1.

INTRODUCTION

1.1 INDUSTRY PROFILE

The evolution of the pharmaceutical industry in India has been largely driven by
regulated forces the DPOC (drugs prices control order), which regulated the prices of bulk drugs
and formulations, and the Indian patent act, which granted process patent to bulk drugs. These
regulations have resulted in the growth of the indigenous pharmaceutical industry, increased
availability of bulk drugs at prices lower than those prevailing in other market, and the
emergences of the India as a key exporter of bulk drugs in the world market during the period
1970-1990, the Indian government as a member of the WTO agreed to adhere to the product
patent regime by 2005. As part of TRIPS (trade related intellectuals property rights) the
pharmaceutical industry will have the right to patent products as well as processes throughout the
world including India.

Being a member of GATT/TRIPS, India will also have a process patents that will be
consistent with the patent laws prevailing in the most developed countries with the expectation of
a product regime, the parent companies of a number of multinationals have begun the process of
increasing their stake in Indian operations, multinationals started increasing the pace of new
product launch and aggressively building market share by expanding their field force. Similarly,
in order to increase their presence in domestic and international markets , Indian companies also
started following a number of strategies , such as , setting up manufacturing and marketing joint
ventures overseas, building world class facilities for bulk drugs , and conducting clinical trials in
India to enable multinationals to reduce development costs for new drugs. `

India is one among the top manufacturers of bulk drugs in the world and is among the
top 20 pharmaceutical exporter in the world. The industry manufactures almost the entire range
of therapeutic products and is capable of producing raw materials for manufacturing a wide
range of bulk drugs from the basic stage. The government has taken measures to give impetus to
domestic production drugs and formulations, creating an environment conductive for channeling
new investments in to pharmaceutical sector. However the industry and experts feel that time has
come for the government to announce new policy initiatives, particularly relating to the research
and development and pricing relating, in order to propel the industry in to a new growth orbit, as
well as, to face the challenges of the WTO led trading system and TRIPS driven product patent
environment. Bulk drugs are medically effective chemicals. They are derived from 4 type
intermediate (raw materials) namely animal derivatives e.g., insulin extracted from bovine
pancreas, synthetic chemicals and Biogenetic (human) derivatives e.g., human insulin.
The Indian Pharmaceutical Industry today is in the front rank of India’s science-based industries
with wide ranging capabilities in the complex field of drug manufacture and technology. A
highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion,
growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of
technology, quality and range of medicines manufactured. From simple headache pills to
sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now
made indigenously. Playing a key role in promoting and sustaining development in the vital field
of medicines, Indian Pharma Industry boasts of quality producers and many units approved by
regulatory authorities in USA and UK. International companies associated with this sector have
stimulated, assisted and spearheaded this dynamic development in the past 53 years and helped
to put India on the pharmaceutical map of the world. The Indian Pharmaceutical sector is highly
fragmented with more than 20,000 registered units. It has expanded drastically in the last two
decades. The leading 250 pharmaceutical companies control 70% of the market with market
leader holding nearly 7% of the market share. It is an extremely fragmented market with severe
price competition and government control.

The pharmaceutical industry in India meets around 70% of the country's demand for
bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals
and injectibles. There are about 250 large units and about 8000 Small Scale Units, which form
the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). These
units produce the complete range of pharmaceutical formulations, i.e., medicines ready for
consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and
used for production of pharmaceuticals formulations. Following the de-licensing of the
pharmaceutical industry, industrial licensing for most of the drugs and pharmaceutical products
has been done away with. Manufacturers are free to produce any drug duly approved by the Drug
Control Authority. Technologically strong and totally self-reliant, the pharmaceutical industry in
India has low costs of production, low R&D costs, innovative scientific manpower, strength of
national laboratories and an increasing balance of trade. The Pharmaceutical Industry, with its
rich scientific talents and research capabilities, supported by Intellectual Property Protection
regime is well set to take on the international market.

Formulations:

Doctors, post- diagnosis to cure a disease or disorder in the patient primarily prescribes
formulation. To prevent misuse/incorrect administration, most formulations are disbursed by
pharmacies only under medical prescription and these are called ethical products. However user
can also purchase tonics etc directly. These are called over-the-counter (OTC) products.
Formulations can be categorized as per three route of administration to patient, like
Oral: Tablets, syrups, capsules, powders etc., taken internally.
Topical: Ointment, creams, liquids, aerosols that are applied on the skin.
Potentials: Sterile solutions injected in an intravenous or intramuscular fashion.
Others: Eye-drops, peccaries, surgical dressings.
1.2 COMPANY PROFILE

Biological E Limited was established over 50 years ago. It is the first private
sector biological products company in India and the first pharmaceuticals company in South
India. BE is also the pioneer in preventive medicine. Originally incorporated as Biological
Products Private Limited in 1953, and launched by Dr. D.V.K. Raju, Biological E today, is a
leader in Vaccinology in India and a significant player in the world vaccine market. We are
further expanding and enhancing the facilities and product lines for vaccines through the
establishment of a new plant and R&D centre in Andhra Pradesh.

