MIRA INFORM REPORT

Report Date :

17.07.2008

IDENTIFICATION DETAILS

Name :	QUANTUM LIMITED
Registered Office :	Arjuna Towers, II Mount Mary Road, Bandra [West], Mumbai – 400050, Maharashtra
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	06.01.2006
Com. Reg. No.:	11-158704
CIN No.: [Company Identification No.]	U73100MH2006PLC158704
IEC No.:	3108003569
TAN No.: [Tax Deduction & Collection Account No.]	MUMQ00749A
PAN No.: [Permanent Account No.]	AAACQ1329D
Legal Form :	A closely held public limited liability company
Line of Business :	Providing solutions in clinical research

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a 2 years old company and progressing well. Directors are reported as experienced, respectable and having satisfactory means of their own. Their trade relations are fair. Business is active. Payments are reported as usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

INFORMATION PARTED BY

Name :	Mr. Rajhans J. Saraswat
Designation :	Project Head, Quantum Limited, Member of Institute of International Business Analyst, USA
Contact No.:	91-9860200088
Date :	16.07.2008

LOCATIONS

Registered Office :	Arjuna Towers, II Mount Mary Road, Bandra [West], Mumbai – 400050, Maharashtra, India
Tel. No.:	91-22-27290550 / 26514000 / 02 / 03
Mobile No.:	91-9860200088
Fax No.:	91-22-26514001
E-Mail :	cmd@quantumltd.co.in marketing@quantumltd.co.in
Website :	http://www.quantumltd.co.in/
Area :	3000 sq. ft. [Owned]
Corporate Office :	301, Eastern Paradise, Near Hotel Amrita, Baner Road, Pune – 410045, Maharashtra, India
Tel. No.:	91 - 20 - 27290550
Fax No.:	91 - 20 - 27290554
E-Mail :	marketing@quantumltd.co.in
Area :	1250 sq. ft. [Rented]
Proposed Clinical Research Centre :	Plot No. 5A & 5B, Phase II, ITBT Park, Near Emcure, Hinjewadi Industrial Park, Pune, Maharashtra, India
E-Mail :	rajhans@quantumltd.co.in
Area :	36000 sq. ft. [Owned]

DIRECTORS

Name :	Mr. Indarjit Singh Chauhan
Designation :	Chairman cum Managing Director
Address :	1001, Arjuna Towers, 10^thFloor, 2^nd Mount Mary Road, Bandra [West], Mumbai – 400050, Maharashtra, India
Name :	Mr. Jagmohan Arora
Designation :	Director
Address :	1 ‘A’, Green Acers Building, Lokhandwala Complex, Andheri [West], Mumbai – 400058
Name :	Mr. Sudhir Chaddha
Designation :	Director
Address :	301, Shailaja Apartment, 50, Pali Hill Road, Bandra [West], Mumbai – 400050
Name :	Mrs. Mona B. Chadha
Designation :	Director
Address :	702, Arjuna Towers, 7^th Floor, Inside Rang Mahal Compound, 2^nd Mount Mary Road, Bandra [West], Mumbai – 400050, Maharashtra, India
Name :	Mr. Hufrish Adi Bhiladwala
Designation :	Professional Director
Address :	402, 4^th Floor, Rang Mahal Building, 2^nd Mount Mary Road, Bandra [West], Mumbai – 400050
Name :	Dr. Faizal A. Deshmukh
Designation :	Technical Director
Address :	Saliwada Naka, Post Taluka – Mahad, Raigad – 402301
Name :	Mr. Aftab D. Siddique
Designation :	Professional Director
Address :	402, 4^th Floor, ‘C’ Wing, Dheeraj Heritage Residency – I, Daulat Nagar, Santacruz [West], Mumbai - 400054

BUSINESS DETAILS

Line of Business :	Providing solutions in clinical research
Terms :
Selling :	Credit [30-60 days]
Purchasing :	Credit [30-60 days]

GENERAL INFORMATION

Customers :

• Corporates
• Hospitals
• MNC’s
• TNC’s
• Government Research Bodies
• Medical Colleges

• Specialty Enzymes and Biochemicals [USA]
• Simbiosys Biowares [USA]
• Genom Biotech Private Limited [Mumbai]
• Altus Pharmaceuticals Inc [USA]
• Metabasis Therapeutic Inc [USA]
• Nabi Biopharmaceuticals [USA]
• Amylin Pharmaceuticals Inc [USA]
• Panthera Solutions Limited [UK]
• Onyvax Limited [UK]
• Pharmadex Pharmaceuticals Limited [UK]
• Photobiotics [UK]
• Prospero Concepts [UK]
• ReGen Therapeutics Plc. [UK]
• Regma Biotechnologies Limited [UK]
• Silence Therapeutics [UK]
• Spirogen Limited [UK]
• Theratase plc [UK]
• Verigen Transplant Services [UK]
• William Harvey Limited [UK]
• Nyxis Therapeutic Inc [UK]
• Daliichi Sankyo Inc [Japan]
• Vacciguard [Israel]
• Bioline [Israel]
• Epix Pharmaceuticals [Israel]
• Inotek Pharmaceuticals [Israel]
• Kamada [Israel]
• Quark Biotech [Israel]
• Dabur Pharmaceuticals [New Delhi]

No. of Employees :

19 [In Office : 5, In Factory : 8 and In Branch : 6]

Bankers :

• Bank of Baroda
• ICICI Bank
• IDBI Bank
• Jammu and Kashmir Bank

Facilities :

Unsecured Loan	Rs in Millions
Indrajitsingh A Chauhan	2.685
Mona Chanda	1.962
Sudhir Chanda	0.300
Total	4.947

Banking Relations :	Satisfactory
Auditors :
Name :	N. G. Jain and Company Chartered Accountants
Address :	320, Hammersmith Industrial Premises Co Operative Society Limited, Narayan Pathare Marg, Off Sitladevi Temple Road, Mahim [West], Mumbai – 400016
Tel. No.:	91-22-24440564 / 0716
E-Mail :	ng_jainco@yahoo.co.in

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
500000	Equity Shares	Rs. 10/- each	Rs. 5.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
500000	Equity Shares	Rs. 10/- each	Rs. 5.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		5.000	5.000	0.000
2] Share Application Money		0.000	0.000	0.716
3] Reserves & Surplus		1.297	0.421	[0.418]
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		6.297	5.421	0.298
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		23.792	4.947	0.000
TOTAL BORROWING		23.792	4.947	0.000
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		30.089	10.368	0.298
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		27.876	10.506	0.128
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1.820	0.000	0.000
	Sundry Debtors	0.066	0.000	0.000
	Cash & Bank Balances	0.375	0.092	0.021
	Deposits	0.000	0.149	0.050
	Loans & Advances	0.200	0.200	0.000
Total Current Assets		2.461	0.441	0.071
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	1.332	1.123	0.020
	Provisions	0.000	0.000	0.000
Total Current Liabilities		1.332	1.123	0.020
Net Current Assets		1.129	[0.682]	0.051
MISCELLANEOUS EXPENSES		1.084	0.544	0.119
TOTAL		30.089	10.368	0.298

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Income form Business Operation		4.150	3.014	0.000
Other Income		0.000	0.000	0.000
Total Income		4.150	3.014	0.000
Profit/(Loss) Before Tax		1.151	0.966	[0.418]
Provision for Taxation		0.275	0.126	0.000
Profit/(Loss) After Tax		0.876	0.840	[0.418]
Export Value		4.150	3.014	NA
Expenditures :
	Administrative Expenses	2.820	1.981	0.385
	Preliminary Expenses W/ Off	0.013	0.013	0.013
	Depreciation & Amortization	0.165	0.054	0.020
Total Expenditure		2.998	2.048	0.418

KEY RATIOS

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
PAT / Total Income	(%)	21.11	27.86	[0.00]
Net Profit Margin (PBT/Sales)	(%)	27.73	32.05	[0.00]
Return on Total Assets (PBT/Total Assets}	(%)	13.68	8.82	[210.05]
Return on Investment (ROI) (PBT/Networth)		0.18	0.18	[1.40]
Debt Equity Ratio (Total Liability/Networth)		3.99	1.12	0.06
Current Ratio (Current Asset/Current Liability)		1.85	0.39	3.55

LOCAL AGENCY FURTHER INFORMATION

Business Operation

The company was incorporated on 6^th January, 2006 and received its certificate of commencement of business on 24^th January, 2006. The company has started its business activities during the year and earned net profit of Rs. 0.966 Millions.

