EXECUTIVE SUMMARY

This report has been made keeping in mind the Indian Pharmaceutical
industry, its growth rate as compared to the global Pharmaceutical
Industry. India's US$ 3.1 billion pharmaceutical industry is growing at
the rate of 14 percent per year. It is one of the largest and most
advanced among the developing countries.
The Indian Pharmaceutical sector is highly fragmented with more than
20,000 registered units. It has expanded drastically in the last two
decades. The leading 250 pharmaceutical companies control 70% of
the market with market leader holding nearly 7% of the market share.
It is an extremely fragmented market with severe price competition
and government price control.
Then, we look at the market and growth scenario of Pharmaceutical
companies in India which brings us to research on MATRIX PHARMA
LABS.
PHARMACEUTICAL INDUSTRY PROFILE

The pharmaceutical industry develops, produces, and markets

drugs licensed for use as medications. Pharmaceutical companies can
deal in generic and/or brand medications. They are subject to a variety
of laws and regulations regarding the patenting, testing and marketing
of drugs. The main aim of a particular Pharmaceutical Industry is to
develop research and distribute drugs in order to provide health care
for the people in the society. The Pharmaceutical Industry like other
industries is subjected to follow certain rules and regulations. The
Pharmaceutical Industry needs to follow rules about patent,
marketing as well as testing of drugs that are scheduled to come to
the market as medicines. Since the inauguration of the Pharmaceutical
Industry in the 19th century, it has covered a long way and now it has
become one of the most influential and successful industry in the world
with both controversy and praise on its part. Pharmaceutical
Industry is very much dependent upon the developments and
discoveries that are made to search new types of drugs and also to
search for new kind of medicines. One can also see differences within
the industry regarding the same drug or report and different
companies within the Pharmaceutical Industry look to follow different
paths for the same thing.

Drug Discovery and Drug Innovation are two very aspects in the
Pharmaceutical Industry:

Drug Discovery: Drug Discovery is a process through which potential

drugs are designed or discovered. It has been observed in the past
that most of the drugs were invented by means of isolating the active
component from remedies which are traditional in nature or through
another kind of discovery known as serendipitous discovery.

Drug Development: This process is taken forward after the discovery

is done and a thing is identified as a potential drug. The development
takes place immediately after that as the component is turned into a
medicine. So this is also considered as a very important process and
has great importance in the Pharmaceutical Industry.

For the first time ever, in 2006, global spending on prescription drugs
topped $643 billion, even as growth slowed somewhat in Europe and
North America. The United States accounts for almost half of the
global pharmaceutical market, with $289 billion in annual sales
followed by the EU and Japan. Emerging markets such as China,
 Russia, South Korea and Mexico outpaced that market, growing a huge
81 percent.

US profit growth was maintained even whilst other top industries saw
slowed or no growth. Despite this, the pharmaceutical industry is —
and has been for years — the most profitable of all businesses in the
U.S. In the annual Fortune 500 survey, the pharmaceutical industry
topped the list of the most profitable industries, with a return of 17%
on revenue.

Healthcare R&D Net incom

Revenue Total Revenues
Company Country 2008 2008
Rank 2008 (USD millions)
(USD millions) (USD milli
1 Pfizer[3] (with Wyeth[4]) U.S. 71,130 11,318 14,111
2 Johnson & Johnson U.S. 61,095 NA 10,576
United
3 GlaxoSmithKline 45,447 6,373 10,432
Kingdom
4 Bayer [5] Germany 44,664 3,770 6,448
5 Hoffmann–La Roche Switzerland 40,315 NA 8,135
6 Sanofi-Aventis France 39,997 NA 7,204
7 Novartis Switzerland 39,800 NA 11,946
8 AstraZeneca UK/Sweden 29,559 NA 5,959
9 Abbott Laboratories[6] U.S. 29,527 2,688 4,880
10 Merck & Co. U.S. 23,850 4,678 7,808
11 Bristol-Myers Squibb U.S. 19,977 NA 2,165
12 Eli Lilly and Company U.S. 18,634 NA9 2,953
13 Amgen U.S. 14,268 3,366 2,950
14 Boehringer Ingelheim Germany 13,284 1,977 2,163
15 Baxter International U.S. 10,378 614 1,397

