1 Table of contents 4
1.1 List of Tables 7
1.2 List of Figures 8
2 Introduction 9
2.1 Guidance 9
3 Drug Discovery Process – Overview 11
3.1 Process of Early Preclinical Drug Discovery 11
3.1.1 Pre-discovery 11
3.1.2 Target Identification 11
3.1.3 Target Validation 11
3.1.4 Lead Identification 12
3.1.5 Early Safety Tests 12
3.1.6 Lead Optimization 12
3.1.7 Preclinical Testing 12
3.2 Major Services under Drug Discovery Stage 13
3.2.1 Medicinal Chemistry 13
3.2.2 Pharmacology 13
3.2.3 HTS (High-throughput Screening) 13
3.2.4 Analytical Chemistry 13
3.2.5 CADD (Computer Aided Drug Design) 14
3.3 Conclusion 14
4 Drug Discovery in India and China – Market Characteristics 15
4.1 Drug Discovery Market Characterization 15
4.1.1 Market Share & Market Size 15
4.1.2 Top 5 Services Offered by Indian and Chinese Players 16
4.1.3 Major Therapeutic Areas under Research 24
4.2 Forces that Drive Drug Discovery in India and China 28
4.2.1 Declining R&D Productivity, Especially For the Big Pharma 28
4.2.2 Generics Competition – Pricing Pressures on Branded Prescription Products 30
4.2.3 Stringent Regulatory Conditions and Increasing Patent Challenges Lead to Shorter Product Lifecycles 32
4.2.4 Removing Redundancies - Focusing on Core Competencies 34
4.3 Why India and China? 34
4.3.1 Availability of Skilled Manpower 34
4.3.2 Scale of Available Resources for Clinical Development 36
4.3.3 Improved IP Protection in India and China 37
4.3.4 Government Support for the Drug Discovery Development 37
4.3.5 Risk Sharing Agreements: A Step Forward by Indian and Chinese Companies 39
4.4 SWOT Analysis 40
4.5 Conclusion 41
5 IP Protection in India and China – Improved IP Protection to Encourage Innovation 43
5.1 India 44
5.1.1 Patent Act 2005 – First Step towards Improving IP Protection 44
5.1.2 IPR Enforcement Rules, 2007 45
5.1.3 Trademarks Bill 2007 45
5.1.4 Drugs and Cosmetics Act (Amendment) 2008 46
5.1.5 EIPR (Enforcers of Intellectual Property Rights) – Ensuring IPR Laws Implementation in India 46
5.1.6 Case 1: BMS (Bristol-Myers Squibb) versus Hetero Drugs on Dasatinib 47
5.1.7 Case 2: Bayer versus Cipla on Nexavar 47
5.1.8 Case 3: Roche versus Cipla on Tarceva 47
5.1.9 Key Takeaways 48
5.2 China 49
5.2.1 Trademark Law 49
5.2.2 Patent Law 50
5.2.3 Anti-Unfair Competition Law 51
5.2.4 Regulations on Customs Protection of Intellectual Property Rights 51
5.2.5 Case 1: Pfizer versus PRB on Viagra 52
5.2.6 Case 2: Aida Pharmaceuticals versus Four Counterfeit Suppliers 52
5.2.7 Case 3: Pfizer versus Guangzhou Welman on Viagra Trademark: Lethargy Proves Costly to Pfizer 52
5.2.8 Key Takeaways 53
6 Government and Regulatory Support in India and China – Strong Support to Research Institutes and Small Companies 54
6.1 Government/Regulatory Support for Drug Discovery in India 54
6.1.1 Open Source Drug Discovery 54
6.1.2 Drug Development Promotion Board: Encouraging PPP Model for Drug Discovery and Development 55
6.1.3 Technology Development Board: Supporting Technology Oriented Projects 56
6.1.4 NMITLI (New Millennium Indian Technology Leadership Initiative) Scheme 57
6.2 Government/Regulatory Support for Drug Discovery in China 57
6.2.1 Setting Up of Biotech Parks in Shanghai and Beijing –Zhangjiang High-Tech Park 57
6.2.2 Research Institutes – Shanghai Institute of Materia Medica 58
6.2.3 National Center for Drug Screening 59
6.2.4 International TCM Program for Cooperation in Science & Technology 59
6.3 Conclusion 60
7 Major Indian and Chinese Drug Discovery Companies – Different Business Models to Provide Similar Services 61
7.1 Indian and Chinese Drug Discovery Companies – Business Models 61
7.1.1 Indian Drug Discovery Business Model – R&D Hive-off for Better Services and Risk Reduction 61
7.1.2 Chinese Drug Discovery Business Model – Drug Discovery and Development as Core Business 62
7.2 Jubilant Organosys’ Jubilant Biosys 62
7.2.1 About Jubilant Organosys 62
7.2.2 Jubilant Biosys 62
7.2.3 Major Drug Discovery Deals 64
7.3 Dr. Reddy’s Aurigene 65
7.3.1 About Dr. Reddy’s 65
7.3.2 Aurigene 66
7.3.3 Major Drug Discovery Deals 67
