assignment for project planning-1

8/8/2019 Assignment for Project Planning-1

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ASSIGNMENT FOR PROJECT PLANNING &CONTROLGuide: Prof. Deepak Danak

Prepared By:FALGUN BHATT 082125GUNJAN SHAH 082126

MBA PT (2008-11)

INSTITUTE OF MANAGEMENT, NIRMA

UNIVERSITY [This project report is prepared for

pharmaceutical Unit.]


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D E C L A R A T I O N

This is to certify that we, the undersigned, have prepared this report for the submission to

be made under Group Assignment component of assessment for the Project Planning and

Control course. It has not been submitted, nor will it be submitted, for assessment by any

of us or anybody else for any other course.

1) Signature:

Name: Falgun Bhatt

Roll No. 082125

2) Signature:

Name: Gunjan Shah

Roll No. 082126

Date: September 3, 2010

Thanks


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OBJECTIVE: TO ESTABLISH A PHARMACEUTICAL UNIT FORINTERMEDIATES & MEDICINES

INDUSTRY: PHARMACEUTICAL

PRODUCT: INTERMEDIATES / MEDICINES

GENERATION AND SCREENING OF PROJECT IDEAS:

GENERATION OF IDEAS:

(1)SWOT ANALYSIS: Strengths

1. Low cost of production.

2. Large pool of installed capacities3. Efficient technologies for large number of Generics.

4. Large pool of skilled technical manpower.

5. Increasing liberalization of government policies.

Opportunities1. Aging of the world population.

2. Growing incomes.

3. Growing attention for health.

4. New diagnoses and new social diseases.

5. Spreading prophylactic approaches.

6. Saturation point of market is far away.

7. New therapy approaches.

8. New delivery systems.

9. Spreading attitude for soft medication (OTC drugs).

10. Spreading use of Generic Drugs.

11. Globalization

12. Easier international trading.

13. New markets are opening.


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Weakness1. Fragmentation of installed capacities.

2. Low technology level of Capital Goods of this section.

3. Non-availability of major intermediaries for bulk drugs.

4. Lack of experience to exploit efficiently the new patent regime.

5. Very low key R&D.

6. Low share of India in World Pharmaceutical Production (1.2% of world

production but having 16.1% of worlds population).

7. Very low level of Biotechnology in India and also for New Drug Discovery

Systems.

8. Lack of experience in International Trade.

9. Low level of strategic planning for future and also for technology forecasting.

Threats1. Containment of rising health-care cost.

2. High Cost of discovering new products and fewer discoveries.

3. Stricter registration procedures.

4. High entry cost in newer markets.

5. High cost of sales and marketing.6. Competition, particularly from generic products.

7. More potential new drugs and more efficient therapies.

8. Switching over form process patent to product patent

(2)CLEAR ARTICULATION OF OBJECTIVE: The main driving for this project generation is that the pharmaceutical is the

evergreen field as it directly affects the human kind.

Direct medicine manufacturing is more difficult to enter in market both in termsof distribution and brand management and also to develop trust.

So we feel that it will be better to go for low cost, good quality intermediates tothe medicine manufacturers.


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(3)BUSINESS ENVIRONMENT: The Indian Pharmaceutical Industry today is in the front rank of Indias science

based industries with wide ranging capabilities in the complex field of drug

manufacture and technology. A highly organized sector, the Indian Pharma

Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent

annually. It ranks very high in the third world, in terms of technology, quality and

range of medicines manufactured. From simple headache pills to sophisticated

antibiotics and complex cardiac compounds, almost every type of medicine is

now made indigenously.

Playing a key role in promoting and sustaining development in the vital field ofmedicines, Indian Pharma Industry boasts of quality producers and many units

approved by regulatory authorities in USA and UK. International companies

associated with this sector have stimulated, assisted and spearheaded this dynamic

development in the past 53 years and helped to put India on the pharmaceutical

map of the world.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000registered units. It has expanded drastically in the last two decades. The leading250 pharmaceutical companies control 70% of the market with market leader

holding nearly 7% of the market share. It is an extremely fragmented market with

severe price competition and government price control.

The pharmaceutical industry in India meets around 70% of the country's demandfor bulk drugs, drug intermediates, pharmaceutical formulations, chemicals,

tablets, capsules, orals and injectibles. There are about 250 large units and about

8000 Small Scale Units, which form the core of the pharmaceutical industry in

India (including 5 Central Public Sector Units). These units produce the complete

range of pharmaceutical formulations, i.e., medicines ready for consumption by

patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and

used for production of pharmaceutical formulations.


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Following the de-licensing of the pharmaceutical industry, industrial licensing formost of the drugs and pharmaceutical products has been done away with.

Manufacturers are free to produce any drug duly approved by the Drug Control

Authority. Technologically strong and totally self-reliant, the pharmaceutical

industry in India has low costs of production, low R&D costs, innovative

scientific manpower, strength of national laboratories and an increasing balance

of trade. The Pharmaceutical Industry, with its rich scientific talents and research

capabilities, supported by Intellectual Property Protection regime is well set to

take on the international market.