The Indian Pharmaceutical Industry today is the front runner of

India’s science-based industries with wide ranging capabilities in the
complex field of drug manufacture and technology. A highly organized
sector, the Indian Pharmaceutical Industry is estimated to be worth $
4.5 billion, growing at about 8 to 9 percent annually. It ranks very
high in the third world, in terms of technology, quality and range of
medicines manufactured. From simple headache pills to sophisticated
antibiotics and complex cardiac compounds, almost every type of
medicine is now made indigenously.
Indian Pharmaceutical Industry plays a key role in promoting and
sustaining development in the vital field of medicines, boasts of quality
producers and many units approved by regulatory authorities in USA
and UK. International companies associated with this sector have
stimulated, assisted and spearheaded this dynamic development in the
past 53 years and helped to put India on the pharmaceutical map of
the world.
The Indian Pharmaceutical sector is highly fragmented with more than
20,000 registered units. It has expanded drastically in the last two
decades. The leading 250 pharmaceutical companies control 70% of
the market with market leader holding nearly 7% of the market share.
It is an extremely fragmented market with severe price competition
and government price control.

The pharmaceutical industry in India meets around 70% of the

country's demand for bulk drugs, drug intermediates, pharmaceutical
formulations, chemicals, tablets, capsules, orals and injectibles. There
are about 250 large units and about 8000 Small Scale Units, which
form the core of the pharmaceutical industry in India (including 5
Central Public Sector Units). These units produce the complete range
of pharmaceutical formulations, i.e., medicines ready for consumption
by patients and about 350 bulk drugs, i.e., chemicals having
therapeutic value and used for production of pharmaceutical
formulations.

Following the de-licensing of the pharmaceutical industry, industrial

licensing for most of the drugs and pharmaceutical products has been
done away with. Manufacturers are free to produce any drug duly
approved by the Drug Control Authority. Technologically strong and
totally self-reliant, the pharmaceutical industry in India has low costs
of production, low R&D costs, innovative scientific manpower, strength
of national laboratories and an increasing balance of trade. The
Pharmaceutical Industry, with its rich scientific talents and research
capabilities, supported by Intellectual Property Protection regime is
well set to take on the international market.

PHARMACEUTICAL INDUSTRIES IN INDIA

• Dishman Pharmaceuticals
• Elder Pharmaceuticals
• J B Pharmaceuticals
• Torrent Pharmaceuticals
• Sun Pharmaceuticals
• Ranbaxy India
• Cadila Pharmaceutical Limited
• Wockhardt
 • Strides Arcolab
• IPCA Laboratories
• Alembic
• Amrutanjan
• Virchow Laboratories
• Polydrug Laboratories
• Dr. Reddy?s Laboratories
• Aurobindo Pharma
• Jubilant Organosys
• Astrazeneca Pharma
• Divis Laboratories
• Merck Ltd.
• Astrazen Pharma
• Abbott India
• Aventis Pharma Limited
• Glenmark Pharmaceutical Ltd.
• Clarion Drugs
• Blue Cross Laboratories
• Intas Pharmaceuticals Limited
• Lincoln Pharmaceuticals Ltd
• Matrix Laboratories

ADVANTAGE INDIA

Competent workforce: India has a pool of personnel with high

managerial and technical competence as also skilled workforce. It has
an educated work force and English is commonly used. Professional
services are easily available.

Cost-effective chemical synthesis: Its track record of development,

particularly in the area of improved cost-beneficial chemical synthesis
for various drug molecules is excellent. It provides a wide variety of
bulk drugs and exports sophisticated bulk drugs.

Legal & Financial Framework: India has a 60 year old democracy

and hence has a solid legal framework and strong financial markets.
There is already an established international industry and business
community.

