“COVID 19 IMPACT ON PHARMACEUTICAL STOCK ”

Faculty of Management Studies,

Parul University
Under the Guidance of,
Prof. Dr.Aashaka Thakkar
Submitted by
Nicky Bhalani Nancy Bachani
Er no: 210614200062 210614200054

ABSTRACT

In light of the recent Covid 19 epidemic, this research will analyze the performance
of top pharmaceutical companies trading on India's National Stock Exchange. We
have picked 10 major pharmaceutical businesses registered with NSE, and the
decision was completely based on the market capitalisation of the companies. The
study's overarching hypothesis was that pharmaceutical equities will go in the
opposite direction of the market (contrarian effect). The time frame that was
examined was split into two parts: before and after the Covid 19 crisis. There are a
total of 123 daily price observations for the 10 pharmaceutical firms included in this
study. The duration of research is extending from 3rd September 2019 to 28th
February 2020. According to the data, the momentum effect is still at work in the
pharmaceutical stock market, with pharmaceutical equities tracking the general
benchmarking index's movements. The total number of companies is reduced.

GENERAL INFORMATION

The 2019 coronavirus disease (COVID-19) is a respiratory illness caused by a new

coronavirus strain. A coronavirus was identified in December of this year. The
illness, which began in Wuhan, China, has now spread to almost every nation,
making it a worldwide pandemic. The flu-like illness known as COVID-19 causes
symptoms include a high temperature, dry cough, and a pounding head.

Many people have died with COVID-19 n, which causes respiratory problems. Those
who are already dealing with xn health issues and the elderly are at increased risk
for getting life-threatening illnesses. Contact with nasal discharges or coughing or
sneezing saliva droplets is the primary mode of transmission of the COVID-19
infection.

There is currently no cure or vaccination available for COVID-19. Prevention

strategies for COVID-19 include regular hand washing with soap, using alcohol-
based nnj to cleanse hands, using face coverings like masks, and refraining from
touching one's face with unclean hands.

Clinical studies for COVID-19 may be able to be canceled if measures are taken to
reduce or eliminate opportunities for person-to-person transmission can one of the
strategies proposed to prevent people from catching the coronavirus. This cc
suggests keeping at least two meters of space between you and other people at all
times while you're not in your own house, among other common. As an added
bonus, this method prevents people from congregating in large numbers in places
where there may be an overpopulation problem. Since the motivation for this
strategy is the hypothesis that some persons may transmit the coronavirus while
showing no symptoms, the fear of catching the virus via clinical trials is likely to deter
participants.

The purpose of this article is to analyze how COVID-19 has affected the
manufacturing sector. The study is primarily concerned with the clinical studies
conducted on COVID-19 in the m-health sector. In this work, we look at what may be
done to mitigate the effects of COVID-19 on clinical trials and our capacity to conduct
them.
ABOUT THE COMPANY / INDUSTRY / SECTOR

India is well recognized as the world's leading supplier of generic pharmaceuticals

and a leading producer of low-cost vaccinations and generic medications. After
starting from scratch and rising at a CAGR of 9.43% over the previous nine years,
the Indian pharmaceutical sector is now ranked third in pharmaceutical output by
volume. The Indian pharmaceutical market is very diverse, with several important
subsectors including generic pharmaceuticals, OTC medications, bulk meds,
vaccines, contract research & production, biosimilars, and biologics. Approximately
8% of the global API market comes from India's 500 API companies, and the
country's pharmaceutical production facilities are in conformity with US Food and
Drug Administration (USFDA) regulations.

The Indian pharmaceutical industry meets more than half of the worldwide demand
for different vaccines, forty percent of the demand for generic drugs in the United
States, and twenty-five percent of the total medication demand in the United
Kingdom. Three thousand pharmaceutical firms and ten thousand and five hundred
production facilities make up the domestic pharmaceutical sector. When it comes to
the pharmaceutical industry, India is among the world's top players. There is a big
number of scientists and engineers in the nation that might help lead the way in
taking the sector to new heights. Today, Indian pharmaceutical companies provide
more than 80% of the antiretroviral medications needed to treat AIDS (Acquired
Immune Deficiency Syndrome) throughout the world. India's cheap prices and good
quality have earned it the nickname "pharmacy of the world."

