Agribusiness, Biotechnology

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Agribusiness, Biotechnology PharmaceuticalOpp
ortunities for Australian Pharmaceutical
Companies

• Azpa International
• 17 Concorde Drive, Keilor Park,
• Victoria 3042

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Areas of Interest

• Business Opportunities in the Sub Continent
• Sales
• Manufacturing
• RD
• Problems / Issues that may affect Increased
  Bilateral Trade between the countries

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Business Opportunities - Introduction

• From the focus being on the Domestic Economy with
  an emphasis on service, the scenario has now
  changed to manufacturing with 2/3rds of all new
  investments in Manufacturing and a higher
  emphasis to sell more in the International
  Markets
• Indians believe in Quality work. India will have
  116 million skilled workers in the age bracket of
  20 24 by 2013. KEY LOW COST SMART
  INTELLIGENCE BASE
• The Engineering and English skills available make
  it competitive across a wide range of industries
  which also makes it a fantastic bargain with the
  lower wages
• Very strong local companies which offer
  tremendous opportunities for Foreign Investment
  into their businesses. Availability of state of
  the art technology
• Tremendous GDP growth, more Indian cities on the
  Global map, shows that urbanization has been on
  the fast track.
• In reality, the majority of India is still rural
  and with this comes an underdeveloped health
  system that needs urgent attention. This Urgent
  Attention is The Opportunity!

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India and its Demographics

• Supports 17 of the world population
• 31.8 of are younger than 15 years
• 70 of the population live in villages and the
  rest in Urban Areas / cities
• 80.5 Hindus, 13.4Muslim and 2.5 Christian
• 20 of the population is below the poverty line
• Approx. 250 million middle class Indians (4000
  - 21000 per Year)
• Average growth rate of 20 per year in the number
  of rich in India.. By 2010, in a population of
  221 million 3.8 million will be rich, 6.1
  million strivers, 22 million seekers, 75 million
  aspirers and 114 million deprived households.
• Overall Strategy (Long Term) Cater to the
  population which can afford your product
  (lifestyle) while establishing a base with the
  middle and lower middle class for Brand
  recognition (infectious diseases)
• Short Term Strategy Cater to Life style
  requirements
• Regions Metropolitan Cities like Mumbai,
  Bangalore, Chennai, Delhi (It is preferable to
  enter the Indian market through these regions and
  then follow up with tier 2 cities. )

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Business Opportunity - Sales

• You first need a Will to Succeed and the
  Willingness to face Challenges
• Choose your partner and choose them well with no
  stone left unturned. Clear understanding of the
  Indian market, regulations and with good ethics.
  Find out more about your potential partner from
  3rd party sources
• Reasonably easy market to enter. Quicker to
  register a new product
• Choose your product lines well. Choose with
  confidence and with the intent to have the most
  efficacious product on offer.
• Compromise on the price, make it affordable, the
  volume will bring you your profits.
• OTC market in India estimated to grow by 18-20
• New Health Insurance have increased affordability
  to the middle class. Look at Insurance companies
  for your business potential and alliances.
• In spite of a history for traditional medicine,
  the Ethical market prevails and doctors prescribe
  most affordable products in spite of all the
  gifts they are blessed with. (They do have a
  heart!!)
• Having said that, small Australian companies are
  beginning to establish their market presence in
  India with products containing Whey Protein.

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Business Opportunity - Sales

• Sales should focus on the categories of
• Diabetes
• Infectious Diseases such as Tuberculosis ,
  Intestinal Diseases and HIV/AIDS
• Cancer
• Diseases of the Cardiovascular System
• CNS Disorders
• Veterinary health
• Disinfectants and Decontamination products for
  Hospitals (A big area India is lacking in,
  especially with non city hospitals)
• An example of a company who is establishing
  their presence in this segment is Du Pont
• States to Sell in Maharashtra, Karnataka, Tamil
  Nadu, Delhi, Andhra Pradesh, Gujarat (Higher
  wealth / Income groups area, Education,
  acceptability of product)

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Business Opportunities - Manufacturing

• INDIA Your Base for the Global Market
• Even with the drawbacks such as Poor
  Infrastructure, Corruption and Age Old Labour
  Laws the country and the government offer
  tremendous opportunity and scope to set up a
  successful manufacturing business in India. The
  opportunity simply outweighs the drawbacks and
  this has been proved time and again by the
  successes of MNCs such as Astra Zeneca, Novartis,
  Aventis, Pfizer, Merck, Bayer, Glaxo, etc in
  spite of stiff competition from local companies.
  India has more or less established itself as a
  base for these companies to cater to the enormous
  local demand as well as highly profitable
  international demand.
• States to Set up Manufacturing in (Key Set up
  where there is easy accessibility to skill,
  infrastructure, market and less powerful trade
  unions)
• Tamil Nadu, Maharashtra, Karnataka, Andhra
  Pradesh, Goa, Gujarat.

