Though the European financial crisis has left a negative impact on the Indian
contract research organisations, the profitability of this industry may not be
impacted due to forex fluctuations in favor of rupee, a top official of GVK Bio
has said. Manni Kantipudi, CEO of GVK Biosciences, today said the contract
research organisation is optimistic about the level of influence of CROs in the
development of new drugs, is going to grow significantly in the coming days. "We
definitely see some slowdown in the European markets. This is unlikely to impact
the earnings as per dollar realisation, will be more owing to forex
fluctuations," Kantipudi told reporters on the sidelines of the 9th edition of
BioAsia 2012, which concluded here today. He said, the CROs were faced with some
challenges in domestic market in terms of actual volumes. There was excess
capacity in the market which resulted in price erosion affecting profitability,
he explained. "Companies are struggling to find the right model," he said.
Worldwide, the research and development spent was close to US $ 120 billion, of
which, 60 per cent was earmarked for clinical development trials, while the rest
being spent on discovering new models. That is the addressable market size and
there is need for innovating and evolving new business models for raising
capital, he added. Replying to queries, on the recent controversy pertaining to
clinical trials, Kantipudi said it may have impact GVK Bio too. GVK Bio is now
looking at the bio-equivalent market that was set to grow and plans to add
capacity in this direction. GVK Bio presently has 2,100 strong team, including
400 in informatics.

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