Information & Technology: It has a good network of world-class

educational institutions and established strengths in Information
Technology.

Globalization: The country is committed to a free market economy

and globalization. Above all, it has a 70 million middle class market,
which is continuously growing.

Consolidation: For the first time in many years, the international

pharmaceutical industry is finding great opportunities in India. The
process of consolidation, which has become a generalized phenomenon
in the world pharmaceutical industry, has started taking place in India.

CURRENT SCENARIO

THE GROWTH SCENARIO

India's US$ 4.1 billion pharmaceutical industry is growing at the rate

of 14 percent per year. It is one of the largest and most advanced
among the developing countries.

Over 20,000 registered pharmaceutical manufacturers exist in the

country. The domestic pharmaceuticals industry output is expected to
exceed Rs260 billion in the financial year 2002, which accounts for
merely 1.3% of the global pharmaceutical sector. Of this, bulk drugs
will account for Rs 54 bn (21%) and formulations, the remaining Rs
210 bn (79%).
 BREAK UP OF DRUGS IN

In financial year 2001, imports were Rs 20 bn while exports were Rs87

bn.

MARKET SHARE FORMULATIONS

79%
The leading 250 pharmaceutical companies control 70% of the
market with market leader holding nearly 7% of the
market share. It is an extremely fragmented market with
severe price competition and government price control.

• The global pharmaceutical market is forecast to grow to $929

billion in 2012, an equivalent compound annual growth rate
(CAGR) of 5.5% over the next five years.
 • In 2007 the leading therapy areas by sales were CNS with
16.5% share and cardiovascular with 15.4%.

• Four of the top 10 products in 2007 are forecast to increase

sales over the next five years.

• The US retail pharmaceutical market grew to $206 billion but

growth rates fell due to loss of patent protection on some
blockbusters

• France, Germany and the UK together accounted for almost 50%

of all European pharmaceutical sales in 2007.

• The top 100 blockbuster drugs generated sales of $252.5 billion,

accounting for 35.5% of the total pharmaceutical market.

• The leading blockbuster by increased sales revenues in 2007 was

the blood agent product Plavix (clopidogrel bisulfate), marketed
by Sanofi-Aventis and Bristol-Myers Squibb.

• There were a total of 61 companies generating pharmaceutical

sales in excess of $1 billion in 2007

COMPANY PROFILE

MATRIX PHARMA LABS

Matrix Laboratories Limited is a public limited company listed on the

major stock exchanges in India and is engaged in the manufacture of
Active Pharmaceutical Ingredients (APIs) and Solid Oral Dosage Forms.
The development and manufacture of quality intermediates, bulk
actives have been critical to our success in delivering innovative and
affordable products for both the domestic as well as international
markets.

With about 2000 employees, including over 200 R&D scientists, Matrix
conducts research & development, and manufacture products at the
company's cGMP facilities located near Hyderabad and Visakhapatnam,
India. The company's Solid Oral Dosage Forms facility is located near
Nashik, about 150 km from Mumbai.
The company's focus on Quality, Safety, Environment and
Occupational Health is pronounced and some of its plants are approved
by regulatory agencies such as US-FDA, EDQM -EU, TGA (Australia)
and some of the largest multinational pharmaceutical companies.

At Matrix our core values are Mutual Respect, Attitude, Teamwork,

Responsibility, Innovation and Excellence. Our commitment is to
create a profitable enterprise with due respect to stakeholders interest,
corporate governance and social responsibilities.

