Lupin global ride hinges on the Power of Five

Drugmaker Lupin is betting on the Power of Five to steer it ahead in the international markets.

The Mumbai-based company is banking heavily on products belonging to therapeutic areas such as oral contraceptives, ophthalmics (eye care), dermatology (skin care), biosimilars (off-patent versions of biologic drugs), and asthma to be the driving force.

Managing director Kamal K Sharma said products belonging to these five categories will be introduced in markets including the US, Latin America (Brazil), Australia and South Africa over the next 2-4 years.

“All these five areas are very promising. Beginning in the US, we will slowly launch the products in other geographies,” said Sharma.

Lupin would also look at acquisitions of brands and technology in markets like Latin America in the future.

Estimates peg the market potential for oral contraceptives in the US alone at $4.5 billion, “In a country like Brazil, the potential for this category is $1 billion,” said Sharma.

While for dermatology, global market is expected to touch $3.9 billion by 2012. On the other hand, data by various global research and consulting firms suggests that the global market for asthma drugs would touch about $12.25 billion by 2016, while it would be $17 billion in the next four years for opthalmic products.

Biophoenix, a UK research firm, predicts that biosimilars would generate a global market of $5.6 billion in the next two years.

“We have a fat basket of products in these categories. About 26 products in oral contraceptives and 21 in ophthalmics. I can’t exactly say how many products will get launched in which markets by when as it all depends on the approvals,” said Sharma, adding that in areas such as asthma and biosimilars, the clinical development is exhaustive as manufacturing the products is a cost, technology, and time intensive procedure.

Other generic players such as Teva, Watson, Sandoz have a presence in product categories which Lupin is planning to enter in the international markets. But analysts said despite the presence of these firms, competition on the whole will still be limited.

“Oral contraceptives, ophthalmics, asthma, etc. are niche areas,” said Suryadeep Das, analyst with Centrum Broking.

According to analyst Bhavin Shah from Dolat Capital Market, four to five players in the market does not lead to severe competition, hence Lupin can try and get a bulk market share.

Das said that in niche product categories, both Indian and international generic players will have a similar playing field, as generics is an area where price points get battered heavily.

“So no company as such can boast of an advantage on the price factor. But yes, players like Teva will definitely have a stronger sales force. However, Indian companies will be able to match that challenge.”

At present, about 67% of the Rs4,871 crore (Lupin’s turnover in the last fiscal) company’s turnover comes from its international markets.

Sharma said that going ahead, when its international markets mature up, the ratio of its international to domestic business would shift to 75:25.

“On an average, our international markets are growing at about 25% per year and this momentum would continue,” said Sharma.