A leading pharmaceutical company in the early 1980s, Alembic, however, didn’t grow as fast as its peers. But it did manage to survive amid the constantly changing dynamics.
Alembic Ltd, the 100-year-old drug maker, is back in form. A leading pharmaceutical company in the early 1980s, Alembic, however, didn’t grow as fast as its peers. But it did manage to survive amid the constantly changing dynamics of pharmaceutical industry. Rajkumar Baheti, director, finance, Alembic, spoke to DNA Money’s Tinesh Bhasin about the company’s current plans and future strategies.
Alembic has invested significantly in creating infrastructure for exports and contract manufacturing. How is it unfolding?
While we were putting up infrastructure for contract manufacturing, we initiated dialogues with global pharmaceutical companies. We managed to bag a few contracts in the process. It also helped us understand the models we can adopt. We decided to work on three models.
Getting manufacturing contracts for medicines or for complex compounds, or Active Pharmaceutical Ingredients (API), required to make drugs is the first model. Secondly, we have become suppliers to these companies. Sourcing from different partners in India, we supply the inputs at the decided price.
Also, Alembic is partnering marketing companies abroad to sell products. Here we split the profits. Overall, the international business will gather momentum from 2009 fiscal. This is out consolidation phase wherein we are starting to capitalise on our expansion carried out in past four years.
Have you signed any contract manufacturing deal?
We are close to signing a manufacturing deal with an innovator company from Europe. Alembic will supply intermediates to this company. The innovator will make the drug from these supplies.
What is the status on registration of medicines abroad?
We are awaiting approval for three Abbreviated New Drug Applications (ANDA). From next year, we will be filing about 15 every financial year. Alembic has also submitted 50 Drug Master Files (DMF) in regulated markets including US and Europe. About 17 among these are for the US.
What about domestic business?
With an eye on future, we have put our focus on two additional areas. Alembic has forayed in geriatrics. This space deals with disease of the old and is a neglected segment. It holds good potential. Selling our medicines in rural markets is another area we have entered recently.
Acquisition of Dabur Pharma’s non-oncology business has added lifestyle and other therapeutic areas that were missing in our portfolio. Apart from this, we have been focusing on launching as many new drugs we can. The company launched 55 medicines, including extensions in past two years.
How about further revenues from research, after the UCB deal?
We are researching on drug delivery mechanisms, or NDDS, though the current research may not be as big as Keppra that we sold to Brussels-based UCB for $11 million. What distinguishes our approach in research is the ability to select products and territories to introduce them.
What are the other business areas that Alembic would venture into?
We don’t want to restrict our international business to contract manufacturing only. Once revenues from international business reaches a critical size of about $150 — $200 million, Alembic will look at options of marketing its own drugs in regulated markets and establishing direct presence.
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