Monday, January 19, 2009

 

Contract Research boom

Indian contract research and manufacturing companies (Crams) such as Divis Laboratories, Jubilant Organosys, Piramal Healthcare, Biocon and Dishman Pharma may to benefit from the global slowdown as MNCs step up outsourcing to cut costs. India is an attractive destination for global companies for cost-effectiveness without compromising on quality, as drug development and manufacturing can be done in India at 40 per cent of the expenses in the US and Europe. India’s total CRO market in 2007 was about $323 million and is expected to grow at around 49 per cent CAGR up to 2010, according to a study by PricewaterhouseCoopers (PWC).

Pharma innovator companies globally are cutting costs. GlaxoSmithKline is planning to cut 1,000 sales jobs, BMS has announced cost cutting of $2.5 billion by 2012. Aztra Zeneca is trimming its workforce by 9,000 people and Pfizer is closing down several manufacturing units and downsizing its workforce.

The Indian drug discovery services market, which includes biology and chemistry-based services and pre-toxicology services are estimated to touch $820 million by 2013, according to a Kotak Institutional Equity report. India’s chemistry skills, availability of labour, strengthened intellectual property rules and capabilities in pre-clinical development may lead to a contract research boom.

Business Standard

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