Soaring drug discovery development times, prolonged regulation-mandated testing, complex review processes, rapidly escalating R&D expenditures and competition are compelling pharmaceutical companies to outsource various services to inexpensive but highly skilled destinations in Asia. This report, based on a study conducted by ValueNotes and KnowGenix, examines the contract research outsourcing market in India for the pharmaceutical and biotechnology space.

India’s total contract research revenues amount to just USD 75 million, but is expected to grow at 23.6% CAGR, hitting USD 175 million by end 2010. India has emerged as an attractive destination for outsourcing research services owing to its low cost manufacturing, lower cost of R&D personnel, lower capital and operational costs for quality infrastructure of international standards. “The rapidly evolving skill-set of Indian vendors in basic research and development have narrowed the skill-gap required for NCE research. This trend is one of the key attractors for western companies to outsource value added research services from India”, believes Dr Raj Rajagopal, CCO KnowGenix.

According to Arun Jethmalani, CEO, ValueNotes, “ Establishing preferred vendor status is one of the critical success factors for Indian firms and would be imperative for long-term repeat business. There is an increasing trend amongst the Indian contract research organizations to move up the value chain by becoming preferred vendors of a few global outsourcers than serving as jack-of-all trades. Preferred vendors often land up with high margin contracts such as researching and/ or developing proprietary technologies for the client”.

Going forward, we expect to see Indian vendors expanding their geographical presence and service-offering portfolio through acquisitions. Partnering strategies like licensing arrangements, collaborative research will be increasingly undertaken.  According to Suchita Chaudhari, Senior Analyst at ValueNotes, “Increased involvement of the outsourcing partner is imperative for success in the drug discovery, development and commercialization. This requires new thinking and new processes with an innovative partner”.

Also, companies are moving up the pharmaceutical value chain and developing capabilities in biologics to complement existing chemistry strengths. “Biodrugs are safer and more target specific than conventional drugs. Innovator companies suffering from low R&D productivity are increasingly looking at biopharma to generate leads for NCE research. Hence, we believe that Indian vendors with strengths in biopharma will see success”, says Poonam Bhana, Analyst, ValueNotes.

The report provides an overview of the buyer scenario and an in-depth analysis of the Indian vendor space along with profiles of major industry players. The report is designed to help:

  • Pharma companies looking to outsource/offshore
  • Global pharmaceutical companies to gain understanding of the Indian vendor space
  • Outsourcing consultants to evaluate and compare the offerings of vendors
  • Potential vendors to assess opportunities
  • Contract research vendors to assess their competitive environment
  • Venture capital companies looking for investment opportunities
  • Researchers looking for detailed information on Contract Research Offshoring

This study is based on secondary data as well as extensive interviews with key people at various contract research organizations (captive as well as third-party) in India.

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Table Of Contents

1. Executive Summary
2. Introduction
2.1 Market Definition
2.2 Scope
2.3 Report Structure
2.4 Research Methodology
3. The Pharmaceutical Outsourcing Opportunity
3.1 Drug Developments and Process
3.2 New Drug Pipeline Economics – Impetus for Pharma Outsourcing
3.3 Drivers for Offshoring
3.4 Global Contract Research Market
3.5 Indian Pharmaceutical Research Outsourcing Opportunity
3.6 The Early Birds
3.7 Indian Contract Research Opportunity
4. India and Contract Research
4.1 Pharma Outsourcing: Evolution in India
4.2 Indian Capabilities
4.3 Chemistries and Technology Platforms
4.4 Indian Costs
4.5 Constraints to Growth
4.6 Competition to India
4.7 Outsourcing Models
4.8 Partnering Initiatives
5. Indian Vendor Landscape
5.1 Vendor Segmentation
5.2 Highest Market Share for Tier 2 Players
5.3 Vendor SWOT Analysis
5.4 Rating and Positioning of Vendor Groups
5.5 Services Capability
5.6 Critical Success Factors
5.7 Vendor Ratings
5.8 Other Promising Players
6. Insights and Likely Future Direction
6.1 Forecasted Global Contract Research Market
6.2 Forecasted Growth in Indian Contract Research Market
6.3 Emergence of One –Stop-Shop through Collaborative Linkages
6.4 Changes in the Vendor Landscape
6.5 Go-to Market Strategies
6.6 Emergence of Virtual Outsourcing Companies
6.7 Effective Partnering
6.8 Growth of Biotechnology Market
6.9 Therapeutic Groups with Strong Growth Potential
6.10 Technology Trends
6.11 Inorganic Growth Option
7. Vendor Information
7.1 Vendor Profiles
Nicholas Piramal India Limited (NPIL)
Dr. Reddy’s Laboratories limited (DRLL)
Wockhardt Limited (WL)
GlaxoSmithKline Pharmaceuticals Limited (GSK)
Jubilant Organosys Limited (JOL)
Panacea Biotec Limited (PBL)
Orchid Chemicals & Pharmaceuticals Limited (OCPL)
Advinus Therapeutics Private Limited (ATPL)
Reliance Life Sciences (RLS) – Emerging Niche Players
GVK Biosciences Private Limited (GB)
7.2 Vendor Directory
8. Vendor Selection 
8.1 Outsourcer’s responsibilities: Caveat Emptor
8.2 Vendor Evaluation Criteria
8.3 Structuring of Contracts
9. Regulatory Framework & Compliance 
9.1 Regulation in the Indian pharmaceutical industry: A historical perspective
9.2 Implication of India’s Changing Regulatory Framework
9.3 Environments, Health and Safety (EHS) Compliance
9.4 Certifications
10. About ValueNotes
11. About Knowgenix

