Indian pharmaceutical companies with a presence in the sterile injectables space are expanding capacities to cater to growing demand in this segment. Bangalore-based Strides Arcolab, Elder Pharmaceuticals are some of the companies that have laid out plans for expansion of existing units and building new units to meet growing demand.
Strides has just completed a Rs 350-crore expansion programme for sterile injectables, while Elder Pharmaceuticals is setting up a new injectables unit near Dehradun. The global market for injectables is estimated to touch $245 billion by 2012 and is expected to grow at a rate of 11%. The global injectable drug market in 2008 was $150 billion, of which generic injectables comprised $30 billion.
Strides Arcolab CEO Ravi Seth said: "Sterile injectable as a segment continues to grow in importance for the company and is a significant driver of the top line and profits. This business is growing fast and will continue to drive improvement in profit margins for the company, given that the margins available for these products are much higher than other segments."
In order to deal with growth, Strides has invested in growing capacities and dedicated sites for cytotoxic products, penicillin, penems, cephalosporins, controlled substances and generic injectable across all dosage forms-liquid vials and ampoules, pre-filled syringes, lyophilised and dry powder parenterals.
"We recently completed a Rs 350-crore expansion in steriles resulting in a 500% increase in capacity. We now have the largest steriles capacity in India and perhaps the largest lyophilisation capacity globally. We expect to obtain a market share of at least 10% for our products," Mr Seth said. The company expects a significant share of growth to come from North America and Europe.
Elder Pharmaceuticals is increasing its capacities in the injectables segment. The company is setting up a new plant at Langa Road near Dehradun at a cost of nearly Rs 120 crore. Alok Saxena, a director at Elder said, "We have completed almost 65% of the construction. We will focus on vials in the first phase, which should start in three months. Within a year, we hope to move into manufacturing of cephalosporins. This market is growing and we see a lot of opportunity in India."
The company's multivitamin injectable product, Eldervit, currently enjoys a market domination of 70%. The generic injectables segment that most Indian companies focus on is getting a boost from government-sponsored healthcare programmes and private insurers.
Biotech drugs, which comprise two-third of the market, represent the biggest segment and are the fastest to grow at 15%. Injectables using small molecules represent 25% of the market and are estimated to be at $35 billion, growing at 11%. Most generic injectables use small molecules which comprise 65% of sales and are focused on oncology and cardiovasculars.
Monoclonal antibodies and bioengineered vaccine injectables are expected to grow faster than the market, analysts say. While in markets like Germany and the UK, generic penetration has been as high as 70%, especially in oncology, there are other markets such as Spain and Italy, where generic penetration is still low. In case of the US, generic penetration in terms of volume is 63%, and in terms of value, is 42% and continues to grow.
In India as well, the injectable market has shown significant growth with large potential for more. According to research consultancy firm ORG IMS, the moving annual total in the domestic market for injectables was Rs 5,631.10 crore for the year ended December 2008.
Another Mumbai-based leading pharma company said that for some of its leading injectable products, capacities have been increased substantially. The company, which has one of the largest USFDA approved injectable sites in Asia, expects both the US and Indian markets to do well.
Injectable antibiotics market in particular has witnessed strong growth, analysts said. Jumana Barnagarwala, head of healthcare consulting at market analysis firm Datamonitor said, "The injectable antibiotics market in India has shown robust growth in the last 4-5 years mainly because of the introduction of high-end antibiotic brands at higher prices and the subsequent proliferation of generic versions of many of the leading high-end antibiotic brands."
The domestic injectable antibiotics market is worth $425 million and has been growing at a CAGR of 21 per cent in the last three years. "The domestic market is likely to slow down a bit and the expected CAGR in the next 5 years is likely to be 16 per cent taking the estimated market value of injectable antibiotics to $900 million," Ms Barnagarwala said.
While healthcare service providers and insurance companies abroad continue to drive pricing down, injectable products, because of their higher regulatory standards and the complexity of development or manufacturing process, tend to command higher margins and price stability as compared to oral products.