FOR MANUFACTURING ENTITIES / FACTORY SITE [S]

Pollution Control

Any pollutants being generated and their disposal

Bio Medical waste will be degraded after the lab is operational

Company has obtained present pollution control board certificate for the same and entered in to the agreement for BMW management

INTRODUCTION TO INDUSTRY

Clinical trial is on a roll in India. India is poised to be the global petri dish . Major pharma companies are out sourcing clinical trial to the country because they conduct fair, transparent and multicentric trial. Previously, when a drug was imported from abroad, one always wondered about its efficacy and whether it would be suitable to the population. It will help us if they are part of the global drug development process.

Pharma Company's major problem is increased pressure on profit margin, spiraling R&D cost and increased overhead outsourcing of clinical research process to third parties in developing countries seems a viable option. By contracting such work to India, this saves anywhere from 40% to 60% in new drug development.

Clinical research involves drug trial to verify their clinical, pharmacology or adverse effects to determine their safety and efficacy. The trial is usually conducted in four phases. Normally the first two phases, which involve small sample size for testing the toxicity of the drug, are held in the parent country itself. It's the third and fourth phases, which are being outsourced.

According to Ernst & Young

Total market for clinical research activities in India is expected to touch $ 1.5 – 2 billion by 2010.

It is also predicted that within the next two year 30% of the global clinical trials will take place outside the United States and that Western Europe and India would emerge as favourable destination.

India required 50,0000 clinical research professionals by 2010 thus reducing a part of one major problem of India i.e. unemployment.

Largest number of clinical trials is being under taken in US till now and India is being considered favourable destination for trial.

While going is getting really good for India Inc. the current scenario is just the tip of the iceberg, giving the predictions for the future.

Management

Shri Indarjit Singh Chauhan (CMD)

He started his career with his leadership and inter-personal skills as an exporter of textile. With his rich experience regarding human resource, finance and technical aspects of various fields, he has diversified his business activities in other areas viz Construction, Infrastructure and Turnkey Project, Fertilizers, Hotel and Clinical Research. He has developed several prime properties in Mumbai for Residential/Commercial purposes. He has business experience of more than two decades and is well conversant with the subject. He has traveled worldwide & established personal contacts with overseas customers. He has a very good network in the hospital, health industry and Pharmaceutical companies. This project is his brainchild and is inspired by him.

Aftab D. Siddique Professional Director

He is well conversant with the Six Sigma principle (Statistical Quality Control Tool). He is eminent in the field of pharmaceutical material handling. He has proved his proficiency in sample storage and tracking, which is most important part of site monitoring .He has joined Quantum Ltd. as a professional director.

Hufrish Adi Bhiladwala Professional Director

She is Chartered Accountant by profession and is working with DBS Bank, Singapore. She has proved her mettle in Corporate financing, Project Financing and Financial control. She has joined Quantum Ltd. as a professional director.

Dr. Faizal A. Deshmukh Technical Director

He completed his MBBS, MD, D.D.C.D. from reputed university. For the past twenty years, he has proved his highest level of competence in medical profession and owns a nursing home. He has a deep knowledge about GCP, GLP and ISO Guidelines, which plays paramount part in a clinical research. He provides technical direction on business decisions and in the execution of each project. He develops, plans and executes, relevant programming for the constituency comprising business and professional. He has joined Quantum Ltd as technical director.

Quantum Limited is into the following businesses

Clinical Research

Quantum Limited has the vision to become a multinational operation clinical research company. It has been established with sole purpose of conducting clinical research in India and aims to get the reputed pharmaceutical companies in India & abroad to conduct their trial with the expertise.

It has tied up with doctors, pharmaceutical expert, bio – statistician and a pool of subject specialists from different disciplines requisite for valued and time bound research. Company also collects DSR of operational area for fast patient recruitment. It minimizes the risk of patient drop out.

The business and the inherited strategy very significantly enable us to provide good services at very competitive rates. The operation is at sites where other CRO ‘s do not have their presence also. So value chain is very strong without high level of struggle in resources management to some extent. The latest management fundamentals and techniques like six sigma and zero error practice from source level (duplication of work can be saved) of work provides a high level of leverage in costing while maintaining high quality norms. R&D is part of pharmaceutical industry and a company cannot survive without R&D, the belief is that they join the hands with a company for not only one or two assignments but they provide them all possible help and services from the end. They build trust by playing significant parts in the growth of company .They never stick with assigned domain only.

BIODIESEL

Appreciating the robust demand of biodesiel globally and also in India very soon they are coming up with bio- diesel plant. The site chosen for this is northern costal area. It's going to be the largest capacity of biodiesel plant in India of about 60,000 TPA. Technology used for the plant is imported from Germany . It will be ‘Multifeed' production plant.

Simultaneously they will produce glycerine to meet the stringent international standard. It can be consumed by pharmaceutical companies.

INTERNATIONAL MEDICAL TOURISM

They will be coming with new project of medical tourism. In this package they lend the helping hands to people in developed economics where medical treatment cost is huge. This package comprises of brining people from their home country then does the required medication and then sends back to their home country. This concept is still very new and they are brining this into the market. With help of alliance hospitals.

Background of the company

The drug when manufactured is tested upon the animals. Thereafter it is tested upon healthy human beings. Then, the CRO comes into scene. The CRO coordinates between pharmaceutical companies, investigator and subject to carry on trial process.

Services provided by them Pre-Clinical, Clinical [Phase I, Phase II, Phase III, Phase IV], BA/BE, others.

Quantum Limited is a multinational operational clinical research company. It has been established with the sole purpose of conducting clinical research in India and aims to get the top pharmaceutical companies in India & abroad to conduct their trials with Quantum. It has tie-ups with doctors, pharmaceutical experts, bio-statisticians and a pool of subject specialists from different disciplines requisite for valued and time-bound research.

They undertake research for safe, innovative, early-phase human drug development complying with Good Clinical Practice and Good Laboratory Practice Standards.

All Phases of trials are conducted utilizing excellent healthcare and bio analytical facilities. The specialized staff at each site comprises physicians, pharmaceutical scientists, nurses, investigators, analysts and pharmacokinetics with experience in varied therapeutic areas.

The primary areas of operation include screening of Cardiovascular drugs, Central nervous system drugs, Sensory organ drugs, Respiratory drugs, Gastrointestinal drugs, Hormones, Urogenital and Anal drugs, External Skin drugs, Vitamins, Blood and Fluid drugs, Metabolic drugs (like Type 2 Diabetes and its complications, Hemodialysis Osteoporosis etc.), Anti-cancer drugs, Anti-allergic drugs, Chemotherapeutic agents, Biological products, Diagnostic agents and Medical devices.

Project

The company proposes to establish State of art high tech Clinical Research center at Pune with accreditation by International reputed agencies like ANVISA, IIQM GCP, NABL, etc. The Clinical Research Services planned by the Company have a good demand in India and overseas market. The company proposes to render their services of Clinical Trials at Pune to the internationally reputed Pharmaceutical and Biotech majors. The main recipient for clinical research are Bulk Drug, Pharmaceuticals, biotech bioengineering manufacturers of India, USA, Europe, Japan and other developed nations. The cost of the project has been estimated at Rs. 141.300 Millions comprising of cost of land, building, medical equipment, data processing equipments etc.

Land

The company has acquired leasehold land Plot No. 5 A & B at ITBT Park, Phase II, Hinjiwadi, Pune from Maharashtra Industrial Development Corporation based on present requirement as well as future expansion plan. Cost of land including stamp duty and registration charges is estimated at Rs. 24.800 Millions based on the rate quoted by MIDC in the ITBT Park. Payment of 24.800 Millions has been done. MIDC is allotting plot of land on long term lease period of 99 years which is renewable for a further period of 99 years.