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MARKET AND DEMAND ANALYSIS:

INTERNATIONAL MARKET:

The global pharmaceutical market will grow 4-6% this year and rise 5-8%annually to 2014, when it will be worth $1.1 trillion, says market researcher IMS

Health.

In its market report, IMS Health said the size of the global market forpharmaceuticals is expected to grow nearly $300 billion over the next five years.

The 5-8 percent compound annual growth rate during this period reflects the

impact of leading products losing patent protection in developed markets, as well

as strong overall growth in the worlds emerging countries. These conclusions are

included in the latest release of IMS Market Prognosis.

The report said global pharmaceutical sales growth of 4-6 percent is expected thisyear, consistent with IMSs prior forecast. In 2009, the market grew 7 percent to

$837 billion, compared with a 4.8 percent growth rate in 2008.

Patient demand for pharmaceuticals will remain robust, despite the ongoingeffects of the economic downturn being felt in many parts of the world, said

IMSs Murray Aitken, senior vice president, Healthcare Insight. In developed

markets with publicly funded healthcare plans, pressure by payers to curb drug

spending growth will only intensify, but that will be more than offset by the

ongoing, rapid expansion of demand in the pharmerging markets. Net growth over

the next five years is expected to be strong even as the industry faces the peak

years of patent expiries for innovative drugs introduced 10 - 15 years ago and

subsequent entry of lower-cost generic alternatives.


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INDIAN MARKET:

According to a Yes Bank report titled 'Indian Pharmaceutical Industry: Vision2015', the Indian pharmacy industry is expected to grow at a Compound Annual

Growth Rate (CAGR) of 14.2 percent to $50 billion by 2015-16.

According to the report, the expected growth rate for exports driven by contractresearch was estimated at a CAGR of 16.2 percent, while the domestic market

growth rate was at 12.50 percent. As an emerging contract research and clinical

trial base, India is expected to garner a significant share of the market. It is

expected that Indian contract research industry to be worth $3 bn by 2015.

The report mentions that the domestic formulation industry grew byapproximately 14 percent per annum over the last six years to reach $8.4 bn in

2007, a growth rate much higher than that of the global pharmaceutical market.

The formulation market is expected to continue its robust growth, touching $21.5

bn by the year 2015. the report also stated that till 2015, the chronic disease

segment will drive industry demand. Also, MNCs will increase their presence in

the domestic formulation market with 35 percent market share. Branded generics

will continue to dominate, while patent protected products are likely to constitute

eight percent of the market within this time frame.

The report on the basis of international growth trends, expects the global genericmarket to grow to $140-150 bn by 2015 and Indian formulation exports to reach

$12-13 bn by 2015. The cost benefits in the pharmaceutical market are expected

to shift from producers to consumers, resulting in lower margins in the generic

business.

The global bulk drug industry has also undergone development as a result ofgrowth in formulation. With a growth rate of 11 percent over the past five years,

the industry reached $90 bn in 2007. The Indian bulk drug exports have reached$4.2 bn in 2007-08 from $1.2 bn in 2002. The report estimated the Indian bulk

drug exports to reach $12.5 bn by 2015.


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BACKGROUND ANALYSIS OF THE INDIAN PHARMACEUTICAL SECTOR:

The Indian pharmaceutical industry was estimated at US $16.6 billion (including exports)

in2007-08. Indias healthcare spending is around 6 per cent of the total gross domestic product

(GDP) of India

Highly fragmented formulation industry:

The formulations industry is highly fragmented both in terms of the number of manufacturers as

well as the variety of products. There are about 300-400 units in the organized sector and

around15,000 units in the unorganized (small scale) sector that form the core of the industry. The

industry has a wide range of over 100,000 drugs spanning across various therapeutic categories.

Supremacy of the Indian companies vis--vis multinational players:

Indian companies dominate the formulations market as seven out of the top ten players

areIndian. The formulation market in India is quite concentrated. The top five formulations

companies, Cipla, Ranbaxy, GlaxoSmithKline, Cadila Healthcare, and Piramal Healthcare,

accounted for about 22.3 per cent of the domestic formulation market in 2007-08. The market is

concentrated at the top with top 10 players controlling about 36%of the total formulaton sales.

Concentrated Manufacturing:

In geographical terms manufacturing operations are largely concentrated in Maharashtra, Andhra

Pradesh.However, many players have shifted their manufacturing bases to excise free zones like

Baddi (Himachal Pradesh) and Haridwar (Uttaranchal) due to the shift towards MRP based

excise duty levy. In 2006, the per capita annual drug expenditure in India was around $3 as

compared to $412 and$191 in Japan and US, respectively. This can be attributed to the huge

population in India and the declining health expenditure as a percentage of total government

expenditure in India.

Unlike US, India does not have a strong health insurance sector to share the healthcare cost

withthe patient. Consumers do not directly pay for their medicines in the US. Government

organizations and managed care organizations reimburse most of the drug cost to the patients

inUS. However, with rising drug expenditure, patients are being asked to share a large portion of


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their expenses. This has prompted consumers to choose generic drugs and forego the use of high

priced branded drugs.

