MPS Pharmaa Ltd Management Discussions

Industry Structure and Development and Market Size

India is a significant player in the global medicines industry. In addition, the country holds a large number of scientists and engineers that can propel the sector forward to even greater heights.In the manufacturing of generic medicines around the world, India takes the first place. The Indian pharmaceutical business supplies 50% of global demand for a variety of vaccines, 40% of generic demand in the United States, and 25% of all medication in the United Kingdom. India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of scientists and engineers with a potential to steer the industry ahead to greater heights. Presently, over 80% of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms.

The Indian pharmaceutical industry ranks third globally in pharmaceutical production by volume and is known for its generic medicines and low-cost vaccines. Major segments of Indian Pharmaceutical Industry include generic drugs, OTC medicines, bulk drugs, vaccines, contract research & manufacturing, biosimilars and biologics. India is a global leader in the supply of DPT, BCG, and Measles vaccines. India is one of the biggest suppliers of low-cost vaccines in the world. India accounts for 60 percent of global vaccine production, contributing 40 to 70 percent of the WHO demand for Diphtheria, Tetanus and Pertussis (DPT) and Bacillus Calmette-Guerin (BCG) vaccines, and 90 percent of the WHO demand for the measles vaccine. There are 500 API manufacturers contributing about 8% in the global API Industry. India is the largest supplier of generic medicines. It manufactures about 60,000 different generic brands across 60 therapeutic categories and accounts for 20% of the global supply of generics. Access to affordable HIV treatment from India is one of the greatest success stories in medicine. Because of the low price and high quality, Indian medicines are preferred worldwide, making it "pharmacy of the world".

Indian pharmaceutical industry plays significant role globally, supplying affordable and lowcost generic drugs to millions of people across the globe. The sector offers lower cost without compromising on quality as is reflected by the fact India has the highest number of United States Food and Drug Administration (USFDA) approved pharmaceutical plants outside the US and also a significant number of World Health Organization (WHO) Good Manufacturing Practices(GMP)-compliant plants as well as plants approved by regulatory authority of other countries. Indias pharmaceutical sector forms a major component of the countrys foreign trade and has been consistently making trade surplus.

FOREIGN DIRECT INVESTMENT

Pharmaceutical sector has emerged as a favourite destination for the foreign investors and is one of the top ten attractive sectors for foreign investment in India. The Government has put in place an investor-friendly Foreign Direct Investment (FDI) policy to promote investment in the Sector. 100% foreign investment is allowed under automatic route in Medical Devices. In pharmaceuticals, up to 100% FDI in greenfield projects and up to 74% FDI in brownfield projectsis allowed under the automatic route. Foreign investment beyond 74% in brownfield projects requires Government approval. After the abolition of the Foreign Investment Promotion Board (FIPB) in May 2017, the Department of Pharmaceuticals has been assigned the role to consider the foreign investment proposals under the Government approval route. Apart from this, the Department considers all FDI proposals of the pharmaceutical sector and medical devices sector wherein investors/ultimate beneficiaries in the investment proposals are from the countries sharing land border with India. The sector contributes about 3.71% of total FDI inflows in the country across various sectors. Total FDI inflows in Pharma and Medtech Sectors have been Rs. 1,32,568 crore from April 2000 to September 2022. During the financial year 2022-23 (till December 2022), Department of Pharmaceuticals approved 13 FDI proposals that would result in foreign investment inflow of Rs 2,814 crore in the brownfield projects of pharmaceutical sector.

MARKET SIZE

Market size of India pharmaceuticals industry is expected to reach US$ 65 billion by 2024, and US$ 130 billion by 2030. According to the government data, the Indian pharmaceutical industry is worth approximately US$ 50 billion with over US$ 25 billion of the value coming from exports. About 20% of the global exports in generic drugs are met by India.India is among the top 12 destinations for biotechnology worldwide and 3rd largest destination for biotechnology in Asia Pacific. In 2022, Indias Biotechnology industry has crossed US$ 80.12 billion, growing 14% from the previous year.