Location advantage

Pune is fully developed, with ready availability of infrastructure facilities like power, water, road, etc. A good number of large, medium and small scale software and other services oriented units are already operating in it. In fact, it is one of the model, well planned and fastest growing service oriented town developed by the MIDC. It owes its rapid growth as a major industrial center to the following factor :

• Cost of living is low comparatively Bangalore and Mumbai
• 40 % biotech and pharmaceutical companies are situated in a range of 200 kms.
• Easy availability of knowledge worker from nearby area as several institutions and government research instrument are located in Pune like NCL, NIV, NCCS etc
• Emerging ITBT Park
• Mumbai is only 148 kms.
• A good IT industry is also emerging in parallel to take care of. Database and software part of the progress.
• Pune is also very well connected with other parts of the nation through air transport as several air lines are regularly operating their flights.

Building

Subject has designed the plant and has applied for approval of MIDC.

Medical Equipment

Detailed list of medical equipments have been listed below as required by subject. Cost of medical equipment is estimated at Rs. 40.000 Millions. All the Equipments have been selected bearing in mind the following Factors :

• Cost of equipments
• Technology
• Reliability and suppliers
• Mode of payment
• Schedule of delivery
• Marketing information regarding the suppliers and tracking record of equipments and past experience.

In respect of all equipments, three competitive quotations have been invited for selection / finalization.

Equipments List

Particulars Equipments

UV-Vis Spectrophotometer

UV-Vis Spectrophotometer [Perkin Elmer]

With 10 mm Quartz Suprasil Cell [Pair]

UV-Vis Spectrophotometer [JASCO]

UV-Vis Spectrophotometer [BIO TEK]

Double beam UV-Vis

Microplate Spectrophotometer [Spectromax™] [340-PC]

[Biotek] CIF by air prices

Automated Cell Counter

Deep freezer [-35C] SANYO UK

Deep freezer [-35C] REMI India

ELISA Reader [BIO RAD] with software

ELISA Washer [BIO RAD]

ELISA Reader [BIO TEK]

HPLC Machine from Perkin Elmer

LC Pump

UV/VIS Detector

LINK Interface

Total Chrom Workstation Software

LC IPM

Power Cord Kit

Pump Communication Kit for Turbo LC Plus

Autosampler

Sampling Syringe [50uL]

C18 Column [150 mm X 4.6mm]

15cm Pecosphere Column Holder

[Total Including Freight, Packing and Forwarding] CIP value

Walk in Coolers

Leica Microscope

Leica Digital Camera [Model Leica DC 150]

Double Door Steam Sterilizer [Metal Chem, India]

With Automatic PLC based control system and printing facility

Automated Hematology Analyser, BC2800 [Spectrum]

Automated Biochemical Analyser [BSI, Italy]

LC-MS/MS with HPLC

SCIEX, API 4000 with Perkin Elmer System

LC-MS/MS [SCIEX, API 2000 with Shimazdu System]

GC-MS/MS [Vatian, Saturn CP-8400]

GC – pFPD, FID and ECD [Varian, with Combi-Pal, SPME CP3800-44]

Flow Cytometer [Beckman Coulter, EPICS XL and / or Becton Dickinson, FACS Calibur]

Fully Automatic Blood Cell Counter [3 part] [ERMA PCE – 210 model]

Fully automated RadioImmuno Assay Analyzer [Stratec Germany, SR 300]

Coagulation Analyzer [Diagnostica stago, ST art 4 and / or Trivitimer 1001, Labour, GmbH]

HbA1c Analyser [Diastat, BIO-RAD]

Fully automated Nephelometry system [Beckman Coulter, ARRAT 360]

Laminar Air Flow [Verticle] [microfilt]

Refrigerated High Speed Centrifuges [SORVAL]

Solid Phase Extraction system [Caliper Life Sciences]

Auto Absorption Spectrometer [flame, graphite furnace and hydride] [varian]

Fully automated Chemiluminescence’s Immunoassay system [Beckman Counter, ACCESS]

Fully automated Quantitative Immunoassay analyzer [IMMYLITE 1000, DPC]

Defibrillator, cardiolife [Nihon Koden]

Vital Singns Monitor [Biosys]

Sequence deection system [Real Time - PCR]

The companies short listed are Water, Nidus Biotech, Dionex, Agilent Technologies.

Clinical Research Analysis in Depth

Phase I [Human Pharmacology]

The objective of studies in Phase I is the estimation of safety and tolerability with the initial administration of an investigational new drug into human(s). Studies in this Phase of development usually have non-therapeutic objectives and may be conducted in healthy volunteers subjects or certain types of patients. Drugs with significant potential toxicity e.g. cytotoxic drugs are usually studied in patients. Drugs with significant potential toxicity identified with Phase I, they may also be indicated at other point in the new drug development plan. Studies conducted in Phase I typically involved one or a combination of the following aspects

a) It is usually intended to determine the tolerability of the dose.

b) Pharmacokinetics (ADME) i.e. characterization of a drug’s absorption, distribution, metabolism and excretion. Although these studies continue throughout the development plan, they should be performed to support formulation development and determine pharmacokinetic parameters in different age groups to support dosing recommendations. Obtaining pharmacokinetics information in sub-populations such as patient with impaired elimination ( renal failure), the elderly, children, women and ethnic subgroups should also be considered. Obtaining pharmacokinetic information in subpopulation such as patient with impaired elimination (real or hepatic failure), the elderly, children, women and ethnic subgroup should also be considered

c) Pharmacodynamics: Depending of the drug and the endpoints studied Pharmacodynamics studies and studies relating drug blood levels to response (pharmacokinetic / Pharmacodynamics studies) May be conducted in healthy volunteer subjects or in patient with the target disease.

d) Early Measurement of Drug Activity : Preliminary studies of activity or potential therapeutic benefit may be conducted when drug activity is readily measurable with a short duration of drug exposure in patients at this early stage.

Phase II (Therapeutic Exploratory Trials) :

The primary objective of Phase II trials is to evaluate the effectiveness of a drug for a particular indication or indications in patients with the condition under study and to determine the common short-term side effects and risks associated with the drug.

Studies in Phase II should typically be conducted in a group of patients (100 to 300 human subjects) who are selected by relatively narrow criteria leading to a relatively homogenous population.

Phase III (Therapeutic Confirmatory Trials):

The main objective of Phase III studies is to confirm the therapeutic benefit [s] of the test drugs in human subjects. Studies in Phase III are designed to confirm the preliminary evidence accumulated in Phase Ii that a drug is safe and effective for use in the intended indication and recipient population.

Phase IV [Post – Marketing Surveillance]

Studies in Phase IV are all studies [other than routine surveillance] performed after drug approval and related to the approved indication[s].

These studies go beyond the prior demonstration of the drug’s safety, efficacy and dose definition. These are no considered necessary at the time of approval but are often important for optimizing he drug’s use. They are often important for optimizing the drug’s use. They may be of ay type but should have valid scientific objectives. Commonly conducted studies include additional drug – drug interaction [s], dose response or safety studies and studies designed to support use under the approved indication [s], e.g. mortality / morbidity studies, epidemiological studies etc.

The company proposes to offer analysis studies in following area :

Bio – analytical method development and validation

Drug molecules that are orally given to patient and healthy volunteers have to be quantified in plasma and other biological matrices like urine etc. the quantification of the drug is in very small quantities and the measurement is made usually in nano-grams and pico-grams. It required very specialized skill sets to extract the drug in minute quantities from the plasma and other fluid like Solid Phase Extraction [SPE], Precipitation etc. The minute quantities of drug extracted are then quantified using HPLC and LCMS instruments. A method developed for analysis has to be validated by taking several runs to establish sensitivity, ruggedness and reproduce ability.

Human bioavailability studies [Phase I Study]

Bioavailability is assessed as the rate and extent to which the active ingredient or active moiety is absorbed from a drug product and becomes available at the site of action. Bio Availability for orally administered drug is documented by developing a systemic exposure profile obtained from measuring the concentration of active ingredients and / or active moieties and when appropriate active metabolites overtime in samples collected in systemic circulation.