Porters Five Force Model for Pharmaceutical Industry:

1) Barriers to entry: Licensing, distribution network, patents, plant approval by regulatoryAuthority.

2) Bargaining power of suppliers: Distributors are increasingly pushing generic productsin a bidto earn higher margins.

3) Bargaining power of customers: High, a fragmented industry has ensured that there iswidespread competition in almost all product segments. (Currently also protected by theD

PCOi.e Drug price Control Order).

4) Competition: High Very fragmented industry with the top 300 (of 24,000 manufacturingunits)players accounting for 85% of sales value. Consolidation is likely to intensify.

5) Supply: Higher for traditional therapeutic segments, which are typical of a developingmarket.

6) Relatively lower for lifestyle segment.7) Demand: Very high for certain therapeutic segments. Will change as life expectancy,

literacyincreases.


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TECHNICAL ANALYSIS:

MANUFACTURING PROCESS:

There are two major types of drug design. The first is referred to as ligand-based drug design and

the second, structure-based drug design.

Ligand based

Ligand-based drug design (or indirect drug design) relies on knowledge of other molecules that

bind to the biological target of interest. These other molecules may be used to derive

a pharmacophore which defines the minimum necessary structural characteristics a molecule

must possess in order to bind to the target. In other words, a model of the biological target may

be built based on the knowledge of what binds to it and this model in turn may be used to design

new molecular entities that interact with the target.

Structure based

Structure-based drug design (or direct drug design) relies on knowledge of the three dimensional

structure of the biological target obtained through methods such as x-ray

crystallography or NMR spectroscopy.[4] If an experimental structure of a target is not available,

it may be possible to create a homology model of the target based on the experimental structure

of a related protein. Using the structure of the biological target, candidate drugs that are

predicted to bind with high affinity and selectivity to the target may be designed using interactive

graphics and the intuition of amedicinal chemist. Alternatively various automated computational

procedures may be used to suggest new drug candidates.

As experimental methods such as X-ray crystallography and NMR develop, the amount of

information concerning 3D structures of biomolecular targets has increased dramatically. In

parallel, information about the structural dynamics and electronic properties about ligands has

also increased. This has encouraged the rapid development of the structure-based drug design.

Current methods for structure-based drug design can be divided roughly into two categories. The

first category is about finding ligands for a given receptor, which is usually referred as

database searching. In this case, a large number of potential ligand molecules are screened to

find those fitting the binding pocket of the receptor. This method is usually referred as ligand-

based drug design. The key advantage of database searching is that it saves synthetic effort to


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obtain new lead compounds. Another category of structure-based drug design methods is about

building ligands, which is usually referred as receptor-based drug design. In this case, ligand

molecules are built up within the constraints of the binding pocket by assembling small pieces in

a stepwise manner. These pieces can be either individual atoms or molecular fragments. The key

advantage of such a method is that novel structures, not contained in any database, can be

suggested. These techniques are raising much excitement to the drug design community.

Active site identification

Active site identification is the first step in this program. It analyzes the protein to find the

binding pocket, derives key interaction sites within the binding pocket, and then prepares the

necessary data for Ligand fragment link. The basic inputs for this step are the 3D structure of the

protein and a pre-docked ligand in PDB format, as well as their atomic properties. Both ligand

and protein atoms need to be classified and their atomic properties should be defined, basically,

into four atomic types:

hydrophobic atom: all carbons in hydrocarbon chains or in aromatic groups. H-bond donor: Oxygen and nitrogen atoms bonded to hydrogen atom(s). H-bond acceptor: Oxygen and sp2 or sp hybridized nitrogen atoms with lone electron

pair(s).

Polar atom: Oxygen and nitrogen atoms that are neither H-bond donor nor H-bondacceptor, sulfur, phosphorus, halogen, metal and carbon atoms bonded to hetero-atom(s).

The space inside the ligand binding region would be studied with virtual probe atoms of the four

types above so the chemical environment of all spots in the ligand binding region can be known.

Hence we are clear what kind of chemical fragments can be put into their corresponding spots in

the ligand binding region of the receptor.


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Ligand fragment link

Flow chart for structure based drug design

When we want to plant seeds into different regions defined by the previous section, we need a

fragments database to choose fragments from. The term fragment is used here to describe the

building blocks used in the construction process. The rationale of this algorithm lies in the fact

that organic structures can be decomposed into basic chemical fragments. Although the diversity

of organic structures is infinite, the number of basic fragments is rather limited.

Before the first fragment, i.e. the seed, is put into the binding pocket, and add other fragments

one by one. we should think some problems. First, the possibility for the fragment combinations

is huge. A small perturbation of the previous fragment conformation would cause great

difference in the following construction process. At the same time, in order to find the lowest

binding energy on the Potential energy surface (PES) between planted fragments and receptor

pocket, the scoring function calculation would be done for every step of conformation change of

the fragments derived from every type of possible fragments combination. Since this requires a


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large amount of computation, one may think using other possible strategies to let the program

works more efficiently. When a ligand is inserted into the pocket site of a receptor, conformation

favor for these groups on the ligand that can bind tightly with receptor should be taken priority.

