Clinical research firms to tap market

A new class of companies from the clinical research sector, a part of $52 billion global industry, will soon debut on the bourses.

The Ahmedabad-based Lambda Therapeutic Research, one of the largest and oldest clinical research organisations (CROs) in the country, is expected to soon announce its initial public offer (IPO).

According to industry sources, many other established CROs are likely to go public in the near future or will team up with private equity companies to expand and extend their presence in various geographies outside India.

The leading CROs in India include Quintiles Spectral (the Indian arm of Quintiles, the world's largest CRO), Vimta Labs, Lambda Therapeutics, Lotus Labs and SIRO Clinpharm.

Clinical research is an organised trial of a new drug conducted on human beings to determine its safety and efficacy. CROs support pharmaceutical companies in conducting such trials. There are about 280 CROs in the country today. Most of them sprang up in the last one or two years to tap the clinical trial opportunity, which is expected to touch around Rs 10,000 crore by 2010, according to various estimates. The industry is estimated to have an annual turnover of Rs 800-1000 crore at present.

"India tightened the patent norms in 2005. This acted as a catalyst for the Indian CR industry, which grew by 84 per cent in India last year. Currently, more than 200 global trials are held in the country. Indian CROs will soon emerge as global CROs," said Vijay Moza, director, Clinical Research Institute.