7.4 Biocon’s Syngene 68
7.4.1 About Biocon 68
7.4.2 Syngene 68
7.4.3 Major Drug Discovery Deals 70
7.5 GVK BIO 71
7.5.1 Business Description 71
7.5.2 Major Drug Discovery Deals 73
7.6 Advinus Therapeutics 73
7.6.1 Business Description 73
7.6.2 Major Drug Discovery Deals 75
7.7 WuXi AppTec 77
7.7.1 Business Description 77
7.7.2 Major Drug Discovery Deals 78
7.8 Chi-Med’s Hutchison MediPharma 79
7.8.1 About Chi-Med 79
7.8.2 Hutchison MediPharma 80
7.8.3 Major Drug Discovery Deals 81
7.9 Shanghai ChemPartner 82
7.9.1 Business Description 82
7.9.2 Major Drug Discovery Deals 83
7.10 HD BioSciences 84
7.10.1 Business Description 84
7.10.2 Major Drug Discovery Deals 86
7.11 Sundia MediTech 87
7.11.1 Business Description 87
7.11.2 Major Drug Discovery Deals 88
8 Deals Analysis – Equal Thrust From Big Pharma and Mid-Size Pharma 89
8.1 Number of Discovery Research Deals – Increased Activity by Big and Mid-size Pharma 89
8.2 Deals by Major Therapeutic Area – Oncology and Metabolic Disorders 89
8.3 Deals by Client Type – Mid-size Pharma Deals Rising in India and China 90
8.4 Major Drug Discovery Deals 93
8.4.1 Amgen with Jubilant Biosys: Supporting Early Stage Preclinical Development Effort to Provide Cost-Effective Drugs 93
8.4.2 Bristol-Myers Squibb with Syngene: Dedicated Research Facility for Discovery and Early Drug Development 93
8.4.3 AstraZeneca with WuXi: Delivering Value beyond Just Cost-Savings 94
8.4.4 Genzyme Corporation and MMV (Medicines for Malaria Venture) with Advinus Therapeutics: To Address the Unmet Needs of Neglected Diseases in Developing Countries 94
8.4.5 Xcovery with Sundia MediTech: Exemplifies 100% Outsourcing as the Most Efficient and Economical Model for New Drug Discovery 95
8.4.6 Novartis with Aurigene: Generating Pre-clinical Candidates for Oncology-focused Program 95
8.4.7 Merck & Co with Advinus Therapeutics: To Develop Clinically Validated Drug Candidates for Metabolic Disorders 96
8.4.8 Eli Lilly with Hutchison MediPharma: Developing Innovative Medicine for Global Market 96
8.4.9 Pfizer with HD BioSciences: To Provide Quality Biology Discovery Services 96
8.4.10 LEAD Therapeutics with Shanghai ChemPartner: Accelerating Drug Discovery Efforts to Generate Novel and Differentiated pre-IND Candidates 96
8.5 Conclusion 97
9 Future Challenges– Financial and Intellectual Obstacles to Impede the Future Growth 98
9.1 Financial Problems will Make It Difficult to Sustain the Growth 98
9.2 Talent Shortage in Early Stage Chemistry and Biology 98
9.3 Competition from Europe as an Alternative Discovery Research Destination 99
9.4 Conclusion 100
10 Key Takeaway 101
11 Appendix 102
11.1 Market Definitions 102
11.2 Abbreviations 102
11.3 Research Methodology 104
11.3.1 Coverage 105
11.3.2 Secondary Research 105
11.3.3 Primary Research 106
11.3.4 Expert Panel Validation 106
11.4 Contact Us 106
11.5 Disclaimer 106
11.6 Sources 1071.1 List of Tables
Table 1: Drug Discovery Market, India and China, Historic Market Size, $bn, 2004–2009 15
Table 2: Drug Discovery Market, India and China, Market Size Forecast, $bn, 2009–2016 15
Table 3: Major Services Offered by Indian and Chinese Drug Discovery Companies 17
Table 4: Key Service Offerings of Indian and Chinese Companies in Medicinal Chemistry 19
Table 5: Key Service Offerings of Indian and Chinese Companies in Drug Metabolism and Pharmacokinetics 21
Table 6: Key Service Offerings of Indian and Chinese Companies in Toxicology 22
Table 7: Key Service Offerings of Indian and Chinese Companies in Pharmacology 23
Table 8: Key Service Offerings of Indian and Chinese Companies in Molecular Biology 24
Table 9: Major Therapeutic Areas of Drug Discovery Research in India and China 25
Table 10: Major Activities of Indian and Chinese Drug Discovery Companies in Inflammatory Diseases 26
Table 11: Major Activities of Indian and Chinese Drug Discovery Companies in Metabolic Disorders 27
Table 12: Major Activities of Indian and Chinese Drug Discovery Companies in Oncology 28
Table 13: Price Difference Between Brand Name Drugs (Average Wholesale Price) and Generic Drugs, $, August 2008 32
