1. Industry and The Drug Development Process
The drug development process involves the testing of drug candidates to
demonstrate safety and efficacy in order to meet regulatory requirements. Developing new
drugs for the treatment of human disease is an extremely expensive, complex, high-risk and
time-consuming process. It is estimated that bringing a new drug or medical device to
market can take up to 15years and cost $2.5 billion or more.
The drug development process consists of two stages: pre-clinical and
clinical. In the pre-clinical stage, the new drug candidate is tested in vitro and then in
vivo in animals, generally over a one- to three-year period, to assess and optimize
potential use in humans. After successful pre-clinical testing and receipt of required
regulatory authorizations, the new drug candidate can be advanced to the clinical
development stage, which involves testing in humans. As we are not part of the
pre-clinical market at this point, we would like to discuss specifically on the clinical
stage.
The clinical stage is the most time-consuming and expensive
partofthedrug development process. During the clinical stage, the drug candidate undergoes
a series of tests in humans, including healthy volunteers, as well as participants with
the targeted disease or condition. Human trials usually start on a small scale to assess
safety, efficacy and dosage (Phase l-ll) and then expand to larger trials (Phase III) to
test efficacy and safety in the target population.
These trials are generally conducted inthefollowing sequential phases,
which may overlap or be combined:
• Phase I trials involve testing the drug candidate on a limited
number of healthy individuals, typically 20 to 80 people, to determine the drug
candidate?s basic safety data, including tolerance, absorption, metabolism and
excretion. This phase lasts an average of six months to one year. In some therapeutic
areas such as oncology, where cytotoxic compounds are being investigated, it is sometimes
necessary to run Phase I trials in diagnosed patients instead of healthy individuals.
• Phase II trials involve testing a small number of volunteer
participants, typically 100 to 200 people, who suffer from the targeted disease or
condition, to assess the drug candidate?s effectiveness and how different doses work.
This phase lasts an average of one to two years.
• Phase III trials involve testing large numbers of participants,
typically several hundred to several thousand people, to evaluate efficacy on a large
scale, as well as long-term safety. These trials involve numerous sites and generally last
two to three years, but can be shorter or longer.
• Phase IV or post-approval clinical trials involve monitoring or
verifying the risks and benefits of a drug product.
• Real-world data and evidence studies, meaning data and evidence
gathered outside of the context of clinical trials, are often used to assess usage,
potential benefits or risks, safety, effectiveness and health economics to achieve
successful market access and product uptake.
Markets, Industry Structure and Developments Summary
The global drug discovery and development services market size is
projected to reach USD 21.4 billion by 2025 from USD 11.1 billion in 2020, at a CAGR of
14.0% during the forecast period. The Asia Pacific market is estimated to grow at the
highest CAGR by 2025, primarily due to the presence of a large patient population,
increasing investments in R&D, and growth in the outsourcing of drug discovery
services to Asian CROs. The global pharmaceutical analytical testing outsourcing market
size is expected to reach USD 12.4 billion by 2028 registering a CAGR of 8.3%, according
to a new report by Grand View Research, Inc. Increasing pipelines for biological
candidates along with rising demand for additional analytical details on drugs as well as
process development by regulatory agencies are boosting the market growth. Biologies
safety testing market was valued at USD 3.05 billion in 2019 and is projected to reach USD
7.15 billion by 2027, growing at a CAGR of 12.13% from 2020 to 2027.
The drug discovery services market is segmented into small-molecule
drugs and biologic drugs where small molecule drugs account for the largest market share
as small-molecule drugs are simple, well-defined, and easy to characterize. Generic
medicines are those that are prescribed and sold-out beneath the non- proprietary name of
their active ingredients or not below the brand or trade name, it is only under the
general descriptive name. Generic drugs are only produced after the patent on a drug
expires. Generics drugs are of the same quality as the branded drugs, but are less
expensive due to the lower cost spent on the research and development. The generic
pharmaceuticals market is expected to reach $426.30 billion in 2026 at a CAGR of 6.4%.
Further increase in R&D spending in the near future will provide a
significant boost to drug discovery and development activities, which will ensure the
growth of the drug discovery services market in the future. Drug innovators are under
constant pressure to bring new products through the pipeline at a faster rate. Developing
advanced analytical testing tools to assess and monitor the quality attributes of these
products requires a broader set of equipment and expertise, which is for many companies,
beyond the internal capacity. This would subsequently lead to increased instances of
outsourcing pharmaceutical analytical testing services.
