Ind.Immunologica Management Discussions

INDIAN IMMUNOLOGICALS LIMITED ANNUAL REPORT 2008-2009 MANAGEMENT DISCUSSION AND ANALYSIS Review of operation: During the year under review, the sales turnover of your company increased by 14.4% to reach Rs.2235 mio. While sales of animal health vaccines and formulations in the domestic market grew by 10.7% to reach the Rs. 1109 mio mark, sales of human health vaccines in the domestic market grew by 24.4% and reached Rs. 888.4 mio. Exports achieved a marginal growth and sales stood at Rs. 237.2 mio. Your company continues to be ranked third in the domestic animal health market. The flagship product Raksha Ovac (FMD vaccine), with a sales of Rs. 836.3 mio continues to be the market leader. Among the other animal vaccines, Rabies vaccine (Raksharab) with sales of Rs.78.2 mio and the unique Raksha Theileriosis vaccine (Rakshavac T) with sales of Rs. 15.5 mio were the notable performers. During the year, the Company added two new products to its nutraceuticals portfolio - rumen specific yeast culture (Gousac) and Bypass fat with yeast culture and herbal galactogogue (Goudhara Shakti). In the animal health formulations segment, your company introduced a new third generation injectable Cephalosporin (Bovicef). In the human vaccine business, the flagship product Abhayrab recorded a sales of Rs. 843.3 mio. Under the Ministry of Healths Universal Immunisation Programme (UIP), the products Abhay M (Measles Vaccine), Abhay TOX (Tetanus Toxoid), Abhay TAG (Diptheria, Pertusis and Tetanus) and Abhay DAG (Diptheria, Tetanus) recorded sales of Rs. 79.9 mio. In the year under review, in the measles vaccination campaign under the Universal Immunization Programme (UIP) in the states of Tamil Nadu and Assam, where your Company supplied measles vaccine, two adverse events occurred. Pursuant to this, the Drug Authorities sent samples of the measles vaccine to various national and international laboratories for complete testing. The vaccine was found to be meeting all the prescribed quality parameters, which conclusively established the fact that the adverse events could not be attributed to the vaccine. However, due to this adverse event, your Company suffered a loss of Rs. 54.3 mio. Response to Natiral Calamity: Your Company donated about rupees Rs. 10 mio worth of veterinary vaccines and healthcare products to the Department of Animal Husbandry, Government of Bihar towards flood relief in Bihar. These included essential livestock vaccines, antibiotics, dewormers and other medicines needed by the government to deal with the threat of epidemics. Major New Initiatives The Operation Pratirodh programme was started in 2004 to take vaccination and deworming services to the door step of livestock owners, along with extension services to improve awareness for preventive health care among farmers. After four years into this programme, it is clear that there is a large gap in the requirement and the actual availability of veterinary services in India. To address this, the Company started the concept of Raksha Veterinary Centres (R Vet C) which are to function as one stop veterinary health centres. The R Vet Cs offer not only vaccination services but also therapeutics and diagnostic services in the villages. By the end of the March 2009, the Company had setup 11 such R Vet Cs on a pilot basis. Recognising the usefulness of such centres for livestock owners, your Company plans to set up another 200 R Vet Cs in the next financial year. Human health product marketing has been strengthened with the creation of a new division Abhay Mart to widen the Companys retail presence and to cater to the organized retail pharmacy chains and corporate hospitals. The Company has commenced construction work on its new vaccine production facility for animal vaccines, animal health formulations and human vaccines in Biotech Park - Phase III near Hyderabad. This facility is expected to be ready for commercial production by mid 2011. To support its growth plans in the export markets, the Company has established its first Representative Office, outside India, in Ho-Chi-Ming City, Vietnam. Tins will enable the Company to maintain consistency in export growth in the retail markets of the Southeast Asian countries. Future outlook: Your Companys strategy of broadening its market presence in the nutrition segment and enlarging its portfolio of vaccines and formulations, alongside efforts to increase depth in its market presence will help in maintaining its leadership position in the animal health product market. Its new i marketing initiatives in the human vaccine market will help it enlarge its retail reach and contribute to delivering affordable immunity to many more people. Research & Development: Vaccines using novel technology platforms and with thermostable properties were the major research areas during the year. Brucellosis is an economically important disease affecting the dairy industry with abortions and infertility as important sequelae of the infection. A glyco-conjugate vaccine for Brucella abortus was tested in mice and found to be better than the live, attenuated vaccine. This vaccine will be tested in cattle for its protective efficacy an dutility mbrucellosis control. Availability of a glyco-conjugate vaccine will enable increase in the vaccine coverage since the vaccine can be used in both sexes and all age groups unlike the existing live, attenuated vaccine. In collaboration with the Programme for Appropriate Technology on Health (PATH), USA, a thermostable and freeze resistant vaccine formulation for recombinant hepatitis B was prepared and tested in laboratory animals. The formulation was found to induce neutralizing antibodies on par with our regular hepatitis B vaccine. Further work on process scale parameters is underway to scale up the formulation for commercial manufacture. Using similar approaches, a stable, liquid formulation for the Haemophilus influenzae type B (Hib) and a pentavalent vaccine (diphtheria, pertussis, tetanus, recombinant hepatitis B and Hib) are being developed. These studies when completed will provide affordable, thermostable vaccines for the control of these infectious diseases in children. The human papilloma virus (HPV) is the causative agent of cervical cancer in women, a disease causing nearly 500,000 deaths in developing countries with India reporting a very high incidence of the disease. An oral vaccine using Salmonella typhi expressing antigens against HPV serotypes 16 and 18 was prepared and tested in laboratory animals. Based on the positive results, further work was undertaken to produce the vaccine for safety tests in mice. Clinical trials are expected to commence in early 2010. Diagnostic methods for tuberculosis and para-tuberculosis are being developed using recombinant proteins expressed in E.coli. These methods are designed to detect the diseases in the early stages so that appropriate control measures can be taken up at farm level.