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Coronary Stents Market – India August 2014
Executive Summary Market
Coronary stents market in India is expected to grow at a CAGR of x1% and x2% in value-terms and volume-terms respectively, over 2012 - 2018e There are three types of coronary stents available in the market, bare metal stents (BMS), drugeluting stents (DES), and bioabsorbable stents Drivers:
Drivers & Challenges
Government Involvement Competitive Landscape
Buyer Details
Challenges: Problems associated with usage Constant need for innovation and new product development
Increasing lifestyle based diseases Improving health infrastructure Changing demographics Increased healthcare spending and insurance coverage Advancements in technology and medical procedures
Regulatory Bodies Regulatory Policies Regulatory Processes Major Foreign Companies
Major Domestic Companies
Company 1
Company 2
Company 3
Company 4
Company 5
Company 6
Top Hospitals Buying Coronary Stents in India Hospital 1
Hospital 2
Hospital 3
Hospital 4
Hospital 5
Hospital 6
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•Macroeconomic Indicators •Introduction •Market Overview •Drivers & Challenges •Government Involvement Regulatory Bodies Regulatory Policies Regulatory Processes
•Competitive Landscape •Buyer Details •Recent Developments •Strategic Recommendations •Appendix CORONARY STENTS MARKET IN INDIA 2014.PPT
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Economic Indicators (1/3) GDP at Factor Cost: Quarterly INR tn 15
13
d1 c1 b1
12
a1
14
c4 b4 a4
c3 b3 a3
d2 c2 b2 a2
11
Q1
Q2 2010-11
2011-12
2012-13
Q3 2013-14
Q4
Inflation Rate: Monthly % 2 1
p
r
s
q
0 -1
-t
-2
Jul 2013 - Aug 2013
Aug 2013 - Sep 2013
Sep 2013 - Oct 2013
Oct 2013 - Nov 2013
CORONARY STENTS MARKET IN INDIA 2014.PPT
Nov 2013 - Dec 2013 4
Indian market for coronary stents is poised to grow in the coming years with emphasis on drug-eluting stents Coronary Stents Market – Overview
• Indian market for coronary stents is expected to show steady growth in coming years, providing strong opportunities for potential players to earn high revenues and increase their profits • There are three types of coronary stents available in the market, bare metal stents, drug-eluting stents and bioabsorbable stents • Type 1 stents experience the highest demand while Type 2 stents are still at a nascent stage
Market Size and Growth (Value-Wise) Type 1
INR bn
Type 2
Type 3
h
40
x1%
30
d
10 0
a
b b1%
c c1%
d1%
a1% a2%
b3%b2%
c3%c2%
d2% d3%
2012
2013
2014e
2015e
g
f1% f2%
2016e
g1%
Type 2
h1%
v t
400
h2% h3%
2017e
2018e
200 0
u
x2%
q
p
g2% g3%
Type 3
800 600
f
f3%
Type 1
‘000
50
20
Market Size and Growth (Volume-Wise)
r
s s1%
p1% p2%
q1%
r1%
q3%q2%
r3%r2%
s3%s2%
2012
2013
2014e
2015e
CORONARY STENTS MARKET IN INDIA 2014.PPT
t1%
t3%
t2%
2016e
u1%
v1%
u2% u3%
v2% v3%
2017e
2018e
5
Prices vary not only across stent types but also depending on whether it is indigenously manufactured or is foreign made Coronary Stents – Price Trends
Type of stent
Bare Metal
Bare Metal
Drug-Eluting
Drug-Eluting
Bioabsorbable
Indigenous /Foreign
Indigenous
Price (INR)
Remarks • These are price at which distributors purchase from manufacturers • When hospitals procure stents directly from manufacturers, they can get up to ‘x’% discounts
Foreign
• Price at which distributors supply the stents to hospitals • Difficult for hospitals to procure directly from manufacturers as these stents are manufactured outside India
Indigenous
• Price at which distributors purchase from manufacturers • Hospitals can get discounts on these price by purchasing directly from the manufacturer
Foreign
• Price to the end-user, that is, the patients • Distributors can procure the lower priced, foreign made DES for as little as INR ‘a’
Foreign
• Was priced INR ‘u’ when it was launched in Dec 2012 • Presently, Abbott has monopoly on these stents but in future as more companies produce these stents, the price is expected to fall
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Drivers & Challenges – Summary
Drivers Increasing lifestyle based diseases
Challenges
Improving health infrastructure
Problems associated with usage
Changing demographics
Constant need for innovation and new product development
Increased healthcare spending and insurance coverage Advancements in technology and medical procedures
