We are committed to ongoing investment in research and development as a way to differentiate our existing products, while bringing innovative, high-value products to market. Our research and development activities are closely focused on market needs and driven by technological progress.
To this end, we allocate a significant amount of our operating budget to research and development. Historically, we have increased our annual spend from year to year. During 2008-09, total spending increased to Rs. 3,320 million from Rs. 2,990 million in 2007-08 to support current growth projects. This represents 8 % of our total sales.
We have developed the skill set to create a wide range of pharmaceuticals across the value chain from complex APIs to formulations. These projects typically work with a lead time of a few years, and power our growth plans across the world. We have close to 600 scientists working across 2 development centers. So far, 233 patent applications were submitted and 76 patents were granted.
The company continues to file ANDAs to create a strong pipeline in the US. ANDAs for 107 products await approval (this includes 7 tentative approvals) as of March 2009. We endeavour to scale up the pace of filings and the speed to market to give us an edge in this highly competitive market. The teams also develop complex generics for our branded generics business in India and in the non-US international markets. In all, over 42 products were brought to the Indian market including complex products like Tyrogef (gertifinib) and Tamlet (modified release tamulosin and extended release tolterodine).
As a strong, integrated pharma player, our API business is crucial to our dosage form business. Sustainable growth in API has contributed significantly to the success of the Company. In all, over the years we have developed around 160 speciality APIs and during the year, 30 APIs were
scaled up. Out of the 133 DMF and CEP applications filed till now, 81 were approved. We will continue to nurture our API business in the future in order to develop high quality products. As we strive to develop new technologies and
products to create a competitive edge and fuel our growth, the benefits we derive as a result of R&D will only increase in the coming years.
Maintaining stringent quality control is of paramount importance in the pharma industry. Customers globally are
becoming increasingly demanding of high standards. At Sun Pharma, quality has always been accorded extreme importance. While 2008-09 has been a challenging year for us on the quality front, the setbacks we faced has motivated us to attain and reach for even higher standards of quality.
The Company has in place an expert quality team which ensures that our processes and documentation are of global standards. We have successfully gained the following regulatory approvals in recent times:
US FDA approval for the Ahmednagar plant
US FDA approval for the Panoli plant
US FDA and UK MHRA approval for the Dadra plant
US FDA and UK MHRA approval for the Halol plant
US FDA approval for our analytical
laboratories at SPARC, Baroda
German approval for the Karkhadi plant
As such, we have one of the strongest pipelines of ANDA products awaiting approval with the US FDA. These new
facility approvals will accelerate our plans for the US and Europe markets with a range of products of differing complexity. Most European authorities and the US FDA require submission of all DMF and ANDA electronically, i.e. no more paper copies. Therefore, the Corporate Quality department has now validated eCTD (electronic Common Technical Document) software and has begun making product applications using this route.
Some of our other initiatives in the area of quality control include frequent in-house training programmes at the shop floor level for basic QC instrument operation and handling and environmental monitoring in the formulation manufacturing area.
During the year, Caraco's facility received a Form 483 followed by a warning letter from the
US FDA on quality practices and non-conformance with SOPs for its Detroit plant. Caraco replied to the letter in which it has addressed the issues and has made specific time-bound commitments. Caraco also voluntarily initiated a recall of certain product lots of Digoxin. Quality teams at both Sun Pharma and Caraco are working closely to review procedures and ensure that all systems are in line with the quality standards expected of an approved site.
Sun Pharma’s well defined organizational structure, documented policy guidelines and adequate internal controls ensure efficiency of operations, compliance with internal policies and applicable laws and regulations, protection of resources and assets, and accurate reporting of financial transactions. Moreover, the Company continuously upgrades these systems in line with the best available practices. The internal control system is supplemented by extensive internal audits, conducted by independent firms of Chartered Accountants so as to cover various operations on a continuous basis.
In 2007, we received ANDA approval to market a generic version of Wyeth's Protonix®, Pantoprazole tablets. We
were one of the first-to-file an ANDA for generic Protonix® with a para IV certification, and shared a 180-day marketing exclusivity with Teva for this product.
We launched this product in January 2008 after the exclusivity was triggered by another generic filer and Wyeth
had launched an authorized generic, and since then generic Protonix® has significantly contributed to our revenue and profits. We do not expect to discontinue selling generic Protonix® in 2009.
We are currently involved in patent litigation with Wyeth and Nycomed concerning this product in the US District Court for the District of New Jersey.
