Market Research Report : Coronary stents market in india 2014 - Sample

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Coronary Stents Market – India

August 2014

2

Executive Summary

Market

Drivers & Challenges

Competitive Landscape

Coronary stents market in India is expected to grow at a CAGR of x1% and x2% in value-terms and volume-terms respectively, over 2012 - 2018e

There are three types of coronary stents available in the market, bare metal stents (BMS), drug-eluting stents (DES), and bioabsorbable stents

Drivers:

Increasing lifestyle based diseases

Improving health infrastructure

Changing demographics

Increased healthcare spending and insurance coverage

Advancements in technology and medical procedures

Challenges:

Problems associated with usage

Constant need for innovation and new product development

Major Foreign Companies Major Domestic Companies

Company 1 Company 2 Company 3

Company 4 Company 5 Company 6

Buyer Details

Top Hospitals Buying Coronary Stents in India

Hospital 1 Hospital 2 Hospital 3

Hospital 4 Hospital 5 Hospital 6

Regulatory Bodies

Regulatory Policies

Regulatory Processes

Government Involvement

CORONARY STENTS MARKET IN INDIA 2014.PPT

3

•Macroeconomic Indicators

•Introduction

•Market Overview

•Drivers & Challenges

•Government Involvement Regulatory Bodies

Regulatory Policies

Regulatory Processes

•Competitive Landscape

•Buyer Details

•Recent Developments

•Strategic Recommendations

•Appendix


4

Economic Indicators (1/3)

11

12

13

14

15

INR tn

Q4

c4

b4

a4

Q3

c3

b3

a3

Q2

d2 c2

b2

a2

Q1

d1 c1

b1

a1

2013-14 2012-13 2011-12 2010-11

GDP at Factor Cost: Quarterly

Inflation Rate: Monthly

-2

-1

0

1

2

%

Sep 2013 - Oct 2013

p

-t

Oct 2013 - Nov 2013 Aug 2013 - Sep 2013 Jul 2013 - Aug 2013

q

r

Nov 2013 - Dec 2013

s


5

Market Size and Growth (Value-Wise)

Coronary Stents Market – Overview

• Indian market for coronary stents is expected to show steady growth in coming years, providing strong opportunities for potential players to earn high revenues and increase their profits

• There are three types of coronary stents available in the market, bare metal stents, drug-eluting stents and bioabsorbable stents

• Type 1 stents experience the highest demand while Type 2 stents are still at a nascent stage

Indian market for coronary stents is poised to grow in the coming years with emphasis on drug-eluting stents

Market Size and Growth (Volume-Wise)

0

10

20

30

40

50

g3% g2%

g1%

2016e

b1%

2012

a

a2%

a1% d3%

d2%

d1%

2014e

c

c3%

f

f3% f2%

f1%

2015e

d

2017e

g

c2%

c1%

2013

b

b3% b2%

INR bn

x1%

2018e

h

h3% h2%

h1%

Type 3 Type 2 Type 1

0

200

400

600

800

2014e

r

r3% r2%

r1%

2013

x2%

2018e

v

v3% v2%

v1%

2017e

u

u3% u2%

u1%

2016e

t

t3% t2% p2%

p1%

‘000

q

q3% q2%

q1%

2012

p t1%

2015e

s

s3% s2%

s1%

Type 3 Type 1 Type 2


6

Coronary Stents – Price Trends

Prices vary not only across stent types but also depending on whether it is indigenously manufactured or is foreign made

Type of stent Indigenous /Foreign Price (INR) Remarks

Bare Metal Indigenous • These are price at which distributors purchase from manufacturers

• When hospitals procure stents directly from manufacturers, they can get up to ‘x’% discounts

Bare Metal Foreign • Price at which distributors supply the stents to hospitals

• Difficult for hospitals to procure directly from manufacturers as these stents are manufactured outside India

Drug-Eluting Indigenous • Price at which distributors purchase from manufacturers

• Hospitals can get discounts on these price by purchasing directly from the manufacturer

Drug-Eluting Foreign • Price to the end-user, that is, the patients

• Distributors can procure the lower priced, foreign made DES for as little as INR ‘a’

Bioabsorbable Foreign • Was priced INR ‘u’ when it was launched in Dec 2012

• Presently, Abbott has monopoly on these stents but in future as more companies produce these stents, the price is expected to fall


