The Blockbusters

Major brands: Roscillini, Sporidex, Cifran, Revital and Fortwin

RANBAXY LABORATORIES

Part of the Delhi-based Dr Parvinder Singh group, Ranbaxy Laboratories is the largest manufacturer and exporter in the country. It plans to retain its leadership position by getting a research pipeline and creating a presence in every therapeutic segment. This strategy and its desire to emerge as a multinational player have fuelled its alliance spree in recent years.

The most prominent of Ranbaxys alliances is with US-based Eli Lilly and Co, resulting in two 50:50 joint ventures, one in India to look at research and development and the other in USA to market products. The initial investments in the ventures is around $90 million.

Besides, Ranbaxy has joint ventures in Canada, China, Malaysia, Nigeria and Thailand, which will enable it to enter these markets and set up manufacturing bases here. It has also expanded in USA, UK and the Netherlands. It recently acquired Rima Pharmaceuticals in Ireland and Ohm Laboratories in USA. While Rima Pharmaceuticals manufactures generic drugs and markets them in UK and other European countries, Ohm Laboratories produces over-the-counter products. The acquisitions are expected to boost Ranbaxys network.

There have been several acquisitions at home as well, including the recent merger with the Rs 73-crore Croslands Research Laboratories, which has core competencies in the dermatological and orthopaedic segments, where Ranbaxy has no presence. The merger will be effective from April 1, 1997 although Croslands will remain a separate profit centre. Another Ranbaxy acquisition was Solus Pharmaceutical in 1995, which is now a wholly-owned subsidiary.

It now plans to restructure its operations and hive-off its fine chemicals and diagnostic divisions, which account for five per cent of turnover, into separate subsidiaries.

Ranbaxy mainly produces antibiotics and anti-bacterial drugs. Nearly 40 per cent of its products are in these categories, where there is intense competition. So it has a market share of just 3.8 per cent.

Exports at Rs 412 crore in 1995-96 accounted for 47 per cent of its turnover. It exports to over 50 countries, mainly in Asia-Pacific, Europe and USA. Ranbaxy spends about six per cent of its turnover on R&D, among the highest in the industry. Research is targeted at four therapeutic areas: cardiovascular, central nervous system, anti-infectives and anti-cancer. It is also focusing on developing a number of generic drugs whose patents expire in Europe and USA in the next five to ten years.

GLAXO INDIA

TURNOVER: Rs 608.29 crore

Major brands: Zinetac, Betnesol, Betnovate, Cobadex, Phexin.

The global acquisition of Burroughs-Wellcome Plc by the $8.48 billion Glaxo Plc in 1995, which resulted in the worlds largest pharmaceutical company, Glaxo-Wellcome Plc, has yet to crystallise in India. But the ball has been set rolling Glaxo Wellcome UK has increased its stake in both the Indian subsidiaries to 51 per cent each and though the formal merger of the two is still a year away, when it does take place, it will make Glaxo a formidable player in India.

Glaxo commands the highest retail market share of 5.4 per cent, which is likely to go up to 7.2 per cent once the merger is completed.

Says H R Khusrokhan, managing director, Glaxo India, One of the advantages of Glaxo and Burroughs coming together is their complementary range of products and the larger market share this will bring. This will also widen the area of operations of Glaxo Wellcome India into more therapeutic segments.

Glaxo has a strong presence in the anti-ulcer and vitamin segments while Burroughs-Wellcome is strong in anti-bacterials and anti-virals. Glaxos bestsellers are Zinetac (20.7 per cent market share), Betnesol (34 per cent), Betnovate-N (45.5 per cent) and Celin (45 per cent) while Burroughss include Septran and Neosporin.

Formulations account for 84 per cent of Glaxos turnover, bulk drugs 12 per cent and food products four per cent. But almost 65 per cent of its products are still under the Drug Price Control Order affecting margins. Its brand, Zinetac, for instance, was affected after the government slashed prices of the Rantidine-based formulation in September 1994.

The merger will also enable the company to synergise production, marketing and distribution facilities thereby reducing costs. Glaxo is already closing down its 22 depots and replacing them with clearing and forwarding agents. This will cut down administrative and distribution expenses. It has reduced employee strength from 6,453 in 1994 to 4,900 in 1995.

