“PHARMACEUTICAL OUTLOOK INDIA-JAPAN”

Dr Gurpreet Sandhu

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India – Japan Bondage India–Japan relations have traditionally been strong.

The people engaged in cultural exchanges since centuries, primarily

as a result of Buddhism which spread indirectly from India to Japan.

Business Partnership started, once companies as Suzuki, Sony,

Toyota, and Honda, have facilities in India.

Infrastructure -- Japan has helped finance many infrastructure projects

in India, most notably the Delhi Metro system.

Many companies of Japan have their Quality Image in India and enjoy

good share of the Market, like.

Sony, Sharp, Panasonic, Toshiba, Hitachi, Diakin, O General – Electronics Sector

Toyota, Honda, Suzuki -- Automobile SectorConfidential -- Reva Proprietary Info.

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Confidential -- Reva Proprietary Info.

PM “Modi” Exhorts Japan to “Make in India”

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Confidential -- Reva Proprietary Info.

Reva is a global pharmaceutical organization with core focus in Regulated and Emerging Markets.

• 5 Manufacturing Facilities globally; 2 dedicated plants for Oncology.

• Certified by all major Health / Regulatory Authorities across the globe.

• Core Area : Oncology, Anti-Infective, HIV & Lifestyle Drugs.

API

• 3 Dedicated R&D centers with scientific team of > 150 people.

• Process, R&D and Analytical Services.• Pilot, Full Scale & Commercial Supply.

CRAMS

• Oncology Facility• Dosage development and dedicated R&D centre • Dosage forms – Lyophilised, Sterile, Pre-filled & oral

• NU Technologies• Novel Delivery system - Orally Disintegrating Strip / Film (ODS)

• Specialized Dosage: Steroids & Hormones.

Dosage

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Confidential -- Reva Proprietary Info.

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Overview of the Pharma Industry.

Role / Paradigm Shift

Growth of Indian Healthcare Industry in Japan.

Sourcing Hub from Western World to India.

Major Role of Mergers & Acquisitions

Confidential -- Reva Proprietary Info.

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2014 Size:~ $ 955bn

Confidential -- Reva Proprietary Info.

Global Pharmaceutical -- 2014

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Confidential -- Reva Proprietary Info.

Source: IMS Health Market Prognosis, India has join the top 10 group by 2015

Top Pharmaceuticals Market’s

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Pharma Outlook -- Japan

Confidential -- Reva Proprietary Info.

The annual market size of Japan is ~ USD 109 Billion.

Second largest market of the world.

The annual sale of Generic Drugs still on the lower side of ~ USD 7.8 Billion.

MHLW have started promoting the Generic Drugs to reduce the burden of

the Medical Expenses of the Patients as well as financial burden of NHI.

The Japanese Quality of product including their appearance and packaging

is extremely severe.

Japanese government is working very hard to harmonize its policies with

ICH.

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Confidential -- Reva Proprietary Info.

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India – Land of Opportunities

Second Largest Emerging

Market

Fourth largest

Economy - A safe place

to do business

Largest democracy –

political stability &

consensus on reforms

Largest reservoir of skilled/semi-

skilled manpower

Long-term sustainableCompetitive advantage

- High growth rate economy

One of the Highest returns on investment; India 19.33%, China 14.25%, Thailand 13.3%

Liberal & transparent investment

policies

Confidential -- Reva Proprietary Info.

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Japan Pharma towards India

Confidential -- Reva Proprietary Info.

Top 20 companies like Takeda, Astellas, Mitsui, Mitsubishi Pharma,

Dainippon Sumitomo etc. have various business opportunities in

India.

There is increasing interest even for contract manufacture and

procurement of finished formulations driven by rising product

development costs in Japan.

From Japanese perspective, they get the manufacturing and

research infrastructure along with the qualified scientific talent

prowess from India.

India is also one of the leading buyer for Japenese high quality

APIs, generics, biosimilars and medical devices.

To reduce the overall cost of healthcare, Japan keen to expand

generic medicines, and the capability of India to meet this

demand will prove a win-win situation for both the countries".

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Confidential -- Reva Proprietary Info.

Paradigm Shift…..

• Japan’s Pharma, opening up to the World.

• Sourcing Hub from Western World to India.

• API to Drug Product development.

• Regulated to Emerging Markets.

• Major Role of Mergers & Acquisitions.

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Japanese Pharma : Opening up to the World Nevertheless, until recently the Japanese pharma sector, though

massive, has traditionally been thought of as somewhat isolated.

Earlier, foreign companies often experiencing difficulty penetrating a customer base that has historically remained loyal to Japanese-made drugs.

The country's rapidly ageing population and its increased medical needs have put pressure on Govt. to wake & look outside for Generic Drugs.

A number of Japan's larger pharma companies have been branching out by setting up R&D sites around the world.

Foreign companies have been finding significantly more success in penetrating the Japanese market in recent years.

Government reforms like greater harmonisation with EU and US regulatory regimes and R&D tax credits have helped persuade companies to set up shop in Japan.

To reduce healthcare expenditure, government wants generic penetration of upto 60% in 2017, from just 30% in 2014.

Confidential -- Reva Proprietary Info.

