Domestic animal healthcare market comprises several large global players such as Zoetis, Virbac, Merck (MSD), Bayer and Elanco among various others. Various home-grown players like Sequent Scientific (Alivira), Zydus, Hester Biosciences, and Indovax have also been growing rapidly.
On analyzing key global players’ growth and
market tailwinds, we spot the following opportunity areas for Indian players
who are fast increasing their share in the global pie.
While OSD (Oral Solid Dosages) are the most
popular dosage form for human subjects, animal equivalents are powders and
pre-mixes. The powders and pre-mixes to be used as feed additives made up 45%
of all formulation dosage forms globally (by volume) in 2019. This, however, is
poised to change as injectables dosage form is fast catching up. Injectables
market size is expected to grow at CAGR 12% in 2019-24E and is expected to
surpass powders and premixes. This is attributable to the corresponding growth
in biopharma (vaccines, serums, toxins, blood plasma, and other biologics) –
most of the products in which are administered using injectables. As per
pipeline data released by Indian animal health players – Sequent, Indovax, and
Hester, injectables make up 50-60% of all pipeline drug formats.
peer-reviewed studies have linked pathogenic Anti-Microbial Resistance (AMR) in
humans to heavy usage of antibiotics in food animals. According to OECD
estimates, on average 1 kg each of beef, chicken, and pork use 45mg, 148mg, and
172mg of antimicrobials, respectively. This led food regulators across the
world to constrain antibiotic use. In India, as per the Food Safety and
Standards (Contaminants, Toxins and Residues) Amendment Regulation 2017 the
tolerance limit for 21 specified antibiotics and 77 other veterinary drugs
should not be more than 0.01 mg/kg for all edible animal tissues and their fat
derivatives, and milk.
While antibiotics were, and continue to still be,
extensively used for therapy, to prevent disease outbreak (metaphylaxis), to
protect the susceptible population (prophylaxis) and for promoting growth – the
tightening regulatory control has propelled innovators to shift future focus.
Antibiotics still make up 50% of revenues for major players but the new drug
development is focussed on areas like anthelmintic and pain-management. This is
parallel to the increasing stringency of antibiotic regulation enforcement by
ICMR’s Antimicrobial Resistance Surveillance and Research Network (AMRSN).
tailored to dominant local population
There is an increasing tendency to innovate for
products catering to the regionally dominant animal population. Foreign players
like MSD, Zoetis, and Virbac have introduced novel products for India’s large
livestock population. Many players are increasing penetration in the Indian
cattle business with mastitis, infertility, and probiotics therapies. Poultry
business in India is being catalyzed through nutritional products like enzymes,
toxin binders, and acidifiers.
A similar trend is witnessed for Indian players
looking to grow their global footprint. Sequent, one such player is focussing
on cattle and sheep segments in Turkey to capture dominant revenue streams.
(whether commercial or companion) globally, are increasingly warming up to the
idea of preventive healthcare as disease burden is becoming heavier due to
increasing costs and loss of revenue. The US$ 150M market for preventive
medications against common animal diseases in India like Foot and Mouth Disease
(FMD), Mastitis, Anthrax, Black Quarter, Haemorrhagic Septicaemia and Brucellosis
in the form of injectables and dietary supplements are expected to grow at CAGR
> 15% in 2019-24E. The high growth is also attributed to increasing
awareness against zoonotic diseases post COVID-19 outbreak.
Phyto and herbal
solutions are becoming increasingly popular in the domestic market due to both
demand and supply factors:
- Inherently high appeal for
rural masses and increasing rural penetration of animal health products
- Increasing adoption of herbal
and alternative medicine (collectively called AYUSH*) in urban population
- India’s abundant reserves of resources like
eucalyptus and other therapeutic herbs
On the back of this, several
pure-play natural products companies have grown to secure stable revenue streams:
- Saharanpur, UP based Indian
Herbs is a US$ 25M company serving the domestic market
- Natural Remedies (NR) is growing
at CAGR 20% between 2015-19 with US$ 31M in revenues. Exports account 25% of
NR’s revenues and the team has contributed many monographs on Indian medicinal
plants to various international pharmacopeia
- Ayurvet worth US$ 20M is also
expanding its only natural portfolio in India and abroad with a strong
portfolio of innovative products
- Largest domestic player, Sequent
while not a pure-play herbal player produces natural biosurfactants for poultry
and cattle under Lipized brand.
- Himalaya Drugs with US$ 10M from animal health,
also offers herbal nutritional products for dairy animals, poultry and
Another popular trend is the launch of
multispecies products i.e. products that can deliver select pharmacological
effects in animals of more than one species. Sequent has recorded 40% of its
revenues from multispecies products year-on-year.
We continue to witness practices like divestment
of auxiliary businesses to focus on the niche animal health segment and launch
in regulated and affluent markets of the EU and the US. These help players
increase margins and boost bottom-line respectively.
Overall, we expect the Indian animal market size
to grow at CAGR 10% for the period of 2019-24E against the same period global
CAGR of 6%. The trends above suggest that the Indian market is cleverly
adapting to local requirements and global trends. These coupled with inherent
Indian advantages of low operational costs, technical expertise, and abundance
of raw materials are sure to assist India to become a force to reckon with on the
global animal healthcare map.
All numbers in the article are for 2019, *AYUSH
stands for Ayurveda, Yoga, Unani, Siddha, and Homeopathy
Ashish Agarwal, Practice Leader, Pharma and Life sciences
Madhur Singhal, Practice Leader, Pharma and Life