In the next few years, according to Khusrokhan, the company will strengthen its leadership in respiratory, gastroenterology, anti-virals, antibiotics, central nervous system (CNS) and HIV therapeutic areas by developing new medicines. Both the Indian subsidiaries plan to upgrade facilities and invest at least Rs 20 crore in the coming years.

Glaxo Wellcome UK is among the foremost research and development-based pharmaceutical companies in the world. However, Glaxo India spends only Rs 48.63 crore or 0.6 per cent of its turnover on R&D. And for the moment, Glaxo Wellcome UK is holding back investments in India because of patent concerns.

LUPIN LABORATORIES LTD

TURNOVER: Rs 528.23 crore

Major brands: R-Cinex, R-Cin, AKT-4, Combutol and Ceff.

Exports account for five per cent of Glaxos sales. So far, they have been limited to a few countries in Europe and Africa but the company may emerge as a supplier to Glaxo Wellcomes units in various countries. India may even become a low-cost manufacturing base for Glaxo-Wellcome worldwide.

By 2001, Lupin Laboratories Ltd plans to become a Rs 5000 crore company. The largest manufacturer of bulk drugs and one of the most integrated pharma companies in the country with interests ranging from synthetic chemistry, fermentation and bio-technology to drug delivery systems and natural products, Lupin sees itself growing into an Indian multinational. It plans to achieve this by indigenously manufacturing products with a high technology barrier.

Lupins thrust is on generics, cephalosporins, anti-TB and natural products. It is the oldest player in the generics market. In the domestic market, it is a leader in cephalosporins, which contribute to 38 per cent of its turnover. Lupins strengths, according to the company, lie in its technology and research and development (R&D) efforts in adaptive and synthetic chemistry. Against an industry average of 1.7 per cent, it spends over three per cent of its turnover on R&D and has applied for eight international process patents.

Apart from being the largest bulk manufacturer in the country, Lupin is also Asias largest producer of erythromycin salts and a world leader in anti-TB drugs with a 70 per cent global market share in Ethambutol. It is also among the largest manufacturers of Rifampicin.

The second largest exporter of bulk drugs, formulations and herbal products, Lupin has adopted a two-pronged strategy to become a global player. It has combined its thrust on exports with the establishment of manufacturing bases overseas. Currently, exports account for nearly 29 per cent of turnover but this will go up to 50 per cent by 2001.

Six years ago, Lupin set up a joint-venture plant in Thailand with a 65 per cent stake. This is now the worlds largest manufacturer of erythromycin salts. Lupin has finalised joint-ventures in South Africa, Russia and China.

It also has three strategic alliances for cephalosporins which will ensure it a dominant position in the worlds three largest markets, USA, Europe and Japan, which account for Rs 30,000 crore or nearly 85 per cent of the total market. These are with Merck Generics of UK, Fujisawa of USA and McGaw Inc, a subsidiary of the IVAX Corp. The last is for marketing injectible cephalosporins to hospitals in USA. Besides, product patents of cephalosporins, which comprise 47 per cent of the global antibiotic market, will expire from 1998 leaving Lupin in a position to catch the first wave of the generics market.

CIPLA LTD

TURNOVER: Rs 361.12 crore

Major brands: Novamox, Novaclox, Bromolin, Ciplin, Ciplox, Norflox.

Over the next two years, Lupin will invest Rs 175 crore towards modernisation. Of this, Rs 20 crore is set aside for R&D, Rs 30 crore for global operations and the remaining Rs 125 crore will be invested to introduce five new products like Ceftazedime, Mefloquine, a malarial drug, cardiac drug Lisinopril, Enalapril maleate, an anti-hypertensive, and the antibiotic Clarithromycin.

Cipla owes its growth largely to its pioneering efforts in manufacturing various drugs. In fact, in-house research and development has been the backbone of the companys operations with chairman and managing director, Dr Y K Hamied, heading this division. In 95-96, Cipla spent around Rs.11 crore or 3.5 per cent of its turnover on R&D.

It pioneered the manufacture of bulk drugs in the anti-ulcerants, anti-cancer, bronchodilators, cardiovascular and anti-anxiolytic categories. It even achieved a global breakthrough with the bulk drug, oral iron chelator Deferipone, and its formulation, Kelfer. Cipla has filed two applications for patents in India and abroad. It is banking on its process development strengths to give it the winning edge.

