Indian pharmaceutical industry has traditionally been a generics playground, notwithstanding the drug makers' claims about research and development being the bedrock of their business.
But, things have changed a fair bit in the last few years. Among the bigger players, Dr Reddy's Laboratories (DRL), Sun Pharmaceuticals, Wockhardt, Lupin, Piramal Life Sciences and Glenmark Pharmaceuticals have been investing heavily on discovery and development of new chemical entities (NCEs) or new biological entities (NBEs).
Piramal has 14 NCEs in the pipeline, while Glenmark has 13, Lupin eight, Sun and DRL four each and Wockhardt two.
NCEs or NBEs are novel molecules, which when developed successfully, become patented drugs with sales running into millions of dollars annually, and even billions (blockbuster drugs).Going by industry sources, a company can gross annual sales of about $100 million in the first year of launch, specifically from sales in regulated markets such as the US, the UK and Europe.
For example, breast cancer drug abraxane, which was launched in 2005, registered sales of $30 million from the US and Canada markets in the first quarter of 2006. The sales grew rapidly and in the quarter ended December 2008, abraxane made about $90 million from the US and Canada markets alone.
For all that, however, pursuing new molecules is a high-risk game, say industry sources. The investment involved in discovery and development of an NCE is huge, at around $350-400 million for an Indian company.
And at the end of all that effort, the molecule may not make it to the market or have to be pulled back shortly after launch, say when some adverse side effect comes to light. "Only one in seven or eight molecules will reach the market," says an official of a Mumbai-based company, which has a pipeline of new molecules. "So drug discovery and development is a major gamble."
But that hasn't deterred the minnows. Following in the footsteps of biggies such as the over-Rs 5000 crore DRL or the over-Rs 2,650 crore Wockhardt are players like the Rs 120 crore Suven Life Sciences and the Rs 70 crore Advinus Therapeutics.