Vista Pharmaceuticals Ltd Management Discussions.


India is the largest provider of generic drugs globally. Indian pharmaceutical sector industry supplies over 50 percent of global demand, 40 percent of generic demand in the US and 25 percent of all medicine in UK.

India contributes the second largest share of pharmaceutical and biotech workforce in the world. The pharmaceutical sector in India was valued at US$ 33 billion in 2017. Indias domestic pharmaceutical market turnover reached Rs 129,015 crore (US$ 18.12 billion) in 2018, growing 9.4 percent year-on-year (in Rs) from Rs 116,389 crore (US$ 17.87 billion) in 2017. In February 2019, the Indian pharmaceutical market grew by 10 percent year-on-year.

With 71 percent market share, generic drugs form the largest segment of the Indian pharmaceutical sector. Based on moving annual turnover, Anti-Infectives (13.6%), Cardiac (12.4%), Gastro Intestinal drugs (11.5%) had the biggest market share in the Indian pharma market in 2018.

Indian drugs are exported to more than 200 countries in the world, with the US as the key market. Generic drugs account for 20 percent of global exports in terms of volume, making the country the largest provider of generic medicines globally and expected to expand even further in coming years. Indias pharmaceutical exports stood at US$ 19.14 billion in FY19 and US$ 3.1 billion in FY20 (up to June 2019). In FY18, 31 percent of these exports from India went to the US.

The Pharma Vision 2020 by the governments Department of Pharmaceuticals aims to make India a major hub for end-to-end drug discovery. The sector has received cumulative FDI worth US$ 15.98 billion between April 2000 and March 2019. Under Budget 2019-20, allocation to the Ministry of Health and Family Welfare increased by 3.1 percent to Rs 63,298 crore (US$ 9.06 billion). Indian pharmaceutical sector is expected to grow at a CAGR of 15 percent in the near future and medical device market expected to grow $50 billion by 2025.

India enjoys an important position in the global pharmaceuticals sector. The country also has a large pool of scientists and engineers who have the potential to steer the industry ahead to an even higher level. Presently over 80 percent of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms.


The pharmaceutical sector was valued at US$ 33 billion in 2017. The countrys pharmaceutical industry is expected to expand at a CAGR of 22.4 percent over 201520 to reach US$ 55 billion. Indias pharmaceutical exports stood at US$ 17.27 billion in FY18 and have reached US$ 19.14 billion in FY19. Pharmaceutical exports include bulk drugs, intermediates, drug formulations, biologicals, Ayush & herbal and surgical products.

Indian companies received 304 Abbreviated New Drug Application (ANDA) approvals from the US Food and Drug Administration (USFDA) in 2017. The country accounts for around 30 percent (by volume) and about 10 percent (value) in the US$ 70-80 billion US generics market.

Indias biotechnology industry comprising bio-pharmaceuticals, bio-services, bioagriculture, bio-industry and bioinformatics is expected grow at an average growth rate of around 30 percent a year and reach US$ 100 billion by 2025.


The Union Cabinet has given its nod for the amendment of the existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100 percent under the automatic route for manufacturing of medical devices subject to certain conditions.

The drugs and pharmaceuticals sector attracted cumulative FDI inflows worth US$ 15.98 billion between April 2000 and March 2019, according to data released by the Department of Industrial Policy and Promotion (DIPP).

Some of the recent developments/investments in the Indian pharmaceutical sector are as follows:

• Between Jul-Sep 2018, Indian pharma sector witnessed 39 PE investment deals worth US$ 217 million.

• Investment (as % of sales) in research & development by Indian pharma companies* increased from 5.3 percent in FY12 to 8.5 percent in FY18.

• In 2017, Indian pharmaceutical sector witnessed 46 merger & acquisition (M&A) deals worth US$ 1.47 billion

• The exports of Indian pharmaceutical industry to the US will get a boost, as branded drugs worth US$ 55 billion will become off-patent during 20172019.


Some of the initiatives taken by the government to promote the pharmaceutical sector in India are as follows:

• In October 2018, the Uttar Pradesh Government announced that it will set up six pharma parks in the state and has received investment commitments of more than Rs 5,000-6,000 crore (US$ 712-855 million) for the same.

• The National Health Protection Scheme is largest government funded healthcare programme in the world, which is expected to benefit 100 million poor families in the country by providing a cover of up to Rs 5 lakh (US$ 7,723.2) per family per year for secondary and tertiary care hospitalisation. The programme was announced in Union Budget 2018-19.

• In March 2018, the Drug Controller General of India (DCGI) announced its plans to start a single-window facility to provide consents, approvals and other information. The move is aimed at giving a push to the Make in India initiative.

• The Government of India is planning to set up an electronic platform to regulate online pharmacies under a new policy, in order to stop any misuse due to easy availability.

• The Government of India unveiled Pharma Vision 2020 aimed at making India a global leader in end-to-end drug manufacture. Approval time for new facilities has been reduced to boost investments.

