Indian pharma has come a long way since its copycat days. Indeed, there was a time in this country when a lot of home-grown companies thrived on process patents. Heavy spend on research and development has always been the preserve of multinationals because of the long gestation period. Indian pharma companies were more preoccupied with survival. Most didn’t have the money and those who had, found it hard to resist instant gratification. Hence, multinational companies always traded at a premium valuation compared to their Indian peers.
It is only when product patents came in, that Indian pharma companies started taking R&D seriously. Though pioneers such as Dr Reddy's and Sun Pharma were the flag bearers for a whole host of Indian companies who headed West to sell their wares, they, too, played it safe by targeting generics. It was only after tasting success in generics that they decided to go head-to-head with the big boys in the West. Again, diversifying away from generics was something that they and most other Indian pharma companies did because the generics market became hyper competitive and was no longer as lucrative when they first entered it.
In contrast, Kiran Mazumdar Shaw-founded Biocon has been the odd one out. Right from the start, it has always worked on developing a strong R&D backbone. As this edition’s cover story points out, it made it a pariah among investors. That was because when most Indian pharma companies were coasting on generics, it did not have much of a performance to talk about. And spends on R&D is never a guarantee of the desired outcome. The stars have to align perfectly in terms of clinical trials, regulatory approvals and sustainable pipeline. After this long trudge, Biocon is now set to reap the rewards, be it in biosimilars or contract research.
Among other stories, we take a look at how IT major Wipro is pursuing innovation through its venture arm. In investing, we have an interview with Enam Holdings’ investment director Sridhar Sivaram, where he shares why of late he is glued to the US stock market.