The increasing frequency of outsourcing R&D activities by the major
pharmaceutical companies in orderto focus on their core competencies is the vital impact
rendering driver for this market. Furthermore, the economic efficiency offered by
outsourcing rather than conducting an in-house study is expected to boost the demand. In
the recent times, generic drug market has evolved into a positive business model for both
Pharmaceutical companies as well as CROs not only in Regulated markets like USA and EU,
but also in Emerging markets (ROW) which adhere to Stringent Regulatory Authorities (SRA).
Due to longstanding patent proceedings, generic product development has shifted gears to
complex generics and large molecule research. In addition to BA/BE studies for ROW region,
Clinical research on Biosimilar has emerged as a new growth opportunity for the CRO
industry based on patent expiry trends. Most small and mid-sized pharma companies as well
as CROs in India are still not addressing this opportunity.
In addition to above factors, few other contributing growth factors
that will create increasing demand for our offering of services:
• Increased complexity in clinical development: Clinical trials
continue to increase in complexity due to a confluence of factors including, but not
limited to, (i) new therapeutic modalities, (ii) the collection of more clinical trial
endpoints, (iii) more specific patient inclusion/exclusion criteria, (iv) ever-changing
regulatory requirements and (v) an expansion of evidence generation methods, such as
electronic patient-reported outcomes and virtual clinical trials. All of these factors
result in more complex trial design, challenges in enrolling protocol-eligible patients,
longer duration of clinical trials and greater overall clinical trial cost. As a result,
we expect pharmaceutical companies to increasingly seek partners that have the experience
and expertise to conduct cost-effective clinical studies. In particular, we believe large
CROs who possess scale, geographic reach and differentiated capabilities to manage the
complexity of clinical trials will continue to grow at a higher rate and take market share
versus the overall industry.
• Increasing importance to prove value of new therapies: As
participants in the healthcare industry are increasingly focused on managing costs,
pharmaceutical companies need to find alternatives to align market constituents on the
value of their treatments. The ability to perform pre and post-approval studies to
transform real-world data (such as medical claims data or electronic medical records) into
real-world evidence provides pharmaceutical companies a solution to quantify the value of
new therapies to market constituents. Real-world data and evidence enable pharmaceutical
companies to develop better therapies and optimize the commercial potential of their new
therapies. With increased R&D activity and competition among newly approved therapies
in similar indications, we anticipate the continued adoption of real-world data and
evidence to demonstrate the value of new medicines.
Company and Our Competitive Strengths
We believe we are well-positioned to serve the global pharmaceutical
industry in obtaining the approval for, and maximizing the market access and value of,
their medicines. We are one of the leading providers of clinical research services to the
pharmaceutical industry in India and abroad, focused on helping our customers bring their
medicines to patients around the world. We have been providing a comprehensive suite of
services in drug development life cycle to pharmaceutical, biotechnology, as well as other
industry participants. We differentiate ourselves from others in our industry through our
competitive strengths, which include: consistent quality, delivery and continuous
innovation that has enabled us to grow faster than our underlying market. We are serving
some of the top pharmaceutical companies in the world, and were involved in many
successful drug approvals including high demand drugs.
Our purpose and mission are to support the health care industry by
helping our customers deliver life-changing therapies to patients. We pursue our purpose
and mission through our clinical research services and our strategy to optimize costs and
time of drug development and hence increase value for our customers.
We believe our medical, scientific and clinical research expertise,
along with our innovative technologies and knowledge of global regulatory requirements
help our customers accelerate the development of safe and effective therapeutics and
maximize returns on their R&D investments.
Our clinical development services include all phases of development
(i.e., Phase l-IV), spanning from pre and post-approval services. Our services offer a
range of high-value, advanced testing services, including bioanalytical services for
small-large molecules ranging across Generics, Biosimilars and other new drugs. We have
deep experience across a broad range of rapidly growing areas of drug development and
engage with customers through a variety of commercial models, including both end-end
service and other offerings tailored to address the specific needs of our customers.
We have developed significant expertise in the design and execution of
complex clinical trials, a result of conducting studies on a wide spectrum of therapeutic
areas. Over the past years, we have conducted about 600 clinical studies across various
therapies and dosage forms, and our laboratory scientists have completed more than 206
bioanalytical method developments of small molecules and 10 bioanalytical method
developments on large molecules and worked with more than 230 drugs/molecules. Among other
elements, our ability to successfully assess feasibility in the context of study design,
recruit for increasingly specialized populations and devise optimal regulatory strategies
is essential to our competitive advantage.
