Helping You Build Wealth With Honest Research
Since 1996. Read On...

MEMBER'S LOGIN

MEMBER'S LOGINX

     
Invalid Username / Password
   
     
   
     
 
Invalid Captcha
   
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Revealed
India's Third Giant Leap

This Could be One of the Biggest Opportunities for Investors




Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
By submitting your email address, you also sign up for Profit Hunter, a daily newsletter from Equitymaster
covering exciting investing ideas and opportunities in India.

AD

Generics scores over new drug R&D
Tue, 31 Aug Pre-Open

The Indian pharma landscape has changed considerably in the past 3-4 years. Then, with the advent of the Indian patent law, many domestic pharma companies started focusing on R&D on new chemical entities. The rationale was simple. Once a new chemical entity gets commercialized in the market, the strong sales of that drug more than make up for the R&D incurred on it. However, R&D in pharma is not easy by a long shot. It is an expensive and time consuming affair. And one that requires considerable investment and patience.

Ranbaxy, Dr.Reddy's, Glenmark, Sun Pharma and Piramal Healthcare had all ventured into R&D to develop India's first R&D molecule. However, none of their products are close to getting launched in the global markets. And the huge cost associated with the same led many of them to hive off their R&D units into separate companies. Some like Glenmark, despite creating headlines for the milestone payments that it received, also suffered setbacks as some molecules failed to progress any further.

And so with these surmounting challenges, domestic Indian companies have made a conscious strategy to focus more on generics. Their case is further strengthened by the fact that big innovators, the likes of which are Pfizer, Glaxo, Sanofi-Aventis, have also begun dabbling in generics in a big way. After all, these MNCs despite loads of experience, are seeing their R&D pipelines dwindling. With sales sagging, many have turned to generics to fill the product gap. Also, drugs worth billions of dollars are scheduled to lose their patents till 2013. And so, provides domestic pharma companies ample opportunities to reap rich rewards.

That said, the generics industry has its own set of problems in the form of intense competition and price erosion. And so, the only way for Indian companies to bolster sales is by continuously launching new products and that too in niche areas where the competition is lesser. Overall, both generics and R&D for new molecules have their own set of rewards and challenges. But for the time being Indian players appear to be more equipped to strengthen their presence in generics than R&D. Although none of them have abandoned their R&D programmes, it appears that India's first R&D molecule will have to wait some more time before it sees light of day.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives

Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Generics scores over new drug R&D". Click here!

  
ABOUT EQUITYMASTER

Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.

PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
TRENDING TOPICS
FREE NEWSLETTERS
EQUITYMASTER SUPPORTS
  • HelpYourNGO
  • You Tube
  • Linkedin
  • Twitter
  • Telegram
  • Google Play

Copyright © Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited).

Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap

Phone +91-9136015013

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407

Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com

LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.