More Indian pharma cos to open innovative research in foreign countries: Report

New Delhi: More Indian companies are looking to establish new dedicated research and development (R&D) firms in foreign countries, particularly in the United States and Europe, according to a report released on Tuesday.

The study, conducted by GlobalData, a leading data and analytics company, highlights a growing trend among Indian pharmaceutical firms to prioritize innovative R&D. This move underscores their commitment to staying competitive in global markets by advancing cutting-edge research.

Traditionally, leading Indian drugmakers like Sun Pharma and Dr. Reddy’s used to execute their innovative research and development in India through a dedicated research company in foreign countries.

“By demerging research and development units and creating new research and development 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,” said Prashant Khadayate, Pharma Analyst at GlobalData.

According to IANS, he added that the move will also help research companies “raise more funds from investors”.

On the other hand, some companies have started establishing dedicated research companies in major markets like the US and Europe.

Examples of such Indian pharma companies are Zydus Lifesciences, Glenmark Pharma, Alembic Pharmaceuticals, and Suven Life Sciences.

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

“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,” Khadayate said.

He noted that other Indian companies will most likely adapt the success model of these companies.

This will not only help Indian companies establish themselves on the innovative research and development front but also fuel their growth globally in the innovative drugs space, he added.