have been accepted across the world including India, and accreditations from multiple
monitoring agencies have become hygiene factors in the choice of a service provider.
2
Outsourced toxicology services: On a robust footing
The ability to accurately assess the toxicity (short-term and long-term) of a drug candidate is the latest in the series of R&D
productivity issues plaguing the global pharma industry. With a ten-fold rise in R&D-cost-per-marketed-drug and a significant
fall in the number of NMEs approved year-on-year, one would expect that paying greater attention to drug safety assessment
is the least that pharma companies can do to course-correct.
Exhibit 2a: Increasing R&D expenditure and declining Exhibit 2b: Ten-fold rise in R&D cost per marketed drug
number of NME approvals
140 60
37 38 36 802
80 800
29 29 30
60 27 25
24 600
20 22 19 19 20
40 400 318
20 10 138
200
0 0 0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Studies have demonstrated that ~ 40% to drug attrition from Exhibit 3: Reasons for drug attrition – discovery
discovery to launch is due to toxicity issues. Preclinical studies, to launch
which comprise < 15% of drug development costs, play a critical
role in screening out “less safe” candidates early on, in order to Others, 7%
Commerci
Commercial,
avoid wasting monies on unviable candidates in human trials. al,7%
7%
Efficacy,
In addition, there has been a sharp acceleration in the last 6 years, 46%
Zelnorm Regulator IBS Novartis CVS ischemic events incl. MI and stroke 2007
3
Prexige Regulator Pain/inflammation Novartis Hepato-toxicity 2007-08
Avandia Regulator Diabetes GSK Heart attacks and death (withdrawn in EU) 2010
Source: Avendus Research
Exhibit 5a: Global toxicology market (USD bn) Exhibit 5b: Outsourced toxicology market (USD bn)
5.0
12.0 11.5
10.8
10.2 4.2
10.0 9.6 4.0 3.9
9.1 9.1 3.5
8.7
8.2
8.0 3.1
3.0 2.7
2.3 2.4
6.0
2.0 1.8
4.0
1.0
2.0
0.0 0.0
2006 2008 2010 2011 2012 2013 2014 2015 2006 2008 2010 2011 2012 2013 2014 2015
The global market for outsourced toxicology services is highly fragmented with only two major players, Covance and
Charles River Laboratories. There are a handful of mid-sized players, including the likes of MPI, Harlan, LSR and Ricerca,
followed by numerous small players. Pure in-vitro players include Ceetox, Caliper, Iconix, Celsis, etc. We also have another
category of players who are engaged in developing software models to predict toxicity effects of a compound (also known
as in-silico or predictive toxicology). This is a fast-growing field since innovators have started using in-silico methods to
supplement traditional toxicity studies.
4
Exhibit 6: Global service provider landscape by type of toxicology services provided
(a) Large in-vivo players (with limited presence in (b) Major in-vitro players (c) In-silico players
in-vitro)
The toxicology space has witnessed significant M&A activity in the last 24 months, driven mostly by the need for newer
services (e.g., Cyprotex - Appredica) and, in others, the need to enter low-cost geographies (e.g., PPD - Bioduro). There have
been 12 deals reported in the last 24 months, shown in Exhibit-7, spanning broad-based in-vivo tox assets and niche-
therapy-specific in-vitro companies. We believe that given the fragmented landscape and the gaps prevailing in the current
offerings of most players, consolidation in this space will continue at a brisk pace.
Exhibit 7: Mergers and acquisitions in the preclinical/ toxicology spaces in the last 24 months
Acquirer Country Target Country Date Deal Size Broad business of the Target
(USD mn)
Cyprotex UK Apredica USA Aug-10 4.2 Preclinical ADME and toxicology services
Apredica USA Cellumen assets USA Aug-10 NA IP for offering high content tox services
PPD USA Bioduro China Nov-09 77 Disc. chem. & biology, DMPK, safety assessment
Mgmt buyout USA LSR Inc** USA Nov-09 115 Mostly in vivo toxicology services
Absorption
USA Perry Scientific USA Jul-09 NA Efficacy studies, tox studies and vivarium services
systems
CRL USA Cerebricon Finland Jul-09 8.1 In vitro neurological preclinical research
Piedmont Res.