Table Of Exhibits

Exhibit 1: Indian Pharma Outsourcing Graduation
Exhibit 2: Global Contract Research Market Forecasts (2007-2011)
Exhibit 3: Growth of Indian Contract Research Market
Exhibit 4: Vendor Segmentation
Exhibit 5: Likely Winners among Contract research outsourcing vendors in India
Exhibit 6: Emerging Opportunities for Indian Outsourcing Companies
Exhibit 7: Market Segmentation
Exhibit 8: Primary Contacts Covered
Exhibit 9: Drug Development Process
Exhibit 10: Drug Discovery Phase
Exhibit 11: Pre-clinical Research
Exhibit 12: Clinical Research & Development (Trials)
Exhibit 13: Drug Development Process & Funding
Exhibit 14: R&D budget in new drug discovery
Exhibit 15: Trends in Drug Development Costs (1975 – 2005)
Exhibit 16: Phase wise costs in drug development
Exhibit 17: Time Required to Market a New Drug
Exhibit 18: Market Drivers for Outsourcing
Exhibit 19: Market Share Breakdown of Global Pharma Outsourcing Opportunity (2006)
Exhibit 20: Comparative Analysis of R&D Budgets and Outsourcing
Exhibit 21: Global Contract Research Market Size (2006)
Exhibit 22: Region-wise Market Share Breakdown
Exhibit 23: Indian Pharmaceutical Industry: How is it Organized?
Exhibit 24: Segmental Breakdown Of Indian Pharma Outsourcing Market
Exhibit 25: Buyers of CRAMS services from India
Exhibit 26: Indian Contract Research Market Segmentation
Exhibit 27: Indian Pharma Outsourcing Graduation
Exhibit 28: Factors Shaping India’s Contract Research Industry
Exhibit 29: SWOT Analysis of India
Exhibit 30: Chemistry Platforms
Exhibit 31: Outsourced Activities and Technologies to India
Exhibit 32: India-Cost Competitiveness
Exhibit 33: Comparative Rating of Outsourcing Destinations
Exhibit 34: India Vs China
Exhibit 35: Business Models for Contract Research Organizations
Exhibit 36: In- Licensing Deals by Indian Pharma Companies
Exhibit 37: Out- Licensing Deals by Indian Pharma Companies
Exhibit 38: Notable Mergers & Acquisitions in 2007
Exhibit 39: Vendor Segmentation
Exhibit 40: Market Share Split by Vendor Segments
Exhibit 41: Vendor SWOT Analysis
Exhibit 42: Capability Rating for Vendor Segments
Exhibit 43: Contract Research Services Players
Exhibit 44: Service Mapping – Multinational Captives
Exhibit 45: Service Mapping – Domestic Pharma
Exhibit 46: Service Mapping – Pure Play CRAMS
Exhibit 47: Service Mapping – Mid-sized Domestic Pharma
Exhibit 48: Service Mapping – Emerging Niche Players
Exhibit 49: Legal Status, Sources of Funds and US Presence
Exhibit 50: Future Winners
Exhibit 51: Global R&D Outsourcing Expenditure Estimates
Exhibit 52: Global Contract Research Market Forecasts (2007-2011)
Exhibit 53: Growth of Indian Contract Research Market
Exhibit 54: Projected Growth Pattern in Tax Preparation Services of Vendor Segments
Exhibit 55: Projected Segments Mix in 2010
Exhibit 56: Infrastructural Strengths for Custom Synthesis Segment
Exhibit 57: Benefits of Outsourcing “One-stop” shop
Exhibit 58: Collaborative Models Preferred by Vendor Segments
Exhibit 59: Expected Changes in Vendor Landscape
Exhibit 60: Go-to Market Strategies by Vendor Segments
Exhibit 61: Targeting Customers
Exhibit 62: Partnering Strategies for Vendors
Exhibit 63: Growth of the Indian Biotech Market (2004-2006)
Exhibit 64: Indian Biotech Industry: Segment Share
Exhibit 65: R&D Competence Areas in Biotechnology
Exhibit 66: Therapeutic groups and their future growth potential
Exhibit 67: Technology Trends
Exhibit 68: Acquisitions in Contract Research Market
Exhibit 69: Acquisitions in CRAMS Market
Exhibit 70: Options to Evaluate prior to Outsourcing
Exhibit 71: Rating Parameters for Vendor Selection
Exhibit 72: Vendor Evaluation Criteria
Exhibit 73: Essentials of an SLA
Exhibit 74: Changing Regulatory Framework (1975 – 2005)
Exhibit 75: Implications for Contract Research
Exhibit 76: Pre and Post Product Patent Environment
Exhibit 77: R&D Spend of Indian Companies (FY 2006)
Exhibit 78: Implications of IPA on Indian Pharma Companies
Exhibit 79: Certifying bodies of various countries

Table of Contents (Bi-Monthly Update)

1. Contract Research Newsletter
2. Alliances in Contract Research
2.1  Contract Research Deals
2.2  Mergers and Acquisitions
3. Q&A with Company CEO
4. Recent News clips
5. About ValueNotes
6. About Knowgenix 

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