Market share of India's pharmaceutical industry

The domestic market is projected to increase by a factor of three during the next
decade, as reported by the Indian Economic Survey 2021. In 2021, India's domestic
pharmaceutical industry was valued at US$ 42 billion. This is expected to rise to US$
65 billion by 2024 and then to US$ 120–130 billion by 2030. Biopharmaceuticals, bio
services, bio agriculture, bioindustry, and bioinformatics are all part of India's thriving
biotechnology sector. In 2020, the Indian biotechnology market was worth $70.2
billion, and by 2025, that number is projected to increase to $150 billion. In FY20, the
market for medical equipment in India was valued at US$10.36 billion. From 2020 to
2025, the market is forecast to grow at a CAGR of 37%, all the way up to US$50
billion. By the end of the forecast period beginning in August 2021, CARE Ratings
anticipates that the pharmaceutical market in India will have grown at an annual
pace of 11% to reach a value of more than US$ 60 billion.

ABOUT MAJOR COMPANIES IN THE INDUSTRY

As the leading pharmaceutical firms take the lead in the battle against COVID-19,
the pharmaceutical sector worldwide is likely to see growth.

The consumer health division of Johnson & Johnson saw revenue rise by 0.3% year
over year, thanks in large part to increased sales in the US market and the
favourable effect of acquisitions and divestitures, which added 1.6% to overall sales
growth.

The pharmaceutical division's revenue increased by 3.6%, with the immunology

($13.95bn) and cancer ($10.69bn) portfolios being the primary contributors.
BALVERSATM (erdafitinib), XARELTO® (rivaroxaban), SPRAVATO® (esketamine),
INVOKANA® (canagliflozin), and STELARA® were just some of the new prescription
medications authorized this year (ustekinumab).

Although J&J's pharmaceutical business growth is expected to stay above industry

growth in 2020, the company anticipates some disruptions. However, certain
subsegments within consumer health may be harmed by fewer people making
purchases and more social isolation.

Using the Ad26® vector technology and the PER.C6® manufacturing platform, J&J
is progressing toward the creation of a vaccine against COVID-19.

The potential vaccine was first disclosed in March of 2020, and preparations for
manufacture began in June of that year. Clinical studies started in September 2020,
and results were anticipated in December 2020. Initial doses of the vaccine for
urgent use are projected to become available in the first quarter of 2021.

The biopharma division accounted for 76.2% of Pfizer's total sales despite the
company's overall 4% revenue reduction. Anti-infective product sales in China,
namely for the company's antibiotic medicine Sulperazon, accounted for 54% of the
company's revenues from international markets. The remaining 46% of sales were
made in the US, where the introduction of generic alternatives to Lyrica for the
treatment of seizures has had a negative impact.

The firm and GlaxoSmithKline (GSK) have combined their consumer healthcare
activities under the auspices of a newly created joint venture. The ownership stake in
the joint venture is split 68% to 32% between Pfizer and GSK.

It was reported that the Upjohn business unit will be merged with Mylan to establish
a new pharmaceutical firm called Viatris. Pfizer spent $11.2 billion to purchase Array
BioPharma and $340 million to buy Therachon Holding. This was in addition to the
$1 billion it spent to purchase the small molecule anti-infectives division of
AstraZeneca. Moreover, the firm has obtained the patent for ANGPTL3-LRx, an
experimental antisense treatment developed by Akcea Therapeutics.

Pfizer's revenue dropped in the first quarter of 2020 as a result of the lockdown
limitations and the subsequent decrease in patient visits. Investment in R&D for the
creation of anti-infective medicines and a COVID-19 vaccine code-named BNT162
mRNA is set to grow by $500 million. The vaccine's phase 2b/3 trials kicked off in
July 2020, and depending on the findings, regulatory clearance is anticipated in the
fourth quarter of 2020.

Roche

Pharmaceutical sales of new medications including Ocrevus, Hemlibra, Tecentriq,

and Perjeta boosted Roche's pharmaceutical division's revenue by 11% year-over-
year. While the biosimilars business in Europe and Japan performed poorly,
Tecentriq in cancer and Actemra/RoActemra and Esbriet in immunology contributed
considerably to the company's sales.

Sales in the US were negatively affected by $1.55bn due to competition from

biosimilars, primarily of MabThera/Rituxan, Herceptin, and Avastin. Although the
United States continues to be the company's most important sales area, the Chinese
market has grown by 36% as a result of the company's increased efforts to break
into that region. The $4.8 billion purchase of Spark Therapeutics was a major deal
for the pharmaceutical industry during the year.

As a result of the COVID-19 pandemic, revenues for Roche are anticipated to

increase. The Actemra and Roaster cancer medicines are being tested in phase
three clinical studies for the treatment of severe COVID-19 pneumonia. Based on the
findings, it is intended to enhance medicine production.

