DRL Q1 net up 120%

The latest in thing in Pharma sector is CRO (Clinical Research Organisations). Also, this is going to be the end thing in separating men from boys. Most big bulk drug manufacturers have in-house R&D facilities and have in-house CRO department. But India is also emerging as an outsourcing destination for CRO's as it was for BPO's earlier.
I reproduce excerpts from an article:
India: A Target-Rich Environment
India is quickly emerging as one of the most strategic locations for global pharmaceutical companies to pursue their drug research and development. Highly skilled doctors, trained paramedical personnel and a supporting research infrastructure that is growing in sophistication are just a few of the factors that have made India one of the most sought-after destinations for clinical trial outsourcing.
This growth in pharmaceutical sales is being driven by a transitional disease profile, growing access to medicines and expanding public-health programs. Pharmerging markets are expected to account for 24 percent of the total market growth, while the top seven markets are expected to contribute just under 50 percent of the growth. According to a recent report from McKinsey & Co., if the Indian economy continues on its current high-growth path, then the Indian pharmaceuticals market will undergo a major transformation in the next decade. The market will triple to $20 billion by 2015 and move into the world’s top 10 pharmaceutical markets. This growth in the worldwide pharmaceutical landscape will have an additive effect on the contract research landscape.
In 2006, the Indian CRO market was estimated to be valued at $265 million. The total global CRO market was $14.3 billion in 2006. By 2010, based on a CAGR of 22.7 percent, the Indian market is expected to be $600 million. The global market will experience a CAGR of 13.8 percent and be valued at $24 billion. A more aggressive estimation by analysts at McKinsey has the 2010 clinical research market in India valued at $1 billion. Furthermore, in 2005 an estimated 1 percent of global clinical trials were conducted in India, a percentage that is projected to grow to 15 percent by 2011. And by the year 2011, more than 300,000 patients are expected to be enrolled in clinical trials in India.
Driving Growth
There are several reasons that India is becoming a preferred region for clinical operations. First, the amendments made in 2005 with respect to the schedule Y of India’s Drugs and Cosmetics Act of 1942 have made India more favorable as a center for new trials. The amendment in Schedule Y allows parallel trial conduct in India simultaneously with the rest of the world, eliminating the phase lag that was observed earlier. India also is expected to become the world’s most populous country by 2035, according to the McKinsey Quarterly report. The country is already the youngest. It is home to 20 percent of the world’s population under 24 years of age.
India has a diverse patient population–genetically, culturally and socio-economically–many of whom are also naïve to treatment. Diseases such as multidrug resistant pneumonia, Hepatitis B, diabetes and some cancers are far more prevalent in India than in the West. As the incidence of these and other diseases continues to increase, these patients become even more important for filling recruitment quotas. Additionally, shorter recruitment timelines are prevalent in India and patient compliance is higher. These factors are critical when global R&D costs have increased 23-fold in the past 28 years and the average development time in the United States is approaching 15 years. Typical clinical studies in the United States take up 30 percent to 50 percent of the time allowed for R&D, one-third of which is spent on patient recruitment. It is crucial to streamline the development process as much as possible. Adding to the country’s viability as a clinical trial haven is that many of the patent protection and intellectual- property-rights issues have been resolved.
Since January 2005, India has risen to the level of developed nations by becoming compliant with the Trade Related Intellectual Property Rights Act (TRIPS). India possesses a world-class data processing infrastructure for biostatistics and bioinformatics. The country also possesses large generic drug-manufacturing facilities, which will grow in importance as the focus on marketing generic drugs in the United States and Europe increases radically and many name brands and blockbusters are scheduled to lose their patent protection this decade.
While there are no language barriers for U.S.-based operations looking to establish a footprint in India, manufacturers, CROs and patient-recruitment companies will need to invest considerable resources into education, as 70 percent of the population lives in rural areas and the poor rely on the public system for preventive and inpatient care. On the other hand, these patient populations often rely on clinical trials for their immediate healthcare needs.
The Challenges
Despite India’s many milestones in the clinical research arena, there are some challenges that the estimated 120 CROs with operations in India must face. There are only about 500 GCP-trained investigators experienced in conducting clinical trials. Moreover, with 0.6 doctors and 0.08 nurses per thousand people, India has significantly fewer physicians than the world average. It has 1.2 doctors and 2.6 nurses per 1,000 people, according to a recent World Health Organization report.
Furthermore, the country only has 1.5 beds per 1,000 people, which is much lower than the average three to four beds per 1,000 people in other developing markets, such as Brazil, China, South Africa and Thailand. In the United States and Western Europe, where there are larger elderly populations, there are four to eight beds per 1,000 people. But McKinsey reports that the number of hospital beds and physicians is expected to double by 2015, driven largely by private investments. Analysts report that as many as two million hospital beds and 400,000 physicians will be added. Furthermore, corporate hospital chains will play a leading role in transforming the quality of secondary and tertiary care. And health-insurance penetration is expected to double by 2015 to cover 220 million people.
For Detailed Article Read
Another article in "Pharmaexpress" titled
"Preclinical CROs in India: the next in thing?"
Can be read here
"The Hindu Business Line" article
"Domestic clinical trials market booms"
Can be read here

Is this not all encouraging?
But we have, as usual, few thumbs down also. Read This

Right Hitesh JI,

The points raised about drug discovery in India are quite valid as pointed in link in your post.
Glenmark's experience in clinical trials also served a jolt as pointed out in thumbs down link in my earlier post. I was trying to evaluate Piramal Life Sciences. For the technical (scientific) evaluation of company's drugs in pipeline. I asked my younger brother and his wife, both senior research scientists in US pharma majors and this is what my brother tells me.

Verbatim From His E-mail:

Avoid it. Drug discovery is a long process >10 yrs. The company has only 2 molecules in Phase I. 9 out of 10 drugs/companies at this stage do not make it. Neither the targets nor the technology is unique. Looking at the trial, I think they do not even know what they are doing. Big returns in pharmaceutical come after Phase II or Phase III.
Financials are too bad. I would say the company will disappear before the end of 2010 or survive as a contract research company.

To  substantiate this he provided this link

http://investingvalues.blogspot.com/2009/07/piramal-life-sciences-or-slot-machines.html

Intresting to note is the dicussion between the blogger and company investor relation executive Sagar Gokani.


Edited by vsb2pwn - 01/Aug/2009 at 6:21pm

There are at least four. You can check here