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Business Opportunities - Manufacturing

• So what is the Potential for manufacturing in
  India?
• THE WINNING FORMULA
• Low Fixed Assets, Low Development Costs, Low
  Clinical Trials Cost, Low Cost highly skilled
  workers, Mix of Indian and Western
  Administration, Emphasis on Quality, Aggressive
  marketing.
• Examples Average Wage for skilled labor in India
  per month A 200 300 Average wage for
  Professionals in India A 2000 2500 per month
• Cost of a Clinical Study involving 60 patients on
  a natural ingredient 3 months A 80,000
  100,000 Cost of doing it in Australia A
  250,000 400,000
• Other Areas
• Revival or takeover of sick units, infusion of
  technology, training and infusion of life in
  marketing/sales skills.
• Do as the NRIs did. Set your marketing base in
  highly profitable markets, set up your
  manufacturing in India.
• The Market is highly fragmented with about 15,000
  small licensed generic manufacturers your
  options should be open to invest into these
  companies by identifying the right partner. Many
  of these companies already have MHRA, US FDA and
  even TGA certification. This opens up channels to
  even bigger opportunities. Ex Sri Krishna
  Pharmaceuticals (FDA, TGA), Medopharm (MHRA),
  Microlabs ( MHRA)

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Business Opportunities RD

• Good estimation of opportunities and forecasted
  demand are critical to the commercial viability
  of drug development Clinical research
• Its pretty evident that the focus of most RD has
  been on Life style related ailments such as
  Cardiovascular Diseases, CNS Diseases, Diabetes
  Antacids especially since these areas grow in
  double digits every year.
• In India and other developing markets the most
  profitable market segments comprise of upper and
  upper middle income groups that are more
  afflicted by life style related diseases
  prevalent in developed countries. With this
  segment growing at a rapid pace in India, it
  could very well turn out to be a highly
  profitable segment to develop products in just
  for the local market and even more profitable to
  use India as the base for all development
  activity for Global markets.
• With new Patent reforms in place, India
  definitely is a high potential RD center for all
  new research activities

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Business Opportunities RD

• Key Parameters for RD centers in India
• Always consider tying up with existing quality
  facilities (Contract Research). Integrated RD
  activity saves in a huge way in terms of time,
  effort and capital. It also allows you possible
  partnership access to drugs being developed and
  in stages of pre clinical and clinical
  development. This in turn allows for ultimate
  productivity and efficiency to boost sagging
  pipelines.
• If Investment in a new facility for product
  development, tie up with recognised and
  specialized manpower consultants, educational
  institutions such as the IIT and IISc, Tox
  Institutes such as the Indian Institute of Tox
  Research, Government bodies such as the CDRI and
  CROs.
• Australian Companies must consider options of
  Training Campus recruits from Australian
  Institutions in Indian Institutes / Partner
  Companies. This will benefit companies with long
  term Indian Business Strategies.

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Problems / Issues that may affect Increased
Bilateral Trade between the countries

• Opposition within Australia with relocated
  manufacturing facilities, loss of jobs locally.
• Solution Expatriate opportunities for
  Australians to manage the business in India.
  /Retain Manufacturing in Australia Focus your
  sales in India with new and Patented Products
  (Life style to begin with)
• Cultural understanding Indian Culture and vice
  versa
• Solution Always ensure there is a clear
  understanding of culture especially with the way
  Indians do business (Do not hurt religious
  sentiments in any way). Cultural training a must.
  
• Logistical poor infrastructure will always
  hurt. Additional issues that could affect are
  strikes, holidays and weather.
• Duties Taxes are an important issue when
  dealing with India.
• Speed to market
• Ability to conceptualize, develop and get product
  to market is crucial in a country like India.
  Ensuring adequate IP protection is another
  important factor to consider. Difficult to police
• The ability to get product in while taking care
  of various local and national factors that could
  hinder. Like State regulations and Central
  Government regulations.
• Dietary supplements to be registered under the
  Food Safety Act whereas Pharmaceuticals under the
  Drug Control Authority (State by State) and not
  one central body.

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THANK YOU

• Rohit Noronha
• Vice President International Business
• P 61 3 83310555
• F 61 3 93317575
• M 61 424238649
• Email rohit_at_azpa.com.au
• Rohit_noronha_at_hotmail.com