Therefore it allows us to put several seeds at the same time into the regions that have significant

interactions with the seeds and adjust their favorite conformation first, and then connect those

seeds into a continuous ligand in a manner that make the rest part of the ligand having the lowest

energy. The conformations of the pre-placed seeds ensuring the binding affinity decide the

manner that ligand would be grown. This strategy reduces calculation burden for the fragment

construction efficiently. On the other hand, it reduces the possibility of the combination of

fragments, which reduces the number of possible ligands that can be derived from the program.

These two strategies above are well used in most structure-based drug design programs. They are

described as Grow and Link. The two strategies are always combined in order to make the

construction result more reliable.

Scoring method

Structure-based drug design attempts to use the structure of proteins as a basis for designing new

ligands by applying accepted principles of molecular recognition. The basic assumption

underlying structure-based drug design is that a good ligand molecule should bind tightly to its

target. Thus, one of the most important principles for designing or obtaining potential new

ligands is to predict the binding affinity of a certain ligand to its target and use it as a criterion for

selection.

The sub models of empirical functions differ due to the consideration of researchers. It has long

been a scientific challenge to design the sub models. Depending on the modification of them, the

empirical scoring function is improved and continuously consummated.

Rational Drug Discovery

In contrast to traditional methods ofdrug discovery which rely on trial-and-error testing of

chemical substances on cultured cells or animals, and matching the apparent effects to

treatments, rational drug design begins with a hypothesis that modulation of a specific biological

target may have therapeutic value. In order for a biomolecule to be selected as a drug target, two

essential pieces of information are required. The first is evidence that modulation of the target

will have therapeutic value. This knowledge may come from, for example, disease linkage


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studies that show an association between mutations in the biological target and certain disease

states. The second is that the target is "drugable". This means that it is capable of binding to a

small molecule and that its activity can be modulated by the small molecule.

Once a suitable target has been identified, the target is normally cloned and expressed. Theexpressed target is then used to establish a screening assay. In addition, the three-dimensional

structure of the target may be determined.

Computer Assisted Drug Design

Computer-assisted drug design uses computational chemistry to discover, enhance, or

study drugs and related biologically active molecules. The most fundamental goal is to predict

whether a given molecule will bind to a target and if so how strongly. Molecular

mechanics or molecular dynamics are most often used to predict the conformation of the small

molecule and to model conformational changes in the biological target that may occur when the

small molecule binds to it. Semi-empirical, ab initio quantum chemistry methods, or density

functional theory are often used to provide optimized parameters for the molecular mechanics

calculations and also provide an estimate of the electronic properties (electrostatic

potential, polarizability, etc.) of the drug candidate which will influence binding affinity.

Molecular mechanics methods may also be used to provide semi-quantitative prediction of the

binding affinity. Alternatively knowledge based scoring function may be used to provide bindingaffinity estimates. These methods use linear regression, machine learning, neural nets or other

statistical techniques to derive predictive binding affinity equations by fitting experimental

affinities to computationally derived interaction energies between the small molecule and the

target.

Ideally the computational method should be able to predict affinity before a compound is

synthesized and hence in theory only one compound needs to be synthesized. The reality

however is that present computational methods provide at best only qualitative accurateestimates of affinity. Therefore in practice it still takes several iterations of design, synthesis, and

testing before an optimal molecule is discovered. On the other hand, computational methods

have accelerated discovery by reducing the number of iterations required and in addition have

often provided more novel small molecule structures.


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Drug design with the help of computers may be used at any of the following stages of drug

discovery:

1. hit identification using virtual screening (structure- or ligand-based design)2. Hit-to-lead optimization of affinity and selectivity (structure-based design, QSAR, etc.)3. lead optimization optimization of other pharmaceutical properties while maintaining

affinity

Flowchart of a Usual Clustering Analysis for Structure-Based Drug Design

In order to overcome the insufficient prediction of binding affinity calculated by recent scoring

functions, the protein-ligand interaction and compound 3D structure information are used to

analysis. For structure-based drug design, several post-screening analysis focusing on protein-

ligand interaction has been developed for improving enrichment and effectively mining potential

candidates:

MATERIAL INPUT:

1. APIS2. Sustained & Immediate Release Pellets3. Excipients & Resins4. Plant extracts


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PHASES OF DEVELOPMENT:

New medicines are developed through a series of controlled trials which assess the safety

and efficacy of each new medicine by applying high scientific standards. An experimental

medicine is first tested in the laboratory and in animal studies. After this preclinical testing,

the medicine can advance to clinical testing.

Clinical trials involve volunteer trial participants. To ensure that such trials are conducted

ethically, there are extensive rules and standards governing the trial design; investigator

qualifications and training; external review by an Institutional Review Board (IRB) or ethics

committee; ongoing monitoring of all of the trial sites; and obtaining informed consent after

the presentation to the potential trial participant of the risks and potential benefits of

participation. All trial participants are free to withdraw from the trial at any time.

