Pharma companies eye bigger share in expanding diabetes therapeutics market

Competition is stiff between domestic and international companies to gain a large share for the diabetes market that is growing at a phenomenal rate

With the number of patients spiralling up, India is becoming the ‘diabetes capital’ of the world. This growth will propel pharma companies’ future as well. According to research reports, total anti-diabetic market in India will grow at a compound annual growth rate (CAGR) of 13% over 2009-2019 to Rs7,348.9 crore from Rs2,127.3 crore.

 “Poor affordability, bio-similars of insulin analogues and lack of data protection restricts growth of the anti-diabetics market in India. Relative positions of top companies in Indian diabetes market are likely to remain unchanged. However, Indian companies could lose a marginal market share on account of new patented product launches lined up by multi-national pharma companies (MNCs),” said BRICS Securities in a research note.

The total diabetes therapeutics market in India has grown at a CAGR of 21% to Rs3,307.20 crore in 2011 from Rs1,852.4 crore in 2008 while the oral anti-diabetics accounts for 71% of the diabetes treatment market in 2011. According to some reports, the prevalence of diabetes in the country has reached at around 3.7% of the total population.
During 2011, insulin sales were Rs950.3 crore comprising over 27% of the anti-diabetes market. The insulin market recorded 20% CAGR over 2006-09 and is expected to grow to Rs2816.4 crore by 2019 of which pre-mixed insulin is the major revenue contributor.

In the insulin market, the pre-mixed class has high acceptance with human Mixtard 30/70 from Abbott (Novo Nordisk) is the leader in this segment, followed by Humulin Mix from Eli Lilly. According to market research firm IMARC Group the size of India’s insulin market is expected to grow three-fold by 2015 from $147 million in 2010.

“Indian regulators have banned rosiglitazone due to possible risks of myocardial infarction. This has left a void in thiazolidinediones-often called TZDs or glitazones market of which majority of patients will move to other TZD class drug like pioglitazone and its combinations,” the brokerage said.

In India, Abbott, with a large insulin portfolio, is the leader in anti-diabetic market with 22% share while USV with 11% market share is the leader in oral anti-diabetic segment. Although generics still dominate the Indian diabetes therapeutics market, a number of new launches like Januvia have witnessed strong uptake on stronger IPR regime and greater affordability by patients.

Bio-similar incursion will eat into the market share of insulin analogues of MNCs. Leading domestic companies like Biocon, Shreya Lifesciences, USV and Wockhardt are developing bio-similars for recombinant human insulin and insulin analogues. Biocon has successfully created bio-similars for insulin analogues like lispro, aspart and glargine. “However, despite having capability to manufacture bio-similars for insulin aspart and lispro, Biocon does not market these in India. Wockhardt has also developed bio-similars for insulin glargine,” said BRICS Securities.

Affordability of healthcare is a serious challenge in India because more than 75% of expenses on healthcare are through out-of-pocket while per capita personal disposable income is low. Many MNCs have adopted differential pricing strategy for new drugs to enable more patients’ access these drugs. However, these drugs with reduced prices remain out of reach and unaffordable for a large section on the population.
International Diabetes Federation, in a release said data from global studies demonstrates that the number of people with diabetes in 2011 has reached a staggering 366 million, 46 lakh deaths are due to diabetes and health care spending on diabetes has reached $465 billion. In 2011, one person is dying from diabetes every seven seconds, the release said.
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Small investor requests SEBI to take action in India Foils merger case

 According to the minority shareholder, the orders issued by BIFR for merger of India Foils with Ess Dee are beyond the powers of the reconstruction board

Nagpur-based Laxmi Girish Jalan has requested the Securities & Exchange Board of India (SEBI) to initiate action against orders passed by the Board for Industrial and Financial Reconstruction (BIFR) in the India Foils case as these orders are beyond the powers and authority (ultra vires) of BIFR. Mrs Jalan, in a notice sent through her counsel Sandeep Jalan, also said that she may approach the Bombay High Court, in case SEBI fails to respond.

In what appears to be another case of absolute apathy and discrimination, minority shareholders have been crying foul about the merger deal between India Foils and Ess Dee Aluminium as they feel the acquirer has put a ridiculously low valuation.