Says Amar Lulla, director, Cipla, In several cases, although the product is out of patent, worldwide, there are very few manufacturers due to complex manufacturing processes. Considering Ciplas strength in the process development area, it will have a clear edge.

Cipla has a product range comprising antibiotics, anti-bacterials, anti-asthmatics, anthelmintics, anti-cancer and cardiovascular drugs. It has a retail market share of 4.2 per cent, with a strong presence in the anti-bacterials and anti-asthmatics segments. Formulations account for around 92 per cent and bulk drugs eight per cent of the turnover.

Exports are another thrust area contributing to 13 per cent of turnover. Cipla exports to countries in Asia, Africa, Europe, America and to the CIS countries. Now, it is getting additional products registered both in these and in China, South-East Asia and Australia.

Says Lulla, Ciplas exports consist of high-value, high-technology products. Some like the anti-cancers and anti-ulcerants have multistage synthesis involving complex reactions, and these act as entry barriers for competitors. Even its manufacturing facilities are approved by the US Food & Drug Authority, Medicine Control Agency of UK , South Africas Medicines Control Council and other international agencies.

Cipla is increasing its global presence by entering into a number of marketing alliances and joint ventures. For instance, it has a marketing and technical tie-up with Novopharm, a generics firm in Canada, which will market products like its medicinal aerosol range.

It has set up a joint venture with Medpro in South Africa called Cipla Medpro Ltd to market inhalers, nasal dosage forms and cardiac drugs. It also has a marketing and technical tie-up with Heliopharma in Egypt.

In the domestic markets, it plans to introduce high-technology products and grow at a rate of 20 to 25 per cent per annum. And in its search for new drugs and processes, it has tied up with research institutes like the Council of Scientific and Industrial Research (CSIR), National Chemical Laboratories in Pune, the Central Drug Research Institute in Lucknow and Regional Research Laboratories.

HOECHST MARION ROUSSEL

TURNOVER: Rs 343.64 crore

Major brands: Combiflam, Soframycin, Daonil, Baralgan, Avil, Novalgin and Hostacycline .

Hoechst Marion Roussel (HMR) is another case of a worldwide merger impacting the Indian subsidiary. The company is a result of the takeover of the $ 7.1 billion US-based Marion Merrel Dow by Hoechst AG in 1995. Hoechst India and Roussel India have been renamed Hoechst Marion Roussel. Although, the legal formalities of the merger are still not complete, the process of integrating the management of the two companies has begun.

As part of its restructuring exercise, HMR spun off the agro-chemical business into a separate company in 1995. Now, it is expanding capacity at its Ankleshwar plant to three million doses at a cost of Rs 32.1 crore. This will be commissioned in 1997.

The worldwide merger has broadened the Indian subsidiarys product spectrum. HMR will introduce and co-market Marion Merrell Dow (MMD) products in the cardiovascular, immunology, tuberculosis, allergies and central nervous system (CNS) segments. So HMR will launch products like Sabril, an anti-epileptic drug, and the antibiotic Teicoplanin. It will also co-market products like the Rifampicin range, an original discovery of MMD. HMR manufactures formulations in the analgesic, antibiotic, vaccine and anti-diabetic segments. It has a market share of 3.5 per cent. Its brands like Combiflam (market share of eight per cent), Soframycin ( 41 per cent), Baralgan (43 per cent), Avil (15 per cent), Novalgin 10 per cent) and Rabipur (39 per cent) are leaders in their respective categories.

Hoechsts animal health division, which accounts for nine per cent of turnover, ranks third in the industry with a market share of 11 per cent. Its leading products are Panacur, Butox, Tolzan and Candur.

Currently, exports contribute to 21 per cent of the turnover. HMR mainly exports to the CIS countries as it cant export to Asian countries like China and Korea where Hoechst AG already has subsidiaries. However, the parent company has identified India as a key centre and plans to source its entire requirement of bulk drugs from here. Moreover, HMR is the only MNC to have a research centre in India. Even as others like Ciba-Geigy shut their research facilities, HMR refused to do so despite pressure from its parent company. Its Hoechst Research Centre at Mulund, Mumbai, celebrated 25 years this month. HMR spent Rs 12.92 crore or 3.79 per of the turnover on research and development (R&D) in 1995-96. It is restructuring the research centre to focus on basic scientific research. So HMR is in a strong position to take on the challenges of the new product patents regime.

TORRENT PHARMACEUTICALS LTD

TURNOVER: Rs 298.73 crore

Major brands: Combiflam, Soframycin, Daonil, Baralgan, Avil, Novalgin and Hostacycline .

Torrent Pharmaceuticals Ltd, flagship of the Torrent group, is banking on exports growth, alliances with multinational research-driven pharmaceutical companies and a thrust on research and development to meet the 2005 products patent deadline. The company expects its turnover, excluding exports, to touch Rs 700 crore by 2000. The groups exports are handled by Torrent Exports Ltd, which had a turnover of Rs 50.60 crore for the six month period ending March 1996. This is expected to touch Rs 200 crore in three years.

It is striking alliances to access research bases and enter new markets. For instance, it entered a joint-venture with Sanofi Pharma to set up the Rs five crore Sanofi Torrent (India) Pvt Ltd in April 1996. Sanofi Pharma is the healthcare major of the $40 billion Elf Group.

The 50:50 joint venture will focus on cardiovascular diseases, central nervous system disorders, gynaecology, dermatology, general medicine and paediatrics. It will develop, manufacture and market formulations in India, Nepal and Bhutan. Investments worth Rs 3.5 crore have already been made and it will launch its products on April 1, 1997. Besides, it has an alliance with Novo Nordisk of Denmark to manufacture and market insulin for the Indian and Russian markets.

It has also chalked out plans to set up manufacturing facilities abroad. First on the cards is a greenfield project in Poland, where Torrent will invest $ 2 million over the next two years. The formulations plant, which will commence operations by 1997-98 end, will make generic drugs from the cephalosporin range.

On the exports front, Torrent has expanded its focus to include Eastern Europe and countries like Vietnam, China, Kenya, Ghana and Peru. Four years ago, the companys main market was the erstwhile Soviet Union. Currently, the CIS countries account for 70 per cent of its exports. But with the new focus, this will come down to 50 per cent by next year. The company, which has registered 668 products in 33 countries, is registering another 290 products in 28 countries.

At home, Torrent has a presence in the cardiovascular, psychotropic and gastro-intestinal segments. It is a market leader in the gastro-intestinal, cardiovascular and neuro-psychiatric segments, with an overall retail market share of 2.2 per cent. It has identified the anti-infectives segment for growth. It plans to manufacture parenterals.

So far, the growth has come because Torrent is an integrated player with a fair amount of backward integration. Take its subsidiary, Torrent Biotech, which is the largest penicillin-G manufacturer with its Rs 210-crore, 1,500 mega million unit (MMU) plant. The fermentation technology for the plant was indigenously developed. Now the plant has commenced a new Rs 35-crore downstream project to manufacture penicillin-based intermediates and bulk drugs like ciprofloxacin and norfloxacin.

In-house R&D has been responsible for the technology Torrent uses to produce international quality penicillin-G. Other R&D successes include the development and launch of a combination drug comprising an ACE inhibitor and a diuretic. It also developed and launched a cardiovascular drug, Nikoran, last month.

Torrent has a Rs 30-crore R&D facility at Bhat near Gandhinagar, which is currently conducting research on New Chemical Entities. It would research areas like molecular pharmacology, long-term toxicity and cellular and molecular biology. In 1995-96, it spent 4.56 per cent of its turnover on R&D and this expenditure will go up to 10 per cent of the turnover per annum over the next three years.

KOPRAN

TURNOVER: Rs 286.75

Major brands: Combiflam, Soframycin, Daonil, Baralgan, Avil, Novalgin and Hostacycline .

After Smithkline Beecham, Kopran is the second largest manufacturer of semi-synthetic based penicillin drugs in the world with a plant capacity of 1200 tpa. It is also one of the largest manufacturers of antibiotics ranging from semi-synthetic penicillins to cephalosporins to macrolides and quinolones. It is especially strong in amoxycillin, which accounts for almost 55 per cent of its turnover.

Now, Kopran is gunning for the top spot by setting up manufacturing bases abroad. Two months ago, it signed a joint venture with Pharmacare Ltd, South Africas largest healthcare company, to set up a $10 million project to manufacture penicillin-based products there. Besides, in conjuction with the Aga Khan Economic Development Fund, Kopran recently acquired an Ugandan firm, Kampala Pharmaceutical Industries. This formulations plant will give it a manufacturing base in south and eastern Africa.

It has a joint venture with DDSA, one of the oldest generic houses in UK, to manufacture and market formulations of antibiotic bulk drugs. This commenced operations a few months ago and is expected to generate minimum sales of one million pounds in the first year.

Kopran already has a presence in the global market through its exports to 52 countries. Its two marketing subsidiaries --- Kopran (Hong Kong) and Kopran International (UK). Exports turnover grew by 71 per cent in 1995-96, from Rs 85.89 crore to Rs 146.32 crore this year.

So far, Kopran has been known primarily as a bulk drugs player with formulations accounting for only 20 per cent of the turnover. But it plans to change that. Says Surendra Somani, managing director, By the turn of the century, the company intends to increase the turnover from formulations from Rs 56 crore to Rs 200 crore.

It also plans to broadbase its bulk drugs range. So it will enter the lucrative market for sterile products and its formulations in the near future. It will launch products like sterile cephalosporins and intermediates like PHPA and CPA.

Apart from bulk drugs, Kopran also makes intermediates like penicillin-G, Acylase-enzyme, 6 APA and CIMC chloride. This integrated nature has helped it keep a tight check on quality.

Kopran has also been marketing medical electronics equipment like gas analysers, gamma cameras and cardiac cath lab systems. Here too, it has several tie-ups with companies like Ciba Corning Diagnostics, Adac Laboratories and Fischer Imaging Corporation from USA.

The company has two separate research and development teams for bulk drugs and formulations. But it has been spending only around 2.27 per cent on R&D. The team has developed processes for manufacturing drugs like omeprazole, ciprofloxacin, roxithromycin and CIMC chloride. Current research efforts are directed at manufacturing third-generation cephalosporins.

ALEMBIC CHEMICAL WORKS CO LTD

TURNOVER: Rs 282.41 crore

Major brands: Althrocin, Bistrepen, Roxid, Glycodin, Norbid and Ciprowin.

Alembic straddles both the bulk drugs and formulations markets. The company manufactures basic drugs like penicillin, erythromycin and roxithromycin and antibiotic formulations like penicillin injections and paediatric drops. It also makes formulations for analgesics and consumable products like Glycodin and Protinules.

It owes its growth to both domestic sales and exports. The latter have surged in recent years exports grew by 36 per cent in 1995 to account for Rs 36.15 crore. Alembic is a market leader in roxithromycin with its brand Roxid, while its Althrocin also ranks among the countrys top pharma products.

The company also has a strong veterinary division, which is sixth in retail sales in this category. Its sales grew from Rs 6.96 crore in 1990 to Rs 13.66 crore in 1995. Its products include liver extracts, anti-histaminics, intermammary infusions and feed supplements for livestock and poultry.

Alembic has earmarked Rs 220 crore to increase pharmaceutical capacities. It is increasing Penicillin G capacity from the current 300 mega million units (MMU) to 700 MMU by the first quarter of 1997 and then to 1,000 MMU by the third quarter of 1997.

It is also upgrading the bulk-and-formulations drugs plant at Vadodara and the high-value-formulations plant at Panelav to meet the standards of the Food & Drug Authority, USA.

It invested around one per cent of its turnover in research and development in 1995 but with growing opportunities in the anti-ulcer segment, this will increase. The division tasted success with the development of a viable process for the new anti-ulcer drug, Lansoprarole.

Alembic is also looking for growth on the exports front. So far, it has been exporting bulk drugs and formulations to the European market, Canada, Australia, Malaysia and Latin America.

The veterinary division has also set its eyes on exports. In 1995, it entered into a marketing agreement with Ciba-Giegy Bangladesh to sell its products in that country. It is talking to a Korean firm to market the companys genetic engineering products in India.

KNOLL PHARMACEUTICALS LTD

TURNOVER: Rs 277.29 crore

Major brands: Brufen, Froben, Ribufen Gel, Digene, Nuclav, Strepsils, Coldarin.

Knoll Pharmaceuticals Ltd, earlier known as Boots Pharmaceuticals and renamed after the worldwide acquisition of Boots Plc by the $ 800 million BASF AG, has restructured its Indian operations. Knoll AG is an associate pharmaceuticals company of chemicals major BASF and contributes around eight to 10 per cent of BASFs turnover. BASF holds a 40 per cent stake in the Indian subsidiary.

Knoll has moved out from bulk drugs manufacturing and is focusing on formulation drugs. It sold its bulk drugs manufacturing facility at Ahmednagar for Rs 7 crore in 1996 and its bulk-and-formulations facility at Mumbai for Rs 66 crore in March 1995. It also completed a Rs 35-crore staff redundancy exercise in 1995.

It is too early to quantify the benefits of the restructuring, but the relocation of its high-cost Mumbai unit to Goa and the expected Rs 6 crore savings on labour costs will boost the balance sheet. The company has registered an annual growth rate of 20 per cent over the last five years.

It is also tightening its focus on prescription products. It has been manufacturing formulations in prescription and OTC products in the rheumatology, gastroenterology, diabetic and central nervous system segments and has a retail market share of 2.5 per cent. Now, it has transferred the OTC range, which accounted for 15 per cent of the turnover and included bestsellers like Strepsil, Coldarin and Burnol, to its 100-per cent subsidiary, Beem Healthcare Ltd.

The BASF connection will help it to access a wider product basket and latest technology. It will exploit opportunities in the cardiovascular, chemotherapeutics, oncology and anti-obesity segments. Also, prior to the takeover, Boots had licensed products like Rytmonorm, Clivarine and Isoptin to BASFs worldwide competitor, German Remediess Indian unit. These products will come back to Knoll.

The company spent 0.4 per cent of its turnover in 1995 on research and development. While it will keep away from basic R&D, it will invest in product and process development. So far, it has concentrated on the domestic market. Exports in 1995 were a mere Rs 0.13 crore mainly to Afghanistan, Tanzania and Sri Lanka. But it has now identified Russia and the CIS countries for future exports growth.

SOL PHARMACEUTICALS

TURNOVER: Rs 257.51 crore

Major brands: Brufen, Froben, Ribufen Gel, Digene, Nuclav, Strepsils, Coldarin.

SOL Pharmaceuticals has expanded its manufacturing base through a series of mergers and acquisitions. It acquired SOL Drugs and Dexo Pharma in 1988. In 1990, it acquired basic drug manufacturing unit, AGIPI Chemicals, and Standard Organics in 1993. The mergers have seen the turnover jump from Rs 8.10 crore in 1986 to Rs 210.22 crore in 1994-95.

For the future, SOL plans to rationalise its product mix, upgrade technology and increase its presence in the international market. The company manufactures a wide range of products in the anti-bacterial, antibiotics, anti-asthamatics cardiovascular and analgesic therapeutic groups. SOL is one of the largest manufacturers of cloxacillin sodium in the country with its R&D team developing CIMC chloride, an intermediate used to manufacture cloxacillin sodium.

Formulations account for 65 per cent and bulk drugs 35 per cent of sales. SOL entered the herbal and ayurvedic segment in 1995-96 with formulations like Herbocalm, Ayushman and Gludip.

SOL is also setting up joint ventures in Russia, Mexico and Vietnam for manufacturing formulations. In its Mexican joint venture with Grukpo Industries Fermet, where it has a 40 per cent stake, SOL will provide technology for new formulations. In its Vietnam joint venture with Medi Plantex, SOL plans to produce a range of cardiovascular, psychotropic and anti-cancer drugs.

Exports are another thrust area. In fact, SOL was the first south-based pharmaceutical company to receive export-house status. Exports in 1995-96 were Rs.106.14 crore or 41.26 per cent of the turnover. The company has US FDA approval for exporting sulphamethoxazole, which has a high price realisation. It also has Abbreviated New Drug & Application approval for manufacturing trimethoprim.

SOLs R&D division has made advancements. Last year, it won the National R&D Award for innovative developments. SOL invested Rs 76 lakh or 0.30 per cent of turnover on R&D. The division is focusing on developing a new anti-bacterial group. It is expected to file patents for antibacterial drugs shortly. It will undertake joint research programmes with the Department of Science and Technology.