7

Drivers & Challenges – Summary

Drivers

Increasing lifestyle based diseases

Improving health infrastructure

Changing demographics

Increased healthcare spending and insurance coverage

Advancements in technology and medical procedures

Challenges

Problems associated with usage

Constant need for innovation and new product development


8

Regulation of medical devices such as stents are done through different divisions under the MoHFW

Organizational Structure

Level 1

Level 2

Level 3

Level 4

Level 5

Level 6A

Level 7B

Level 6B

Level 7A Level 7D Level 7C


9

Although there isn’t any specific legislation governing the entire medical devices industry, certain devices are…

Regulatory Body A

• Regulatory Body A is the main body for the regulation of pharmaceuticals and medical devices in India

• Within Regulatory Body A, Entity B is responsible for the regulating pharmaceuticals and medical devices and is advised by Body C and Body D

• It is responsible for establishing the safety, efficacy, and quality standards for pharmaceuticals and medical devices

• A list of regulated pharmaceuticals and devices, Indian Pharmacopeia, is published and updated by Regulatory Body A

• It also appoints notified bodies for conducting conformity assessment procedures including tests for all drug and device applications to ensure that it complies with all standards set by the body

• Regulatory Body A is also divided into several zonal offices which conduct the pre-licensing and post-licensing inspections, post-market surveillance, and recalls whenever necessary

• Apart from the regulatory functions, Regulatory Body A also offers technical guidance and trains regulatory officials and analysts as well as monitors adverse events

• Regulatory Body A also works with the World Health Organization to promote Good Manufacturing Practice (GMP)

Regulatory Bodies (1/2)


10

Competitive Rivalry

Bargaining Power of Suppliers

Bargaining Power of Buyers

Threat of Substitutes

Threat of New Entrants

Impact

Impact

Impact

Impact

Impact

Market Competition – Porter’s Five Forces Analysis


11

Market for coronary stents in India is dominated by products from foreign companies

Market Share – Volume-Wise (2013)

b%

a%

c%

f%

d%

h%

g%

Company 5

Company 3

Company 2

Company 4

Company 1

Company 6

Others

Competition Overview


• MNCs have a dominant share in the coronary stents market in India

• Products from MNCs are generally viewed as superior to those manufactured by domestic companies

• As a result of this, there is a higher uptake of products from foreign companies while Indian manufacturers find it difficult to get buyers for their products

• Company 1, company 2 and Company 3 together account for ~’m’% of the market in terms of volume and ‘n’% of the market in terms of value

• Company 1 is the clear leader in the market with a a% share in volume terms in 2013 compared to p% in 2012

• Company 2 with a market share of b% had the second-largest share

12

Key Ratios of Top 3 Companies – Operational Basis (FY 2013) (1/3)

Competitive Benchmarking – Private Companies (1/4)

0

10

20

30

40

50

a1

b2

Company 2

b1

Company 1

a2

a3

Company 3

%

b3

Net Margin Operating Margin

• Company 3 recorded operating margin of a3%, higher than that of Company 2 and Company 1 which recorded operating margin of a2% and a1% respectively

• Net margin was highest for Company 2 which recorded a net margin of b2%, followed by Company 1 and Company 3 which recorded net margin of b1% and b3% respectively


13

Key People

Products and Services

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Stock Exchange

Category Products/Services

Medical Equipment

Interventional Devices

Name Designation

Person 1 Chairman and Managing Director

Person 2 Director

Person 3 Director

Person 4 Independent Director

Head Office


Public: Domestic Company – Company 1 (1/5)

14

Key Ratios

Financial Summary

• Company earned a net profit of INR XX mn in FY 20XX, as compared to net profit of INR Y mn in FY 20YY

• It reported total Income of INR XX mn in FY 20XX, registering an increase of X per cent over FY 20YY

• It earned an operating margin of X.X per cent in FY 20XX an increase of X.X percentage points over FY 20YY

• The company reported debt to equity ratio of X.XX in FY 20XX, an increase of X.X per cent over FY 20YY

Particulars y-o-y change

(2013-12) 2013 2012 2011 2010

Profitability Ratios Operating Margin

Net Margin

Profit Before Tax Margin

Return on Equity

Return on Capital Employed

Return on Working Capital

Return on Assets

Return on Fixed Assets

Cost Ratios Operating costs (% of Sales)

