Pharma intermediates mart to touch $590 m this year

As India emerges a hot spot for multinational pharma companies for active pharmaceutical ingredients and research services outsourcing, the domestic pharma intermediates segment is also growing.

According to a recent study by global consulting firm Frost & Sullivan, the domestic intermediates market, which is mostly dependent on imports from China, Korea and Thaiwan, is estimated to be around $590 million (Rs 2,655 crore) this year from the existing $373.7 million (Rs 1,681 crore).

The segment caters to six major therapy areas – anti-infective, cardiovascular, oral antidiabetic, central nervous systems, anti-ulcerant, anti-inflammatory and anti-rheumatic.

At present, 60-80 percent of the intermediates produced in the country are exported, states the report.

Multinational companies' outsourcing to India in the intermediates space has grown substantially over the last few years, said Anand Ranagchary, director, Frost & Sullivan.

US-based Israeli multinational, Taro Pharma, which set up an Indian subsidiary last year, has been scouting for intermediate suppliers from India to cater to its global market requirement. The company is also likely to acquire one or two intermediate units in India to ensure reliable and uninterrupted supply.

Senior executives at Japanese pharma giant Otsuka Pharmaceutical Co were also in the country recently to explore opportunities for outsourcing its intermediates and other products supply to Indian companies.

Currently, the leading domestic players in the intermediate space are Jupiter Biosciences, Dishman Pharmaceuticals & Chemicals, Anu's Laboratories, Atul Ltd, among others.

Frost & Sullivan recently conducted a comprehensive study on the Indian intermediates space to recognise the best practices and performers in the segment.

Intermediates are a comparatively a high-cost and low- volume business. Intermediates are chemical substances used for stability, colour additives and coatings of drugs.

Until recently, domestic manufacturers have not shown interest in this highly capital-intensive sector in which China, Thaiwan and South Korea are the global leaders.

At the same time, as it is an essential commodity for both bulk drugs and formulations, which domestic companies were importing from the traditional markets abroad.

Recently, the fact that pollution control norms forced a few intermediate units in China to close down production made the domestic pharma industry panicky as they anticipated a shortage in supply from that country.

Also, the Indian bulk drug producer Hikal had picked up a minority stake in a Chinese intermediate company to supply its intermediates.

However, the trend in India is changing now, as the few players engaged in the business are currently increasing their capacities manifold.