PHARMA INDUSTRY
By- Jaideep
Jayanthan
Juliet
Karthikeyan
Introduction
• Indian pharmaceutical sector is estimated to account for 3.1 – 3.6
per cent* of the global pharmaceutical industry. It is expected to
grow to US$100 billion by 2025.
• India accounts for 20 per cent of global exports in generics.
• The country’s pharmaceutical industry is expected to expand at a
CAGR of 12.89 per cent over 2015–20. India is the second largest
contributor of global biotech and pharmaceutical workforce.
• By 2024-25, India’s biotech industry is estimated to increase to
US$ 100 billion from US$ 11 billion in FY 2015-16.
Indian Market Analysis
Cost Efficiency: Economic Drivers:
Low cost production- 33% lower than US. To improve drug affordability
Medical tourism- low cos treatment Increasing penetration of health
High quality- Low price insurance
Advantage INDIA
Policy Support:
Diversified Portfolio: Pharma Vision 2020- To make India the
Accounts to 10% of global pharma global leader
production Reduce approval time
Over 60000 generic brands 100 percent FDI is allowed
Reference:Pharmaceuticals Exports Promotion Council of India
Structure of Pharma sector in INDIA
Reference: IBEF
Important Segments
References :IBEF
Revenue in India
• Witnessed growth at a CAGR of 5.64
per cent, during FY11-16
• By 2020, India is likely to be among
the top three pharmaceutical
markets by incremental growth and
6th largest market globally in
absolute size.
• Medicine sales in India increased 8.1
per cent year-on-year in November
2017
Market Size & Market Share
Reference: IBEF
Pharma Giants and its R&D Spending
• Sun Pharma
• Biotech Companies.
• Aurobindo Pharma.
• Aventis Pharma.
• Biocon.
• Cadila Healthcare.
• Cipla.
• Dabur.
• Dishman Pharmaceutical
• Dr. Reddy’s Lab
• LUPIN
References: MapsofIndia.com, IBEF
India’s Growth in Expenditure
References: IBEF
Strategies Adopted for Growth
PORTER’S FIVE FORCE ANALYSIS
Bargaining power of Competitive Rivalry
Bargaining power of
Buyers - Growth opportunities for
Suppliers
- Generic drugs offer a pharma companies are Threat of New Entrants
- Difficult-to-manufacture expected to grow in next
cost-effective alternative - Strict government
Threat of Substitutes APIs such as steroids, few years, with many drugs
to drugs innovators and regulations restricts entry
Low, homeopathy & sex hormones and going off-patent in the US
significant savings to of new players.
ayurvedic medicines can peptides give bargaining and other countries, thus
customers. - Difficult to survive
act as substitute power to suppliers. increasing competition.
- Biosimilars offer - Indian pharma companies
because of high
- However, generic APIs
significant cost saving for will face competition from gestation period.
do not have much of that
insurance companies in big companies, backed by
power.
India huge financial muscle.
TRENDS IN THE SECTOR
TRENDS
Product
R&D (PPP), Expansion by Draft Patents Remarkable Involvement of
patents, Less Focus on
Export Indian players (Amendment) Global Global
time for BioTech
Revenue, JVs, abroad Rules, 2015 Positioning Companies
approval
Introduction
• Indian multinational pharmaceutical and biotechnology company
• It develops medicines to treat respiratory, cardiovascular
disease, arthritis, diabetes, weight control and depression; other medical
conditions.
• Founded by Khwaja Abdul Hamied as 'The Chemical, Industrial
& Pharmaceutical Laboratories'
• 34 manufacturing units in 8 locations across India and has presence in 100
countries.
Stock price of Cipla
Financial summary
Financials
• Market capitalization : 45033.22cr
• P/E : 37.49
• Industry P/E : 28.57
• Book value : 161.02
• EPS : 12.12
• Div yield : .36%
• Price to books ratio : 3.53
• ROCE : 9.3%
Profitability
Graph on operating profit
EBITDA,PBT,PAT
Total assets
Cash flow statement
Competitors
Strengths
1. Cipla has developed good positive image by providing support to cancer patients by issuing drugs at
low cost
2. Imminent commencement of the Fixed-Dose combination for treatment of uncomplicated P.
falciparum malaria to tackle the 200+ million cases of malaria globally
3. Initiation of ‘No Touch Breast Scan’ a step forward in the screening technology in India.
4. A foremost player in anti-infective and anti-asthmatic formulations.
5. Has a strong employee force of over 16,000
Weakness
1. Strong competition from international and domestic giants means limited market share.
2. Cipla had faced problems during negative campaign by AHF
Opportunities
1. It can venture into Alzheimer’s disease medication
2. They can use Viramune generic to achieve higher growth.
3. Increased investment in the budding markets, to push expansion in the global
economy
Threats
1. Constant price rises in the Indian country is taking its toll and compounding the
problem.
2. The Indian Rupee depreciated as compared to the US Dollar.
3. Fluctuations in currency exchange rates have a noteworthy impact on the
Company’s operations and financial results.
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