Conventional Bio-equivalence studies

Bio-equivalence [BE] is measured as the absence of the significant difference in the rate and extent to which the active ingredient or active moiety in pharmaceutical equivalents or Pharmaceutical alternatives becomes available at the site of Drug action when administered at the same molar does under similar conditions is an appropriate designed study. Typical studies for BE is carried out as a crossover study in which clearance, volume of distribution and absorption as determined by physiological variables are assumed to have less interoccassion variability compared to the variability arising from formulation performance. The difference between two products due to formulation factors can be determined.

Food effect studies in humans

The absorption of the drug in human system varies depending on whether the human has been fasting or consuming food at regular intervals. To assess the Bio-equivalence and quality. Bioavailability in different food consumption states, studies are conducted using specially designed meal programs. Specific meal programs contain high calories and animal fats, which influence the rate of absorption of the orally absorbed drug. The efficacy and side effects are also investigated.

Multiple dose studies in humans

Single dose and multiple dose studies are used to evaluate steady state levels of the drug in the system. Single dose studies are normally performed on healthy volunteers whilst multiple studies are conducted on relevant patients. There are several technical points and specific requirements to develop and monitor protocols for multiple dose studies and dose proportionality studies.

Other Related Services

• Hematology
• Lipid Profiles
• Coagulation studies
• Drug screening
• Endocrinology
• Inflammatory / Immune Markers
• Auto – Immune

In addition to above

• Sponsor dedicated project management services
• Development of custom database driven by Protocol specification for data capture and management
• Customized visit of site an site – specific clinical trial material
• Development of protocol – specific investigator instruction manual and flow charts
• Efficient and timely interaction with investigator site. Study status report daily or as par required by client by using IVRS technology [Interactive Voice Recognitions Systems]
• Professionally managed project risk management for risks like patient drop out, site selection, protocol complexity.
• Patient abnormality and alert mail summaries for trend reporting through Internet.
• Specification design for data transmission to sponsor or sponsor’s designated data recipient.
• Risk assessment and risk measurement step will be defined as per the requirement of client.

Cost of the Project

Purpose	Rs in Millions
Cost of Land	24.800
Cost of Building	50.000
Medical equipments	40.000
Furniture	5.000
Data Processing Equipments	6.000
Vehicles	2.200
Preliminary Expenses	6.000
Margin Money for working capital	7.300
Total	141.300

Means of Finance

Promoters contributions	Rs in Millions
Equity Share	20.000
Unsecured Loan	21.300
Term Loan from Bank	100.000
Total	141.300

Promoters Contribution

The Promoters of the Company propose to induct Rs. 41.300 Millions to part finance the project comprising of Equity Share Capital of Rs. 20.000 Millions and Unsecured Loan of Rs. 21.300 Millions from Directors / shareholders. Thus promoter’s contribution towards project is Rs. 41.300 Millions equivalent to 30 % of project cost.

Term Loan

To part finance the project, it is proposed to raise term loan of Rs. 100.000 Millions from the bank. It is proposed to repay the term loan in 17 quarterly equal installments with initial moratorium period of 24 months.

Laboratory Chemical and other Consumables

Clinical research trials require laboratory chemicals, testing material and other consumables that are easily available locally or from Mumbai.

Several medical research centers including Government owned Research center are already operating in Pune and in close vicinity of Pune. Manufacturers and importers of Lab Chemicals are providing materials at the doorsteps of the research units. As such, procurement of quality material at a most economical price and their timely supply will pose no problem.

Power

Power supply round the clock is assured from MSBE along with in house generator set as a stand by arrangements.

Transport

Pune is very well connected by network of roads, railways and air transportation to various part of the nation. Pune being an international airport several reputed airline companies are regularly operating from Pune Airport. This assures free movement of man and material at a resemble cost.

Effluent

The unit will not generate any gaseous effluents and will not pollute the atmosphere.

Employees and Staff

The Company is closely held public limited Company of Mr. Indarjit Singh Chauhan. The company has tied up with Nucleus Institute, Pune for recruiting highly qualified and experienced professionals from medical and Paramedical stream. The requirements of skilled and semiskilled employees have been given in Schedule “g”. Staff will be trained in their own establishment under the supervision and guidance of Technical Consultants and Work Manager.

Present Status of the Project

Institute of Management in Bangalore in Strategic Management from IIM Bangalore. He was associated with Videocon for a year and has served clients like Reliance and Bombay Hospital while doing CA. He has exemplary leadership and Project Management skills. He has jointed Quantum Limited as Project Head.

List of Sponsors / Pharmaceutical companies who have evinced interest in the project and have tied up for the research :

1. Specialty Enzymes and Biochemicals [USA]
2. Simbiosys Biowares [USA]
3. Altus Pharmaceuticals Inc [USA]
4. Metabasis Therapeutic Inc [USA]
5. Nabi Biopharmaceuticals [USA]
6. Amylin Pharmaceuticals Inc [USA]
7. Panthera Solutions Limited [UK]
8. Onyvax Limited [UK]
9. Pharmadex Pharmaceuticals Limited [UK]
10. Photobiotics [UK]
11. Prospero Concepts [UK]
12. ReGen Therapeutics Plc. [UK]
13. Regma Biotechnologies Limited [UK]
14. Silence Therapeutics [UK]
15. Spirogen Limited [UK]
16. Theratase plc [UK]
17. Verigen Transplant Services [UK]
18. William Harvey Limited [UK]
19. Cancer Research Technologies Limited [UK]
20. Nyxis Therapeutic Inc [UK]
21. Daliichi Sankyo Inc [Japan]
22. Vacciguard [Israel]
23. Bioline [Israel]
24. Epix [Israel]
25. Inotek [Israel]
26. Kamada [Israel]
27. Quark Biotech [Israel]
28. Genom Biotech Private Limited [Mumbai]
29. Vedic Life Sciences Private Limited [Mumbai]
30. Dabur Pharmaceuticals [New Delhi]
31. Panacea Biotech [New Delhi]

Currently they serving the following clients :

Advanced Enzyme Technologies Limited

Nature of services provided to client

• Protocol Writing
• Project Implementation
• Data Management
• Project Management
• Regulatory Approval

Contract Value – 3709000

Simbiosys Biowares India Private Limited

Nature of services provided to client

• To collect surgically removed tissues from patients of colon cancer
• To separate each tissue into cancerous area and adjacent benign area.
• To provide histopathology report of each tissue
• To snap freeze the diseased tissues & adjacent benign area and ship it to Bangalore with temperature controlled tracking device

Contract value – 507500

One of the medical Direct from LAXAI, USA based company is ready to give Phase III study. They have accepted their Quotation and are going to visit India in a couple of months. They are enclosing quotations sent to them for the internal reference.

STRENGTHS

QL has Biggest strength in its decentralized operational business module. It mans company has developed an unique business operational module which is helping in cost saving fast patient recruitments, mapping of patient, risk management, better site management and good relationship with doctors and hospitals.

Good industrial relationship that would help them in getting business from various business houses in inception of the project.

Cordial relationship with DCGI and DGFT office, which are / will help they in getting statutory compliances done in faster and better way.

Expertise force of knowledge workers are ready to work with the company, not only from India but also from abroad. They will be major contributing factor in success of project. As company will be able to materialize their relationships in industry. It includes management relationship also with major pharmaceutical companies in India and abroad.

Quantum Limited does not have any pharmaceutical background and neither any sister concerns in manufacturing business of pharmacy, so foreign clients and even domestic clients would provide business without any hesitation. They hesitate in providing business to a company who have pharmaceutical background, because in today’s cut throat competition era it is next to impossible to rely on competitors in research Like –

An international company who wants to conduct a clinical trials in India will feel safe in QUANTUM’s [CRO] hands rather, SRL LABS [CRO] hands which has background in pharmacy as RANBAXY.

For better quality and transparent research it is required to obtain all information about a drug or contents or research from client. Client will only share all information once they will feel they are in safe hands for outsourcing of research part and whatever research they have done in drug discovery phases will be kept confidential. During the research also, if here might be some finding which be kept confidential. During the research also, if there might be some finding which can have commercial values and IPR issues. So, they always go to the clinical research companies which are not in pharmaceutical business. This transparent process of research also helps CRO to conduct a highly integrated quality research with adequate information supplied by CRO. Quantum has capacity to do a fearless and transparent clinical research.

