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| Veeda Clinical Research Corporate Blog on internal news, views, happenings in the group and discussion about the industry subjects. |
1/18/2010
 
GMD- Mr. Apurva Shah GMD-Mr. Binoy Gardi
Veeda Clinical Research is a global Indian CRO which brings to you a progressive blend of tangible and intangible reading in a series of quarterly newsletter. This edition, the first for the year 2010 starts with the Message from the founders and Group managing directors, Mr. Binoy Gardi and Mr. Apurva Shah. The Founders are the pioneers in a new generation of entrepreneurship in clinical research where they have dared to dream of the skies. The founders have achieved the fastest growth in the Indian CRO market. With their dynamic corporate strategies the founders placed the foundations of Veeda in the Indian geography in Ahmedabad in the year 2004 followed by an acquisition in the United Kingdom in the subsequent year. The strategy to implement the concept of outsourcing clinical research to India has been the prime focus of Mr. Gardi and Mr. Shah. The stepping stone to growth establishment in clinical research was Bio equivalence studies in India and NCE development in the United Kingdom. With a clear vision and sound understanding of their business goals in a market with double digit growth, the founders have taken the company to the levels of the fastest growing Indian CRO in the business achieving a growth (organic and inorganic) at least double of the market rates. Veeda CR has achieved what no other company has achieved in the present and that too without a corporate backing.
Since its inception, Veeda CR has been in an expanding phase under the able leadership of its founders. Data management services were started by Veeda CR with an acquisition of a DM (DICE CRO) unit in 2006-2007 followed by the establishment of an oncology division with acquisitions in the year 2008.Veeda CR has an impeccable track record has overcome major challenges and believes in team augmentation. Veeda CR offers Lab services, DM services, BA BE studies and Oncology services and has achieved milestones by working with at least Top 5 of the Big Pharma companies for studies in major therapeutic areas of interest mainly Women's health, elderly subjects , CV studies and CNS to name a few.
Children who do not have parents are termed as orphans and are catered by social organizations or government funded organizations. Once suitable foster parents are found for them, they continue to grow up in the custody of their existing environment.
Global Pharma is now moving to focus on the orphan drug area for clinical development. The times and the regulatory requirements for the same are more flexible. The investments in the clinical trials are conducted for rare diseases for smaller/ miniscule section of the population. The incidence of diseases for orphan drugs is generally lower than expected and can be claimed as a drug for a higher pricing while placing the trial results post Phase III.
Pharma investment is generally a long term investment for all viable reasons because diseases are going to rise and medicines will always be needed. So pharmaceuticals will always be in demand.
At this point in time, as you are aware most major MNC's are trying to increase stake in Indian Subsidiaries especially Novartis (71% to 90% approx), Pfizer has nearly taken over Aurobindo, Sanofi is likely to go for some Indian Pharma major any time in the next few months and Glaxo may manage to place a little stake in Dr. Reddy's share. The situation is technically volatile.
If you are really going for Pharma today, Zydus cadila stock or its subsidiary may be okay for the time being. Lupin is another company which is both Long and short term. Lupin generaly targets the EU and makes money in the EU. If the EU market opens up to India again depending if a resolution is arrived on the recent drug seizures, then Lupin is good bet. Just check JB chemicals and Cipla, Mumbai. It has been quiet for a while from their side. Cipla generally gets Government contracts for exports to African countries (AIDS drugs) . So this company's stock postion will always be credible in the long and short term.
Generic manufacturers like Dishman or may be Troika ( if it is listed, I am not aware) can be taken because these companies function on short term market gains only.( based on the nature of their press releases)
For Outsourcing manufacturing business like Biocon (Syngene and Clingene) once again benefits are likely.
A "new "thought" that came to my mind if you allow some money to be "risked", is to buy a stock of a company with an office which is also a local threat to China. Many Chinese companies are listed on the NYSE.
These are only advisory statements based on the nature of press releases of various companies. Actual figures and market performance at the BSE should be analysed from a pre recession (before 2007) perspective and current scene before investing.
Sometimes Pharma may be as volatile as mutual funds!
Global multinational drug companies' need to outsource manufacturing to low-cost destinations like India has turned out to be a boon for leading drug companies in India such as Ranbaxy, Cipla, Dr Reddy's Laboratories and Aurobindo. Thanks to such deals, these drug companies are now well poised to post growth in excess of 20 per cent every year for the next five to 10 years, say industry analysts. Most of these players, who follow different generic business models, were growing organically at an above industry-average growth rate of 12 per cent for the past five years. More such deals, which also include equity investments, are being discussed in the boardrooms of multinationals and Indian generic companies, said industry circles.
In the changing global drug manufacturing landscape, profitability in multinational drug companies is under pressure from patent expirations, pricing challenges and falling research and development productivity. As a result, companies like Pfizer, GlaxoSmithKline (GSK), Sanofi-aventis, Astra Zeneca and Merck & Co are closing their manufacturing units in the developed world and moving production to low-cost destinations.
The BioEntrepreneur award was given to Apurva Shah and Binoy Gardi of Veeda Clinical research for emerging as a global CRO
The market for the Site management organizations in India till date has been an area of clinical research with a presence which has yet to take to a place in the calculators of the forecasters. With cancer due to the most potential and growing area of interest for conducting clinical trials in India, the need to classify this market as a growth driver to the already existing clinical research arises in the current scenario.