CRL USA USA Apr-09 46 Preclinical efficacy testing with expertise in oncology
Centre
Midwest Bioassay techniques, bioanalysis, and genetic
Wuxi USA USA Feb-09 NA
Bioresearch LLC toxicology
*Earlier known as NexMed
**Parent of Huntingdon Lifesciences
India’s presence in the preclinical development domain has been historically limited to medicinal/ discovery chemistry. As
of 2009, the total Indian export of preclinical services (discovery + development) was dominated by discovery chemistry (at
78% of the total), followed by discovery biology (at 15% of the total) and toxicology services trailing with a mere 8%
contribution to the total kitty. However, with the expanding global requirement for low-cost and world-class toxicology
5
services, preclinical toxicology services are projected to account for as much as 15% of total preclinical service exports from
India by 2015, with preclinical toxicology projected to grow ~ > 30% p.a. during this period.
1200
1094
116
800 737
378
88 2009-15 CAGR ~41%
596 270
600
482 65 193
393 48 136
400 320 95
36
246 27 68
48 561 2009-15 CAGR ~15%
171 20 512
34 457
200 119 396
21 13 289 339
12 8 245
193
98 137
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Indian companies providing pre-IND toxicology services can be divided into three broad segments. Firstly, there are over 10
CROs that provide non-GLP tox studies to aid lead optimization/candidate selection as part of the overall discovery process.
Secondly, we have 5-6 CROs that are capable of providing selected GLP tox services that enable an IND submission. Lastly, we
have CROs that provide end-to-end services required to deliver an IND package. The (GLP) Regulatory Animal toxicology
landscape in India is dominated by Advinus, which remains the “go-to” player for customers seeking a vendor who can deliver
end-to-end services from candidate-selection to IND filing.
Company Non-GLP toxicology studies Portions of IND enabling GLP End to end IND enabling GLP
aiding lead optimization toxicology studies toxicology studies
6
Conclusion
The increasing importance of drug safety assessment, coupled with the imperative for innovators to outsource development
activities to low cost locations presents a great opportunity for Indian preclinical service providers. Toxicology as a standalone
service has not evinced too much interest from the Indian players in the past. The scenario is changing with the sector poised
to become a USD 150 mn opportunity by 2015. Most Indian CROs have a strong presence in discovery chemistry and have the
client relationships in place to be able to expand into toxicology services, if they can build up the required capability and
infrastructure. This “share-of-wallet” mindset is driving CROs like Syngene, Aurigene and GVK to step up their activities in GLP
toxicology services over the last 2-3 years. We believe that Indian CROs will soon start looking at international markets to find
tox-focused assets in order to accelerate their time-to-market. Likewise, we expect inbound interest to step-up. Global CRO
majors are expected to take in this regard, driven by their business imperative to establish global delivery capability from low-
cost locations like India.
7
Valuation Snapshot
st
(As on 31 January, 2011)
Generics
Sun 45,629 45,192 50% 8.2 22.6 24.8
Cipla 26,676 26,619 5% 4.3 17.8 28.6
Glenmark 8,288 9,908 27% 3.3 11.8 17.3
Lupin 18,852 19,791 49% 3.5 16.7 21.6
Generics Mean 4.8 17.2 23.1
Generics Median 3.9 17.3 23.2
Hospitals
Apollo Hospitals 6,115 6,717 43% 3.0 18.3 37.3
Fortis 5,252 9,411 -9% 5.1 19.2 42.7
Kovai Medical 140 235 6% 1.4 7.0 13.0
Indraprastha Medical 326 351 -17% 0.8 5.4 11.4
Hospitals Mean 2.6 12.5 26.1
Hospitals Median 2.2 12.7 25.2
8
Newsline
Apax, KKR in talks to acquire Blackstone stake in Emcure
Economic Times
Three investor groups, including private equity firms Apax Partners and Kohlberg Kravis & Roberts (KKR), are in separate
discussions to buy Blackstone's stake in Indian drugmaker Emcure Pharmaceuticals for about USD 100 million. The Pune-
based company's plan for a public issue to get listed on the stock markets has been delayed and this may have prompted
Blackstone to go for a secondary transaction to exit the company.
Emcure was one of the first investments made by US private equity major Blackstone in India and this could well be one of its
first exits from an Indian portfolio company. It had invested USD 50 million in Emcure in an undisclosed stake in 2006. One of
the persons aware of the negotiations said Blackstone holds 10-15% in Emcure and wants to sell the entire holding.