• The government introduced mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines.


Medicine spending in India is projected to grow 9-12 percent over the next five years, leading India to become one of the top 10 countries in terms of medicine spending.

Going forward, better growth in domestic sales would also depend on the ability of companies to align their product portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers that are on the rise.

The Indian government has taken many steps to reduce costs and bring down healthcare expenses. Speedy introduction of generic drugs into the market has remained in focus and is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on rural health programs, lifesaving drugs and preventive vaccines also augurs well for the pharmaceutical companies.



• Low cost of production and R&D boosts efficiency of Indian pharma companies, leading to competitive exports. Indian pharma exports reached US$ 3.1 billion in FY20 (up to June 2019).

• Indias cost of production is approximately 33 percent lower than that of the US.

• Indias ability to manufacture high quality, low priced medicines, presents a huge business opportunity for the domestic industry.


• Economic prosperity to improve drug affordability.

• Increasing penetration of health insurance to drive expenditure on medicine.

• With increasing penetration of pharmacies, especially in rural India, OTC drugs will be readily available


• Increasing private sector investments in R&D and acquisitions are driving the sectors growth. In FY18, Indian pharma companies invested 8.8 percent of their sales in R&D.

• Between 2008-18 the S & P BSE Healthcare Index has grown at 16.72 pe cent.

• In 2017, Indian pharmaceutical sector witnessed 46 merger & acquisition (M&A) deals worth US$ 1.47 billion.


• Pharma Vision 2020 aimed at making India a global leader in end-to-end drug manufacturing.

• Under Budget 2019-20, allocation to the Ministry of Health and Family Welfare increased by 3.1 percent to Rs 63,298 crore (US$ 9.06 billion).

• In this sector, 100 percent FDI is allowed under automatic route.


India accounts for around 30 percent (by volume) and about 10 percent (value) in the US$ 70-80 billion US generics market.


All the Multi-National Companies (MNCs) from India like, Aurobindo, Cipla, Dr, Reddys, Glenmark, Strides, Sun Pharma, Unichem, and Wockhardt are the players in US Generic market,


The Generic Price Competition is very Piers, The reason being, there will be at least 4 to 5 competitors and even up to 10, if the off-patented drug has sales are in Billions (US Dollars),


US Generic Market is our focus, Since the margins are better compared other country markets and the volumes are also huge, More than 50% (Value) of the prescription drug market is of Generic Drugs in US,



Opportunities and Threats

The key challenges for the Indian pharmaceutical industry include the following:

• Ensuring 24x7 compliance with global cGMP standards; this will involve continuous improvement in systems and processes as well as training of the workforce

• Increasing competition from smaller new entrants,

Risks and concerns

Vista Pharmaceuticals Limited has established a strong risk mitigation process which entails regular and stringent monitoring of its business activities to identify, evaluate and resolve risks, The top management of the Company and the Board are involved in monitoring of risk assessment and mitigation, thus ensuring a quick resolution mechanism, The Company has a work philosophy of doing business with high ethical standards and topmost integrity, This principle has helped it to pre-empt and ease considerably the risks that came across its way,

Internal control systems and their adequacy

• The Company has a well-established internal control framework, which is designed to safeguard its assets against loss from unauthorized use and ensure reliability of financial reporting. It maintains a system of internal controls designed for effectiveness and efficiency of operations, compliance and regulations, continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. The management is committed to ensure an effective internal control environment, commensurate with the size and complexity of the business, which provides an assurance on compliance with internal policies, applicable laws, regulations and protection of resources and assets.

• The Company has in place adequate internal financial controls with reference to financial statements. It has adopted necessary policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.



Vista Pharma recorded the revenue of Rs. 31.07 Crores during the year, registering a growth of 7.45% as compared to last year revenue of Rs. 28.92 Crores.

Other Incomes

The Other income for 2018-19 was Rs. 2.95 Crores as compared to Rs. 0.40 Crores in 2017-18.


The expenses for 2018-19 were Rs.32.87 Crores as compared to Rs. 26.49 Crores in 2017-18.

Finance Costs

The finance costs for 2018-19 were Rs.1.67 Crores as compared to Rs. 1.57 Crores in 2017-18.

Profit Before Tax

There is Profit Before Tax for 2018-19 is Rs.1.15 Crores as compared to Profit Before Tax of Rs. 2.83 Crores in 2017-18

Profits after Tax

The Profit After Tax for 2018-19 is Rs.0.94 Crores as against Profit After Tax of Rs. 2.19 Crores in the previous year 2017-18.

Earnings Per Share

The EPS for 2018-19 decreased to Rs.0.31 from Rs.0.76 in Previous Year.


Demographic trends will be a significant driver of global demand for pharmaceuticals in the next five years. Increase in diagnosis and treatment of chronic conditions and an aging population will drive pharmaceutical demand in developed markets. In emerging markets, population growth, coupled with improved access to healthcare and rising per capita income will drive demand.