Our deep understanding of the drug development process has allowed us
to effectively invest in and evolve our service offerings to meet the needs of our
customers. We maintain a strong presence of experienced professionals and state of the art
facilities in all key areas to support our customers? drug development programs. We
believe the investments in our businesses and our innovative solutions have enhanced the
strength of our clinical research services and further differentiated our offerings from
other organizations, providing us with meaningful competitive advantages and growth
opportunities.
2. Opportunities and Threats
Post pandemic relaxation and wholistic efforts from the industry,
Domestic and International authorities have created a positive environment for the service
industry. This resulted in return of normalcy in business practices, legal and compliance
procedures and overall improvement in outsourcing industry. Based on the current trends,
focused approach towards continual quality and regulatory compliance is required for
organizational growth. However, future growth can be sustainably achieved by emphasizing
on good quality management and regulatory compliance within the clinical research industry
with special focus on data integrity and reliability.
3. Segment-wise Performance
The Business plan of JSTL is to ensure multi-fold growth in business in
the coming year(s) with primary focus on Quality. During the Financial Year under report,
Clinical Research Services division has strengthened its services into offering the
complete portfolio of services as explained below:
JSTL has the advantage of fully integrated scientific expert team from
clinical research domain. JSTL offers a varied range of clinical research services like
Bioavailability/Bioequivalence studies, various Clinical trials (including Phase I to
Phase IV services) and Pharmacovigilance services. The technical team at JSTL has immense
experience in handling various projects in diverse therapeutic areas for multiple
regulatory authorities. JSTL has carried out more than 500+ clinical studies and has faced
about 14 regulatory inspections successfully.
a. Clinical Operations-BA/BE
BA/BE studies have been a prime focus in JSTL service offerings so far
and in this regard, major efforts have gone into maintenance and advancement of the
JSTL?s clinical facility. JSTL has its clinical pharmacology centre spread over
20,000 sq.ft, accommodating a total of 132 beds distributed into 4 clinical pharmacology
units with bed capacity of 42 (Clinic 1), 24 (Clinic 2), 42 (Clinic 3) and 24 (Clinic4).
This facility also consists of special care areas (3+3 beds), temperature and
humidity-controlled Pharmacy area, emergency lift, tie-up with tertiary care hospitals and
a dedicated ambulance to handle emergencies. This facility is capable of carrying out
about 150-200 studies peryear at a peak capacity based on the variation in study designs.
Experienced, trained medical and para-medical staff conduct all the studies at this
facility as per GCP compliance and all applicable regulations. JSTL has developed new
capabilities of conducting large molecule clinical research activities in diabetes segment
and have successfully conducted multiple glucose clamp studies.
The facility is in compliance with all the statutory requirements and
the applicable regulatory requirements like that of CDSCO. The clinic has successfully
cleared many regulatory inspections including USFDA, WHO, UK-MHRA, CDSCO and many sponsor
audits and stands for its quality and safety procedures involved in delivering a reliable
output to pharmaceutical companies who are developing products for global market.
b. Bioanalytical Research
JSTL?s Bioanalytical research laboratory is designed with state
ofthe art facility equipped with advanced instrumentation including ten (10) LC-MS/MS and
one ELISA reader. The facility is in compliance with all the statutory requirements
including applicable principles of GLP (Good Laboratory Practice) and the applicable
regulatory requirements like that of CDSCO. This facility is being used to carry out the
bio analytical activities related to both healthy and patient-based BA/BE studies and all
phases of clinical trials for pharmaceutical companies who are developing products for
global market.
The lab, which stands for its quality data, has successfully cleared
many regulatory inspections including USFDA, WHO, UK-MHRA, CDSCO and many sponsor audits.
JSTL offers a unique combination of highly trained workforce enabled with well-equipped
bio analytical research and development (R&D) laboratory which can cater to diverse
requirements ofthe Sponsors as per current needs. To specialize further into more niche
services, JSTL is planning to add additional instruments in the nearfuture.
c. Pathology Laboratory
NABL approved laboratories in India are only 2500+ and JSTL has one of
the best in-house NABL accredited Pathology Laboratory. JSTL has its in-house Clinical
Pathology Laboratory to caterto majority of the diagnostic/screening activities related to
Clinical Research Participants and we are proud to say that JSTL got NABL accreditation to
the lab. This lab can handle all general screening tests including Haematology, Serology,
Biochemistry and Urine analysis. JSTL?s Pathology laboratory is equipped with
advanced modern equipment for conducting all the required assessments during medical
screening activities in various clinical research projects.