Early on, Biological E Limited partnered with Evans Medical of UK to develop

pharmaceutical formulations. Later it teamed with Glaxo, India to focus on building the
pharmaceutical business in India. They have also collaborated with Pasteur Meriux Connaught of
France and Solvay & Cie of Belgium. Every tie-up they entered into has sought to strengthen and
advance their over all strategy of being innovative, expanding and developing product lines and
building infrastructure with an eye to the future. Biological E Limited supplies most of the
essential and life saving drugs to Central and State Government Hospitals, Public Sector
Undertakings, the Indian Armed Forces and the domestic retail market. Its International division
provides global-access to high quality innovative products and caters to the health and well being
of people worldwide.

Biological E Limited is now a serious participant in the exciting new face of

medical science - Gene Therapy. With the dynamic Dr. Vijay Kumar Datla, Chairman &
Managing Director as its head and inspiration, BE is offering hope to people who can't be helped
by standard treatments From being one of the first endeavours to promoters of the indigenous
pharmaceutical industry to a formidable presence in the preventive spheres of vaccines;
producers of bulk drugs to cutting edge genetic and cell-based technologies to treat disease,
Biological E Limited has always displayed the vigour, energy to surmount ever higher peaks and
the vision to constantly expand it's horizons. Biological E Limited has a long and richly textured
history but the future promises to be even more exciting and successful.

Mission Statement: “Biological E.Limited is a dedicated health Care Company, Offering

Innovative for Disease Prevention & Management, through superior, value added products that
satisfy current and future needs, not only for its customers but also for the health and wellbeing
of people worldwide”

Vision Statement: “A Leading Healthcare Company”

Objectives: BE marshals its talents to explore new therapeutic approaches that address two key
objectives: “Meeting the medical needs of patients and their families” and “Improving their
Quality of life”-Through high quality products, which strengthen the prescribing hand.
BE-Its chronology of milestones:

1953 - Biological E Limited was incorporated.

1963 - Commenced large scale production of Sera &Vaccines.
1964 - Collaboration with Evans Medical UK Subsequently taken over by Glaxo India.
1988 - Launch of Veterinary Products (In collaboration with Solvay & CIE Belgium).
1995 - BE becomes wholly Indian company.
1996 - Launch of natural products division.
1997 - Launch of Onco Specialties division.
1998 - Launch of full- fledged vaccine division.
2008 - Launch of manufacturing division in Dehradun.
2010 – Entered an Agreement with Vax Innate, US based company to license its Recombinant
H1N1 Swine flu vaccine.

1.2 a) Management Position

BE was promoted by Dr.D.V.K Raju, and Mr.G.A.N Raju in 1953. Dr.Vijay

Kumar Datla took over as managing director in 1969.Dr. Datla is a Graduate in Medical sciences
from Manipal medical college, Manipal .He currently leads one of the most reputed
Pharmaceutical companies in India .He has over 40years of experience in pharmaceutical
Industry in various functions such as R&D, Product management, Production & marketing. With
the dynamic Dr. Vijay Kumar Datla, Chairman &managing director as its head and with his
inspiration, BE is as reshaped its focus more on to vaccines identifying that as the future growth
area.

b) B.E’s Culture

Biological E Limited has a tradition of concern for people and healthcare

providers, with a dedication to develop good pharmaceutical products. Biological E Limited
regards "practitioners, patients and their families" as the most important participants in the
healthcare process and expects all its employees to consider and be responsive to - "the
practitioner and patient's perspective" in their effort to improve human healthcare through
proactive medication.
Biological E Limited is committed to improving the quality of human life by enabling people to
do more, feel better and live longer.

c) Business division

(i) Biologics: Biological E Limited was the first Indian private company to enter into the
production and marketing of vaccines in the country. With its specific focus on paediatric and
adult vaccines, Biological E Limited has built up a very significant share of the Indian vaccine
market, especially in the paediatric range. Bett from BE is the market leader in Tetanus Texoid
segment in India. Biological E Limited started up a state-of-the-art Technology project at
Biotech Park Phase II - Genome Valley - in Andhra Pradesh to produce a new generation of
vaccines in order to reach out to international markets. Through the enhancement of its
manufacturing and development capabilities BE is focused on becoming a major world player in
the vaccines business. Biological E Limited’s dedicated manufacturing facilities have been
awarded with the WHO GMP certification. The new facilities at Biotech Park Phase II, Andhra
Pradesh are aimed at acquiring WHO prequalification for all the products.