Namita Thapar, CFO at Emcure, said the company is not aware of any specific discussions between PE players for any
transaction. Although Thapar did not say whether the company's public issue has been delayed and whether it was expected
soon, she said, "The company is evaluating various options to meet its growth as well as capital objectives."
Blackstone and Apax Partners did not respond to separate e-mails, while a KKR executive declined to comment.
Healthcare is one of the five sectors in which Apax Partners invests globally, besides technology & telecom, retail & consumer,
media, financial & business Services. Although it has not invested in any pharmaceutical company in India it has exposure to
drugmakers internationally and last September Apax sold its stake in sixth largest generic drugmaker Qualitest to Nasdaq-
listed Endo Pharma. In India, Apax has healthcare investment in the country's largest hospital operator Apollo Hospitals.
KKR has invested in technology, cement, consumer retail, power generation and telecom infrastructure firms in India.
Earlier media reports suggested that promoter and CEO Satish Mehta, who started Emcure in 1981, has the option to buy
back the securities held by Blackstone but the company CFO said no such discussions between the promoter and Blackstone is
on.
Emcure makes active pharmaceutical ingredients and generic medicines, besides providing contract research services to
global drugmakers. It has revenues of Rs 1,600 crore, and has profits in line with the pharma industry, the company said. Most
Indian pharma companies command a profit margin of 15-20% which means Emcure could have net profit of Rs 240-320
crore.
If valuations in the drug industry as a multiple of earnings is a benchmark, Blackstone may get about twice its investment, said
one of the persons mentioned above on condition of anonymity.
Ahmedabad-based privately held Intas Pharmaceuticals, which has similar revenues of Rs 1,600 crore, has proposed to raise
Rs 750-800 crore by selling 15% to the public, valuing the company at about Rs 5,000 crore. But Intas revenue grew 39% last
fiscal- much faster than the industry rate.
If Blackstone indeed sells its stake in Emcure, it would be among the larger private equity exits in the pharmaceutical space.
ChrysCapital is set to exit at least half of its 11.5% stake in Intas Pharmaceuticals' proposed IPO.
Healthcare sector has attracted significant investor interest over the last few years in India, one of the fastest growing
markets for drug sales with lack of adequate healthcare services. According to audit tax and advisory firm Grant Thornton,
there were a total of 23 private equity deals in India in the healthcare sector last year worth USD 320 million. New Silk Route's
USD 55 million investment in Chandigarh-based Nectar Life Sciences was the biggest transaction.
9
Zydus, Bayer Healthcare enter 50:50 JV
Business Standard
Ahmedabad-based Zydus Cadila and Germany’s Bayer Healthcare have signed an agreement to set up a 50:50 joint venture
(JV) company, Bayer Zydus Pharma, to market pharmaceutical products in India. Both companies will be equally represented
in the board. The new entity will operate in key segments, including women’s healthcare, metabolic disorders, diagnostic
imaging, cardiovascular disease, anti-diabetic treatments and oncology, the company said in a statement.
The JV will start operations with Bayer Healthcare’s pharmaceutical division contributing to its existing sales and marketing
business in India to the new company. Zydus will contribute women’s healthcare products, diagnostic imaging business and
other products. In addition to Bayer Healthcare’s existing pharmaceutical products portfolio in India the joint venture would
also focus on the sales and marketing of future patented pharmaceutical products, said Zydus in a release to the Bombay
Stock Exchange. Both Bayer Healthcare and Zydus will supply the joint venture with products sourced from its manufacturing
operations at existing locations.
Commenting on the development, Zydus Cadila managing director Pankaj Patel said, “We have always believed in partnering
growth, have keenly explored new opportunities and looked at synergies in the market place.”
Through this transaction Bayer Healthcare will enhance its marketing capabilities in India as part of its emerging market
growth strategy, while Zydus can strengthen its network with global healthcare players. “With this step, Bayer Healthcare
aims to significantly accelerate its capabilities to better serve the fast growing Indian market,” said Bayer Healthcare AG CEO,
Jorg Reinhardt.
Zydus Cadila has eight manufacturing facilities across India and is also present in the regulated markets of US, Europe and
Latin America.
Zydus had posted a total income of Rs 1,170 crore in the quarter ended December 31, up 18 per cent from Rs 994 crore in the
corresponding period last financial year. Bayer Healthcare is part of the Bayer AG Group with annual sales of over EUR 15.9
billion in 2009.