Below is a hypothetical model which signifies the presence of the"proposed' SMO market in India. The SMO market in India is predicted to be major driver of the Indian Clinical research market in the times to come (estimations based on the pre recession period indicate the market to be growing in the range of 25-50%).
Clinical trials are the preferred market of interest for SMO's. Out of the total of around 60,500 Clinical Trials conducted across the globe, 58 percent are in North America, 19 percent in Europe, 5 percent in Central and South America, 5 percent in China, 3 percent in Arab & Middle East Countries, 2 percent in Africa, a little above 1 percent (616) in India and only 0.1 percent (80) in Pakistan. Biopharmaceutical Clinical Trials is highest in Asia after Eastern Europe
As 2010-2011 approaches and the scene for the a record breaking expiries of patented drugs as compared to any year since the last 5 years, it remains to be seen as if the cliff hanger for Big Pharma.
The important thing as this can be viewed as the most strategic opportunity for CRO's conducting bio equivalence studies for generic drugs especially the emerging regions with significant projected growths for their outsourcing budgets. The cliff hanger trend is an indicator of the trend for which Big Pharma will have to take cautionary approach but for those companies which are in the CRO business of BA Be studies for generic drugs the "growth line " (In blue). It would be always projected towards profits only.
What will happen in the upcoming years for Pharma? Pharma R&D spending is slowing – 0-5% annual growth which is likely the reality. Patent cliff is coming – increasing the need for more compounds. There is a need to continue to spend and find opportunities for new drugs- Post M&A restructuring will likely result in substantial R&D synergies.CRO industry growth is increasingly and biotech funding decreasing, CROs are more dependent on greater outsourcing – strategic alliances will be key going forward. Expect share shift towards larger CROs in the future, larger CROs are putting up larger booking numbers-Outsourcing will continue to movie ex-US
"Street" view – tough 2009 but improvement in 2010 CROs will be valued differently from the future.
Outsourcing stocks have performed nicely, but underperformed since September 2008.
Horse Riding Yesterday- Pre 2007 (Just before the recession) for the CRO Industry
(The outsourcing Industry was booming!)
Horse riding has taken a changed look to a mouse riding on an elephant for the CRO Industry today
(The inevitable question- has the horse rider become a "mouse "(market transformation) and has started targeting /focusing on larger domain/geography/ broadening their service areas like a "heavy" elephant. This has retarded the speed of the target market.)
The last 12 months have been very difficult for the whole world and especially the CRO industry. The collapse of the financial system has meant significant reduction in funding for small pharma/biotech. The impact on the CRO industry has further been exaggerated as many of the large pharmaceutical companies are merging with each other causing many studies to be frozen or rationalized.
Based on market reports the worst affected sector in clinical development has been early phase studies. The first 6 months of this calendar year were particular difficult and the number of RFPs received from the previous year was significantly down despite continuous business development efforts. However, we have noticed a dramatic increase in RFPs since July and we hope that this trend increases in the New Year. We believe the worst is over.
In order to continue our growth the name of the game is to attract more RFPs and increase our conversion rates from RFPs to studies won. In view of the current economic environment we have increased our marketing and business development initiatives.
On the Marketing front in order to showcase the scientific expertise within Veeda we have launched webinars wherein our senior people share their knowledge on key industry topics. We expect to conduct at least 2 webinars every month. The first one was attended by about 20 people and the second webinar which took place earlier this month had about 40 people.
We have added fresh information and case studies on our website which highlight our expertise in various therapeutic areas.
We have been having a very good response from the market for our bioanalytical laboratory in Ahmedabad. Therefore the entire Indian laboratory section in our website has been revamped to promote it as a standalone service. Poster presentations and publications by our people have been added to the laboratory section for further recognition of our scientific know-how.
Continuing our focus on Asia and the successful conference in Japan with Kinsato University our website is now also available in Japanese to attract more business from the Japanese sponsors.
Due to the additional on-line marketing efforts put-in we have been able to increase the number of visitors to our website by 44% in comparison to the previous quarter.
Marketing our Biometrics services has been the other focus area in the past quarter. We have launched a new website www.veedabiometrics.com and are taking up widespread marketing initiatives to promote Veeda Biometrics which will surely bear fruits in the coming year. Autumn is often a busy period for Pharmaceutical conferences and Veeda has certainly shown its presence. We have attended two major conferences in Europe and USA and two others in UK and Europe. Each of these conferences attracted over 1000 visitors and has helped us generate over 100 leads for the coming year. In Europe we attended the 8th Annual Partnership in Clinical Trials which was in general an excellent meeting for making contact with key decision makers from mid size to large pharma across Europe. In USA we participated at the 2009 AAPS (American Association of Pharmaceutical Scientists) Annual Meeting and Exposition. This is one of the largest meetings in the world for the Pharmaceutical industry and a must attend. We have also launched 2 newsletters that will be sent out to clients every quarter. One is on the NCE market and the other is targeted to our Generic client base.
The above is just a glimpse of the efforts that are being put-in for a continuous flow of business. Things usually do not happen overnight but we can assure you that there is a lot more happening backstage and the year 2010 will be yet another year filled with excitement. |
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