(ii) Pharma: From 1977 Biological E Limited has focused on building its pharmaceutical
business in India. Our core competencies are development, manufacturing and marketing of
pharmaceuticals. Biological E Limited is the 57th ORG ranking company in India in terms of its
prescription market share.
We have dedicated manufacturing facilities for Solid Dosage Forms, Liquid Orals
and Syrups, Parenterals and Active Pharmaceutical Ingredients and continue to invest in world-
class facilities that will be in accordance with US FDA and EMEA standards. Biological E
Limited has significant capabilities in pharmaceutical product development. We are looking at
partnering with innovators and academic institutions as well as licensing from other companies.
Our strategy is to develop and launch innovative pharmaceuticals through a collaborative model.
In the domestic market, we have sales offices at 23 locations and 25 depots. We cover around 1,
00,000 doctors allover India and our products are sold by around 15,000 stockists in India.
These facilitate the marketing efforts of our team throughout the country. Biological E Limited is
also expanding sales and marketing channels internationally. Currently, we export to Japan,
Korea, Taiwan, Indonesia, Malaysia and the CIS countries.

(iii)Public Market: As the first private sector manufacturer of vaccines and pharmaceutical
products in India, Biological E Limited has built up a countrywide distribution network of
clients. We cover 72,000 doctors all over India .However, the Government of India, all
institutions allied to it, semi-government organizations including Private and Public Institutions
are Biological E Limited's biggest clients. The Government of India as a single entity stands out
as our largest customer. This is in keeping with its social objectives of providing affordable
healthcare and medicines to the masses. Among the most sought after products are Anti Snake
Venom, Anti-Tetanus Serum, Tetanus Toxoid, DPT, DT, Heparin and the Coscopin Range

d) Infrastructure
(i) Manufacturing: Biological E. Limited has several firsts to its credit. It was the first private
sector biological products company in India; the first pharmaceutical company to manufacture
anti-TB drugs in India and the first private sector vaccine manufacturer in the country. However,
Biological E Limited's standing and reputation lie not in merely being first but in its long
standing and firm commitment to maintaining the highest quality standards through constant
innovation, partnerships with reputed institutes and modernization of its manufacturing facilities.
(ii) Sales and Distribution: Sales and Distribution is the backbone for any business. The
distribution department plays a vital role in the success of the company. Sales and distribution
strategies are essential for taking a new product beyond its introduction phase, increasing market
share and maximizing potential .BE's committed and hard working Distribution Department
supports the Marketing team by ensuring the timely availability of finished goods in the market.
As we are leaders in the Vaccine Market, the Distribution Department makes that extra effort in
specially packing and forwarding goods to the highest standards.
Sales & Distribution operates as an extended arm of the Finance
department and co-ordinates various services in support of the Marketing Department. The
Marketing Department in turn ensures the redistribution of finished goods to end users through
Authorized Stockists spread across the nation, getting the most out of the distribution.

Marketing services plays a key role

• The appointment of stockists and CFAs
• Timely settlement of customer claims
• Optimum customer satisfaction
• Attending to customer Quires

B.E’s Network
The department has four Zonal Representatives with the objective of providing
efficient services to internal and external customers and the CFA's. These representatives act as
Internal Auditors, visiting all the CFA's periodically. This has led to improved CFA
Performance.The Company operates with
• 25 carrying and forwarding agents.
• Approximately 15,000 authorized Distributors across the country.