Administration costs (% of Sales)

Interest costs (% of Sales)

Liquidity Ratios Current Ratio

Cash Ratio

Leverage Ratios Debt to Equity Ratio

Debt to Capital Ratio

Interest Coverage Ratio

Efficiency Ratios Fixed Asset Turnover

Asset Turnover

Current Asset Turnover

Working Capital Turnover

Capital Employed Turnover

Improved Decline

Financial Snapshot

Net Profit / Loss Total Income

6

4

2

0

25

20

15

10

5

0

INR bn INR bn

2013

a4

b4

2012

a3

b3

2011

a2

b2

2010

a1

b1

Financial Summary

Indicators Value (dd/mm/yyyy)

Market Capitalization (INR bn)

Total Enterprise Value (INR bn)

EPS (INR)

PE Ratio (Absolute)



15

Key Business Segments Key Geographic Segments

Business Highlights

Description News

Overview

• Company 1 is a medical device company specializing in vital signs monitoring, emergency cardiac care, vascular treatments and sensing technologies

• It has ‘n’ subsidiaries across Country 1, Country 2, Country 3 and Country 4

Network • It markets its products in over ‘m’ countries with significant presence in Region 1, region 2

and Region 3

Design and R&D • It has design and development facilities in City 1, Country A; City 2 and City 3, Country B;

and City 4, Country C

30,000

20,000

10,000

0

2013

c1 b1

a1

30,000

20,000

10,000

0

2013

b2

a2

Segment 3 Segment 2 Segment 1 Region 2 Region 1


Key Business Segments data is not available for financial years before

2013

Key Geographic Segments data is not available for financial

years before 2013


16

Business Highlights

Description News

OEM Partnerships • Company 1 partners with leading medical companies around the world and manufactures

white-label products

Manufacturing Locations

• It has 3 manufacturing units each in Country 1 and country 2 and six units in Country 3

• In Country 3 , it has two manufacturing units each at City 1 and City 2, and one each at City 3, City 4 and City 5

• In mid 2012, the company acquired ‘k’ acres of land from the Organization A at the industrial growth centre in City 5 to set up a greenfield manufacturing facility with an investment of INR ‘p’ bn

• Three group companies of Company 1 will have their manufacturing facility here and they were expected to be ready by the end of 2013

Coronary Stents Products

• Coronary stents from the company are manufactured by Company A which is a wholly-owned subsidiary of Company B and is part of the Company 1 group

• Stainless steel and cobalt chromium bare metal stents from the company include the ‘Model 1’, ‘Model 2’, ‘Model 3’ and ‘Model 4’ stents

• It also markets ‘Model 5’ series of polymer-free DES which are coated with Paclitaxel and are available on stainless steel and cobalt chromium platforms

• ‘Model 6’ coronary stent system is the company’s latest cobalt chromium coronary stent technology from the ‘Y’ series and is delivered by the company’s Paclitaxel-eluting coronary balloon dilatation catheter ‘Model A’



17

T O

W S


Public: Domestic Company – Company 1 – SWOT Analysis (5/5)

18

Key People


Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website


Products/Services

es Name Designation

Person 1 Director

Person 2 Director

Person 3 Director

Head Office


Private: Foreign Company – Company 2 (1/5)

19

Name No. of Shares held

Shareholder 1

Shareholder 2

Total

100.00%

Category 1

Shareholders of the Company as on dd/mm/yy Ownership Structure



20

Financial Snapshot Key Ratios

Financial Summary

• Company earned a net profit of INR XX mn in FY 20XX, as compared to net profit of INR Y mn in FY 20YY

• It reported total Income of INR XX mn in FY 20XX, registering an increase of X per cent over FY 20YY

• It earned an operating margin of X.X per cent in FY 20XX an increase of X.X percentage points over FY 20YY

• The company reported debt to equity ratio of X.XX in FY 20XX, an increase of X.X per cent over FY 20YY

Improved Decline

Net Profit / Loss Total Income

5

-15

0

-5

-10

-20

-25

30

25

20

15

10

5

0

INR bn INR bn

2013

a4

b4

2012

a3

b3

2011

a2

b2

2010

a1

b1

Particulars y-o-y change

(2013-12) 2013 2012 2011 2010

Profitability Ratios Operating Margin

Net Margin

Profit Before Tax Margin

Return on Equity

Return on Capital Employed

Return on Working Capital

Return on Assets

Return on Fixed Assets

Cost Ratios Operating costs (% of Sales)