10
Sun, which has made 13 purchases in the past 14 years including the USD 454 million acquisition of a majority stake in Israel’s
Taro Pharmaceuticals completed in September, needs to buy a bigger US company to attain critical scale, Shanghvi said in a
January 21 interview in Mumbai. Sun, which owns about 77% of Detroit-based Caraco Pharmaceutical Laboratories, isn’t in
takeover talks yet, he said.
“We are still a very small player in the US,” Shanghvi said. “We will have to look at a slightly bigger acquisition rather than to
look at very small acquisitions that we have done in the past.” A buyout may help expand Sun’s capacity to sell generic
medicines and enable the Mumbai-based company to gain control of manufacturing sites and sales networks, according to
Shanghvi.
Sun and Taro supplied less than 3% of the generic medicines prescribed in the US in November, compared with Teva
Pharmaceutical Industries’ 20% share and Mylan Pharmaceuticals’ 13% share.
Shanghvi didn’t say how much Sun could spend on a US buy. Any target would need to have annual sales of more than USD
300 million for Sun to compete effectively with the top five generic-drug makers in the US market.
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Data exclusivity still key hurdle to India-EU FTA
Business Standard
Despite all official assurances, the path towards a free trade agreement (FTA) between India and the European Union (EU) this
year remains ambiguous, as both sides are unwilling to relax their stand on the biggest stumbling block — the issue of “data
exclusivity”.
While the commerce ministry, the government arm responsible for scripting policy framework for intellectual property rules
in the country, says there is no let-down in this matter, its EU counterpart insist that data exclusivity is integral to the trade
deal.
The rigid stand taken up by the negotiating sides and simultaneous assurances of a timely agreement are sending conflicting
signals to various stakeholders, including the domestic pharmaceuticals industry and public health groups that oppose the
inclusion of any clauses that go beyond India’s World Trade Organization (WTO) commitments under the FTA.
Data exclusivity provides protection to the technical data generated by innovator companies to prove the merit of usefulness
of their products. In the case of pharmaceuticals, it means the data generated by drug companies through expensive global
clinical trials to prove the efficacy and safety of their new medicine. By gaining exclusive rights over this data, innovator
companies can prevent their competitors from obtaining marketing license for low-cost versions during the tenure of this
exclusivity.
Indian drug firms that make generic versions of innovator medicines get their approvals after proving that their product is bio-
equivalent to the original drug. In other words, they do not repeat the same clinical trials conducted by the innovator
company to generate data needed to prove its safety under current laws.
“The most serious impact is likely to be on drugs that are not under patent. In such cases, data exclusivity will create a
“patent-like” barrier that will prevent generic entry of new formulations during the entire period of exclusivity. For instance,
traditional medicine ‘colchinine’, which cannot be patented as it has been used as a therapeutic agent in the treatment of
gout for thousands of years, was awarded data exclusivity in the United States. Once the US drug regulator accepted the one-
week trial of the drug, the company was able to enforce data exclusivity to block affordable generics. It enforced its exclusive
rights, raised the price from USD 0.09 per pill to USD 4.85, and sued to remove other competitors off the market,” Indian Drug
Manufacturers’ Association Secretary General Daara B Patel said.
Commerce ministry officials say they are aware of the seriousness of the issue. “There is no question of data exclusivity. We
are under no pressure from anyone (to include this provision under FTA). EU and their negotiators are well aware of India’s
sensitivities and we have made our position very clear to them,” a senior commerce department official involved in the
negotiations told Business Standard.
However, earlier in the week, Daniele Smadja, head of the delegation of EU to India, said the India-EU FTA had to include data
exclusivity. “This is a very important issue and it has to feature prominently in the trade deal,” she said.
Global pharmaceutical giants say data exclusivity is essential for their future investments and research on developing country
needs.
“Data exclusivity is very good as it will encourage innovation. It will also make companies do clinical trials before they launch
their products thereby ensuring patient safety,” said Ranga Iyer, consultant to Pharmaceutical Research and Manufacturers of
America.
12
Jupiter plans to ship raw material to the Swiss company, which will process and supply organic and chiral API—the basic raw
materials used in drugs— to both generic drugmakers and innovator companies in the US, Europe, and Japan.
Jupiter Biosciences’ board had approved a proposal last month to raise USD 100 million for funding business projects,
including acquisitions in India and overseas. It plans to raise the money through a preferential issue of shares.
