MATRIX LABORATORIES

LTD.
 PHARMACEUTICAL INDUSTRY
PROFILE
• develops, produces, and markets drugs licensed for use
as medications
• Pharmaceutical companies can deal in generic and/or
brand medications
• The main aim of a particular Pharmaceutical Industry
is to develop research and distribute drugs in order to
provide health care for the people in the society
• Since the inauguration of the Pharmaceutical Industry in
the 19th century
• dependent upon the developments and discoveries that
are made to search new types of drugs and also to
search for new kind of medicines
 TWO ASPECTS
• Drug Discovery
• Drug Development
• In 2006, global spending on prescription drugs
topped $643 billion
• The United States accounts for almost half of the
global pharmaceutical market, with $289 billion
in annual sales followed by the EU and Japan.
• Emerging markets such as China, Russia, South
Korea and Mexico outpaced that market,
growing a huge 81 percent.
• In the annual Fortune 500 survey, the
pharmaceutical industry topped the list of
the most profitable industries, with a return
of 17% on revenue.
 INDIAN PHARMACEUTICAL
INDUSTRY
• front runner of India’s science-based
industries with wide ranging capabilities in the
complex field of drug manufacture and
technology.
• is estimated to be worth $ 4.5 billion,
• growing at about 8 to 9 percent annually
• highly fragmented with more than 20,000
registered units
• The leading 250 pharmaceutical companies
control 70% of the market with market leader
holding nearly 7% of the market share.
 ADVANTAGE INDIA
• Competent workforce
• Cost-effective chemical synthesis
• Information & Technology
• Globalization
• Consolidation
 COMPANY PROFILE
• Matrix, a subsidiary of the US-based Mylan
Laboratories, is a Hyderabad-based manufacturer
of active pharmaceutical ingredients(APIs).
• Matrix merged with MedicorpTechnologies and
Vorin Laboratories with the company in 2002.
• In January 2007 ., Mylan Inc. (Mylan), one of the
largest US generic drug makers, acquired a 71.5
percent stake in Matrix Laboratories Ltd. (Matrix).
Therapeutic wise Revenue
 OPERATIONS:

• Matrix Laboratories, a subsidiary of US-

based Mylan Inc, has successfully turned
the corner during the year ended March
2009 and earned a consolidated net profit
of Rs 30 crore as against a huge net loss
of Rs 457 crore in the previous year. We
attempt to understand the 8 critical
business success factors for activities
ensuring the company’s success.
 1.Cost
• Cost management: Raw material as a
proportion of the company’s turnover
declined from 58.34 per cent in 2001-02 to
40.62per cent in 2002-03, largely due to
better negotiation, price decline, intelligent
substitution and process improvements.
• The company has demonstrated a
high proportion of product success 95
per cent in a competitive global
environment.
• R&D investments are recovered
through such commercial success as
inventory management & negotiations
for the price of raw materials.
2.Quality
• Matrix Labs core competence lies
in the development and
commercialization of generic
Active Pharmaceutical Ingredients
• They have set up manufacturing
facilities and established quality
management systems, as per
Good Manufacturing Practices
guidelines to meet the
requirements of drug regulatory
agencies worldwide
• The employees are trained
periodically on GMP requirements
• The plant has been designed in line
with
advanced international hygiene
systems to minimize contamination.
One of the company’s facilities is
certified as per the ISO 14001.
 3.Speed
• By adopting Lean principles, pharma
companies like Matrix have can increased
inventory turns and not only achieved
significant financial benefits but also have
enhanced their competitiveness in the
important areas of speed, quality and
costs
• Pharma companies can increase inventory
turns and not only achieve significant financial
benefits but also enhance competitiveness in
the all-important areas of speed, quality and
costs.
• Lower levels of inventory directly correlate to
improvement in these competitive edge factors.
Reduced inventories are beneficial only if the
reduction derives from process improvement.
Inventory Turnover Mar’08 Mar’07
Ratio
Matrix pharma 3.31 3.66
Glenmark pharma 5.55 4.18
4.Dependability
• Dependability is a key decision
factor in today’s global business
environment affecting product cost
and process
• Being a part of the US-based
Mylan, Matrix takes special care to
enhance user confidence in fitness
for use by attaining satisfaction in
product performance capability,
delivery, service availability upon
demand, and minimizing cost.Eg.
AIDS drug will be available at
cheaper prices in places such as
Africa, Latin America, as a part of
Clinton Foundation’s initiative.
Mar’06 Mar’05 Mar’04
3.63 4.02 4.54
4.77 5.01 4.83
 5.Flexibility
• For generic drug manufacturers
like Matrix Labs, the ability to ramp
up quickly to meet surges in
market demand confers a
significant competitive
advantage. The lean
manufacturing operations of Matrix
labs provide it with the opportunity
to counter the volatility in the
global demand.
• On the other hand, US company
Mylan Inc has said it will acquire
100% stake in its Indian arm,
Matrix Laboratories, for “enhanced
flexibility and efficiencies.” in
managing their global technical
operations platform
6.Services
• Matrix provides services of
Contract Manufacturing. Being a
commercial-scale manufacturer of
many Active Pharmaceutical
Ingredients
• They bring to your project, diverse
chemistry expertise coupled with
problem-solving skills.
• They undertake exclusive
manufacturing services for APIs
without compromising their
customer's intellectual property.
 7.Innovations 8.Intangibles
• The Research and Development team of • They offer Contract Research &
company successfully developed, Development for Chemical
patented and commercialized non-
infringing process for Citalopram, an anti Development of new molecular
depressant during the year 2001-02. entities (NMEs) from Lead
• It was responsible for 50% of the Optimization through Pre-Clinical
company sales. Development and into
• Other example like Quinolones (anti manufacturing of API for Clinical
bacterial Development phases
drugs)containsmoleculeslikeCiprofloxacin
,Gatifloxacin.
• The AIDS drugs will include the first-ever
heat-stable version of Ritonavir that does
not require continuous refrigeration for its
transport and distribution — an
advantage in poor countries.
• Matrix received the National Award in
2005 for its R&D efforts in Pharma Sector
from the Department of Scientific &
Industrial Research, Govt of India
 SUCCESS
Infringing processes
• Much of Matrix technology competence has been
derived from its ability to manage complex,
hazardous and explosive reactions across a
range of pressures and temperatures.
• Its non infringing routes have also created
attractive patentable opportunities that can
translate into stronger margins across the
foreseeable future.
 SUCCESS CONTINUED
Strategic Mergers
• They facilitated a timely transfer of assignments
from one facility to another to accelerate product
development.
• They enabled Matrix to access new API
technologies at a lower development cost.
• They empowered Matrix to leverage the
knowledge from diverse plants for organizational
benefit.
• They enabled Matrix to enter new markets and
leverage years of experience immediately.
• They encouraged Matrix to capitalize on tax
benefits and maximize the retention of profits from
2002-03 onwards.
 SUCCESS CONTINUED
Patent Tracking
• Matrix tracks products scheduled to go off
patent. Thereafter, the company selects to
make complex molecules with low
competition, based on the size of the post-
patent market and the therapeutic spread.
 SUCCESS CONTINUED
• R&D
An R&D investment of up to 4 per cent of turnover
supported by skilled team of professionals.
High Product Success rate
Company maintains a high proportion of product
success i.e, 95 per cent in a competitive global
environment
 Failure
• Matrix was issued a notice by the World
Health Organization (WHO) on the grounds
of major deviations from WHO`s good
manufacturing practices (GMP) in relation
to the anti-retroviral (ARV) drugs that Matrix
supplies to WHO for its HIV/AIDS
programmed.
• SOURCE: 29TH JULY 2009, ECONOMIC
TIMES
 Recommendations
• Matrix Labs needs to strengthen its R&D initiative to
develop and commercialize more value-added products
through non-infringing processes.
• India will have 100 million patients or 60 per cent of the
world’s cardiovascular patients over the coming decade
(WHO). Matrix must focus on the lipid lowering,
cholesterol lowering products.
• Matrix Labs need to attain the right product-mix for
sustained future growth.
• Core competencies will play an important role in
determining the future of Matrix Labs in the post product-
patent regime after 2005.
 Recommendations
• Matrix Labs, in an effort to consolidate their position, will
have to increasingly look at merger and acquisition
options of either companies or products. This would
help them to offset loss of new product options, improve
their R&D efforts and improve distribution to penetrate
markets.
• Matrix Labs also needs to take advantage of the recent
advances in biotechnology and information
technology.
 CONCLUSION
• The future of Matrix Labs will be determined by
• how well it markets its products to several regions
and distributes risks,
• its forward and backward integration capabilities,
• its R&D,
• its consolidation through mergers and acquisitions,
• co-marketing and licensing agreements.