Quantum has developed a robust communication and Information Technology base for clinical research, as both are very crucial pillars in successes of clinical research business. In communication and data-base management EDCR are very latest technology. Hardly 5 % competitors are using these technologies. Other can not because their social, economical or professional impediments restraining them to switch from old to new technology. Wherein Quantum will adopt the latest technology with utmost use of the same.

Quantum will provide a very vast area of therapeutics range in terms of diseases, which is challenging but with help of large number of hospitals tie-ups it has been achieved by the company.

Bio Markers, metabolic disorders diagnosis, Genetic and Amino acid’s diagnosis and screening technology which will change face of Neo – natal screening –

In India except Quantum, no one has the capacity to provide these services. Theses services will be flagship services form company and will cater all India market and in future other Asian countries will be also covered.

Weakness

Likewise all companies QL is also not a perfect company and it has some weakness but they are not so prominent that would material effect on business performance.

Quantum does not have established brand image to attract man power to work with it. It will have effect on higher cost of human resources, because man power will ask for higher compensation.

Does not have any readymade set-up in foreign countries.

Highly capital intensive business wherein company has to make adequate size of investment in Indrastructure, Equipments, Manpower, System developments, Quality control and Trainiing.

Opportunities

1) Consistent high quality of research has been proved by Indian companies

2) QL will have Global presence that will enable it with better market access globally

3) Breadth of services is long

4) Broad therapeutic expertise

5) Strong and flexible data systems

6) Diversified customer care

7) Reliability

8) Timelines

9) GLOCAL (Global Reach Local Expertise)

10) Steadily increasing growth of R and D spending

11) Need for speed to market

12) Discovery challenge created by patent expirations

13) Need to capitalize on advancement in the realm of biotech, genomics and

14) Other discovery research

15) Cost containment

Clinical research business is very promising business According to few government and private bodies.

CII – 2.8 billion US$ Industry by 2010

ASSOCHEM – 87.1 Million US$

Growth rate over previous year 87% (including clinical trials)

(Sources – Cygnus Research)

AIMR (American Investment management and Research) – CRO is third preferred business in terms of FDI in INIDA

Bio-tech department, GOI 3 Billion industry in 2010

FICCI – 2 billion US$ Industries in 2009.

(some reports has been enclosed with this opportunity we can list down as like –

· Changes in WTO rules and according to changes in IPR (Patents) rules

· Pharma companies inclination towards R and D and spending big budgets for NEC and drug drug developments

· Development of bio-Technology in medical science

· New dieses formulation and lead to make new drugs for the same

· Changed rules in account of safety and efficacy of drugs

· Shifting R and D investment model in India.

Threats

1. There are new up coming players in the market those are cutting prices by compromising with quality to large extent.

2. Government intervention might be extended in procedures and documentation.

3. If a company fails in logistics management, then entire project will be in deep soup

4. Past patient pool is not a 100% guaranty of future recruitment rate.

12) Detailed workings on Break Even Point Analysis is enclosed in document “A Project Report for establishing Clinical Research Organization in India’

13) The patient recruitment rate is based upon a large number of factors like –

· Client requirement and timelines

· Phase of study – The number of patients required for the different phases are as follows –

Phase I – less than 100,

Phase II – 100-300,

Phase III – 1000-1500,

Phase IV – More than 1500

· Therapeutic areas like Arthritis, Sinusitis, Cardiac, Oncology, Urinary Tract Infection (UTI), ENT etc.

The recruitment rate is high for Quantum Limited due to the following factors like –

· Multiregional presence

· Excellent hospital network

· Availability of renowned and experienced doctors having access to large patients pool

· Good level of communication between the patient and the patient and the doctor

Keeping in view the above mentioned facts, Quantum has covered a very large geographical area from Rajasthan to Karnataka which covers almost five states. Quantum has created 21 zonal positions in the five states. Each zonal position has 8-10 rural / urban / semiurban geographical areas and at each area they have 2-3 sites or hospitals. One hospital is equal to one site for patient recruitment.

Each site will not provide all the number of patients required for each therapeutic area. So, they have very versatile and diverse geographical area which covers a diverse gene pool and a wide variety of therapeutic areas.

For some therapeutic area, a particular site may be more suited than others due to demographical, geographical, socio-economic or cultural reasons. For example, the occurrence of colon cancer is more in Rajasthan region due to their habit of eating oily food. The occurrence of oral cancer is more in Maharashtra region due to the tobacco chewing habit.

Quantum has dedicated Clinical Research Associates [CRA] on site who regularly visit doctors and prepare the Disease Surveillance Reports [DSR].

Direct Reporting Model of other Companies

Most of other companies appoint Clinical Research Associates [CRAs] as and when required at Zonal level. They do not have dedicated CRAs onsite and appoint CRAs only when a clinical trial starts.

Quantum has dedicated Clinical Research Associates [CRA] on site who regularly visit doctors and prepare the Disease Surveillance Reports [DSR].

The DSR contains details like –

• Doctor’s name
• Therapeutic area
• Number of patients of that particular therapeutic area
• Past trend of patients and economic background

DSR report is prepared by the Clinical Research Associates for different sites. The doctors are graded depending upon the number of patients they have access to. By analyzing DCR for a considerable period of time, the recruitment trends can be predicated and the recruitment rates can also be arrived at.

The CRAs also keep the location related details of the patients. So, fewer patients will be lost to follow up. Hence, there will be fewer patient dropouts when the traps commence.

For creating DSR and establishing relationship with the doctors, they have a decentralized business operational model which helps them t get the latest information about the latest patient pools with zero source error in data.

Whenever there is any query from sponsor, they can accurately predict and tell the recruitment rates up to the highest level of satisfaction of the client.

The decentralized business module has been invented and implemented by Quantum Limited itself. Now, they are hoping that other companies are also likely to adopt this module for good reasons.

Company has focused on patient pool and recruitment issue for the last 15-16 months. So, company has invested a large amount also on creating patient pool related details and maintaining good working relationship with doctors.

In clinical research business when the patient pool is high, the chance of getting good business is very high. As Quantum has DSR for most of the major therapeutic areas, so it can pursue any study at any given time with greater speed along with maintaining high enrollment rates. Most foreign and India clients prefer Clinical Research Organizations [CRO] with multi region presence and this feature being a very integral part of the business model of Quantum Limited, it will act as one of the key Competitive Advantages of Quantum Limited as a CRO.

Justification for projected turnover of Quantum Limited

“Clinical research industry will be the next big boom after IT in India”

By Mr Kapil Sibbal

Honorable Minister of Department of Science and Technology

“India is favorite destination for clinical trial in view of foreign drug discovery companies”

Economics Times 22 June 2006

“India to be pharmacy contract research hub [Clinical research]”

Times of India dated 19/June/2007

“India lures US researchers”

DNA Mumbai edition dated 30.10.2006

“Indian CRO’s eyeing a lion share”

Bio-spectrum dated 17.05.2005 [a well reputed journal]

Likewise many more news can be prominently seen in media advocating a positives, strong and robust trend for the clinical trials industry as a whole. Exemption of services tax under special notification for clinical trials no – 11/2007/ST of 13-2007 (exception of service tax for technical testing and analysis head) exception on importing equipments of clinical trials and other capitals good are also made custom duty free. Clinical trial bill also being passed from parliament to conduct fair and transparent environment to groom this industry in fast mode. These are self explanatory and sufficient points to say groom this industry in fast mode. These are self explanatory and sufficient points to say government taking all possible initiatives to help and support clinical trials industry in India, which is very strong justification for Quantum Limited yearly turnover forecast.

With utmost good faith in industry as well as in government of India, After considering business intelligence and analysis Quantum has done competitive intelligence, Pipeline Analysis, business development and licensing support analysis, patient flow and cost analysis, performance analysis of 20 existing CRO in India, Therapeutic area and products assessment along with portfolio optimization, ZIP level data mining, demand – price elasticity analysis QL has reached on stage where QL started market research study, and high end statistical analysis, which conveyed a very conservative figures of forecasted turnover. BUT till the time actual interest from buyers can not be measured in Quantum Limited is was difficult to comment about forecasted turnover.

