Panacea eyes generics, US operations

Eyeing the lucrative pie of off-patent drugs, Panacea Biotec, the largest vaccine producer in the country, is looking to manufacture generics to expand its domestic formulation business and has plans to venture into the US market, its top official said.
Over $150 billion drugs would be off-patent in the next several years as their exclusivity time matures.

“We would be introducing several generic drugs in India soon, we are looking into hypertension, type 2 diabetes and gastrointestinal diseases etc in the next few years,” Rajesh Jain, joint managing director at Panacea Biotec told DNA.

Its vaccine business has been lagging behind the formulation business over the last few quarters, and analysts covering the company are expecting Panacea to offer products aggressively from the formulation segment.

There was muted growth in the first two quarters of the fiscal but sales picked up in the third quarter in the vaccine business. The company is expected to grow 20% in the current fiscal from last year’s sales of about Rs 800 crore. 

The company would announce deals in the next few weeks and is currently working on the Japanese encephalitis and Dengue vaccine which may be launched next fiscal.

“Most of these vaccines and formulations are currently in the licensing stage and we expect to launch at least 2-3 by July-August,” Jain said.

Interestingly, the New Delhi-based firm, which gets most of its sales from domestic operations, is looking to start operations in the US from next fiscal to expand its exports, the area and region which they ignored till now.

It has tied up with a US firm for the distribution agreement, but refused to provide details.

 “We expect by 2010-11 second half, we will launch our products in the US, which will lay the foundation and then 2011-12 would give the momentum. We will be announcing the distribution deal arrangement with a US firm in the next two weeks for this US initiative,” Jain said.

The company is also expecting 30% growth for its Rs 45 crore export segment and expects its operating margins to improve from 16% to 20% as it expands its business to US and domestic formulations. 

The company has about Rs 120 crore of cash reserves and it is not looking for acquisitions but expects in licensing and out licensing opportunities deals in the vaccines and medicines for infectious diseases and organ rejection. 

The company has also finished its phase 1 trial for the H1N1 flu vaccine and would submit the data to DCGI next week.

“We will be in a position to offer the product to government in case of emergency from April because safety and efficacy has been checked,” Jain said.