The Phases of Clinical Development

Phase 1

In Phase 1, an experimental medicine, also called an "investigational new drug", is

administered, for the first time, to humans. Phase 1 clinical trials usually focus on safety and

tolerability, rather than the effectiveness of a new medicine. During this phase, low doses of

an experimental medicine are administered to a small number of participants under the close

supervision of an investigator. Trial participants are typically healthy individuals, although

for some medicines, the first trials in human participants are patients with the disease that

the experimental medicine is intended to treat. The dose of the new medicine is gradually

increased during Phase 1 clinical trials to allow the investigator to measure the participant's

clinical response to the medicine, whether the medicine is sufficiently absorbed, how long

the medicine remains in the bloodstream after dosing, and which dosage levels are safe and

well tolerated.


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Phase 2

In Phase 2, the focus of the trials is on the effectiveness of an experimental medicine in

treating an illness or medical condition. Information about the experimental medicine's

safety, side effects, and potential risks is also collected. In this phase, researchers work to

determine the most effective dosages for the experimental medicine and the most

appropriate method of delivering it (e.g., tablets, extended release capsules, infusions,

injections, etc.). Phase 2 clinical trials involve a larger number of trial participants; typically

up to several hundred participants (although in some cases there could be fewer than 100).

The participants studied in Phase 2 clinical trials are usually patients who have the medical

condition that the experimental medicine is intended to treat. They are usually identified by

physicians at research centers, clinics, and hospitals at multiple sites around the world.

Phase 3

Phase 3 trials test the results of earlier trials in larger populations and gather additional

information about the effectiveness and safety of an experimental medicine. This phase will

usually involve several hundred to several thousand participants from multiple sites with

many physician-investigators. These trials are often randomized and "double-blinded."

"Double blinded" means that during the trial, neither the investigator nor the participant

know who in the trial are getting the experimental medicine versus a placebo (sugar pill) oranother medicine (a "comparator"). Phase 3 trials generally provide the primary basis for the

benefit-risk assessment for the new medicine and much of the core information about the

medicine that is analyzed for inclusion that will be described in the labeling of the medicine.

Registration

The next step in bringing a new medicine to market is the filing of an application with the

health regulatory authority of a country in order to obtain approval to market the new

medicine. This step is known as registration. In the U.S., a New Drug Application (NDA) is

filed with the U.S. Food and Drug Administration (FDA). In Europe, a Market

Authorization Application (MAA) is filed with the European Agency for the Evaluation of

Medicinal Products (EMEA). A description of the medicine's manufacturing process along

with quality data and trial results are provided to the health regulatory authorities in order to


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demonstrate the safety and effectiveness of the new medicine. If approval is granted, the

new medicine can then be sold for use by patients.

Recent Approvals

Medicines that have been recently approved for marketing in the U.S. or Europe are known

as "recent approvals."

Phase 4

Phase 4 trials - also called "post marketing studies" - are conducted after the regulatory

approval of a medicine. Through such trials, researchers collect additional information about

long-term risks, benefits, and optimal use. These trials often involve thousands of subjects

and may continue for many years.

LOCATION:

160acre site with 2.7 millionsquarefeet of stateoftheart facility space More than 4,00 highly skilled research scientists, technicians, clinicians, and other

professionals employed

Functions:

Discovery, Drug Metabolism, Pharmaceutical Sciences, Development, Animal Health, and Drug

Effectiveness and Safety Evaluation

Therapeutic Areas:

Inflammation Development, Infectious Diseases (Antibacterials), Cardiovascular/Metabolic

Diseases, Neurosciences

Key Technologies:

Molecular Profiling, GeMM (Genetically Modified Models), Liquid Materials

Management, Reagent Antibody, Discovery High Throughput Screening, ADME

(absorption, distribution, metabolism, excretion and toxicity) Screening, Biocatalysis,

Microbiology, Spray Dried Dispersion, Parental Form, DART, Safety Pharmacology, Whole

Body, Biobank


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FINANCIAL ANALYSIS:

(1)BASIC DETAILS:Name of Company Rolson Pharma Ltd

Currency-Rs.in (M,Cr,)Rs. In Crore

Reporting PeriodYearly

No. of Year

Projected Year-12011







Projected Year-8

2018




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(2)COST OF PROJECT:Cost of Project and Means of Finance

Rs. In CroreCost of Project

Land and site development100.00

Building150.00

Plan and Machinery500.00

Miscellaneous Fixed assets40.00

Preliminary Expenses20.00

Pre-Operative expenses80.00

(including interest

during construction)

Contingency margin60.00

Working capital margin50.00

Total 1,000.00

Means of Finance

Share Capital150.00

Term Loans650.00

State Governments Spicial200.00

incentive loan( Repayable in

6 installments after 12 years)

Total 1,000.00


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(3)INTEREST ON TERM LOAN:Interest on TermLoan

