The pharmaceutical industry strives for innovation as it is a major business growth driver. Innovation in this industry could lead to high monetary benefits in the form of Blockbuster drugs. For example – Obeticholic acid, a drug to treat chronic liver diseases is forecasted to generate $2.62 billion by 2020.
In the current scenario, innovation is the need of the hour in the Pharmaceutical industry, given the large and diverse patient pool, rising cost of treatments, and increasing risk factors of chronic diseases due to changing lifestyles in emerging countries like India. The Government of India (GoI) and the pharma industry have both shown growing focus to boost innovation. Multiple initiatives by the GoI to boost innovation and protect intellectual property rights and the increasing R&D spend by the corporate segment highlight this.
Success in innovation can be enhanced by increasing spend in R&D, protecting new ideas, monetizing patents, and by external collaboration. Leading pharmaceutical companies in India have increased their aggregate R&D spend. 46,000+ patents have been published in India between 2013 and 2015 with the focus on clinically and commercially viable drugs in various sub-technologies. The top 5 sub-technology categories indicating the applications of pharmaceuticals in India are covered in Figure 1.
FIGURE 1: Top Sub-Technology Categories in Pharmaceuticals in India
Source: Derwent World Patents Index and Derwent Innovation
Generic corporations such as Cipla, Dr. Reddy’s Laboratories, and Cadila Pharmaceuticals feature in the top applicants list. It is worth noting that various Multinational Corporations such as Novartis, Sanofi, Roche, and Bristol-Myers Squibb have also filed patents in India. Top Indian patent filers such as Cadila Healthcare, Dr. Reddy’s, Cipla, Sun Pharma, Wockhardt and Lupin have 100+ drugs in discovery phase and a sizable drug pipeline, which indicates growing inclination towards innovation.
Pharmaceutical companies are also exploring external collaboration in terms of in/out-licensing and Mergers & Acquisitions (M&A) as a key success factor. This is underscored by the fact that Indian companies have signed 55 deals in the last year. Of these 55 deals, 50 are currently active, 4 are completed and one deal was terminated. Of the 50 deals, 14 are in the context of drug-development Services, 11 are M&A (whole or in part) deals, 9 are related to drug-manufacturing supply, and 8 are for drug development and commercialization.
More than 50% of the drugs under development through these deals are in discovery phase. This indicates that most of the deals happen at an early stage of the drug discovery lifecycle.
The top 10 corporations that have entered into collaborations are as shown in Figure 2.
FIGURE 2: Top 10 Indian corporations for collaborations
Source: Cortellis Deals Intelligence
An increase in R&D spend, patent publications and collaboration of Indian corporations with academia and global MNCs through a considerable number of deals, indicates that the Indian Pharmaceutical Industry is on the right path to enhance innovation and strategic growth across the globe.