Reliance Industries was recently in news that it had filed over 3,000 patents in recent months, i.e., at a rate of 100 per week, in cutting edge technology areas such as Artificial Intelligence (AI), 6G, and 5G in India and abroad. Across the sectors, Indian companies are realizing the importance of Intellectual Capital. This holds true for the pharmaceutical sector in India as well as it is research-intensive sector. Indian pharmaceutical companies gain due to the expiry of patents on blockbuster drugs as many Indian companies can come up with generic products. Intangible assets of pharmaceutical companies comprise Computer Software, Marketing Intangibles/Brands, Technical know-how, Trademarks, Technologies, Non-compete rights, Trademark and Licences, Clinical Trials, Patents & Copyrights.  

Integrated Reporting process guided by the principles and content element of the International Integrated Reporting Council’s (IIRC) International Integrated Reporting Framework outlines financial and non-financial performance across the six resource capitals namely Financial Capital, Manufactured Capital, Intellectual Capital, Human Capital, Social & Relationship Capital and Natural Capital.

In some of these top pharmaceutical companies in India, e.g., Mankind Pharma , Alkem Labs, Intellectual Capital primarily comprises brands whereas in others, significant emphasis is on other components such as Abbreviated New Drug Applications (ANDAs), Patents, etc. ANDA contains the data which is submitted to the Food and Drug Administration (FDA) for the review and potential approval of a generic drug product. New Drug Application (NDA) is a type of application in which a pharmaceutical manufacturer or its agent requests permission from the regulatory body, e.g., the U.S. FDA in the USA, for a license to market a drug for one or more specified indications. As per the U.S. FDA, a Drug Master File (DMF) is a submission to the FDA which may be used to provide confidential detailed information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of one or more human drugs.

Sun Pharmaceutical Industries holds number 1 position in terms of market capitalization and market share. The company has a diverse range of intangibles as listed in Table 1.

Table 1: – Sun Pharmaceutical Industries: Filings and Approvals as on March 31, 2024

*Excludes Expired and Abandoned Patents

Source: Annual Report 2023-24 of Sun Pharma (p.32)

By March 31, 2024 Divi’s Labs had a total of 41 Drug Master Files (DMFs) with the U.S. Food and Drug Administration (USFDA), 26 Certificates of Suitability (CoSs) filed with the European Directorate for the Quality of Medicines & Healthcare (EDQM) and referred as a Certificate of Suitability to the monographs of the European Pharmacopoeia (CEP), 25 DMFs with Health Canada and 7 DMFs with the Pharmaceuticals and Medical Devices Agency (PMDA), Japan. The company had also filed a total of 43 patents for generic products.

Cipla had 298 patents as of March 31, 2024 which were granted in FY 2023-24. In addition to this, the company had 2,204 cumulative DMFs and 277 cumulative ANDAs and NDAs filed. The company had successfully launched 101 new products across geographies. 298 patents were granted to Cipla in FY 2023-24. 11 brands of Cipla clocked Rs. 200 Crores in revenue as per IQVIA MAT March 2024 against 9 such brands in FY23. 11 brands with this much revenue makes Cipla the 2^nd highest among all Indian Pharmaceutical Market (IPM) players. The company also completed successfully 10 clinical trials.

Till date, Torrent Pharma has been granted 684 patents out of 1,274 patent applications submitted. In FY 2023-24 alone, the company has filed 38 patents. During the same period, the company has been granted 38 New Drug Delivery Systems (NDDS) patents and secured 2 API/Process/formulation patents.

Zydus Lifesciences received 46 ANDA approvals (including 5 tentative approvals) and filed 20 additional ANDAs with the USFDA in FY 2023-24. For APIs, the company filed 4 DMFs with the USFDA, taking the cumulative US DMF filings to 142.

Dr. Reddy’s Laboratories filed 241 dossiers, including 17 ANDAs and 2 NDAs taking cumulative ANDAs to 325. 86 Filings comprising 81 ANDAs and 5 NDAs were pending as on March 31, 2024. Of these, 54 were Para IVs and the company believed that 24 had ‘First-to-File’ Status. Integrated Annual Report of the company also showed that the company had filed 133 DMFs including 11 DMFs in the U.S. thereby taking Cumulative DMFs to 1,537 including 251 in the U.S. The number of DMFs filed stood at 134 in FY2023. The company launched 181 new products in FY2023-24.

Lupin Limited has provided comprehensive information on Intellectual Capital that comprised Novel Drug Discovery and Development (NDDD) applications, formulations, Active Pharmaceutical Ingredient (API), and Biotech as given in Table 2 and Table 3. In addition to this, the company has reported about Intellectual Capital and Patents in different countries for FY24 as well as Cumulative figures. Type of filing (number of dossiers) included NDA, ANDA, Abbreviated New Drug Submissions or ANDSs (Canada), Marketing Authorisation Applications (MAAs) in Europe, Australia, Brazil, South Africa, among others. In total, there were 33 filings, and 63 approvals in FY24. Cumulative filings and Cumulative Approvals in all these markets stood at 684 and 506 respectively.

Table 2: – Lupin Limited – Intellectual Capital for FY24

Source: Integrated Report 2023-24 of Lupin Limited (p.152)

Table 3: – Lupin Limited – Intellectual Capital as on March 31, 2024

Source: Integrated Report 2023-24 of Lupin Limited (p.152)

Strength of Mankind Pharma is in brands across segments as the company has 23 brand families worth over Rs. 100 Crore from 20 in FY23, and the count of Rs. 50 Crore brand families increased to 40 in FY24. Nine brands of the company are number 1 ranked brands, and 19 brands of the company are ranked among top 3. Mankind Pharma had 41 per cent revenue from Top 21 brands in FY2024. Overall, 21 of Mankind’s brands fall in IPM’s top 300 brands including 11 brand families worth above Rs. 200 Crore.

Aurobindo Pharma had filed 833 patent applications as on March 31, 2024 out of which 188 patents have been granted to the company. In December 2023, the company forayed into the Indonesian market with acquisition of market authorisations and assets related to 17 brands from Pfizer and Viatris. During FY24, the company filed 40 ANDAs and received approvals for 68 ANDAs. As on March 31, 2024 the company had 830 ANDAs filed with the US FDA. In addition to this, it had filed 3,642 formulation dossiers in Europe, 291 DMFs with the US FDA, and 1,859 API dossiers in Europe.

Alkem Labs has a diversified portfolio of over 800 brands. 18 brands of the company figure in IPM Top 300 brands. In FY24, 19 of the company’s brands had sales of more than Rs. 100 Crore each. These brands constituted more than half of the company’s sales. Three of the company’s brands namely Pan (rank 7), Clavam (rank 9), and Pan-D (rank 15) featured among the top 15 brands in the IPM during this period.

It has been observed for top Indian pharmaceutical companies that intellectual capital inputs comprise R&D expenditure, number of R&D Global Centers, Integrated Product Development (IPD) team, team of R&D professionals, evaluation of molecules in number, number of clinical trials, etc. and output comprises new product launches across geographies, number of patents, number of DMFs, number of ANDAs and NDAs, and number of successfully completed trials. Intellectual Capital enables pharmaceutical companies to bring innovative healthcare solutions to the end-user and in pushing the frontiers of innovation.

Dr. Anil Kumar Angrish-Associate Professor (Finance and Accounting), Department of Pharmaceutical Management, NIPER S.A,S, Nagar (Mohali), Punjab

Disclaimer: Views are personal and do not represent the views of the Institute.