Loan Amount ( Rs.In M ) 650.00Installment No. 16HY installment 40.625Rate of Interest 12%

Rs. In Crore

Year Loan Loan inst. Loan inst. Loan o/s Loan o/s Int. for the Int. for theTotalint.

o/s at paid paid at the end at the end first half second half for the

the for first for second of the first of the year yeartermloan

beginning half year half year half year secondhalf year

1 2 3 4 5 6 7 8 9=7+8

2011 650.00 - - 650.00 650.00 39.00 39.00 78.00

2012 650.00 - 40.63 650.00 609.38 39.00 39.00 78.00

2013 609.38 40.63 40.63 568.75 528.13 36.56 34.13 70.69

2014 528.13 40.63 40.63 487.50 446.88 31.69 29.25 60.94

2015 446.88 40.63 40.63 406.25 365.63 26.81 24.38 51.19

2016 365.63 40.63 40.63 325.00 284.38 21.94 19.50 41.44

2017 284.38 40.63 40.63 243.75 203.13 17.06 14.63 31.69

2018 203.13 40.63 40.63 162.50 121.88 12.19 9.75 21.94

2019 121.88 40.63 40.63 81.25 40.63 7.31 4.88 12.19

2020 40.63 40.63 - - - 2.44 - 2.44


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(4)WORKING CAPITAL REQUIREMENT:Working Capital Requirements

Margin of WC 25%

Rs. In Crore

Sr.No. Item Norms in 2011 2012 2013

Months

A

1 Raw Materials(Including Consumables) 2.00 146.25 170.63 195.00

2 Stock-in-Process 0.50 39.21 45.72 52.27

3 Finished Goods 1.00 78.50 91.52 104.63

4 Book Debts * 1.00 112.50 131.25 150.00

Total Current Assets 376.46 439.12 501.90

B Less : Margin for Working Caiptal from 94.11 109.78 125.48

Long term Sources(25% of Total CurrentAssets)

C Less : Trade Credit for Raw Materials 0.50 36.56 42.66 48.75

and Consumable Stores

D Bank Finance for Working Capital (A-B-C) 245.78 286.69 327.68


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ECONOMIC ANALYSIS:

The days when the Indian pharmaceutical industry was synonymous with cheap generic drug

production are passing. While generics continue to play a major part in the industrys success,

many companies have started down the long road of drug discovery, novel product development

and pharma services. With high-quality research, low-cost manufacturing facilities and educated

personnel, the Indian pharmaceutical industry presents both a competitive threat and partnering

opportunities.

A significant international industry

India is the worlds fourth largest producer of pharmaceuticals by volume, accounting for around

8% of global production. In value terms, production accounts for around 1.5% of the world total.

The Indian pharmaceutical industry directly employs around 500,000 people and is highly

fragmented. While there are around 270 large R&D based pharmaceutical companies in India,

including multinationals, government-owned and private companies, there are also around 5,600

smaller licensed generics manufacturers, although in reality only around 3,000 companies are

involved in pharmaceutical production. Most small firms do not have their own production

facilities, but operate using the spare capacity of other drug manufacturers.

A new approach

The advent of pharmaceutical product patent recognition in January 2005 changed the ground

rules for Indian companies. In the run up to the new post-patent era and since, the Indian industry

has been evolving. R&D departments are moving away from reverse-engineering in favour of

developing novel drug delivery systems and discovery research. It is anticipated that the

experience of selling generics in the international market will hold Indian companies in good

stead for selling their own branded products to these markets in the future.

Focus on...current and future markets

The dynamics of the domestic Indian market have always encouraged Indian industry to pursue

overseas lines of business. Expansion comes at a cost and some companies have had to

restructure. In June 2009, Wockhardt divested its German business, esparma and more recently,


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in March 2010, Orchid sold its generic injectable formulations business to Hospira but came out

of the deal with a long term supply agreement for its APIs.

INDIA

India remains an important market for the vast majority of Indian companies. The indigenous

industry supplies around 70% of the countrys pharmaceuticals. The proportion of revenue

derived from India depends largely on the strategy of the individual company and its penetration

into overseas markets. For example, while Zydus Cadila aims to grow rapidly overseas, India

remains its most important market, accounting for 55.8% of revenue in fiscal 2008/09. India is

also Ciplas key market, generating almost half of the companys revenue in 2008/09, although

this percentage has been declining in recent years as the company has increasingly targeted

overseas markets. Other companies, such as Dr. Reddys, are less reliant on the Indian market; in

2008/09, India contributed just 17% of the companys global revenue.

INTERNATIONAL DEVELOPMENT

The attractive opportunities offered by the loss of patent protection on several major products in

the coming period, and resolution of the biosimilar regulatory issue in the US, has to be offset

against price reduction pressures driven by the ongoing economic downturn and aggressive

competition for the business that is on offer.

USA: The largest generic market and the most sought after target for Indian companies involved

in the generic business, is the US. As more companies gained the expertise to file for FDA

approval, the number of ANDAs approved increased dramatically. In 2005, the number

increased to 52 and subsequently increased year-on-year, to reach 132 in 2008. In 2009, the total

number of ANDA approvals was 125. In the first quarter of 2010, a further 20 were approved.