Administration costs (% of Sales)

Interest costs (% of Sales)

Liquidity Ratios Current Ratio

Cash Ratio

Leverage Ratios Debt to Equity Ratio

Debt to Capital Ratio

Interest Coverage Ratio

Efficiency Ratios Fixed Asset Turnover

Asset Turnover

Current Asset Turnover

Working Capital Turnover

Capital Employed Turnover

Note: Financial year ending 31st Dec



21

Business Highlights

Description News

Overview

• Company 2 operates in the nutritional products, laboratory diagnostics, medical devices, and pharmaceutical therapies space

• It was previously the domestic formulations business of Company A and was renamed as Company 2 after it was acquired by Company B in May 2010

Manufacturing Facility

• It has a formulation facility at City 1, State 1 where a wide range of formulations and dosage forms are manufactured

• However, coronary stents sold by the company in India are manufactured by various subsidiaries of the parent company Company B

Coronary Stents Products

• A number of models of coronary stents from the company are available in India • ‘Model 1’ Carotid Stent System and ‘Model 2’ Coronary Stent marketed by the company

are manufactured by Company C, Country 1 • ‘Model 3’ Coronary Stent System and ‘Model 4’ series are manufactured by Company D,

Country 2 • ‘Model 5’ Stent System is manufactured by Company E in its manufacturing facility at City

3, Country 3 • Everolimus Eluting ‘Model 6’, ‘Model 7’, ‘Model 8’, ‘Model 9’, ‘Model 10’ and ‘Model 11’

are manufactured by Company F, Country 4 • ‘Model 12’ stent system are manufactured by Company G, Country 5 • In 20xx, ‘Model 13’, a Type A stent from the company, was launched in India at a price of

INR ‘y’ mn; however the price was decreased to INR ‘z’ mn within 6 months due to the overwhelming response that it received



22

T O

W S


Private: Foreign Company – Company 2 – SWOT Analysis (4/5)

23

Hospital Name Hospital

Logo Hospital

Chain Ownership

Type Angioplasty Procedures Per

Month

All India Institute of Medical Sciences

Max Super Specialty Hospital

Asian Heart Institute

B.M. Birla Heart Research Centre

Apollo Hospital#

Sri Jayadeva Institute of Cardiology

Narayana Hrudayalaya

Fortis Healthcare*

Wockhardt Hospital**

Metro Heart Institute

Top 10 hospitals buying coronary stents in India

Buyer Snapshot: List of Top 10 Buyers of Coronary Stents


24

Key People


Company Information

Corporate Address

Tel No.

Fax No.

Website


Name Designation

Person 1 President (Institute Body)

Person 2 Dean

Person 3 Director

Person 4 Medical Superintendent

Category Products/Services

Specialty Centers

Surgery

Laboratory

Head Office and Hospital Network– India

Public: Domestic Company – Hospital 1 (1/3)

Head Office Hospital Network


25

Description News

Overview

• Hospital 1 is a group of 7 hospitals across India

• It has ‘m’ teaching departments and centers, a total of ‘p’ beds, ‘q’ doctors (including faculty members, senior and junior residents) and ‘r’ nurses

Facilities

• It is a leader in stem cell therapy, especially in the fields of cardiology and neurology

• It has India's first and only minimally invasive surgery training centre, under collaboration with Germany

• It is a pioneer of robotic surgeries in India, particularly the Da Vinci system for urology, and robotic CTVS

• The first in-vitro fertilization facility in the public sector was set up at the Hospital in Feb 2008

Future Plans

• Expansion plans of the hospital were recently approved by the Regulatory Body A

• The government is planning to set up two more such hospitals cum institutions at City 1, State 1 and City 2, State 2

Business Highlights



26

Parameter Hospital Indicators

Total cardiac patients per month

Angioplasties per month

Stent providers

Purchase decision factors

Stents procurement Centralized/ Hospital level

Contact details HOD/ Technician/ Procurement

Procedure/ process involved in procurement

Contact details – Purchase

Stent types

Overview of Stent Procurement Process



27

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