SynphaBase provides contract research and development services specialising in organic and medicinal chemistry, besides
manufacturing intermediates and APIs for other drugmakers. The small-sized Indian pharma company specialises in synthesis
of peptides, a type of protein. It also makes specialty and fine chemicals, drug intermediates, bulk drugs and nutraceuticals.
13
According to the company’s 2009-10 annual report, Vinton Healthcare had Rs 184.3 crore worth assets and liabilities worth Rs
109 crore. The unit also made a loss of Rs 5.4 crore during 2009-10. The debt-ridden company’s lenders had allowed a debt
restructuring scheme in 2009.
14
Elder Pharma set to supply to Japan
Business Line
Elder Pharmaceuticals Ltd has its eyes set on supplying to the Japanese market. The Mumbai-based drug-maker's API (active
pharmaceutical ingredients) plant at Patalganga, Maharashtra, has received accreditation from Japan's Ministry of Health, a
note from the company said, thereby opening up the fast-growing Japanese market for its products.
The company is in talks with Japanese generic companies for supply contracts, the note added. “Elder is positioning itself to
be an API and advanced intermediate supplier to the Japanese market. This accreditation for the API plant is a step towards
strengthening Elder's position as a supplier of APIs and intermediates in the Japanese market,” said Elder Pharma's Director
Mr Alok Saxena.
The company has also developed two products, going off-patent in the Japanese market in 2014 in the central nervous system
and gastro-intestinal segments.
Elder has already filed an international patent application for one of the advanced intermediates, targeting the Japanese
market.
The Japanese pharmaceutical market, valued at USD 69.4 billion in 2009, is the world's second largest pharmaceutical market.
In an effort to rationalise its healthcare costs, Japan is increasingly looking at pro-generic drugs policies, including increasing
its healthcare-spend in this segment.
15
Lupin will supply the product for the next five years and also provide Farmanguinhos with the desired support for the set up
of its local manufacturing in future, a company statement said here.
With this agreement between Lupin and Farmanguinhos in place, Farmanguinhos has entered into a commitment to produce
and supply the 4 in 1 combination drug to the Department of Health (Brazil), which will result in substantial savings for the
government, the release said.
The 4 in 1 combination reduces the pill burden on the patient drastically, particular as the treatment lasts for at least six
months. As per WHO, the treatment abandonment rate has fallen from 8 per cent to only 5 per cent due to this reduced pill
burden provided by the combination drug. WHO estimates indicate that globally there are 9.2 million new cases each year
resulting in 1.7 million deaths.
In Brazil alone, it is estimated that approximately 57 million people have already been infected by this disease with 83,000
new cases annually.
16
These would focus on heart diseases, trauma and cancer, he said, adding the hospitals at Bhatinda and Mohali would be
under a public-private partnership mode with the Punjab government.
Max Healthcare, which presently runs six hospitals and two centres, is also planning to enter into medical education in near
future. "We are also planning to foray into medical education space but that would be three years from now," Ahmed said.
One of the prominent hospital chains in the country, Max Healthcare at present has a capacity of over 930 beds.
17
Lanka, 751 in Maldives and 60 in Bhutan. "The per person government spending on health in India was about 22% of that in
Sri Lanka, 16% of that in China and less than 10% of that in Thailand," the paper says.
Public spending on health, 0.94% of the gross domestic product (GDP), is among the lowest in the world.
Between 1986 and 2004, the average real expenditure per hospital admission increased three times in government and
private hospitals. The sharp increase in the prices of drugs has been the main reason for the rising costs of medical care,
which more than tripled between 1993-94 and 2006-07, says the paper.
Dr Kumar added, "Between 1993-94 and 2004-05, compared with a 67% increase in real per person income and an 82%
increase in per person tax collections, real per person public health expenditure rose from Rs 84 to Rs 125 -- an increase of
48%."
18
About Avendus
Avendus Capital (Avendus) is a leading financial services firm with a strong transaction record and established relationships
with companies and investors. Avendus has been consistently ranked among the top-five corporate finance advisors in India.
The firm is also a leading syndicator of private equity deals in India. Avendus uses its unique domain and industry-focused
approach in businesses such as M&A advisory, private placements for growing companies, structured finance advisory, equity
capital markets, institutional broking, alternative asset management and wealth management. Avendus has emerged as the
advisor of choice for cross-border M&A deals, having completed more than 30 Indo-US and Indo-Europe deals in the past
three years. Headquartered in Mumbai, Avendus has offices in New Delhi, Bangalore, New York and London.
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