UK: Over 80% of prescriptions in the mature UK market are written generically. The UK has

always been a focus for Indian companies with 9 companies running 11 manufacturing sites.

Between January 2009 and January 2010, Indian companies had more than 260 marketing

authorisations approved by the UKs Medicines and Healthcare Regulatory Agency (MHRA) for

a wide range of products. During this period, Ranbaxy received 55 approvals; Dr. Reddys

received 54; Aurobindo received 39; and, Lupin received 25.


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Europe: Beyond the UK and Germany, significant European markets have been slow to adopt a

vigorous generics drugs policy. However, pressure on governments to cut costs in the face of

burgeoning drugs bills and economic recession, are seeing countries such as France, Italy and

Spain exploring the increased use of generics. A number of Indian companies are either

monitoring them from the sidelines or have already identified growth potential; Ranbaxy, for

example is established in France, Germany, Italy and Spain.

Brazil: Brazil is perhaps the most notable emerging generic market in recent years. According to

the Brazilian generic industry association, Pr-Genricos, prices of generic medicines have to be

at least 35% cheaper than prices of original medicines but, in practice, they are up to 50%

cheaper. In 2009, generic medicines represented 19.4% of the pharmacy sector by volume,

increasing 19.0% over the previous year to 330.0 million units. In value terms, pharmacy sales of

generic medicines increased by 24.0% to R$4.5 billion (US$2.2 billion). Indian companies have

been present in the Brazilian market for several years. In 2008, Indian pharmaceutical exports to

Brazil were valued at around US$166 million per year and made up a significant part of all trade

between India and Latin America.

Australia: Due to low prices of branded products, Australia is not yet a major market for

generics. A number of leading drugs are due to lose patent protection, but price competition

tends to be muted for off-patent drugs. The government is, however, currently looking at ways to

boost generic consumption in an effort to rein in the overall drugs bill. The market is beginning

to attract Indian companies, a number of which have gained approval from the Therapeutic

Goods Administration for their manufacturing facilities and a range of products.

Indian pharmaceutical companies are no strangers to competition. The Indian market is highly

competitive with more than 300 organised players and branded promotional costs associated with

every product, yet the industry is able to offer low-priced products and remain profitable in

India. However, whether the Indian industry will be able to maintain the pace of expansion

across the world is questionable in the current economic climate.


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The Indian Pharma Industry - looking beyond generics

The Indian pharmaceutical industry has a long history of reverse-engineering and its ability to

produce and distribute globally generic copies of pharmaceutical products is well proven. Post

TRIPs, the R&D focus of Indian companies has shifted towards novel drug delivery systems or

discovery research. But the global launch of innovative new products is still some way off, so

what are the options for companies going forward?

In-licensing and custom manufacturing are alternative strategies to generics

Building upon its strengths in chemical synthesis and process engineering, the availability of

highly-skilled labour and a low-cost manufacturing base, some companies have elected to pursue

alternative business strategies.

Piramal Healthcare has always partnered global innovator companies and, in addition to an

extensive Indian generic business, is a global player in custom manufacturing and has a number

of early stage development candidates. In May 2010, it was announced that Abbott had agreed to

pay a total of US$3.7 billion for the domestic drug business, leaving Piramal to concentrate on its

research, formulation and customer manufacturing businesses.

Another company with a diverse portfolio of services is Jubilant Organosys. The companys

main focus is its Pharmaceuticals and Life Sciences Products and Services business, which has

grown significantly over the last few years. Jubilant is active in APIs, proprietary products,

contract manufacturing of liquid and lyophilized sterile injectables, ointments, creams and

liquids, radiopharmaceuticals, drug discovery services, medicinal chemistry services, clinical

research services, generic dosage forms and healthcare.

Biosimilars

The resolution of the regulatory issues surrounding biosimilars in the USA has removed at least

one obstacle to the development of these products. As one of the leading producers of generic

drugs, it is logical that Indian companies would see biosimilars as a natural follow-on business.

Recent milestones in the development of biosimilars include:


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Biocon signed a collaborative agreement with Mylan in June 2009 on the development,manufacturing, supply and commercialisation of multiple, high-value generic biologic

compounds for the global marketplace. The collaboration combines Biocons scientific

and biologics manufacturing with Mylan's global commercial footprint.

In March 2010, Ranbaxy and the San Diego, California-based Pfenex announced thatthey had entered into an agreement under which Ranbaxy will develop an undisclosed

biosimilar therapeutic produced in the Pfenex Expression Technology platform, a

pseudomonas-based recombinant protein technology.

In February 2009, Wockhardt announced that it had launched Glaritus, a recombinantlong-acting human insulin analogue, in India. The company commented that it was the

first company in the world, after the innovator, to launch this particular type of insulin,

which works slowly for over 24 hours.