For 2019, Novartis's sales increased by 6% year-over-year, with 79% coming from
the new pharmaceuticals segment and 21% from Sandoz. Established markets such
as the United States, Canada, Western Europe, Japan, Australia, and New Zealand
accounted for the bulk of the company's sales.

INTRODUCTION OF THE STUDY

The global community has been under extreme pressure ever since the COVID-19
epidemic broke out. The coronavirus epidemic has had devastating effects on the
health and well-being of the population. The global economy and financial markets
have not had a very good 2020.

The Indian stock market suffered one of its worst falls ever as a result of this crisis.
Since the beginning of March 2020, both the SENSEX and the NIFTY have dropped
drastically, by roughly 20%. There was widespread red ink throughout markets and
economic spheres. Companies of all sizes were hit hard during this period of market
volatility. In spite of the enormous fall in share prices across the board, the
pharmaceutical industry has been showing signs of recovery. Keep reading to learn
how the coronavirus is affecting the pharmaceutical industry.

The State of the Markets during the COVID-19 Pandemic

Investors, both retail and institutional, are frantically exiting cyclical equities as the
number of COVID-19 cases rises throughout the nation and the globe. Stock prices
have plummeted and market volatility has skyrocketed as a result of the widespread
selling frenzy.

All non-essential services have been outlawed and production across all sectors has
practically stalled due to the 21-day shutdown imposed in India, adding to the load.
The adverse pressure on stock markets has only increased as there has been no
sign of a cure so far.

Drug company share prices affected by the coronavirus

Contrarily, despite the current situation, investors have begun to see the value in
pharmaceutical equities. Most pharmaceutical firms, with a few notable exceptions,
have closed each trading day in the green, giving the impression that they are on a
spending frenzy. S&P BSE Healthcare and Nifty Pharma, two important indexes that
monitor pharmaceutical firms, both increased by about 36% and 42% from March 23,
2020, as of April 16, 2020. Investors, both little and large, may profit greatly from the
recent surge in the price of pharmaceutical companies.
The stock prices of diagnostic labs have risen precipitously alongside those of
pharmaceutical firms. Both Dr. Lal Pathlabs and Thyrocare, two of the largest
diagnostics companies in India, have had their share prices soar by roughly 20% and
14% since March 23, 2020, as of April 16, 2020. As people became more conscious
of the need of taking care of their health, the demand for preventative exams and
diagnostic lab work skyrocketed, driving up stock values dramatically.

When markets are unstable, why do pharmaceutical stocks tend to do well?

Now that you know how coronavirus affects pharmaceutical stocks, let's examine
what's driving this increase in depth.

LITERATURE REVIEW

The global pharmaceutical industry was negatively impacted by the Covid-19

epidemic. There is currently no accepted protocol or medication for treating Novel
Corona virus infection. The pharmaceutical sector is helping governments meet the
unmet requirements of Covid-19, such as doing research and development on
alternative treatment techniques, and ensuring a stable supply of medicines during
an emergency.

The high rates of illness and death brought on by the Covid-19 pandemic had a
chilling effect on people's standard of living and ability to provide for themselves.
Especially during pandemics, when the medications supply chain might be
overburdened for a variety of causes, the pharmaceutical sector plays a crucial role
in producing high-quality healthcare services. One of them is a dependence on age-
old production and distribution channels, such as those based in India and China.

In addition, lockdowns, such as those enacted in the early days of the Covid-19
outbreak, restricted in-country and cross-border mobility, which had a significant
effect on the delivery of pharmaceutical supplies. With most pharmaceutical
producers keeping just two to three months' worth of bulk pharmaceuticals on hand,
the Covid-19-related disruption has caused an extreme scarcity of APIs beginning in
May 2020.

Many pharmaceutical factories in India were only able to produce at 20-30% capacity
due to a shortage of APIs and other active ingredients. Further evidence pointed to
rising API acquisition expenses. The factories weren't running at full capacity
because to issues like lockdown and government instructions on physical separation
in the workplace. In the pharmaceutical industry, the standard stockpile duration is
180 days. In most cases, a 60-day maximum storage duration is acceptable for retail
pharmacies' stock.

As the need for pharmaceuticals, vaccines, and medical equipment rises, Covid-19
may be considered a once-in-a-century opportunity for the pharmaceutical industry.
Immediate effects of Covid19 on the healthcare industry include a shift in demand,
supply shortage due to shortage of inventory of input materials to manufacture
drugs, panic buying and stockpiling, new regulations, and a shift in communication
and promotion to remote interactions via technology and research & development
process changes. It is possible that the pandemic and limitations in the supply chain
have caused a shift in demand, resulting in a scarcity in the case of induced demand
and panic-buying of oral home medicine, especially for chronic illness.