Earlier in September 2010, the BIFR sanctioned and approved the merger of India Foils with Ess Dee in terms of the modified rehabilitation scheme. According to the scheme, India Foils’ shareholders were offered a share-swap ratio of 1285:1. This also meant that India Foils’ shareholders would surrender their 1,285 shares to get a single share of Ess Dee. Apparently, Mumbai-based chartered accountant firm, MP Chitale & Co, did this incredible valuation for the merger.

In November 2008, Ess Dee bought a majority stake in India Foils for Rs130 crore from the Anil Agrawal-led Vedanta Group as part of the rehabilitation scheme approved by the BIFR. However, advocate Mr Jalan has objected to the scheme of rehabilitation saying that BIFR cannot change ownership of a company. “According to Section 18 of the Sick Industrial Company (SIC) Act, among other things, the proposed scheme may provide for financial reconstruction, change or appointment of new board of directors, etc. While looking at, all the provisions of section 18 of SIC Act, 1985, it is nowhere provided that the ownership of the sick industrial company can be changed, save, by way of amalgamation,” he said in the notice, a copy of which is with Moneylife.

Mr Jalan said, the amalgamation ordered between India Foils and Ess Dee was ‘absolutely unwarranted’ and there was no ‘cause of action’ for the BIFR to exercise its jurisdiction. “The clause of SIC Act, 1985 does not contemplate the nature of amalgamation effected between sick India Foils and Ess Dee and the said amalgamation, in particularly frustrates the mandate of Section 18(3)(a) of the SIC Act, 1985 and Regulation 30 of BIFR Regulations 1987,” the notice said.

Some years ago, Kumar Mangalam Birla, who controls Hindustan Aluminium, almost bought India Foils, the Kolkata-based aluminium foil-maker. His team took a close look at the books of the company and balked. Then a more intrepid and ambitious businessman jumped in—Anil Agarwal of Sterlite. He is more adept at wading through the mess and fixing it—or so he thought. But even he gave up. Finally, it was left to the local boy who had made it good in Mumbai to come back and invest in his home state. Sudip Datta of Ess Dee Aluminium took over India Foils, a sick company, from Anil Agarwal for Rs130 crore.

After relisting it in June 2009, India Foils’ shares last traded on the Bombay Stock Exchange on 22nd October at Rs5.12 apiece.


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2G case: SC grants bail to five corporate executives

The apex court also directed release of Reliance ADAG managing director Gautam Doshi, Sanjay Chandra, Vinod Goenka, on furnishing two surities of Rs5 lakh each

The Supreme Court on Wednesday granted bails to five corporate executives who were arrested for their roles in the second-generation (2G) spectrum allocation scam allegedly involving former telecom minister A Raja and Tamil Nadu chief minister M Karunanidhi's MP daughter Kanimozhi. This is the first bail the 2G spectrum case granted by the apex court.

A bench comprising Justices GS Singhvi and HL Dattu directed release of accused from Tihar Jail including Reliance ADAG managing director (MD) Gautam Doshi, Hari Nair and Surendra Pipara, Unitech MD Sanjay Chandra and Swan Telcom's director Vinod Goenka, on furnishing two sureties of Rs5 lakh each.
The accused had moved the apex court challenging Delhi High Court and trial court orders turning down their bail pleas. The Central Bureau of Investigations (CBI) had opposed their release on bail saying they could approach the trial court for relief.

The bail plea of Ms Kanimozhi and four others is due to come up for hearing before the Delhi High Court on 1st December. Other accused in the case include Mr Raja's private secretary RK Chandolia, who is a suspended IRS officer, and former Telecom Secretary Siddhartha Behura. Swan Telecom promoter Shahid Usman Balwa, his cousin Asif Balwa and their colleague Rajeev Agarwal, besides DMK-run Kalaignar TV MD Sharad Kumar and Mumbai filmmaker Karim Morani are the other accused arrested in the 2G spectrum case.

The CBI chargesheeted 14 persons in the 2G scam, with Mr. Raja being the first to be arrested on 2 February 2011, along with Mr Behura. Three telecom companies, Reliance Telecom Ltd, Swan Telecom and Unitech (Tamil Nadu) Wireless Ltd too have been listed as accused in the CBI charge sheet.

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