List of Active Pharmaceutical Ingredients

Anti Bacterials

Ciprofloxacin - CAS No : [ 85721-33-1 ]

Gatifloxacin - CAS No : [ 112811-59-3 ]

Norfloxacin - CAS No : [ 70458-96-7 ]

Levofloxacin Hemihydrate - CAS No : [ 100986-85-4]

Moxifloxacin HCL - CAS No : [ 151096-09-2]

Clarithromycin - CAS No : [ 81103-11-9]

Manufacturing Facilities

Matrix Laboratories has manufacturing facilities at four locations in and

around Hyderabad and Visakhapatnam, India, manufacturing a wide
range of Active Pharmaceutical Ingredients. The company's Solid
Oral Dosage Forms facility is located near Nashik, about 150 km
from Mumbai. All the manufacturing facilities in India have been
designed to meet the requirements of Drug Regulatory Agencies. All
our facilities are US-FDA approved. The facilities also have ISO 9000,
ISO 14000 Certifications.

Reaction Capabilities
 Alkylations
 Metal Hydride Reactions
 Friedal-Crafts Acylation
 Nitration
 Chlorosulphonation
 Halogenation
 N - Bu Li Reactions
 Azide Reactions
 Hoffmann Reaction
 Oxidations
 Grig Nard Reactions
 Cyanations
 Reductions
 Iron/Hcl
 Raney Nickel
 Palladium
 Vitride
 Sodium Borohydride
 Sodium Dithionate
 Zn/Naoh
 Diborane

API Facilities Hyderabad

- Pashamylaram

- Jeedimetla

- Kazipally

Visakhapatnam

- Vizianagaram

Quality Policy

We at Matrix Laboratories Limited are committed to meet and by far

exceed our customers requirements through well documented Quality
Management Systems.

To us, Quality means "a synthesis of world guidelines,

Pharmacopoeial requirements, industry standards, laws and
regulations governing the manufacture of Active Pharmaceutical
Ingredients and Intermediates".

We strive for continuous improvement in everything we do through

active involvement of our employees, customers and suppliers.

Quality Assurance

Matrix plants are designed to facilitate world-class manufacture of

quality products. Towards this objective, we have set up
manufacturing facilities and established quality management systems,
as per cGMP guidelines to meet the requirements of drug regulatory
agencies worldwide.

We assure quality of our products by regularly inspecting the facilities,

systems and procedures to meet the current GMP norms. The
employees are trained periodically on GMP requirements.
At Matrix, one of our core values is our commitment towards
Environment, Health & Safety measures. We provide proper in-house
education and training with an objective to in calculate in every
member of the organization, a sincere appreciation for Environmental,
Safety & Health concerns.

We provide a safe, accident free operation at our facilities and identify

potential hazards before the manufacturing process begins. All
manufacturing and R&D locations are subjected to a detailed safety
audit and risk assessment exercise. The company organizes Safety day
week and Clean and Green environment day at all its manufacturing
units.

We strive to prevent pollution of land, atmosphere and water and are

committed to reduce, recycle and re-use all resources for conservation
and waste reduction, wherever feasible. To monitor and continuously
improve our Environmental Management Systems, our employees are
trained regarding health hazards; whether it is in handling materials,
operating various processes, or waste generation and effluent
treatment. We provide personal protective clothing and devices to our
employees to protect people from product and process, and product
from people. All employees go through a pre-employment medical
examination and thereafter, periodical medical check-ups.
RECOMMENDATIONS

STEPS TO STRENGTHEN THE INDUSTRY

Indian companies need to attain the right product-mix for
sustained future growth. Core competencies will play an important
role in determining the future of many Indian pharmaceutical
companies in the post product-patent regime after 2005. Indian
companies, in an effort to consolidate their position, will have to
increasingly look at merger and acquisition options of either
companies or products. This would help them to offset loss of new
product options, improve their R&D efforts and improve distribution to
penetrate markets.

Research and development has always taken the back seat

amongst Indian pharmaceutical companies. In order to stay
competitive in the future, Indian companies will have to refocus and
invest heavily in R&D.

The Indian pharmaceutical industry also needs to take advantage of

the recent advances in biotechnology and information
technology.

CONCLUSION

The future of the industry will be determined by

• how well it markets its products to several regions and
distributes risks,
• its forward and backward integration capabilities,
• its R&D,
• its consolidation through mergers and acquisitions,
• co-marketing and licensing agreements.