According to the research, "panic-buying" of medicines for chronic diseases is

expected to increase global pharmaceutical market 5 demand by +8.9% by March
2020 [8]. There was a 65% rise in the use of asthma drugs and a 25% increase in
the use of type 2 diabetes medications, according to a research conducted in the
United States between March 13 and 21, 2020. The API and bulk commodity
markets in India have already seen the effects of this shortfall. The observed
average rise was about 10-15%, while it might go as high as 50% in some situations,
such as paracetamol APIs.
To achieve their primary objective of making vital medications available at
reasonable prices, pharmaceutical industries are battling to preserve natural market
flow in the wake of the recent pandemic. The pharmaceutical business may see a
slowdown in growth as a consequence of the coronavirus epidemic, which caused
economic slowdowns in numerous nations. Supply chain expenses, including local
freight rates, air and sea fares, and fuel surcharges, all went up as a result of the
interruption to international shipping.

BACKGROUND OF THE STUDY

The pharmaceutical market plays a significant role in international trade.

An increasing and aging population, new medical problems, and the introduction of
illnesses all bode well for the industry's long-term growth prospects. The Over the
last 50 years, the Indian pharmaceutical business has flourished, expanding into new
local and international markets. In 2020, "Made in India" medications will account for
80% of the Indian pharmaceutical market, up from 5% in 1969 (when global
pharmaceuticals had a 95% share). In addition, the nation has become the
"Pharmacy of the world" for its dominant position in the worldwide market for generic
drugs during this time. India's pharmaceutical sector supplies a whopping 62% of the
world's vaccinations and over 20% of its generics. With a 9.8 percent increase over
its 2018 total (US$18.12 b), India's home pharmaceutical industry is now worth
US$20.3 b. Despite a slow start to the year owing to the pandemic, the domestic
market increased by 2.2% from April to September of 2020, as compared to the
same period in 2019. In FY20, Indian pharmaceutical exports hit $20 billion, an
increase of 8.4% from FY19.

On March 11, 2020, after a flu-like epidemic was initially detected in Wuhan, China in
early December 2019, the World Health Organization (WHO) proclaimed COVID-19
infection, i.e., Severe Acute Respiratory Coronavirus infection (SARS-CoV-2).
Uncertainty over the effect of the COVID-19 pandemic on the global and Indian
pharma sector supply chain has been a particular topic of worry as nations and firms
continue to struggle with the extraordinary problems brought up by the new
coronavirus (COVID-19).

China, the world's largest producer and exporter of APIs by volume, supplies around
70-75% of India's APIs and critical beginning raw materials. Paracetamol, penicillin,
and anti-asthma pharmaceuticals, among others, have seen price increases in India
of 40-50% due to disruptions in the supply chain. Due to labor shortages and the
reduction of several facilities to a single shift, pharmaceutical production was running
at barely 40-50% of capacity.

Transportation difficulties for employees were exacerbated by pass requirements

and limits on using public transportation to go to factories. Another important
difficulty at the time was the lack of transportation infrastructure for delivering
supplies. Some of the sectors that provide the pharmaceutical industry's support
functions, such as the manufacture of packaging for medications, have not yet been
designated as critical. This created a severe problem for packaging suppliers in
locating the raw materials needed to make the drug packaging, which might have a
major effect on the pharmaceutical industry as a whole. Innovative medication
research has also been impacted by the reduction in imports.

OBJECTIVES OF THE STUDY

 The purpose of this discussion is to examine how COVID-19 has affected

clinical trials in the pharmaceutical sector.

