Lake Chemicals will open its new facility that complies to US FDA norms in September 2003 as a first step to its entry into the stringent and regulated US market.
The new plant, which is scheduled for completion shortly, is coming up next to its decade-old existing facility located at Attibele Industrial Area, in the outskirts of Bangalore at an investment of $1 million. The facility will produce the active pharmaceutical ingredients (APIs) for the US market. Prior to its entry into the US market, the company has identified a few global generic companies whose team is expected to examine the premises before the US FDA officials are in India for a thorough inspection of the facility in the end of 2003 or early 2004.
The main attraction for Indian bulk drug companies to tap the US markets is the potential to generate over four times the revenues earnings compared to the other global destinations. Having a presence in the US strengthens the company's stand in the other regulated markets, Manoj C Palrecha, managing director, Lake Chemicals Pvt. Ltd told Pharmabiz.com.
Currently, Lake Chemicals has 17 products. Its strengths are research and manufacture of 'Benzodiazepine,' which is used in the production of drugs related psychiatry, anxiolytic, epileptic and insomnia conditions. The Benzodiazepine series are Alprazolam, Lorazepam, Midazolam, Bromazepam to name a few. The other central nervous system depressants include Zaleplon, Bupropion HCL, Chlorazepate etc. The diabetic range has Rosiglitazone. The other products are Bambuterol HCL (bronchodilator), Loperamide (anti diarrhoea), Pitofenone HCL and Fenpiverinium (anti spasmodic), to name a few. An anti asthmatic bulk drug which is in great demand in the Asian countries and an anti obesity bulk drug have also been added to its existing product portfolio.
The focus of the company is the anti depressant segment, which is growing at 25-30 per cent worldwide. It is the second fastest growing segment after cardiology. The total value of the anti depressant market in India is Rs. 20 crore and Lake Chemicals share is 25 per cent. The nine products from Lake Chemicals in this category help provide customers a wider option, said Manoj Palrecha.
The Rs. 12 crore Lake Chemicals entered the international market in 1995 and has a major presence in 30 countries including Europe, Australia and New Zealand. The company's total international and domestic sales is pegged at 70:30. Its plans to achieve 80:20 sales in favour of exports. This year, the company hopes to garner a 50 percent export growth as against 45 percent export growth in 2002.
The international market is lucrative for bulk drug manufacturers mainly because the quality of products have a greater edge over the pricing unlike the domestic market which is bogged down by price bargains and a poor concern over the quality of bulk drugs. The company's strategy is to produce high-value and low volume niche products where the competition is mainly from global majors, he added.
The company has been able to survive in the international arena with its research and development efforts where a team of 12 scientists working on the new products. The annual allocation of budget to research and development is 3.5 per cent of its turnover.
About the problems in bulk drug sector, Manoj Palrecha is of the opinion that there was an imminent need for a streamlined and faster procedural clearance from government agencies to enter into the competitive global market where the existing cumbersome dealings and delays could be avoided.