Pharmabiz
 

Granules pitches on high margin PFIs

Y V Phani Raj, HyderabadThursday, September 28, 2006, 08:00 Hrs  [IST]

The Hyderabad-based Granules India is targeting regulated markets in the US and Europe in the pharmaceutical formulation intermediates (PFIs) segment. The company is strengthening its marketing force in the New Jersey, USA, besides South America, Brazil, Canada and UK. North America and Latin America will also remain key markets for the company in future. Granules will particularly target South America for PFIs. The company has already entered the new markets of Egypt, Argentina, Guatemala, Venezuela, Hong Kong, Saudi Arabia, Algeria and Romania through PFI approvals. The global pharmaceutical outsourcing is estimated to grow to $ 53 billion by 2010, and the company aims to tap this opportunity. Outsourcing is gaining prominence across the world, and now pharma companies have realised that they should focus on key activities and the rest should be outsourced from efficient partners. India has enormous advantage as it can offer better soft skills, which account for about 60 per cent of the total manufacturing cost. Our unique positioning in the pharmaceutical value chain ensures a unique proposition for global Pharma giants looking at outsourcing,'' C Krishna Prasad, MD, Granules India, said. In spite of a large global PFI market of about 350,000 tonnes per annum (TPA), global capacity is estimated at only around 25000 TPA due to unavailability of skills to convert APIs to PFIs and combination PFIs in large commercial volumes, inability to offer low-cost solutions and failure of new entrants to stablise operations. After the success of OTC PFI manufacturing, companies are recognising the possibility of outsourcing the manufacture of prescription PFIs, the latter offering higher margins than OTC products. The company along with Amneal Pharmaceuticals LLC (United States) have recently obtained a US FDA approval of the ANDA of metformin hydrochloride tablets of 500 mg, 850 mg and 1000 mg. This is the first time that the US FDA has approved an ANDA with a PFI (pharmaceutical formulation intermediate). The company operates two PFI manufacturing facilities in and around Hyderabad. To de-risk the company's dependence on few products, the company's R & D team is working on the development of new prescription products. As more products are evaluated and approved by its clients, the company expects to improve its capacity utilisation and the margins in the coming years. Over the years, the company has created PFI models for a number of products from basic (paracetamol, calcium carbonate, ibuprofen and aspirin) to complex products (based on metformin and guaifenesin). The company has not only extended the concept of PFIs to complex products but also improved the physical properties of existing products so that PFIs compress efficiently under diverse atmospheric pressures, climatic conditions, compressing equipment and tablet shapes. The company's uniqueness in its R & D has been reflected by the development of skills to commercially manufacture combination PFI involving two or more APIs. The company has developed a combination PFI with guaifenesin and PFI for ciprofloxacin. The company which pioneered the concept of commercialising the manufacture of directly compressible granules (PFIs) is also one of the few global companies that have received regulatory approvals for PFI plants from three regulatory agencies- USFDA, Australian TGA, and German Health Authority. The company plans to roll out half a dozen OTC and prescription products in next two years. OTC segment will concentrate on paracetamol and ibuprofen, while prescription segment will cover metformin and paracetamol. At present, paracetamol contributes about seventy per cent of its revenues. ANDA filings will show progress within next one year. The company may also focus on dossier and formulations development. It may look at high-end nutraceuticals also. Granules India is positioning itself as an integrated pharmaceutical company providing global pharmaceutical majors with PFIs, APIs and technical support. The company is looking at various partnership models in APIs and intermediates. It is open to talks with companies in US, Europe and China, and in some places, the talks are in advanced stage. The company may look at complete takeovers too, he said.

 
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