d. Clinical Trials and Trial Management
JSTL?s Clinical Trials team has a vast experience in executing
clinical projects of different therapeutic areas across the globe. JSTL has rich pool of
clinical investigators experienced in handling various phases of clinical projects
including Pharmacokinetic and Pharmacodynamic studies. The Project management team
oversees the technical and administrative aspects ofthe study. The team is committed to
ensure timely update of project status, and meeting the client requirements in agreed
timelines. In addition, ourtrained team of clinical research professionals, closely
monitor the study execution periodically across various clinical sites all over India.
JSTL aims to deliverthe most effective, timely and reliable results possible in this
segment.
JSTL?s team has plans to offer Clinical Data Management (CDM) -
Biostatistics and Medical writing services as both integrated and stand-alone customized
services to suit and offer tailor-made services to customers of different categories.
Apart from this, capability enhancement in clinical trials team is being emphasized in the
areas of interventional trials, observational studies and risk-based monitoring studies to
increase the customer engagement and retention.
e. Pharmacovigilance Services
JSTL has a very experienced and skilled Pharmacovigilance team to cater
to Pharmaceutical and Biotechnology industry, both on Domestic and Global platforms. With
the help of established PV software and trained team, JSTL is successfully supporting its
customers for different PV services like PSURs, Signal detection & management, Risk
management program (RMP), PADERs, PSMFs and PBRERs. With constant support and
encouragement from JSTL management, PV group of JSTL is poised to achieve greater heights
in future.
f. Other Services
JSTL has embarked on an ambitious journey of leveraging the technical
know-how ofthe experienced personnel and healthy regulatory history, to convert the
scale-up dreams into reality. The Organizational structure is being revisited after
visualizing the revised business processes in line with prospective service offerings to
JSTL customers including various decentralized line functions like Clinical Data
Management (CDM) & Statistics and Medical writing.
4. Outlook
Based on recent market trends, the outlook for CRO services like BA/BE,
PV, and CT looks promising, and the company is well positioned to benefit from the
prevailing market trends. The overall focus on technology, innovation, quality and
compliance in the company is high, and is open to evolve as per changing market
requirements without compromising on the vision and ideology of JSTL.
Service portfolio diversification and Customer database expansion is
being acted upon with unrelenting focus on process life cycle management coupled with a
reinforced vigor of Regulatory compliance. Entry into new segments like complex generics
(for example, large molecules, biosimilars, and sensitive molecules) is being planned and
executed.
The overall focus of being a full-service CRO will enable the company
to provide a range of end-to-end clinical research services to its existing customer base
which will further fuel the growth of the company. Focus on delivering high-quality
reliable services in time and at competitive prices should allow the company to improve
customer satisfaction and hence retention as well as cross selling of services. As per the
current business plan, Clinical trials and Pharmacovigilance will be the growth drivers in
coming years of JSTL.
JSTL as a group has further expanded its service offerings into new
areas through its subsidiary Nayas Laboratories Private Limited. Nayas is India?s
First of a kind Contract Research Organization specializing in Advanced Drug Delivery
Technology Platforms and In-house, Novel, Innovative, Patentable Biomedical Polymers.
Nayas Laboratories Private Limited
Nayas aims to be one of the most promising Quality and Technology
Driven Independent Formulation Research and Development Organization with primary focus on
Drug Delivery Technology, Complex Generics, 505 (b)(2) & Para IV developments. Its
center(s) are fully equipped with state-of-the-art facilities and robust technologies to
develop high quality niche formulations/ globally accepted dossiers of various dosageforms
and high-end cutting-edge polymers.
Nayas offers an end to end service model from Conceptualization to
Commercialization with first-rate, robust, customer-centric and exceptional Drug Delivery
Systems, Formulation Services and Pharmaceutical Polymers of a superior nature to prevent,
alleviate and cure diseases. Nayas aims to enhance its expert and innovative solutions by
best use of cutting-edge technology, rich expertise, world- class research and Development
and its highest Qualitative approach. Nayas?s service offerings include:
• Novel & Patentable Biomedical Polymers
• Drug Delivery Technology Platforms
• Formulation &Analytical Development
• Quality and Regulatory Services
5. Risks and Concerns
Clinical research industry worldwide stays compliant to ICH
requirements and subsequently the individual country regulatory requirements. Regulatory
authorities evaluate CROs across the globe for the Quality Management System (QMS) design
based on recent risk assessment and management related guidelines. Hence, due to risk
categorization into low, medium and high, CROs need to adapt similar approach in
identifying strengths and weaknesses within their quality management systems. Risk
mitigation strategies are being constantly explored and evaluated for achieving continual
improvement in organizational compliance. The concern however is to retain the right
talent aligned towards the organizational thought process towards Regulatory Compliance
and Quality by design approach.