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Regulation of medical devices such as stents are done through different divisions under the MoHFW Organizational Structure Level 1
Level 2
Level 3
Level 4
Level 5
Level 6A
Level 7A
Level 6B
Level 7B
Level 7C
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Level 7D
8
Although there isn’t any specific legislation governing the entire medical devices industry, certain devices are… Regulatory Bodies (1/2)
Regulatory Body A • Regulatory Body A is the main body for the regulation of pharmaceuticals and medical devices in India • Within Regulatory Body A, Entity B is responsible for the regulating pharmaceuticals and medical devices and is advised by Body C and Body D • It is responsible for establishing the safety, efficacy, and quality standards for pharmaceuticals and medical devices • A list of regulated pharmaceuticals and devices, Indian Pharmacopeia, is published and updated by Regulatory Body A • It also appoints notified bodies for conducting conformity assessment procedures including tests for all drug and device applications to ensure that it complies with all standards set by the body • Regulatory Body A is also divided into several zonal offices which conduct the pre-licensing and post-licensing inspections, post-market surveillance, and recalls whenever necessary • Apart from the regulatory functions, Regulatory Body A also offers technical guidance and trains regulatory officials and analysts as well as monitors adverse events • Regulatory Body A also works with the World Health Organization to promote Good Manufacturing Practice (GMP)
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Market Competition – Porter’s Five Forces Analysis Impact Threat of New Entrants
Impact
Impact Impact
Bargaining Power of Suppliers
Competitive Rivalry
Bargaining Power of Buyers
Impact
Threat of Substitutes
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Market for coronary stents in India is dominated by products from foreign companies Competition Overview
Market Share – Volume-Wise (2013)
• MNCs have a dominant share in the coronary stents market in India • Products from MNCs are generally viewed as superior to those manufactured by domestic companies • As a result of this, there is a higher uptake of products from foreign companies while Indian manufacturers find it difficult to get buyers for their products • Company 1, company 2 and Company 3 together account for ~’m’% of the market in terms of volume and ‘n’% of the market in terms of value • Company 1 is the clear leader in the market with a a% share in volume terms in 2013 compared to p% in 2012 • Company 2 with a market share of b% had the second-largest share
Company 1
Company 5
Company 2
Company 6
Company 3
Others
Company 4
h% a% g% f%
d%
CORONARY STENTS MARKET IN INDIA 2014.PPT
b% c%
11
Competitive Benchmarking – Private Companies (1/4) Key Ratios of Top 3 Companies – Operational Basis (FY 2013) (1/3) Operating Margin
Net Margin
%
50
a3
40 a2
30
b2
20 10
a1
b1
b3
0 Company 1
Company 2
Company 3
• Company 3 recorded operating margin of a3%, higher than that of Company 2 and Company 1 which recorded operating margin of a2% and a1% respectively • Net margin was highest for Company 2 which recorded a net margin of b2%, followed by Company 1 and Company 3 which recorded net margin of b1% and b3% respectively
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Public: Domestic Company – Company 1 (1/5) Company Information
Offices and Centres – India
Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange
Products and Services Category
Head Office
Products/Services
Key People Medical Equipment
Interventional Devices
Name
Designation
Person 1
Chairman and Managing Director
Person 2
Director
Person 3
Director
Person 4
Independent Director
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Public: Domestic Company – Company 1 (2/5) Financial Snapshot Total Income
INR bn
Key Ratios Net Profit / Loss a3
25 20
INR bn a4
a2
15 10
a1
5
b1
6 4
b3
b4 2
b2
0
0 2010
2011
2012
2013
Financial Summary • Company earned a net profit of INR XX mn in FY 20XX, as compared to net profit of INR Y mn in FY 20YY • It reported total Income of INR XX mn in FY 20XX, registering an increase of X per cent over FY 20YY • It earned an operating margin of X.X per cent in FY 20XX an increase of X.X percentage points over FY 20YY • The company reported debt to equity ratio of X.XX in FY 20XX, an increase of X.X per cent over FY 20YY
