The Indian active pharmaceutical ingredients (API) sector is expected to outperform other countries with an estimated Compound Annual Growth Rate (CAGR) of 9.6 per cent over the calendar year 2021-26, while complex APIs would see a faster growth owing to the focus on complex formulations and others, says a latest report by Motilal Oswal Financial Services research.

The Global API sales are expected to grow at around six per cent CAGR over the same period, to touch $259 billion as against 3.6 per cent CAGR witnessed over the calendar year 2018-20, given the rising prevalence of chronic disorders and growing development trend in innovative therapeutic drugs. In addition to increasing demand and re-consideration of the API source by formulations, shutdown of API factories in China is expected to drive better business opportunities for Indian API companies, it said.

“As a result, the Indian API sector is expected to outperform other countries, with an estimated CAGR of 9.6 per cent over CY21-26E. Focus on complex formulations/generics by innovators/generic companies is expected to drive faster growth for complex APIs, at 9.3 per cent CAGR over CY21-26E, and is expected to account for 62 per cent of global API sales in CY26E,” said the report.

Contract research and manufacturing services (CRAMS) has emerged as a niche segment, offering a high growth potential and the global CRAMS segment is expected to clock in 6.2 per cent CAGR over the period between 2021-2026, to touch $170 billion. Biological-based CRAMS is expected to witness 11 per cent CAGR over 2-020-26, led by the increasing number of products under development for targeted action and limited manufacturing skill set of these companies. With around 6,000 molecules in the pipeline, small molecules constitute a dominant share within the CRAMS segment.

With availability of capital for emerging pharma companies, there is a growth in the number of biopharma companies focusing on R&D and outsourcing manufacturing at the research/commercial level. This, along with cost consciousness of larger pharma companies, is proving a booster to the segment. The Indian CRAMS players are uniquely positioned to outperform the industry in this segment, it added.

However the US sales is expected to remain under pressure over the near to medium term, even though the generics industry has clocked in a steady year on year growth in the year 2020 after a decline to $56 billion in 2019 from $66 billion in 2016. While the improved launch pace was sufficient to counter the price erosion in the base business, the annual pace of filings has slowed to around 800/230 in FY21 from more than 1,000 in FY17, partly owing to the increased filings of complex products and Covid-related hurdles.

The Indian active pharmaceutical ingredients (API) sector is expected to outperform other countries with an estimated Compound Annual Growth Rate (CAGR) of 9.6 per cent over the calendar year 2021-26, while complex APIs would see a faster growth owing to the focus on complex formulations and others, says a latest report by Motilal Oswal Financial Services research.

The Global API sales are expected to grow at around six per cent CAGR over the same period, to touch $259 billion as against 3.6 per cent CAGR witnessed over the calendar year 2018-20, given the rising prevalence of chronic disorders and growing development trend in innovative therapeutic drugs. In addition to increasing demand and re-consideration of the API source by formulations, shutdown of API factories in China is expected to drive better business opportunities for Indian API companies, it said.

“As a result, the Indian API sector is expected to outperform other countries, with an estimated CAGR of 9.6 per cent over CY21-26E. Focus on complex formulations/generics by innovators/generic companies is expected to drive faster growth for complex APIs, at 9.3 per cent CAGR over CY21-26E, and is expected to account for 62 per cent of global API sales in CY26E,” said the report.

Contract research and manufacturing services (CRAMS) has emerged as a niche segment, offering a high growth potential and the global CRAMS segment is expected to clock in 6.2 per cent CAGR over the period between 2021-2026, to touch $170 billion. Biological-based CRAMS is expected to witness 11 per cent CAGR over 2-020-26, led by the increasing number of products under development for targeted action and limited manufacturing skill set of these companies. With around 6,000 molecules in the pipeline, small molecules constitute a dominant share within the CRAMS segment.

With availability of capital for emerging pharma companies, there is a growth in the number of biopharma companies focusing on R&D and outsourcing manufacturing at the research/commercial level. This, along with cost consciousness of larger pharma companies, is proving a booster to the segment. The Indian CRAMS players are uniquely positioned to outperform the industry in this segment, it added.

However the US sales is expected to remain under pressure over the near to medium term, even though the generics industry has clocked in a steady year on year growth in the year 2020 after a decline to $56 billion in 2019 from $66 billion in 2016. While the improved launch pace was sufficient to counter the price erosion in the base business, the annual pace of filings has slowed to around 800/230 in FY21 from more than 1,000 in FY17, partly owing to the increased filings of complex products and Covid-related hurdles.