The Indian pharmaceutical industry has seen a massive expansion over the last few years and is expected to reach about 13% of the size of the global pharma market while enhancing its quality, affordability, and innovation.

The biosimilar market in India is estimated to grow at a compounded annual growth rate (CAGR) of 22% to become US$ 12 billion by 2025. This would represent almost 20% of the total pharmaceutical market in India.

India is the 3rd largest producer of API accounting for an 8% share of the Global API Industry. About 500+ different APIs are manufactured in India, and it contributes 57% of APIs to prequalified list of the WHO. The current market size of the medical devices sector in India is estimated to be US$ 11 billion and its share in the global medical device market is estimated to be 1.5%.

Indian pharma companies have a substantial share in the prescription market in the US and EU. The largest number of FDA- approved plants outside the US is in India.

According to the Indian Economic Survey 2021, the domestic market is expected to grow 3x in the next decade. Indias domestic pharmaceutical market stood at US$ 42 billion in 2021 and is likely to reach US$ 65 billion by 2024 and further expand to reach US$ 120-130 billion by 2030. Indias biotechnology industry comprises biopharmaceuticals, bio-services, bioagriculture, bio-industry, and bioinformatics. The Indian biotechnology industry was valued at US$ 70.2 billion in 2020 and is expected to reach US$ 150 billion by 2025. Indias medical devices market stood at US$ 10.36 billion in FY20. The market is expected to increase at a CAGR of 37% from 2020 to 2025 to reach US$ 50 billion. As of August 2021, CARE Ratings expect Indias pharmaceutical business to develop at an annual rate of 11% over the next two years to reach more than US$ 60 billion in value.

In the global pharmaceuticals sector, India is a significant and rising player. India is the worlds largest supplier of generic medications, accounting for 20% of the worldwide supply by volume and supplying about 60% of the global vaccination demand. The Indian pharmaceutical sector is worth US$ 42 billion worldwide.

EXPORTS

Pharmaceutical is one of the top ten attractive sectors for foreign investment in India. The pharmaceutical exports from India reach more than 200 nations around the world, including highly regulated markets of the USA, West Europe, Japan, and Australia. India supplied around 45 tonnes and 400 million tablets of hydroxychloroquine to around 114 countries globally.

Indias drugs and pharmaceuticals exports stood at Rs. 2,08,231 crore (US$ 25.3 billion) for FY23, as per the data by Pharmexcil.Exports of Drugs & Pharmaceuticals was estimated to be at US$ 2.48 billion in March, 2023 and shared 6.47% of the total exports of the month.

India is the 12th largest exporter of medical goods in the world. Indian drugs are exported to more than 200 countries in the world, with US being the key market. Generic drugs account for 20% of the global export in terms of volume, making the country the largest provider of generic medicines globally. Indian drug & pharmaceutical exports stood at US$ 24.60 billion in FY22. Indian drug & pharmaceutical exports stood at US$ 2.19 billion in September 2022.

INVESTMENTS AND RECENT DEVELOPMENTS

The Indian Pharmaceuticals industry plays a prominent role in the global pharmaceuticals industry. India ranks third worldwide for production by volume and 14th by value.

In this regard the sector has seen a lot of investments and developments in the recent past.

• Up to 100%, FDI has been allowed through automatic route for Greenfield pharmaceuticals projects. For Brownfield pharmaceuticals projects, FDI allowed is up to 74% through automatic route and beyond that through government approval.

• Emcure Pharmaceuticals Limited (EPL) becomes the first ever company to launch Orofer FCM 750, a new extension of its parenteral iron brand containing Ferric carboxymaltose (FCM). The dose is suitable for the majority of Indian patients with iron deficiency and iron deficiency anemia.

• Japanese companies have been invited to invest in the Indian Pharmaceutical and Medical Device Industry. The cooperation between Pharmaceutical Traders Association and Japan Federation of Medical Devices Associations of the two countries can contribute to stabilize the global supply-chain especially of APIs and Medical Devices.