6. Internal Control systems and their Adequacy
We have effective and adequate internal controls across all the
functions including finance, supply chain, Quality, Operations, HR and IT to carry out and
deliver effective and reliable work. We have periodical
(weekly/monthly/quarterly/half-yearly/annual) review mechanisms across all functions to
significantly monitorvarious departments and address any issues immediately. Our Quality
Assurance (QA) team audits all our systems periodically and addresses the gaps through
effective corrective and preventive actions.
Similarly, we have internal financial controls which are duly certified
by our statutory auditors (both internal and external). As an organization, we work with
an ideology inspired by Quality, Integrity and Safety coupled with strong abidance to our
inherent Values.
7. Financial Performance with respect to Operational Performance
Revenues-Standalone
During the year under review, the Company on a standalone basis has
recorded an income of Rs.3723.99 Lakhs and incurred a loss of Rs. 308.90 Lakhs as against
the income of Rs. 6246.47 Lakhs and Profit of Rs. 1247.34 Lakhs respectively in the
previous financial year ending 31.03.2022.
Revenues-Consolidated
During the year under review, the Company on a consolidated basis has
recorded an income of Rs. 3725.22 Lakhs and incurred a loss of Rs. 315.07 Lakhs as against
the income of Rs. 7371.74 Lakhs and Profit of Rs. 1215.39 Lakhs respectively in the
previous financial year ending 31.03.2022.
8. Material developments in Human Resources/Industrial Relations from,
including number of people employed.
There are no material developments in Human Resources/Industrial
Relations from FY 22 to FY 23.
| Particulars |
31 March FY 23 |
31 March FY 22 |
| Staff |
250 |
223 |
| Workmen |
-- |
-- |
| Third Party |
10 |
38 |
| Total |
260 |
261 |
9. Details of any change in Return or Net Worth as compared to the
immediately previous financial year.
| RATIOS: Particulars |
2022-23 |
2021-22 |
Remarks |
| Current Ratio |
2.68 |
2.44 |
|
| Debt Equity Ratio |
0.18 |
0.25 |
Decrease in Current Borrowings as compared to last year |
| Debt Service Coverage Ratio |
0.87 |
5.92 |
Decrease in earnings as compared to last year. |
| Return on Equity |
(0.06) |
0.24 |
Loss reported in currentfinancial year when compared to
profit in previous financial year. |
| Inventory Turnover Ratio |
31.09 |
9.80 |
Decrease in inventory in the current year resulted in
increase in Inventory Turnover ratio even though turnover decreased when compared to
previous financial year. |
| Trade Receivables Turnover Ratio |
3.75 |
5.64 |
Decrease in turnover in the current year. |
| Trade Payable Turnover Ratio |
1.07 |
1.68 |
Decrease in purchases in current year. |
| Net Capital Turnover Ratio |
2.07 |
1.96 |
-- |
| Net Profit Ratio |
(0.10) |
0.20 |
Loss reported in currentfinancial year when compared to
profit in previous financial year. |
| Return on Capital Employed |
(0.05) |
0.33 |
Decrease in earnings before interest and taxes. |
| Return on Net worth |
(6.39) |
24.66 |
Loss reported in currentfinancial year when compared to
profit in previous financial year. |
10. Any other Sector Specific ratios, as applicable: Not Applicable
11. Disclosure of Accounting Treatment
During the preparation of Financial Statement of F.Y. 2022-23 the
treatment as prescribed in an Accounting Standard has been followed by the Company. There
are no significant changes in Accounting Treatment as followed bythe Company in
currentfinancialyearas compared to previous financial year.
12. Cautionary Statement
Although we believe we have been prudent in our projections, estimates,
assumptions, expectations or predictions while making certain statements, realization is
dependent on various factors. Should any known or unknown risks or uncertainties
materialize, or should underlying assumptions prove inaccurate, actual results could vary
materially from those anticipated, estimated or projected. We undertake no obligation to
publicly update any forward-looking statements, whether as a result of new information.
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