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Novo Nordisk to Relocate R&D Operations, Increase Manufacturing in India
7 Feb 08
Denmark-based diabetes care pharma major Novo Nordisk has announced plans to expand its Indian operations.
Global Insight Perspective | | Significance | Novo Nordisk is set to scale up its production capacity and transfer most of its R&D activities to its Indian subsidiary. | Implications | The company will join a host of global pharma majors, such as Eli Lilly (U.S.), GlaxoSmithKline (GSK; U.K.), and Merck & Co. (U.S.), which have increasingly shifted operational activities to India in order to take advantage of its low-cost structure in manufacturing and research. | Outlook | Novo Nordisk's interest is also likely to have been sparked by India's burgeoning diabetes market, which is expected to double in the next decade. |
Danish firm Novo Nordisk has etched out new plans to increase its operations in India. New efforts include ramping up production units, with the company having entered into alliances with local drug-makers. Business Standard reports that the company has tied up with domestic firm Torrent Pharmaceuticals with regard to a dedicated insulin manufacturing facility. Quoting Melvin Oscar D' Souza, managing director of Novo Nordisk India, the report adds that the facility is reportedly undergoing major expansions. The company will also triple its staff strength in the next four years from the current 600, indicating considerable activity in domestic marketing, R&D, and other services. In terms of R&D, Novo Nordisk is looking to outsource almost one-third of its global research activities to India within the next three years, Press Trust of India reports. This would entail mostly diabetes-related research, according to the company, without disclosing any specifics. Novo Nordisk will also launch three diabetes products in India—one each year—in an effort to expand its portfolio. Other activities that are expected to be shifted to India include data management and financial units. Outlook and Implications The increasing focus into India is unsurprising given the influx of global pharma and biotech majors choosing to invest in a range of corporate activities in the country. Novo Nordisk's efforts are aimed at a collective interest in addressing both its international operations and the Indian diabetes market. Interestingly, the company is using partnerships and alliances with Indian firms for both manufacturing and R&D activities. It is also known to be contemplating developing a few molecules in India, and is therefore likely to be scouting for collaborations with Indian firms. Additionally, the company demonstrated its focus on India when it shifted its clinical trials project from Singapore; nine clinical trials are currently ongoing in India. The low-cost advantage of the Indian set-up is a prime attraction for global pharma majors, including Novo Nordisk, looking to cut costs while at the same time bolster development opportunities in an increasingly competitive global market. The Indian diabetes market expected to double to US$440 million by 2025—also of interest to Novo Nordisk, which holds a majority share in the insulin market. India's diabetic population is set to reach 57 million in the next decade, according to World Health Organization (WHO) figures. Hence, opportunities for expansion are being quickly recognised. Novo Nordisk has targeted a 75% market share in the basal insulin analogue segment following a slew of new introductions recently. However, competition is intense. Eli Lilly has announced intentions to expand its portfolio, while local producers such as Wockhardt, Biocon, Shantha Biotech, and Bharat Biotech have stepped up investments to increase their product portfolios. Ranbaxy, Sun Pharma, Glenmark, and Dr Reddy’s also offer substantial generic diabetes treatment alternatives.
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