In house business development team and figures collected by them with more than 200 international companies and their response to their prima – face correspondence, are very accurate sources to say forecasted turnover will be replica of future calculated turnover.

After above mentioned analysis, QL were knowing how to create competitive advantages within Industry only.

• QL has created and implemented decartelized module of operation for better QC and QA, for faster patient recruitment rate and better logistics samples.
• QL will be having India’s largest clinical trial facility with installation of international standard equipments for R and D to serve developed nations as well as domestic services.
• QL has greed up for internationally accepted Quality control and assurance accreditations like – USFDA, ANVISA, and DCGI etc. Which will help a lot in achieving projected turnover with more confidence along – with accessing new clients.
• QL has made its reach to very naïve geographical area where its competitors do not have access. That helps in fast recruitment, more therapeutics, more investigators. Like Rajasthan, J& K, MP, Maharashtra.
• QL is not restrictive in selected therapeutics like – wise many other CRO’s are. That will help in accesses of waste number of clients in all stream of clinical research as – Bio tech, neuracuticals, pahramictuacl, disposable medical consumables, IEM, r-DNA, drug-mentoring, vitamin analysis etc.

In International market also India is fast - India is fast-emerging as an attractive destination for clinical trials. Today, the market value of clinical research outsourced to India is estimated at US$100 million. In India this outsourced value is typically projected turnover will not be very difficult.

As per GOI and international agencies predicated the over all clinical research market is rising by 60 % to 80 % in India and till 2010 the market size of outsourced Clinical trial in India will be not less than 2 billion US$. QL has predicated very conservative data in projected turnover, so only 20 % of Industry growth has been taken in accounts for calculation of the same.

Details of Studies carried out or to be carried by Quantum Limited

Advanced Enzyme Technologies Limited – 4 Studies have been given and two have been completed successfully worth Rs. 4.850 Millions.

They would also go for phase 3 and phase 4 studies for the same molecules which would be worth Rs. 20.000 Millions.

Further Quotations of 12 different therapeutic areas have also been sent to Advanced Enzyme Technologies Limited the details of which is as follows –

Study Code	Price Quoted in Millions	Phase
QL110015	25.000	II, III, IV
QL110016	42.500	II, III, IV
QL110017	25.000	II, III, IV
QL110018	22.500	II, III, IV
QL110019	35.000	II, III, IV
QL110020	30.000	II, III, IV
Total	180.000	II, III, IV

Laxai – Study code QL110061 worth 50 millions

Vivo Serve – Study code QL110071A worth 34.800 Millions

Simbiosys Biowares India Private Limited – Colon Cancer tissue Collection study has been completed successfully and they are considering 32 more studies with the company for different cancer tissues that would be worth 40 millions.

Hence, total turnover expected is of 300-400 millions for the year 2008-09 and Inborn Errors of metabolism [IEM] detection technology will also fetch them 120-150 millions in the first year. Thus, total expected turnover of 330-340 millions is very justifiable.

The Associated concern is the following

Nature of association : Partner

Line of Activity – Construction and Turnkey Projects

Banking Arrangements – Bank of Baroda

Name and Address of Bankers – Bank of Baroda, Mumbai, Bandra Branch

Technical Consultants for the Project

Mrs. Suchita Kurundkar is the technical consultant. She is M. Sc. From University of Pune having more than ten years of experience in the field of preclinical and clinical trials. She has audited many trials and experience in NABL accreditation which is bench mark for all laboratories for their quality and standard. She has knowledge about ICH GCP, GLP.

Dr. Faizal Deshmukh – Technical Director

He completed his MBBS, MD, D.D.C.D. from reputed university. For the past 20 years, he has proved his highest level of competence in medical profession and owns and nursing home. He has a deep knowledge about GCP, GLP and ISO guidelines which plays paramount part in a clinical research. He provides technical direction of business decisions and in the execution of each project. He develops plans and executes, programming for the constituency comprising business and processional. He has joined Quantum Limited as technical director.

Mrs. Sushma Naidu is also one of the employees who is assisting Mrs. Suchita. She is M. Sc. From Kakatiya University. She has more than 5 years of clinical trials. She has deep knowledge about ICH, GCP, database management and Standard Operating Procedure development. She is currently working as Assistant Manager cum Study Coordinator.

Indian CROs chant globalization mantra

Nayantara Som

Wednesday, June 04, 2008

Indian CROs chant globalization mantra

A host of Indian CROs are going global to strengthen their network and expand their services while many MNCs are foraying into India to tap the India advantage.

Globalization has become the latest mantra for most Indian CROs. Having consolidated their position in the Rs 425-crore Indian CRO market that had registered a growth of 70 percent in 2007, Indian CRO companies are now looking for opportunities beyond Indian shores. Attribute this to the basket of advantages they have to offer to the global market in the form of skilled manpower and expertise, cost effectiveness, improving infrastructure with a simultaneous easing up of regulations. Globalization as the industry claims, has today become a 'business necessity'. "If we do not take the step now, then a number of global CROs will come to India and give the same India advantage to the world. This will lead to rising competition, which will ultimately eat into our margins," said Dr Anand Bidarkar, vice president, business development, SIRO Clinpharm. Considering the advantages India has and its offerings to the sponsors, McKinsey & Company has estimated that the size of the clinical research market in India will be close to $1.5 billion by 2010. Currently the market size is just $160 million.

On the other hand, global drivers like decline in R&D activity, increasing regulatory compliances in the world market coupled with strong enablers in the Indian market has been a major impetus for MNC CROs pitching their tents in India .A KPMG 2007 report broadly points out that given the conducive regulatory environment, strong chemistry innovation skills, large and diverse patient pool; and availability of players providing ancillary services such as bioinformatics, clinical data management and biostatistics; the contract research market in India is expected to grow at a CAGR of 30-35 percent during 2006-2011.

Hot spots

Apart from the usual regulated markets of Europe and the US, the emerging markets are proving to be hot spots for Indian companies setting shop. Out of the emerging markets, the Asia- pacific region which is now witnessing investments by some of the top pharmaceutical and biotech companies habors a world of opportunities for Indian CROs. "Asia is the biggest emerging market. We always run to the US or Europe which are now saturated. On the other hand, in Asia, there are no home-grown companies. In countries like China, India or even Singapore, it is mostly the multinational CROs that have taken the advantage. No local companies have taken centerstage. So now is the time for us to get into these emerging markets and reap the benefits in a span of five years once these markets open up," says Dr Shivprakash, managing director, Synchron Research Services.

Ahmedabad-based Synchron Research Services, which provides a broad range of phase I-IV clinical research services, including data management in compliance with GCP, GLP and ICH guidelines is now expanding to emerging markets of Thailand and Vietnam. Dr Shivprakash said, "We are targeting emerging nations in Asia because they are very few CROs there. Plus regulations are changing there and from across the globe the top pharmaceutical companies are pooling in a lot of investments into these countries. There is a requirement and we do have the capabilities to localize our activities in such growing countries." The company intends to set up a full-service facility-conducting phase 1-4 clinical trials. In fact, Synchron, whose projects are all greenfield, recently set up a full- fledged biological facility in Thailand with analytical capabilities in phase 2-4 clinical trials. It also has business plans of setting up a similar facility in the neighboring country of Vietnam, which they view as a potential market.

In Europe, Synchron Research Services prefers to tap the advanced western European countries due to the immense benefits that can be reaped. In March 2008, it announced the acquisition of the stand-alone bioanalytical and biomarker facility of Parexel in France. The lab is located in Poitiers, south of Paris. It has now become a part of Synchron's international network of laboratories. The lab with a manpower strength of 50 personnel will be known in France as Synexel Research International SAS. Parexel sold the Poitiers business to Synchron's Synexel Research International for approximately $6.7 million dollars. With this, subsequently Synchron intends to use Europe as a base to expand into the US. "Next year we may look at the US as part of our expansion plans. To go to the US you will have to travel via Europe and we have already made our presence there. As of now we have nothing on the cards as we took one year for this French acquisition. So it may take another few months for us to consolidate in Europe. We are not ruling out the option of tapping that market," Dr Shivprakash added.