• Sun Pharmaceutical Industries Limited announced the successful completion of its acquisition of Concert Pharmaceuticals, Inc. on March 6, 2023, a late-stage clinical biopharmaceutical company that is developing deuruxolitinib, a novel, deuterated, oral JAK1/2 inhibitor, for the potential treatment of adult patients with moderate to severe alopecia areata.

• Glenmark Pharmaceuticals Ltd. (Glenmark), an innovation-driven, global pharmaceutical company, is the first to launch a unique I.V. injection formulation, Akynzeo I.V., in India for the prevention of chemotherapy-induced nausea and vomiting (CINV), under an exclusive licensing agreement with Helsinn, a Swiss biopharma group company.

• Entod Pharmaceuticals has recently launched its new ocular aesthetic range focused on improving eye comfort and enhancing the aesthetics of the eyes.

• BDR Pharmaceutical has launched the first generic apalutamide (brand name Apatide) in India to treat both metastatic castration sensitive prostate cancer as well as non-metastatic castration resistant prostate cancer. The product will be available across India.

• Anglo French Drugs & Industries Limited (AFDIL), a 99-year-old organization in the pharmaceutical sector, announced that it has entered into the fertility space with the launch of the LYBER range.

• Eli Lilly introduces Ramiven in India, for certain high-risk early breast cancer patients in November 2022.

• ICPA Health Products Ltd (ICPA), a leading pharma company in the oral healthcare segment, has launched its latest product - Heximetro at the annual conference of the Indian Society of Periodontology (ISP) in November 2022.

• The FDI inflows in the Indian drugs and pharmaceuticals sector reached US$ 19.90 billion between April 2000-June 2022.

• The Indian pharmaceutical industry generated a trade surplus of US$ 15.81 billion in FY22.

• Medical Device industry is expected to reach US$ 50 billion by 2030 growing at a CAGR of 15%.

• In November 2022, Sun Pharma and SPARC entered into a license agreement for commercialization of phenobarbital for injection in the US.

• Glenmark becomes the First Company in India to launch Teneligliptin + Dapagliflozin Fixed Dose Combination in October 2022.

• In October 2022, Lupin signed an agreement to acquire two inhalation brands from Sunovion Pharmaceuticals Inc.

• Dr. Reddys Laboratories announced the launch of Lenalidomide Capsules in the U.S. with two of six strengths eligible for first-to-market, 180-day exclusivity in September 2022.

• In June 2022, Cipla partnered with Drugs for Neglected Diseases initiative (DNDi) to announce the launch of a 4-in-1 antiretroviral treatment for children living with HIV in South Africa.

• Glenmark becomes the first pharmaceutical company to launch Indacaterol + Mometasone fixed-Dose combination drug for Asthma in India.

• In May 2022, Sun Pharmaceutical Industries Limited through one of its wholly owned subsidiaries plans to launch Bempedoic Acid under the brand name Brillo, in India for reducing low-density lipoprotein (LDL) cholesterol.

• In May 2022, Dr. Reddys Laboratories enters into exclusive partnership with HK inno.N Corporation to commercialise novel molecule Tegoprazan in India & select emerging markets.

• In April 2022, Dr Reddys Laboratories Ltd. inked a pact with MediCane Health to announce the launch of medical cannabis products in Germany.

• The Union Cabinet has given its nod for the amendment of existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100% under the automatic route for manufacturing of medical devices subject to certain conditions.

• In March 2022, Themis Medicare Ltd. (Themis), announced the approval of its antiviral drug VIRALEX by the Drug Controller General of India (DCGI).

• The National Digital Health Blueprint has the potential to generate nearly US$ 200 billion in added economic value for Indias healthcare industry over the next 10 years.

GOVERNMENT INITIATIVES

Some of the initiatives taken by the Government to promote the pharmaceutical sector in India are as follows:

• As per the Union Budget 2023-24:

o A mission to eliminate sickle cell anemia by 2047 will be launched. It would involve raising awareness, conducting a comprehensive screening of seven crore individuals in the impacted tribal regions between the ages of 0 and 40, and providing counselling through coordinated efforts. o For innovation in the pharmaceutical sector, through centres of excellence, a new initiative to encourage pharmaceutical research and innovation will be implemented. The government persuades business to spend money on R&D in a few chosen priority fields. At the grassroots level, government has also announced on building 157 nursing colleges in co-location with government medical colleges. o The Union Cabinet, on April 26, 2023, approved the National Medical Devices Policy, 2023. The National Medical Devices Policy, 2023 is expected to facilitate an orderly growth of the medical device sector to meet the public health objectives of access, affordability, quality and innovation.

• Ayushman Bharat Digital Mission (ABDM):

o Under the ABDM, citizens will be able to create their ABHA (Ayushman Bharat Health Account) numbers, to which their digital health records can be linked. This will enable creation of longitudinal health records for individuals across various healthcare providers and improve clinical decision making by healthcare providers.

o The pilot of ABDM is completed in the six Union Territories of Ladakh, Chandigarh, Dadra & Nagar Haveli and Daman & Diu, Puducherry, Andaman and Nicobar Islands and Lakshadweep with successful demonstration of technology platform developed by the NHA. o During the pilot, digital sandbox was created in which more than 774 partner solutions are undergoing integration. As on February 21, 2022, 173,369,087 Ayushman Bharat Health Accounts have been created and 10,114 doctors and 17,319 health facilities have been registered in ABDM.

• Scheme for Development of Pharma industry - Umbrella Scheme:

o The Department of Pharmaceuticals has prepared an Umbrella Scheme namely Scheme for Development of Pharma industry. Which comprises of the following sub schemes: o Assistance to Bulk Drug Industry for Common Facilitation Centres o Assistance to Medical Device Industry for Common Facilitation Centres o Assistance to Pharmaceutical Industry (CDP-PS) o Pharmaceutical Promotion and Development Scheme (PPDS) o Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS)

• In March 2022, under the Strengthening of Pharmaceutical Industry (SPI) Scheme, a total financial outlay of Rs. 500 crore (US$ 665.5 million) for the period FY22 to FY26 were announced.

• To achieve self-reliance and minimise import dependency in the countrys essential bulk drugs, the Department of Pharmaceuticals initiated a PLI scheme to promote domestic manufacturing by setting up greenfield plants with minimum domestic value addition in four separate Target Segments with a cumulative outlay of Rs. 6,940 crore (US$ 951.27 million) from FY21 to FY30.

Factors Influencing Growth Of The Industry

The Indian pharmaceutical industry ranks 14th in the world by value of pharmaceutical products. With a well- establisheddomestic manufacturing base and low-cost skilled manpower, India is emerging as a global hub for pharma products and the industry continues to be on a growth trajectory. Moreover, India is significantly ahead in providing chemistry services such as analogue preparation, analytical chemistry, and structural drug design, thereby offering ample scope in contract research and other emerging segments in the pharmaceutical industry. Some of the major factors that would drive growth in the industry are as follows:

• Increase in domestic demand: More than half of Indias population does not have access to advanced medical services and depend on traditional medicine practices. However, with increase in awareness levels,rising per capita income, change in lifestyle due to urbanization, and increase in literacy levels, demand for advanced medical treatment is expected to rise. Moreover, growth in the middle-class population would further influence demand for pharmaceutical products.

• Rise in outsourcing activities: Increase in the outsourcing business to India would also drive growth of theIndian pharmaceutical industry. Some of the factors that are likely to influence clinical data managementand bio-statistics markets in India in the near future include: 1) its cost efficient research vis-a-vis othercountries 2) highly-skilled labour base 3) cheaper cost of skilled labour 4) presence in end-to-end solutionsacross the drug-development spectrum and 5) robust growth in the IT industry.

• Growth in healthcare financing products: Development in the Indian financial industry has easedhealthcare financing with products such as health insurance policy becoming popular. This has resulted in increase in healthcare spending, which in turn, has benefitted the pharmaceutical industry.

SWOT Analysis of the Industry

The SWOT analysis of the industry reveals the position of the Indian pharmaceutical industry in respect to its internal and external environment.

a) Strengths

1. India is regarded as having an edge over China in terms of qualified, English-speaking manpower and fair protection of intellectual property rights supported by well-developed judicial system. (Appendix IV gives more information on IPR status in India).

2. India has skilled scientists/technicians/management personnel at affordable cost leading to low cost of innovation/ manufacturing/capex costs/ expenditure to run cGMP compliance facilities and high quality documentation and process understanding.

3. The country has well developed chemistry, R & D and manufacturing infrastructure with proven track record in advanced chemistry capabilities, design of high tech manufacturing facilities and regulatory compliance.

4. The healthy domestic market with rising per capita expenditure is another significant strength enabling achievement of economies of scale. The country also has a strong marketing & distribution network.

5. India is considered a desirable destination for off shoring of data management functions for clinical trials and also due to its rich biodiversity and strength in Chemistry which are essential for drug discovery.

6. The country has significant ability to circumvent API Patents. India has filed a number of non-infringing process patents. The country has a recent success track record in circumventing formulation patents. Proven Legal skills to evaluate IP and commercial strategies are available at least in select top companies.

7. The present domestic regulatory environment though in need of further improvement has been conducive to the growth of an emerging pharmaceutical industry.

b) Weaknesses

1. Low investments in innovative R&D continue to be a major weakness of Indian pharmaceutical industry.

2. Diffused nature of the Indian pharmaceutical industry means that only about 20 to 30 companies are large enough to bear the transactions costs associated with sustained exports to and compliance with entry regulations of the developed markets.

3. Majority of companies lack the ability to compete with MNCs for New Drug Discovery, Research and commercialization of molecules on a worldwide basis due to lack of resources.

4. Strong linkages between industry and academia which are essential for growth of the industry is lacking in India.

5. Comparatively small domestic market size due to low medical and healthcare expenditure in the country.

6. The country has at times shown inadequate regulatory framework or compliance and enforcement regime, reflected in occurrences such a production of spurious or low quality drugs.

7. Competency in API/Formulation, intellectual property creation, facility design and maintenance, global regulatory affairs, legal intricacies, and managing international work force is limited to a few players among the big players.

8. Rapidly increasing costs of skilled manpower such as scientists/ regulatory compliance personnel / pharmaceutical lawyers/ international business development personnel is pushing up the cost of innovation. Ability to evaluate contracts/alliances etc., is available only in top companies. Significant lacuna in this area exists and companies are falling into traps created by the competitors. Institutionalization of learning in the following areas is restricted:Regulatory affairs knowledge for different countries and continents Process and product patents procedures knowledge for different countries and continents.

9. Sales and marketing knowledge is inadequate due to lack of understanding of international Pharmaceutical marketing/pricing practices and market environment in various countries.

c) Opportunities

1. India is faced with significant export opportunities, such as:

i. US$40 billion worth of drugs in the U.S.A and US$25 billion worth of drugs in Europe are expected to go off patent soon. Assocham estimates that Indian manufacturers may capture 30 percent of that market. This translates to an opportunity of US$19.5bn which is significant considering the countrys current exports of approx. US$7.25bn. However the figures need to be appropriately deflated since Indian opportunity will lie in generics equivalent of branded or patented drugs, which would be cheaper.

ii. Generic launches by Indian manufacturers have increased in the United States from 93 in 2003 to 250 by 2008.

iii. Compulsory licensing provisions negotiated in the Doha Round, allows for countries to import cheaper generic versions of patented drugs in the interests of public health. Thailand and South Africa have already started such initiatives from which Indian firms have benefited.

2 Due to the cost advantage in contract manufacturing & Research multi-national companies find it compelling to shift their production bases to countries offering such cost advantage. Typical of the industry which requires approval of manufacturing facilities by various drug regulatory agencies of the world involving a very high cost, once such business finds base in India it would continue with it for at least one & half to two decades.

3. Licensing deals with MNCs for NCEs (New Chemical Entities) and NDDS (New Drug Delivery Systems) offer new opportunities for Indian manufacturers.

4. Marketing alliances for MNC products in domestic and international market is another emerging opportunity.

5. Contract manufacturing arrangements with MNCs is estimated at 10% of patented markets estimated at US$450bn which is approx. US$45bn.

6. India has a very high potential for developing as a centre for international clinical trials due to its rich diversity.

7. India can become a niche player in global pharmaceutical R&D and possibilities exist for expansion of biotechnology generics (also known as bio-similars) and biopharmaceuticals.

d) Threats / Risks And Concerns

1. Product patent regime poses serious challenge to domestic industry unless it invests in research and development.

2. R&D efforts of Indian pharmaceutical companies are hampered by lack of enabling regulatory requirement.

3. Drug Price Control Order puts unrealistic ceilings on product prices and profitability.

4. Export effort is hampered by procedural hurdles in India as well as non-tariff barriers imposed abroad.

5. Lowering of tariff protection has increased competition in domestic markets resulting in erosion of profitability.

6. Mergers and acquisitions by foreign companies particularly multinational corporations of afew Indian generic leaders may completely change the direction of Indias pharmaceutical movement neutralising its thrust on generics and cost competitiveness.

Road Ahead

The pharmaceutical industry in India is a significant part of the nations foreign trade and offers lucrative potential for investors. Millions of people around the world receive affordable and inexpensive generic medications from India, which also runs a sizable number of plants that adhere to Good Manufacturing Practices (GMP) standards set by the World Health Organization (WHO) and the United States Food and Drug Administration (USFDA). Among nations that produce pharmaceuticals, India has long held the top spot. Medicine spending in India is projected to grow 9-12% over the next five years, leading India to become one of the top 10 countries in terms of medicine spending. Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers, which are on the rise. The Indian Government has taken many steps to reduce costs and bring down healthcare expenses. The National Health Protection Scheme, which aims to offer universal healthcare, the ageing population, the rise in chronic diseases, and other government programmes, including the opening of pharmacies that offer inexpensive generic medications, should all contribute to boost the Indian pharmaceutical industry. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programmes, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.

With significant contributions toward generics, the pharmaceutical industry is all poised to further extend its R&D capabilities and offer cutting-edge products in a post-pandemic world. Here are some of the key areas that must be a focus for the industry to excel in the future:

Innovation and R&D: The industry needs to focus on innovation so as to move up the value chain. The Indian pharma industry requires a strong innovation pipeline with new product launches and molecular entities every year. To achieve the same, the industry is now entering the complex generics and specialised drugs market. The idea should be to enhance pharmas significance in new drug development, biologics and innovations and on increasing capabilities in usage of technology, biological sciences and cell and gene therapy, with the core focus on patient needs.

Digital Transformation: Digital transformation is vital for enhanced patient care, greater transparency, cost-effectiveness, improved production and drug development. Latest technologies such as artificial intelligence (AI), AR/VR, machine learning (ML) and additive manufacturing are helping pharma companies to improve the R&D process, conducting clinical tests in less time and adding innovation to the products as well as improving compliance and efficiencies in manufacturing.

Nurturing Collaborations: During the course of the pandemic, cohesive collaborations between academia, government and industry proved to be the key to promoting research initiatives. Integrated efforts, Regular feedback, sharing and constant dialogue between industry leaders and government authorities proved crucial during the pandemic and the same needs to continue in the future.

Agility to adapt must be the mantra for the pharma industry in sustaining its commitment to better patient care. India must also increase its focus on producing improved drugs, medical devices, biologics, diagnostics and vaccines. This will provide the much-needed impetus to the quality, affordability and accessibility of medical products through innovation and strict regulatory supervision.

Outlook

The Indian pharmaceuticals market is the 3rd largest in terms of volume and 13th largest in terms of value, as per a report by Equity Master. India is the largest provider of generic medicines globally with the Indian generics accounting for 20 percent of global exports in terms of volume. Of late, consolidation has become an important characteristic of the Indian pharmaceutical market as the industry is highly fragmented.

India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of scientists and engineers who have the potential to steer the industry ahead to an even higher level. Presently over 80 percent of the antiretroviral medicines used globally to combat AIDS (Acquired Immuno Deficiency Syndrome) are supplied by Indian pharmaceutical firms.

The UN-backed Medicines Patent Pool has signed six sub-licenses with Aurobindo, Cipla, Desano, Emcure, Hetero Labs and Laurus Labs, allowing them to make generic anti-AIDS medicine TenofovirAlafenamide (TAF) for 112 developing countries. The Indian pharma industry, which is expected to grow over 15 percent per annum between 2015 and 2020, will outperform the global pharma industry, which is set to grow at an annual rate of 5 percent between the same period. Branded generics dominate the pharmaceuticals market, constituting nearly 80 percent of the market share (in terms of revenues).

India has also maintained its lead over China in pharmaceutical exports with a year-on-year growth. Overall medicine approvals given by the US Food and Medicine Administration (USFDA) to Indian companies have nearly doubled.The country accounts for around 30 percent (by volume) and about 10 percent (value) in the US$ 70-80 billion US generics market.

Indias biotechnology industry comprising bio-pharmaceuticals, bio-services, bio-agriculture, bio-industry, and bioinformatics is expected to grow at an average growth rate of around 30 percent a year and reach US$ 100 billion by 2025.

In the recent Union Budget of 2022-23, the pharma industry of the country was recognised as the "sunrise sector" for Indias economy and is expected to grow threefold over the next decade. As per the Economic Survey of 2021-2022, the Indian pharmaceutical industry is expected to reach $65 billion by 2024. The massive growth of the industry can be contributed to the domestic manufacturers leadership in providing generic formulation to different markets worldwide. The Indian pharmaceutical market size is expected to grow to US$ 100 billion by 2025, driven by increasing consumer spending, rapid urbanization, and raising healthcare insurance among others.

Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers that are on the rise.

The Indian government has taken many steps to reduce costs and bring down healthcare expenses. Speedy introduction of generic medicines into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programs, lifesaving medicines, and preventive vaccines also augurs well for the pharmaceutical companies.

Overall growth outlook for the Indian drugs and pharmaceutical industry appears positive.

Segment Wise Performance

The Company is into single reportable segment only.

Internal Control System

The Company has laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Company has also laid down an adequate system for legal compliances. It has created appropriate structures with proper delegations of duties and responsibilities of employees at each level on enterprise basis which ensures the proper adherence and compliance of such systems.

Both the Internal Financial Control and Enterprise Legal Compliance System are subject to review by the Management in respect of their adequacy and operative effectiveness which in turn are also reviewed by the Internal Auditors, Statutory Auditors and Audit Committee. Finally, the Board of Directors of the Company also review and take note of them.

Human Resources

Human resource is considered as key to the future growth strategy of the Company and looks upon to focus its efforts to further align human resource policies and processes to meet its business needs. The Company aims to develop the potential of every individual associated with the Company as a part of its business goal. Respecting the experienced and mentoring the young talent has been the bedrock for the Companys growth.

Human resources are the principal drivers of change. They push the levers that take futuristic businesses to the next level of excellence and achievement.

Cautionary Statement

Investors are cautioned that this discussion contains statements that involve risks and uncertainties. Words like anticipate, believe, estimate intend, will, expect and other similar expressions are intended to identify "Forward Looking Statements". The company assumes no responsibility to amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events. Actual results could differ materially from those expressed or implied. Important factors that could make the difference to the Companys operations include cyclical demand and pricing in the Companys principal markets, changes in Government Regulations, tax regimes, economic developments within India and other incidental factors.

	For and on Behalf of the Boardof Directors of
	MPS Pharmaa Limited
	(Formerly Advik Laboratories Limited)
	Sd/-
	(Peeyush Kumar Aggarwal)
Date : 29th August, 2023	Chairman
Place: New Delhi	DIN : 00090423