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Alembic seeks allies in US to double sales

September 08, 2008 10:41 IST

The 101-year-old Alembic, India's oldest pharmaceutical company, has chalked out an aggressive expansion plan to double its turnover within 2 to 3 years by foraying into the regulated markets of the US and Europe as well as contract manufacturing.

The Rs 1,027-crore (Rs 10.27 billion) company has filed 13 abbreviated new drug applications and 22 drug master files with the US Food and Drug Administration and regulatory agencies in Europe for supply of formulations and active pharmaceutical ingredients.

Some of the ANDAs challenge innovator patents and the company's strategy will be to partner with established companies in the US and Europe for marketing formulations, said Pranav Amin, director, Alembic.

"I feel we are about ten years late to enter the regulated markets, but will file about 10-12 ANDAs every year to tap potential in the generic markets of the US and Europe. We will also tap Latin America and Africa," he said.

Alembic's plan is to follow the low-risk and less-expensive model of roping in strategic alliances with major companies with presence in the US and Europe for supplying drugs, similar to the business model of drug major Cipla, instead of creating own front-ends through greenfield projects and expensive acquisitions in various geographies.

Currently, exports to non-regulated markets contribute only 20 per cent of the turnover and plans are afoot to improve this to a ratio of 50:50 in coming years.

Alembic was talking to several multinational and domestic companies to rope in alliances, he said.

"Now large retail chains in the US are looking at second-level Indian companies with quality manufacturing facilities for direct drug supplies and we will try to capitalise that opportunity.

Contract manufacturing for the big pharma is also another major focus area," said Pranav Amin, the eldest son of Chirayu Amin, the chairman and managing director of Alembic.

Alembic has already signed a three-year contract manufacturing agreement with a multinational company to supply APIs, which will fetch it $25-30 million annually.

It also licensed a novel drug delivery system for the extended release version of Keppra (levetiracetam), Belgian drug major UCB's leading epilepsy drug. 

Alembic will benefit with milestone payments of $11 million and low to medium single-digit royalties on worldwide sales of the new Keppra product, which will soon enter the market.

Commenting on the domestic market, Pranav Amin said the company has restructured the domestic business, with eight marketing divisions, instead of the earlier five divisions, to focus on acute, chronic and other speciality products.

The domestic marketing team has shifted to Mumbai from Vadodara, the home of Alembic. The company recruited 600 medical representatives alone during the last quarter to have a field force of 2,800.

He said focus in the domestic market will be on creating more brands, especially in acute and speciality segments, to maintain an average growth rate of over 15 per cent every year. 

Alembic, the market leader in anti-infective segment (macrolides), has brands such as Azithral (Rs 60-crore or Rs 600-million sales) Althrocin (Rs 72.5 crore or Rs 725 million) and Roxid (Rs 62 crore or Rs 620 million), which help control about 38 per cent of the domestic market for anti-infectives. 

The acquisition of Dabur's non-oncology business during the last year has helped add about 23 products to the basket, he said.

P B Jayakumar in Mumbai
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