Table 14: SWOT Analysis – Drug Discovery Market in India and China 40
Table 15: Jubilant Biosys – Major Capabilities 64
Table 16: Major Drug Discovery Deals – Jubilant Biosys 65
Table 17: Aurigene – Major Capabilities 67
Table 18: Major Drug Discovery Deals – Aurigene 68
Table 19: Syngene – Major Capabilities 70
Table 20: Major Drug Discovery Deals – Syngene 71
Table 21: GVK BIO – Major Capabilities 72
Table 22: Major Drug Discovery Deals – GVK BIO 73
Table 23: Advinus Therapeutics – Major Capabilities 75
Table 24: Major Drug Discovery Deals – Advinus Therapeutics 76
Table 25: WuXi AppTec – Major Capabilities 78
Table 26: Major Drug Discovery Deals – WuXi AppTec 79
Table 27: Hutchison MediPharma – Major Capabilities 81
Table 28: Major Drug Discovery Deals – Hutchison MediPharma 81
Table 29: Shanghai ChemPartner – Major Capabilities 83
Table 30: Major Drug Discovery Deals – Shanghai ChemPartner 84
Table 31: HD BioSciences – Major Capabilities 85
Table 32: Major Drug Discovery Deals – HD BioSciences 86
Table 33: Sundia MediTech – Major Capabilities 87
Table 34: Major Drug Discovery Deals – Sundia MediTech 881.2 List of Figures
Figure 1: Drug Discovery Research in R&D Value Chain 9
Figure 2: Drug Discovery Process 11
Figure 3: Drug Discovery Market, India and China, Market Size, $bn, 2004–2016 15
Figure 4: Global Drug Discovery Market, Market Breakdown by Value, 2008 16
Figure 5: Comparison of CAGR of R&D Expenditure versus Turnover for the Top 5 Pharma Companies, 2004–2008 29
Figure 6: Increasing Cost of Introducing a NME in the US 30
Figure 7: Price Difference Between Brand Name Drugs (Average Wholesale Price) and Generic Drugs, $, August 2008 31
Figure 8: Savings Generated by Use of Generic Drugs During First Decade of Hatch-Waxman Act, $bn, 1999–2008 33
Figure 9: Results Breakdown of Patent Challenges, the US, 2001–2008 33
Figure 10: India & China Talent Pool – Comparison 35
Figure 11: Top 5 Nationalities of Foreign Inventors Named in the PCT (Patent Cooperation Treaty) International Applications Filed, 2008 36
Figure 12: Risk-Sharing Model Between Western Pharma Companies and Indian/Chinese Companies 39
Figure 13: Number of Patent Applications Originating from China and India, 2004–2008 43
Figure 14: Intellectual Property Rights Protection Framework in India 44
Figure 15: Intellectual Property Rights Protection Framework in China 49
Figure 16: Open Source Drug Discovery Activity Map 55
Figure 17: Technology Development Board Financial Assistance, India, Value Breakdown by Sector, 1997–2007 56
Figure 18: Comparison of Business Models, Indian and Chinese Drug Discovery Companies 61
Figure 19: Jubilant – Corporate Profile 63
Figure 20: Dr. Reddy’s – Corporate Profile 66
Figure 21: Biocon – Corporate Profile 69
Figure 22: GVK BIO – Corporate Profile 72
Figure 23: Advinus Therapeutics – Corporate Profile 74
Figure 24: WuXi AppTec – Corporate Profile 77
Figure 25: Hutchison MediPharma – Corporate Profile 80
Figure 26: Shanghai ChemPartner – Corporate Profile 82
Figure 27: HD BioSciences – Corporate Profile 85
Figure 28: Sundia MediTech – Corporate Profile 87
Figure 29: Number of Major Discovery Research Deals by Country, India and China, 2006–2009 89
Figure 30: Percentage of Major Discovery Research Deals by Therapeutic Area, India and China, 2006–2009 90
Figure 31: Number of Major Discovery Research Deals in India and China by Client Company Type, 2006–2009 91
Figure 32: Major Discovery Research Deals by the Type of Client Companies for 10 Major Indian and Chinese Discovery Research Companies, 2006–2009 92
Figure 33: Top 5 Big Pharma Companies by Number of Deals in India and China, 2006–2009 93
Figure 34: Client Testimonial – BMS-Syngene Partnership 94
Figure 35: Client Testimonial – WuXi-AstraZeneca Partnership 94
Figure 36: Client Testimonial – Sundia MediTech-Xcovery Partnership 95
Figure 37: Client Testimonial – Shanghai ChemPartner-LEAD Therapeutics Partnership 97
Figure 38: Arthur Higgins, President of EFPIA on Establishing Europe as a Leading Developer of Medicines 99
Figure 39: Methodology 105