(iii) Quality standards: Quality Policies are focused on the World Health Organization as well
as the Drug and Cosmetics Act 1940, India guidelines, laws and regulations governing the
manufacture of Pharmaceutical products, Biological products, Herbal products and Active
Pharmaceutical Ingredients as well as pharmaceutical requirements to achieve customers delight.
Quality Management is mandated and supported by executive
management and although co-ordinated by the Quality Management Department, it is monitored
by departmental self-audits, internal facility audits and Quality Assurance compliance
programs. It is further enforced by regulatory agency inspections/investigations
Quality Standards are achieved through Quality principles and
relevant Standard Operational Procedures that ensure each product meets the requirements for
safety, identity, potency, strength, quality, purity, uniformity, reliability and stability. These
Quality principles in conjunction with our internal procedures are used in the planning, design
and construction of facilities and validation of processes, products, test methods and systems.
Research and Development, Engineering, Maintenance, Materials Management, Production,
Quality Assurance and Quality Control are always oriented with true Quality principles.
Quality Control laboratories are equipped with routinely calibrated
instruments that carry out chemical, biological and microbiological testing. These laboratories
separated from the production areas are independent. Our controls are designed to ensure that
raw materials, package components, in-process materials, labeling, finished products conform to
appropriate standards of safety, identity, strength, quality, purity, uniformity, reliability , and
stability. Biological E Limited attaches high importance to maintaining a strict quality control, at
every stage of its processes, and over products and management practices across all its facilities
and throughout the organization. The safety of our products is checked, through extensive
testing, sampling and validation procedures, so as to be consistent with the final product
specifications.

e) Awards and Recognition: In 2005, based on the export performance of last three years, BE
has been awarded STAR EXPORT HOUSE status by Directorate General of Foreign Trade,
Ministry of Commerce and Industry, Govt. of India. All India Congress of Obstetrics and
Gynecology (AICOG ) has recognized BE for the invaluable support and assistance rendered in
the area of Obstetrics and Gynecology in 2003. In 2001, Department of Biotechnology, Ministry
of Science & Technology, Govt, of India has given recognition to BE for its outstanding
contribution towards technology development and Industry Partnership in Biotechnology.

f) Research and Development: R&D Cycle

(i) Discovery: Drug discovery is the process by which drugs are discovered, designed and then
developed. Despite advances in technology and understanding of biological systems, drug
discovery is still a long process with low rate of new therapeutic discovery. Biological E Limited
has always been conscious of the need to continuously discover and develop new products. This
understanding has seen Biological E Limited enter into Partnerships with highly reputed research
institutions across the world in its efforts to develop and bring out remedies to ailments. We are
constantly in the process of developing and launching pharmaceutical products through this
collaborative model. Biological E Limited is building partnerships with various companies
giving it access to innovative products.

(ii)R&D: Biological E Limited has a dedicated development facility having a large pool of
experienced scientists who are committed to development of various vaccines and recombinant
proteins. Our R & D scientists are engaged in process development, process improvement,
formulation and analytical development. Our product development pipeline includes various
bacterial polysaccharide and conjugate vaccines, viral vaccines and recombinant protein
therapeutics. This facility is recognized by Department of Scientific and Industrial Research,
Government of India
.
(iii)Clinical Research: Biological E Limited's Clinical research is that part of the continuum of
health research which is conducted in human beings. This discipline combines discoveries from
the basic science laboratory with the observations and insights of clinicians. It then delineates the
mechanisms of human health and disease, develops potential preventive, diagnostic and
therapeutic measures and finally evaluates their effectiveness for improving health. It also
focuses on making rigorous comparisons among current diagnostic, therapeutic and preventive
approaches and developing new ones, to determine which are most effective and safe. Clinical
research merges with the closely related fields of health systems and population health research.
Biological E Limited believes that the maximal benefits to the nation's health and its economy
will be achieved by supporting a continuum from basic to clinical to health services to
population health research.

g) Recent Developments:
The state of the art facility (100%EOU) set up at shamerpet, R.R District, spread over 72 acres of
land and WHOGMP compliant, was developed by Shapoorji Pallonji and jointly promoted by
latest WHO release, this is not showing any signs of weakening and there is an acute shortage of
vaccines, especially in the developing nations. The technology contracted for by the company is
a revolutionary one capable of producing about 3000 to 5000 million doses in a 8 to10 week time
frame, which is several times of the capacity involving other technologies. Once proved, the
company will be able to produce the vaccine in huge quantities, at a very affordable cost and
with good potency and safety.

h) Human resources and expertise:

BE has a large pool of experienced and dedicated scientist who are committed to development of
various vaccines and recombinant proteins. BE technical team has vast experience in process
development and manufacturing ranging from handling Fermentor,Bioreactor vessels,
Rollerbottles,cell factories for growth of bacteria and /or viruses, process improvement for
improving the yield, formulation and analytical development.

i)Manufacturing Locations: The company has the following manufacturing facilities:

• Azmabad, Hyderabad(Registered office and plant)
• Gaganpahad, RR district, Andhra Pradesh
• Pattancheru ,Medak District ,Andhra Pradesh
• Shameerpet, RR district, Andhra Pradesh
• Dehradun, Uttarakhand.