Role of Pharma Sector in Indian Economy:

The Indian Pharmaceutical industry is currently the largest amongst the developing nations

andone of the flagship sectors of the Indian economy. Indian pharmaceutical companies continue

tomove to the center stage of the global pharmaceutical market. As such The Indian government

has listed the pharmaceutical industry as an intellectual industry and investment in research and

Development has been enhanced.

The pharmaceutical industry in India has emerged, as a prominent maker ofhealthcare products, currently meeting almost 95% of the domestic healthcare

needs.

From a modest beginning in 1970, today the total Indian pharmaceutical sector isvaluedat US $ 8.8 billion with a growth rate of 8 %. The Indian pharmaceutical industry

is a netexporter of bulk drugs and generics and ranks 17th in the world in terms of bulk

drug andformulation exports. In 2004-05 the net pharmaceutical export was more than

US $ 3.75billion, formulations accounted for 55% while the remaining 45% came from

bulk drugs.


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Exports of pharmaceuticals have been consistently outstripping the value of

corresponding Imports in the period 1996-97 upto 2008-09.Thetrade balance

increased from Rs. 2157 crores in 1996-97 to Rs29881 crores in 2008-09.

India, with its increasing pool of. 29881 crores in 2008-09. intellectual workforce andlower production costs israpidly turning into a manufacturing hub for global outsourcing.

The average life expectancy in India is 63 years as compared to 78 years in developedcountries. However, Indias improving healthcare delivery infrastructure has ensured the

continued rise in life expectancy and maternity child care measures. There has been a

strengthening of specific programs, such as the Expanded Program on Immunization

(EPI) and the introduction of Oral Rehydration Therapy (ORT) in 198687. Ongoing

measures seek to control local endemic diseases. The consequent increase in life

expectancy drives the growing proportion of an aging population - the 60+ age-group will

account for 11% of total population by 2021. This will further boost growth of the

pharmaceutical industry.

As the Indian Pharma Industry grows- more and bigger players gear up to bringglobal blockbusters in the Indian market, as such bringing in more funds to the

Indian economy through FDI Investments and Joint Ventures. The Pharmaceuticals

sector has been able to attract FDI amounting to Rs.21409 million during the period fromApril, 2007 to April, 2009including Rs. 43.42 million in the first month of the current

year.

The pharmaceutical industry in India has made phenomenal progress in the past 10 years.With over $ 8 billion in domestic sales and another $ 5 billion in exports in the year 2006,both growing at double digit, it has acquired its place in the sun. It has also started

making global footprints and over $ 2.5 billion worth of acquisitions were made overseas

in past couple of years.

Employment:Indian pharmaceutical sector employs over 42 lakh people directly and


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Indirectly.

Exports of pharmaceuticals at Rs 38433 crores in FY 2008-09 registered a growth rate of25% in

2008-09. This is quite impressive, given the growth in the countrys total exportsof all

commodities was at 16.9% in the corresponding period

Social Benefits:

Major causes of concern are environmental issues pertaining to pharma industry. With the

funding from world bank technological advances can be made moving towards cleaner

environment. Thus reducing health hazards resulting from toxic wastes. This would intern result

in higher life expectancy thereby increasing the potential workforce for the entire Indian

economy


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ECOLOGICAL ANALYSIS:

Basic Principles on the Environment

1. Overall Policy

Give serious consideration to the impact on the environment in every aspect of corporate

activities, including R&D, production, distribution, marketing, procurement and clerical

works, and make the best efforts to conserve and improve the environment.

2. Efficient Utilization of Resources and Minimization of Waste

Conserve energy and other resources, and actively pursue waste minimization and resource

recycling.

3. Assessment of Environmental Impact from Products and Manufacturing Processes

When developing new products and processes, evaluate the impact on the environment in

advance, during development, and periodically after commercialization. Consider the entire

business cycle from procurement of raw materials and supplies through the use and the final

disposal of products to reduce the impact on the global environment.

4. Development and Utilization of Environmental Technologies

Develop technologies for environmental protection and improvement, and actively pursue

outside technologies when it is beneficial.

5. Response to Emergencies

When an adverse effect on the environment is foreseen, exercise the best possible contingent

efforts to eliminate or minimize such adverse impact.

6. Clear Definition of Accountability and Responsibility

Appoint executives and managers in charge of environment-related activities and clearly

define their authority.


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7. Cooperation with the Community and Society at Large

Actively cooperate with the environmental efforts of local communities and provide fair and

unbiased information.

8. Education and Training

Educate and train each employee to understand and realize the importance of environmental

issues and to act accordingly in his or her daily routine.

Environment and Safety Management Structure

ISO14001

Rolson Pharma Ltd. Also plan for ISO 14001 certification, a globally accredited authentication

for an environmental management system.

Responsible Care Activities

Responsible Care

Responsible Care is an international voluntary program dealing with the management of

chemical substances by businesses, with activities now extending to 52 countries. The purpose of

the program is to secure "environment," "safety" and "health" while handling chemical

substances and Rolson has plan to implement such activities.

082125 FALGUN BHATT # 082126 GUNJAN SHAH

assignment for project planning-1

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