Indian pharma companies focus on innovative research in foreign countries through dedicated entities: GlobalData

New Delhi: Indian pharma players have increased their focus on innovative research and development (R&D). Historically, the majority of Indian companies used to execute their innovative research and development (R&D) from India. However, Indian companies have started establishing dedicated research companies in Western countries as well. Against this backdrop, the success of these dedicated research companies will compel more Indian companies to open new dedicated R&D companies in foreign countries, says GlobalData, a leading data and analytics company.

Historically, leading Indian players like Sun Pharma and Dr. Reddy’s used to execute their innovative R&D in India through a dedicated research company. Sun Pharma formed Sun Pharma Advanced Research Company as part of the demerger in 2007. Similarly, Dr Reddy’s operates its research company Aurigene Oncology, founded in 2002.

Prashant Khadayate, Pharma Analyst at GlobalData, comments: “By demerging R&D units and creating new R&D companies, parent firms de-risk their main business from the risks associated with the failure of research projects without impacting the profit and loss of the main business. Moreover, research companies could expect to raise more funds from investors.”

On the contrary, a few Indian pharma companies have established dedicated research companies in major markets like the US and Europe. Examples of such Indian pharma companies are Zydus Lifesciences Ltd, Glenmark Pharma, Alembic Pharmaceuticals Ltd and Suven Life Sciences Limited.

Zydus Lifesciences has established Zydus Therapeutics in the US. Glenmark Pharma has spun out its innovative biologics research division into a wholly owned subsidiary Ichnos Sciences Inc. It is now an alliance known as Ichnos Glenmark Innovation (IGI) with a US headquarters. Suven Neurosciences, Inc. is a US-based subsidiary of Suven Life Sciences Limited. Rhizen Pharmaceuticals AG is a Switzerland-based associate company of Alembic Pharmaceuticals Ltd.

According to GlobalData’s Pharmaceutical Intelligence Center, as of 20 December 2024, there are a total of 16 drugs in the pipeline from Phase I to Phase III, with the above companies having a base in the US or Europe. Two drugs are in Phase III from these companies.

Khadayate concludes: “Indian pharma companies with their research arms in the US or Europe are certainly benefitting from the local talent in those countries. The pipeline drugs from these companies look promising and are expected to bring rewards for these companies in the future. Based on their success, this model is expected to be followed by other Indian companies as well. It will also help Indian companies establish themselves on the innovative R&D front and is expected to fuel the growth of Indian companies globally in the innovative drugs space.”