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Sourcing Drivers – India Pharma Growth Scenario: Growth rate of 14% pa where as developed markets

expected to grow at 6% pa.

Quality workforce: Pool of personnel with high managerial and technical

competence to provide safe and quality controlled pharmaceuticals to the

world.

Competent Manufacturing : Highest number of regulatory approved

facilities in the world.

Cost-effective chemical synthesis: Track record of development and

providing improved cost-beneficial chemical synthesis for various drug

molecules is excellent.

Information & Technology: World-class educational institutions &

established strengths in Information Technology.

Globalization: The country is committed to a free market economy and

globalization.

Consolidation: International pharmaceutical industry is finding great

opportunities in India.

Confidential -- Reva Proprietary Info.

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Focus Shift……

India Attraction – Shift from API to….

Contract Manufacturing

Drug Product Development / Manufacturing

Custom Research Organizations

High Absolute Growth of Local Pharma

Market.

Confidential -- Reva Proprietary Info.

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India – Japan Pharma Relations Indian big boys putting investments in Japan, like.

Lupin  went in for two buyouts : Kyowa in 2007 and I’rom in 2011.

Dr. Reddy’s Labs, Aurobindo Pharma, and Sunpharma too have fortified their

investment in the region by setting up offices in Japan.

Japanese Companies setting their base in India, either directly

or through M&A like.

Meiji, acquired Medrich

Otsuka, acquired Claris Lifesciences

Daiichi Sankyo, acquired Ranbaxy afterward become “Sun Pharma”

Eisai, set up their manufacturing base in South of India.

Sumitomo & Mitsui also have their tie ups in India.

Ajinomoto Omnichem & Granules IndiaConfidential -- Reva Proprietary Info.

Reva Confidential Info.

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Open Secrets to Success

For Indians Failure is natural and is accepted everywhere, even in Japan, but unreliability and

lack of trustworthiness NOT Japanese a great race….They help. So don’t run away if there is an issue. Please be

forthright and communicate the problem. Communicate – Communicate

well…Prompt…Frequent…Clear…Honest/Facts….whether there is problem or no problem.

Observe closely and understand the differences….And REPSECT it. Don’t try to teach them the Indian way.

Japanese are preciseness personified and are very well organised. Try to emulate Japanese to be successful. See how successful they are by being “Japanese”. Visual inspection / check from beginning (Sourcing,/production) to end (Supply, including Logistcs – i.e. Delivery)

Be thorough with the basic Japanese requirements (Quality, Aesthetics, regulations, service expectations etc. etc)….Not to compare it with other markets and other regulations….Japanese requirement is unique….Again respect it, don’t try to enforce what is there elsewhere

It is only just LONG TERM for everything in Japan, no short-term or short cuts. Have dedicated local Japanese support term ….(Reva way…)

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MNC strategies are changing along three dimensions

Partnership

Local market:

• Abbott-Takeda, Abbott-Novo

• AZ-BMS

• Novartis-USV

• Mundi-Modi

Global – Generic Market

• Pfizer – Claris, Strides, Aurobindo

• GSK – Dr. Reddy’s

• AZ - Torrent

Acquisition

• Abbott-Piramal

• Daiichi-Ranbaxy

• Sanofi-Shanta Biotech

• Hospira- Orchid Inj

• Reckitt Benckiser – Paras

• Fresenius Kabi – Dabur

• Mylan Inc. – Matrix

• SUN Pharma -- Ranbaxy

Local market initiatives

• Branded generic (launched ): Pfizer, AZ

• Expanding footprint: Sanofi Aventis, Pfizer

• India specific Pricing: Sanofi Aventis, Pfizer, MSD

Confidential -- Reva Proprietary Info.

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Lupin – Leverage Fruits of Japan

Lupin entered Japan by acquiring Kyowa in 2007.

Then Acquires I’rom Pharmaceuticals through its Subsidiary,

Kyowa Pharmaceuticals.

Market leader in Risperidone in terms of units and key player in

Amlodipine.

6 new products launched in the Market.

Profit enhancement measures to yield better results in the days

to come.

Work ongoing for more than12 manufacturing site transfer

projects for cost advantage.

In April, 2014; formed a joint venture with Japan's Yoshindo for

biosimilars.

Japan become the third largest market for Lupin in term of net

sales.

Confidential -- Reva Proprietary Info.

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Mylan: Leverage Fruits of India …. More than 50% of its total Revenue invested in India.

Vertical Integration – Affordable Medicines to the World 7 billion people.

2007 -- Acquisition of Matrix, USD 1 Billion (Able to cater 40% of the total

requirement of Global AIDS Organizations).

2010 -- Set up a Dosage Form R&D center & Start generating Dossiers from India

2012 -- Enter the Generic Formulation Market

2013 -- Acquisition of Strides Injectible Arm, USD 1.6 Billion

2015 – Acquired Famycare of India (Femal hormonal drugs)

Shift its base from US/EU to India – more than 50% of its employees in

India.

Still Counting on Indian gigantic capabilities in Science and its strong

work ethnic.

Confidential -- Reva Proprietary Info.

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Confidential -- Reva Proprietary Info.

Thank you !

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