The 12-year-old, Mumbai-based SIRO Clinpharm is also set to venture on a "go global mission". Growing a rate of 60-80 percent CAGR and having an employee strength of 400 personnel, the family-owned company today serves nine out of the top 10 biopharma MNCs, passed more than 140 audits in a span of three years dedicated to the entire process of clinical research right from study set-up to clinical data management to regulatory submission support. As a part of its business model, it is first setting up shop in Eastern Europe and other non-traditional countries--all of which provide the same advantages as India. Dr Anand Bidarkar, vice president, business development, SIRO Clinpharm, said, "With the US and Western Europe markets still being our biggest clients, we now want to differentiate ourselves from other CROs by penetrating into those geographies which are unexplored but which offer the same advantage as India. That is where we can emerge as a Indian MNC CRO." As the first step towards its expansion plans, SIRO Clinpharm recently acquired Omega Mediation Group, a mid-sized European CRO for an undisclosed amount. Omega Mediation, which started in 1992 as a trouble shooting CRO for pharma companies, has operational capabilities in Germany, Greece, Estonia, the Baltic States and Israel and has conducted 200 trials out of which 100 were full service trials. The European arm will be known as Omega Mediation –a SIRO Group company. SIRO had also established a presence in the US through its acquisition of its partner Global Client Partners (GCP) in October 2007 for an undisclosed amount. SIRO USA provides the necessary US-based project management, client liaison and other direct drug development support services for US-based clients. As of now plans are that SIRO USA would explore developing operational capabilities in the US in order to provide end-to-end solutions for US-based companies for their regulatory submissions.

Hyderabad-based GVK Biosciences is looking at acquisitions in the UK and other European cou`tries. The CRO which in the past has partnered with Wyeth and INC Research, delivers integrated research services to global pharmaceutical and biotech companies. Currently the company has over 1,300 employees spread across facilities in Hyderabad, Chennai and Gurgaon. "We are not satisfied with organic growth. We are looking at acquisitions in the US and Europe to add pre-clinical toxicology and safety studies offering to our value chain," said Manni Kantipudi, president, GVK Bio. To go global, the company also intends to compete in the generics space.

Bangalore-based Manipal AcuNova Limited (MAL) also now known as ECRON Acunova, in November 2007 completed the acquisition of ECRON GmbH, a European expert CRO for clinical development of medicinal products for human use. ECRON has conducted trials for submission to European and the US authorities, with MAL's association with India' largest medical university. With research facilities in Bangalore, Mangalore and Manipal, MAL is a university-backed CRO with preferred access to Manipal Medical University's 19 teaching hospitals treating 1.5 million patients with more than 1,500 physicians. Manipal Acunova now offers faster enrolment with access to a large patient pool matching demographics of large markets.

Favorable market conditions

Most of the regions explored by Indian CROs makes strategic sense to their overall business model. Proximity to the bigwig pharma and biotech clients is one of the significant factors taken into consideration while choosing a region to invest.

Europe is a strategic region for most CROs owing to the presence of a large number of pharmaceutical and biotech companies in the continent. These opportunities coupled with the low cost and talent pool opportunities provided in the lucrative region of East Europe makes it the most conducive region for investments.

For SIRO Clinpharma setting up shop in Eastern Europe it is a simple case of demand and supply that comes into operation here. Presence in "high speed-optimal cost" geographies will allow SIRO to provide a compelling alternative option to pharmaceutical companies. "Proximity makes a huge difference. We are right at their door step providing clinical trials with the same high quality standards that would have been offered in India and plus at one-third the cost," added Dr Bidarkar. Expansion to Europe will also give SIRO access to a different set of gene pool. This also makes sense in the face of regulatory bodies getting stringent by the day. "When you have covered patients covering a vast range of races like the India, Mongoloid, South-Eastern race, you have covered diverse races which makes your case stronger while making your submission to the regulatory bodies," added Dr Bidarkar. The cost structure which is comparatively cheaper than its counterparts in Western Europe makes Eastern Europe a lucrative ground for SIRO. This region also boasts of a vast pool of experienced and skilled investigators despite the hindrance of less English–speaking people. This includes areas like biostatistics and key therapeutic areas. "Most people do not realize that there is vast sea of opportunities in biostatistics. Biostatistics is an important part of clinical trials if you are doing statistics and data management work for global trials. Such expertise is available only in Europe. So in a country like Germany where there are a lot of biostaticians, we get an opportunity to attract them," added Dr Bidarkar. The acquisition of Omega Mediation for instance, will give SIRO a 100 percent stake in Omega. The acquisition will give them access with the operational capabilities in five key European countries and Israel and also an access to Omega's clients which includes its European pharma and biotech clients.

On the other hand, Synchron believes that benefits can pour in by investing in the advanced countries of Europe. Its recent French acquisition is a case in point. "Europe is a growing generic market and by 2015 it is said that France would be the third largest generic country after the US and Japan. It is a big market for bioanalyticals. Being in France we need not go into any other European country because it is already in the European Union which is like one big nation. Unlike other CROs which target East European regions for their low-cost facilities, we are targeting the more advanced countries in Europe and leveraging the low-cost facilities from India," Dr Shivprakash stated. The French facility is characterized by high the bioanalyticals and biomakers facility. "This lab is also developed for analytical methods for new chemical entities which in India CROs are not capable of doing this. This European acquisition would put us in that segment in which have the face to face of drug discovery companies," Dr Shivprakash added.

For Bangalore-based Manipal AcuNova, tying up with ENCRON has been beneficial because ECRON has direct operations in Germany, Ukraine, Poland, Spain, the UK, Italy and Czech Republic and through partners in key European countries. The two leading CROs have combined the clinical research expertise of ECRON's 20 years experience.

The US which by far is the biggest market in the pharma and biotech space is another destination. SIRO's US office in Princeton, New Jersey, is aimed at supporting their growing number of strategic customers in North America. "Following a consistent high growth over the last few years, a US presence had become a necessity in providing rollout support and closer communication," added Dr Bidarkar. Synchron too is also not ruling out the option of investing in the US. GVK Bio also intends to venture into those markets through M&As.

Emerging nations

For companies, setting up base in emerging countries is a stepping stone towards navigating their way to the rest of adjacent regions. A case in point is South East Asia. According to a Frost & Sullivan report, Southeast Asia (SEA) has a plethora of opportunities to capitalize upon, with a large patient pool, low cost and constant support from the government. This market is still in the early stages of development in this region as it is dominated by a few large multinational participants such as Quintiles, Covance, Pharmaceutical Product Development (PPD), and Apex. Synchron also takes its Vietnam investment as a step to spread out to other South-East Asian regions. "We have just finished the due diligence in Vietnam which is an emerging country. From there we can cover up the South East Asian countries," revealed Dr Shivprakash. Market conditions in Thailand are also conducive for the company. This includes regulations which are structured, establishment of at least 150 pharma companies who intend to come up with new products in the pipeline, availability of skilled manpower and a government willing to lend support to CROs wishing to invest there. "The government is happy to support us and they are open to Indian CROs," added Dr Shivprakash.

Indian CROs eyeing a lion’s share

Government support

According to a report by the Boston Consulting Group (BCG), the CRO market growth is expected to be double digit in the next five years. India has a record of conducting clinical data management and biostatistics work for MNCs. It is expected to get major share of such work in near the future too. 

Currently, India conducts about 1.5 percent of the global clinical trials. This could rise to five percent by 2008 and 15 percent by 2011. And that is the percentage of a global total that itself is increasing by 10 percent every year.

To support this growIng service sector, in its recent budget, the country’s central government announced exemption of service tax for CROs. Welcoming the initiative, the industry, noted that it would bring more customers to India and also more companies would start operations in this area.

The government has also committed $1 million fund to upscale the capacities and competence of the country’s clinical research organizations. Indian government’s Department of Biotechnology (DBT) and the Indian Council of Medical Research (ICMR) are supporting this fund.