 looks at how COVID-19 may affect clinical trials and what may be done to
mitigate its effects so that testing can proceed.
Initially, network analysis was
used to evaluate the posi-
tional proximity in trade network.
A seminal path-breaking
article published in 1979 was the
first explicit attempt to
use the network approach to
examine the world economic
system. Snyder and Kick [22]
used block-modeling to analyze
the world system in order to
provide an explanation of the
dynamic trade relationship among
118 countries. They focused
on classifying countries in three
groups: core, semi-core, and
periphery. They found that
members of the Organization for
Economic Co-operation and
Development (OECD) seem to
exist among core countries. Their
exhaustive research work
set the standard for a series of
subsequent research on the
topic.
The core-periphery approach was
also used by Nemeth
and Smith [23], who represented
countries in structural po-
sitions based on flows separated
over five distinct types of
internationally traded
commodities. Whereas Snyder
and Kick
[22] placed countries into
positions based on trade, military
interventions, treaty
memberships, and diplomatic
exchanges,
Nemeth and Smith [23] solely
focused on classifying nations
based on trade networks and
unequal exchange. In their anal-
ysis, 89 countries were separated
into four different structural
positions that validated the
dependency theories.
Smith and White [24] wrote a
seminal article related to
world trade network (WTN)
analysis. They apply the core-
periphery approach to study the
evolution of the WTN using
dynamic analysis for three
different years (1965, 1970 and
1980). Previous studies analyzed
only one point in time. By
using a dynamic modeling
approach, they were able to
confirm
the expansion of core countries
over the period of time, track
the change of position of specific
countries, and observe the
continuous marginalization of
circumferential countries. In a
similar study, using a weighted
network approach, Fagiolo
et al. [25] examined the presence
of homophily between
countries in terms of richness,
structure, and other variables.
They also confirm that nations
with high positions in the WTN
lead to higher growth than
nations with low positions.
Apart from studies centered on
the core-periphery frame-
work, there are studies in which
network analysis has also
been employed to investigate the
debate over whether re-
gionalization is a stepping stone
or a stumbling block to
globalization. Some pundits
consider regionalization as an
ephemeral maneuver that some
countries follow to become
more competitive on the
globalized market and believe
that
in the end it will promote
globalization. Others propose
that regionalization hinders the
process of globalization by
damaging the welfare of
individual non-member countries
and
contributing to inefficient
production strategies that may
work
at the regional level but not at the
international level. Kim
and Shin [26] also find that the
density of the network of
countries and node-degree
distributions both have increased
with time—an effect associated
with the globalization pro-
cess. Furthermore, newly added
connections do not seem to
be equally distributed. Countries
in the core tend to make
outbound connections while
peripheral countries tend to make
inbound connections. The
consequences of globalization
are
further researched by Kastelle et
al. [27] who used complex
network analysis on International
Monetary Fund data from
the period 1938–2003 to examine
standard hypotheses on the
dynamics of the topological
properties of the world trade
network. They determined that
development of the WTN has
not reached any stabilized state
that would imply one huge
integrated global market. Instead,
it has been slowly modifying
and appears to continue doing so
in the future.
Studies related to trade networks
have focused on either
understanding the network
structure and properties or its
economic impact. They have
used the unweighted undirected
network approach to demonstrate
the connection between
nations which may not be a good
idea because consideratio
RESEARCH METHODOLOGY

METHODS FOR DATA COLLECTION & VARIABLES OF THE STUDY

Methods for data collection

Secondary Data

Secondary Data

Secondary source of data was collected from

Books

Journals

Magazines

Web’s big data es

Sampling
The sample technique utilized for data gathering is convenient sampling. The
convenience sampling method is a non-probability strategy.

Sampling size

Big data indicates the numbers of people to be surveyed. Though large samples give
more reliable results than small samples but due to constraint of time and money,

Plan of analysis

 Diagrammatic representation through graphs and charts

 Big data able inferences will be made after applying necessary statistical
tools.
 Findings & suggestions will be given to make the study more useful.

CONCLUSION/SUGGESTIONS

The emergence of OVID-19 has disrupted current clinical studies and threatened to
derail the whole initiative. Both currently underway clinical studies using established
procedures and future clinical trials using untested methods or unwritten regulations
need adherence to established protocols. The negative effects of COVID-19 must be
mitigated. Due to the current COVID-19 epidemic, it is necessary to adjust
monitoring procedures to meet the challenges it presents.
 BIBLIOGRAPHY

 The Coronavirus. In: World Health Organization (Ed.). (2020). Geneva. The
Centers for Disease Control and Prevention (2020).

 Self- and community-protection. Third, the Federation of American Scientists

(2020) examines the worldwide financial effects of SARS and COVID-19.

 During the 2020 pandemic of COVID-19 (coronavirus), the European

Commission issued guidelines for the administration of clinical trials.

 Points to ponder on the implications of Coronavirus disease (COVID-19) on

the methodology of current clinical studies.

 European Medicines Agency. 2020. Influence of COVID-19 on cancer clinical

trials. Upadhaya S, Yu JX, Oliva C, Hooton M, Hodge J, et al. Nat Rev Drug
Discov. 19.3.76-377.

 Good clinical practice seventh European medicines (2020). To see how

coronavirus (COVID-19) may harm your lungs, see Cleveland Clinic's (2020)
report.

 COVID-19 and lung disease frequently asked questions. European Lung

Foundation (2020).

 The United States Food and Drug Administration (FDA), 2020, FDA
guidelines on conducting clinical trials of medicinal goods during the COVID-
19 public health emergency.