Financial Summary Indicators Market Capitalization (INR bn) Total Enterprise Value (INR bn) EPS (INR) PE Ratio (Absolute)
Value (dd/mm/yyyy)
Particulars
y-o-y change (2013-12)
2013
2012
2011
2010
Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets
Cost Ratios Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)
Liquidity Ratios Current Ratio Cash Ratio
Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio
Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover Improved
CORONARY STENTS MARKET IN INDIA 2014.PPT
Decline
14
Public: Domestic Company – Company 1 (3/5) Key Business Segments Segment 1
Key Geographic Segments
Segment 2
Segment 3
Region 1
Region 2
30,000 Key Business Segments data is not available for financial years before 2013
20,000 a1
10,000 c1
0
b1
30,000 a2
20,000
b2
10,000
Key Geographic Segments data is not available for financial years before 2013
0 2013
2013
Business Highlights Description
News
Overview
• Company 1 is a medical device company specializing in vital signs monitoring, emergency cardiac care, vascular treatments and sensing technologies • It has ‘n’ subsidiaries across Country 1, Country 2, Country 3 and Country 4
Network
• It markets its products in over ‘m’ countries with significant presence in Region 1, region 2 and Region 3
Design and R&D
• It has design and development facilities in City 1, Country A; City 2 and City 3, Country B; and City 4, Country C
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Public: Domestic Company – Company 1 (4/5) Business Highlights Description
News
OEM Partnerships
• Company 1 partners with leading medical companies around the world and manufactures white-label products
Manufacturing Locations
• It has 3 manufacturing units each in Country 1 and country 2 and six units in Country 3 • In Country 3 , it has two manufacturing units each at City 1 and City 2, and one each at City 3, City 4 and City 5 • In mid 2012, the company acquired ‘k’ acres of land from the Organization A at the industrial growth centre in City 5 to set up a greenfield manufacturing facility with an investment of INR ‘p’ bn • Three group companies of Company 1 will have their manufacturing facility here and they were expected to be ready by the end of 2013
Coronary Stents Products
• Coronary stents from the company are manufactured by Company A which is a whollyowned subsidiary of Company B and is part of the Company 1 group • Stainless steel and cobalt chromium bare metal stents from the company include the ‘Model 1’, ‘Model 2’, ‘Model 3’ and ‘Model 4’ stents • It also markets ‘Model 5’ series of polymer-free DES which are coated with Paclitaxel and are available on stainless steel and cobalt chromium platforms • ‘Model 6’ coronary stent system is the company’s latest cobalt chromium coronary stent technology from the ‘Y’ series and is delivered by the company’s Paclitaxel-eluting coronary balloon dilatation catheter ‘Model A’ CORONARY STENTS MARKET IN INDIA 2014.PPT
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Public: Domestic Company – Company 1 – SWOT Analysis (5/5)
S
W
O
T
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Private: Foreign Company – Company 2 (1/5) Company Information
Offices and Centres – India
Corporate Address Tel No. Fax No. Website Year of Incorporation
Products and Services
Head Office
Products/Services
Key People es
Name
Designation
Person 1
Director
Person 2
Director
Person 3
Director
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Private: Foreign Company – Company 2 (2/5) Shareholders of the Company as on dd/mm/yy Name
No. of Shares held
Ownership Structure Category 1
Shareholder 1 Shareholder 2 Total 100.00%
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Private: Foreign Company – Company 2 (3/5) Financial Snapshot Total Income
Key Ratios Net Profit / Loss
Particulars
INR bn 30
INR bn a1
a2
25
a3
a4
0
20
-5
15
b4
10
-10
-15 b3
5 0
5
b1
b2
2010
2011
-20 -25
2012
2013
Financial Summary • Company earned a net profit of INR XX mn in FY 20XX, as compared to net profit of INR Y mn in FY 20YY • It reported total Income of INR XX mn in FY 20XX, registering an increase of X per cent over FY 20YY • It earned an operating margin of X.X per cent in FY 20XX an increase of X.X percentage points over FY 20YY • The company reported debt to equity ratio of X.XX in FY 20XX, an increase of X.X per cent over FY 20YY
y-o-y change (2013-12)
2013
2012
2011
2010
Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets
Cost Ratios Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)
Liquidity Ratios Current Ratio Cash Ratio
Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio
Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover
Note: Financial year ending 31st Dec
Improved
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Decline
20
Private: Foreign Company – Company 2 (4/5) Business Highlights Description
Overview
Manufacturing Facility
Coronary Stents Products
News • Company 2 operates in the nutritional products, laboratory diagnostics, medical devices, and pharmaceutical therapies space • It was previously the domestic formulations business of Company A and was renamed as Company 2 after it was acquired by Company B in May 2010 • It has a formulation facility at City 1, State 1 where a wide range of formulations and dosage forms are manufactured • However, coronary stents sold by the company in India are manufactured by various subsidiaries of the parent company Company B • A number of models of coronary stents from the company are available in India • ‘Model 1’ Carotid Stent System and ‘Model 2’ Coronary Stent marketed by the company are manufactured by Company C, Country 1 • ‘Model 3’ Coronary Stent System and ‘Model 4’ series are manufactured by Company D, Country 2 • ‘Model 5’ Stent System is manufactured by Company E in its manufacturing facility at City 3, Country 3 • Everolimus Eluting ‘Model 6’, ‘Model 7’, ‘Model 8’, ‘Model 9’, ‘Model 10’ and ‘Model 11’ are manufactured by Company F, Country 4 • ‘Model 12’ stent system are manufactured by Company G, Country 5 • In 20xx, ‘Model 13’, a Type A stent from the company, was launched in India at a price of INR ‘y’ mn; however the price was decreased to INR ‘z’ mn within 6 months due to the overwhelming response that it received
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Private: Foreign Company – Company 2 – SWOT Analysis (4/5)
S
W
O
T
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Buyer Snapshot: List of Top 10 Buyers of Coronary Stents Top 10 hospitals buying coronary stents in India Hospital Name
Hospital Logo
Hospital Chain
Ownership Type
Angioplasty Procedures Per Month
All India Institute of Medical Sciences
Max Super Specialty Hospital Asian Heart Institute B.M. Birla Heart Research Centre Apollo Hospital# Sri Jayadeva Institute of Cardiology Narayana Hrudayalaya
Fortis Healthcare* Wockhardt Hospital** Metro Heart Institute
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Public: Domestic Company – Hospital 1 (1/3) Company Information
Head Office and Hospital Network– India
Corporate Address
Tel No. Fax No. Website Year of Incorporation
Products and Services Category
Head Office Hospital Network
Products/Services
Key People Specialty Centers
Surgery Laboratory
Name
Designation
Person 1
President (Institute Body)
Person 2
Dean
Person 3
Director
Person 4
Medical Superintendent
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Public: Domestic Company – Hospital 1 (2/3) Business Highlights Description
News
Overview
• Hospital 1 is a group of 7 hospitals across India • It has ‘m’ teaching departments and centers, a total of ‘p’ beds, ‘q’ doctors (including faculty members, senior and junior residents) and ‘r’ nurses
Facilities
• It is a leader in stem cell therapy, especially in the fields of cardiology and neurology • It has India's first and only minimally invasive surgery training centre, under collaboration with Germany • It is a pioneer of robotic surgeries in India, particularly the Da Vinci system for urology, and robotic CTVS • The first in-vitro fertilization facility in the public sector was set up at the Hospital in Feb 2008
Future Plans
• Expansion plans of the hospital were recently approved by the Regulatory Body A • The government is planning to set up two more such hospitals cum institutions at City 1, State 1 and City 2, State 2
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Public: Domestic Company – Hospital 1 (3/3) Parameter
Hospital Indicators
Total cardiac patients per month Angioplasties per month Stent providers
Purchase decision factors Stents procurement Contact details
Centralized/ Hospital level HOD/ Technician/ Procurement
Procedure/ process involved in procurement Contact details – Purchase Stent types
Overview of Stent Procurement Process
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