Besides the financial support, the Ministry of Health and Family Welfare has constituted the National Council for Clinical Establishments under the directorate of health services with a view to determine minimum standards for clinical establishments and to maintain and update a national register of clinical establishments in the country. The Director General of health service, at the Ministry, will head the council as Chairman.

The functions of the National Coun cil for Clinical Establishments shall be to determine the standards for clinical establishments; classify the clinical establishment into different categories; develop the minimum standards and their periodic review; compile, maintain and update a national register of clinical establishments; perform any other function determined by the Central government from time to time.

In the foreseeable future, the Indian CRO market is expected to undergo a composition change in the coming few years. Bioavailability and bioequivalence studies, that occupied a major share in the clinical research market pie, are likely to lose to other areas such as clinical trials (phase I-IV) and data management. The cost advantage will no longer be the prime-attracting factor for the Indian players. The importance would shift to factors such as quality, timeliness, and value added services that are being offered by the Indian CROs.

However, data security, manpower and public infrastructure still act as a bottleneck for the growth of the industry. And also the issue of the lag for phase I trials in India. But Frost & Sullivan noted that the nascent markets like phase I and pre-clinical toxicology will see growth due to the pressure from the industry on government and the industry’s need to become a one-stop solution for its clients. Once that is in place, Indian CROs can increase their share in the global CRO market.

OPERATING STATEMENT

Rs In Millions]

Particulars	2009	2010	2011	2012	2013	2014	2015
	Projected
Income
Clinical Research Charge	31.829	330.000	390.000	440.000	450.000	450.000	450.000
Other Income	0.000	0.250	0.250	0.250	0.250	0.250	0.250
Total Income	31.829	330.250	390.250	440.250	450.250	450.250	450.250
Expenses
Direct Expenses
Compensation to Volunteer / Patient	1.500	55.439	65.511	73.914	75.600	75.600	75.600
Traveling and Conveyance to volunteer / patient	0.442	11.880	14.038	15.839	16.200	16.200	16.200
Consultancy Charges to doctors	1.150	69.299	81.888	92.393	94.500	94.500	94.500
Insurance premium on life of the volunteer / patient	1.250	16.500	19.497	21.998	22.500	22.500	22.500
Chemical and analytical charges	0.625	8.250	9.749	10.998	11.250	11.250	11.250
Logistics and CSA Costs	0.657	3.300	3.899	4.400	4.500	4.500	4.500
Salary to staff	1.046	42.538	46.004	70.218	63.263	66.667	70.253
Depreciation	10.173	11.784	3.906	3.307	2.800	2.371	1.538
Administrative Overhead	2.743	31.405	37.220	40.521	39.670	39.746	39.827
Marketing Overheads	1.040	32.999	38.994	43.996	45.000	45.000	45.000
Finance Charges	7.550	13.630	12.133	10.017	7.932	5.296	3.650
Preliminary Expenses	0.013	1.242	1.242	1.242	1.242	1.103	0.000
	28.189	298.265	334.081	388.844	384.457	384.733	384.818
Profit / Loss Before Tax	3.640	31.985	56.169	51.406	65.793	65.517	65.432
Less : Provision for Taxation @ 35 %	0.960	12.459	19.293	17.682	22.765	22.708	22.757
Profit / Loss After Tax	2.680	19.526	36.877	33.724	43.028	42.808	42.675
Add : Depreciation and Preliminary Expenses	10.173	34.848	36.879	48.043	10.080	8.826	6.574
Net Cash Accruals	12.853	54.374	73.756	81.767	53.108	51.634	49.249

PROJECTED BALANCE SHEET

[Rs In Millions]

Particulars	2009	2010	2011	2012	2013	2014	2015
	Projected
LIABILITIES
NET WORTH
Equity Share Capital	30.000	40.000	40.000	40.000	40.000	40.000	40.000
Reserve and Surplus	3.978	23.504	60.381	94.105	137.133	179.942	222.617
Secured Loan
Term Loan
Bank	80.000	75.294	56.470	37.644	18.818	0.000	0.000
Motor Car Loan		0.000	0.000	0.000	0.000	0.000	0.000
Working Capital Loan	12.000	12.000	15.000	17.500	17.500	17.500	17.500
Unsecured Loans	31.347	31.347	31.347	31.347	31.347	31.347	31.347
Current Liabilities and Provision
Sundry creditors for Goods	0.040	4.688	6.250	7.813	9.375	9.375	9.375
Other Liabilities	1.155	2.500	2.500	2.500	2.500	2.500	2.500
Provision for Taxation	0.960	12.459	19.293	17.682	22.765	22.708	22.757
Total	159.480	201.792	231.240	248.590	279.438	303.372	346.096
Assets
Fixed Assets
Gross Assets	124.724	124.724	124.724	124.724	124.724	124.724	124.724
Less : Depreciation	10.173	21.957	25.863	29.169	31.969	34.340	35.878
Net Assets	114.551	102.767	98.861	95.555	92.755	90.384	88.846
CURRENT ASSETS
Stores and Laboratory Chemicals	1.230	2.813	3.750	4.688	5.625	5.625	5.625
Clinical Charges Receivables	2.586	18.750	25.000	31.250	37.500	37.500	37.500
Investments [internal Case Accruals]	34.590	51.590	71.590	91.590	114.590	139.590	184.590
Cash and Bank Balance	0.103	0.884	4.159	0.481	0.100	2.565	1.778
Advance Payment of Income Tax	0.200	12.459	19.293	17.682	22.765	22.708	22.757
Other Assets	0.149	7.700	5.000	5.000	5.000	5.000	5.000
Preliminary Expenses	6.071	4.829	3.587	2.345	1.103	0.000	0.000
Total	159.480	201.791	231.239	248.590	279.438	303.372	346.096

ESTIMATED OF DIRECT COST

[Rs In Millions]

Particulars	2009	2010	2011	2012	2013	2014	2015
	Projected
INCOME
Export Sales		330.000	390.000	440.000	450.000	450.000	450.000
Other Income		0.250	0.250	0.250	0.250	0.250	0.250
TOTAL INCOME [A]		330.250	390.250	440.250	450.250	450.250	450.250
DIRECT EXPENSES
Compensation to Volunteer / Patient		55.440	65.520	63.920	75.600	75.600	75.600
Traveling and Conveyance to volunteer / Patient		11.880	14.040	15.840	16.200	16.200	16.200
Consultancy charges to doctors		69.300	81.900	92.400	94.500	94.500	94.500
Insurance premium of life of the volunteer / Patient		16.500	19.500	22.000	22.500	22.500	22.500
Chemical and analytical charges		8.250	9.750	11.000	11.250	11.250	11.250
Logistics and CSA Costs		3.300	3.900	4.400	4.500	4.500	4.500
Salary to Staff 75 %		35.888	35.817	56.592	47.447	50.000	52.690
Depreciation		14.318	12.167	10.376	8.880	7.626	6.574
Administrative Overheads – 40 %		12.562	14.888	16.209	15.868	15.898	15.931
Marketing overhead - 85 %		28.049	33.145	37.397	38.250	38.250	38.250
Interest on working Capital		2.112	2.496	2.816	2.100	2.100	2.100
Variable Expenses		257.600	293.123	332.950	337.095	338.424	340.095
Contribution [A] – [B]		72.650	97.127	107.300	113.155	111.826	110.155
Fixed Expenses
Salary to Staff - 25 %		6.650	10.187	13.626	15.816	16.667	17.563
Depreciation		14.318	12.167	10.376	8.880	7.626	6.574
Administrative Expenses 60 % Fixed		18.843	22.332	24.313	23.802	23.848	23.896
Selling and Distribution [15 %] Fixed		4.950	5.849	6.599	6.750	6.750	6.750
Interest on Term Loan and other financial charges		11.200	9.553	6.917	4.282	1.646	0.000
		55.961	60.088	61.832	59.530	56.537	54.783
Break Even Sales		254.191	247.890	264.356	247.221	238.116	230.522
Break Even Sales [%]		77.03	63.56	60.08	54.94	52.91	51.23

Fixed Assets

• Furniture and Fixture
• Plant and Machinery
• Vehicles
• Land
• Building

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.42.78
UK Pound	1	Rs.85.51
Euro	1	Rs.67.90

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		45

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions