PlasmaGen Biosciences hopes for turnover of Rs 640 crore in five years

Awareness of human plasma products and their utility is still nascent

PlasmaGen BioSciences, a start-up in the niche area of plasma products, incorporated in September 2010, is working on creating a manufacturing facility near Bengaluru. It aims to touch a turnover of $100-120 million (Rs 640-800 crore) in the next five years.

Plasma products

Blood plasma is a liquid component of blood that normally holds the blood cells (red, white and platelets). Human plasma contains proteins like serum albumins, immuno-globulins, fibrinogen and clotting factors, which have  various therapeutic uses. These are used for patients with Haemophilia, fibrinogen deficiency, and burn and trauma patients, among others. It is considered safer than conventional blood transfusion, with the latter’s risk of pathogen transmission.

The plasma industry is expected to grow at a compound annual rate of 10.5 per cent in 2015-2020. Asia, with 60 per cent of the world's population, has only 20 per cent of global plasma fractionation capacity. This imbalance is likely to be a key growth driver for such products in Asian markets. Vinod Nahar, director of Plasmagen Biosciences, says America and the European Union (EU) house 15 per cent of the world’s population but consume 70 per cent of the plasma products.
India has 2,700 blood banks and a tenth of the world’s blood collection (around 10 million units). However, only 40 per cent of the blood is subjected to componentisation, in the absence of source plasma collection. So, a very limited amount of plasma is available for fractionation. A country with almost 18 per cent of the world’s population shows only 1.3 per cent of global plasma collection. In this challenge lies the opportunity.

Early years

Plasmagen began operations around January 2011. In the same year, it launched its first product in India, ‘RonsenGlob’ — Intravenous Immunoglobulin. Followed by ‘PlasmaHep’ — Hepatitis-B Immunoglobulin.
In the following years, it launched various products. Earlier this year, it raised close to $25 million in a funding round led by Eight Roads Ventures India (proprietary investment arm of Fidelity International), with participation from US-based F-Prime Capital Partners and the founders.

Prem Pavoor, partner at Eight Roads Ventures, who is now on the board of directors at Plasmagen, the only institutional investor, says there is a huge gap between demand and supply, with clinicians awakening to the therapeutic uses. Also, the supply chain is complex and the regulatory requirements are stringent. “The barriers to entry are, thus, high and only a few are present in this space,” he said. These products are well accepted in the US and EU markets for treatment; India suffers from low awareness and affordability issues.

Business model

Nahar says China has 17 plasma product manufacturers; India has three to four. "None other has plasma products as their core business area. We have decided not to dilute our focus and concentrate only on plasma products,” he said. The India market is $150-200 million (Rs 960-1300 crore) at present, compared to the global $23-25 billion.

PlasmaGen’s main clients are hospitals and it has a field force across the country. It says it works with around 200 hospitals and 5,000 doctors. “We plan to expand to around 20,000 doctors and 500 hospitals in the next one or two years,” he said.
PlasmaGen is to use the funds raised for building its plant near Bengaluru, making products for the Indian and neighbouring markets. Ranjeet S Ajmani, chief executive, said initial capacity would be around 200,000 litres a year and expandable by at least two to three times over the years if demand grew. At present, it is getting its products made on contract.

“In FY18, we are looking at turnover of Rs 100-120 crore. The plan is to touch $100-120 million (Rs 640-800 crore) in the next five to six years,”  Nahar said. According to Pavoor, it has already operationally broken even and exports to  South Asian and some Latin American countries. It is looking at Africa as well. Export is through in-licensing agreements, whereby PlasmaGen markets products made by other companies in these regions. Nahar said wherever possible, these products are sold under PlasmaGen’s brand name.

Challenges

The biggest challenge or concern in this industry is a continuous focus on quality assurance. And, pricing has a key role. Historically, the growth rate in the Indian market was low as the products were considered expensive. As most of the medical spending in India is out of one’s pocket, it is a hindrance for rapid penetration of specialised products.

Collection is another challenge and so is the complex supply chain management. PlasmaGen’s products are priced at Rs 2,000- 7,500 a unit. These are 100 ml units. Normal whole blood, usually sold in standard unit sizes of 350-450 ml, costs Rs 3,000-4,000. However, since blood contains all the proteins, someone who needs only albumin, for example (used for burn and trauma patients) would get only 16g of this per litre of blood. Raising awareness at the level of physicians is, thus, key to the growing adoption of plasma products.

Sumant S Karnik

Expert Speak: ‘Sourcing good quality plasma is biggest challenge’
 
While there is a huge demand-supply gap for plasma products, and much of it is imported, for a local manufacturer, the biggest challenge to source the good quality plasma and further would be supply chain management together with cold chain logistics management.
 
The market for such products exists in India, and is growing steadily but the prices are prohibitive for the common patient. For example, an immunoglobulin therapy might run into lakhs (each unit costs around Rs 10,000). Once players like PlasmaGen get their own manufacturing facility, margins would improve surely for them.  While they aim for 200,000 litres per annum capacity, nobody in India so far has above 100,000 litres per annum capacity, and sourcing of plasma has to be stepped up.
 
As such margins in this business have started to come under pressure, with the Drug Price Control Order regulating prices of some products like albumin. However, making FVIII and FIX (blood coagulation factors) is a challenge to meet requirements of haemophilia patients in the country. 

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The expert is a former director, NPFC, & head, quality assurance, Haffkine Biopharmaceutical Corp