Parabolic Drugs Limited– IPO Note - ANS Pvt. Ltd.

INDUSTRY OUTLOOKINDIAN PHARMACEUTICAL INDUSTRYThe Indian pharmaceutical industry can be classified based on products manufactured as ‘bulk’actives and ‘formulations’. Based on the markets catered, these can be further classified intodomestic and exports. Further, exports can be made to regulated or developed markets like US,Europe, Japan etc and semi-regulated/non regulated or emerging markets like Asia, Africa andLatin America.Bulk actives are otherwise known as Active Pharmaceutical Ingredients (APIs) or bulk drugs.They comprise medicinally active ingredients that are converted into formulations or dosageforms. APIs are either manufactured in-house by formulation companies or they can beoutsourced to third party API manufacturers. Formulations involve developing a preparation ofthe drug (from APIs and other ingredients) which is both stable and acceptable to the patient.This usually involves incorporating the drug into a tablet, capsules, injectibles, syrups, etc. Theformulations are administered to or taken by the patient and are available either byprescription or over-the-counter. A prescription drug is a licensed medicine that is regulated bylegislation to require a prescription (usually from a doctor) before it can be obtained. The termis used to distinguish it from over-the-counter drugs which can be obtained without aprescription.Strong GDP growth (8.5% in 2007-08, 9.4% in 2006-07 and 9.0% in 2005-06) and significant costadvantages have resulted in the Indian pharmaceutical industry growing significantly by 19.8%from around USD 6.9 billion in 2002-03 to around USD 17.0 billion in 2007-08. Indianparticipation in the international pharmaceutical market has increased and with more productsgoing generic in developed economies, Indian formulations and bulk drug exports have grownsignificantly. Also, increasing cost pressures on innovators has resulted in significant growth incontract research business. Driven by the above factors Indian pharmaceutical exports havegrown at a CAGR of 27.0% in the last six years to reach USD 8.6 billion in 2007-08.