Strides Arcolab which acquired the Chennai-based Grandix Pharmaceuticals last year is now scouting for acquisitions to increase its national foot print. The company's domestic business 'Grandix' which is the branded business arm is now sketching a strategy to tread on an inorganic growth path.
"We are now looking at acquisitions to increase our domestic presence. If we find companies which meet our criteria, then we will consider a buy out. But acquisitions are not easily available in India because costs are high and it is also difficult to find companies," Arun Kumar, vice chairman and managing director, Strides Arcolab, told Pharmabiz.
Prior to the Strides acquisition, Grandix was able to launch around 20-30 products. Now with Strides R&D integration, this year alone it introduced 8 products, compared to two or three in the past. It is gearing up for at least 20 product launches next year.
In the current Grandix portfolio, ReNerve, a neurology vitamin supplement, is ranked among the top 15 ORG brands. The company expects the sales of Renerve to cross Rs 30 crore this year.
In order to increase market reach, Strides is making a lot of investment in Grandix. It will have four product segments: gynaecology and anti-infective in addition to its existing neurology and diabetology. By end of 2009, it will access 15 states with medical sales force of around 600. There will also be several Strides products into the Grandix pipeline, Kumar said.
Strides has an advanced oncology drug development unit at the Bommasandra Industrial Area on the outskirts of Bangalore. The facility manufactures the maximum number of sterile injectables targeting the US markets. Its oncology orals constitute one of the largest pipelines. As part of an vertical integration strategy, the company will have a dedicated Specialty Critical Care division from Strides for the oncology drugs from January 1, 2009. A team of 40 personnel will man the division. It has filed 32 products with the US FDA.
Right now the revenues from Grandix constitutes only 10 percent of its total turnover of ending in 2007 at Rs 865 crore. Ninety percent of the revenues are from the international operations in Australasia, Europe, North America and the Africa where generics continues to show rapid growth. If Grandix also generates similar progress it still cannot be a beyond 10 per cent. But it will start contributing to a proportionate share of profits, Kumar said.
On the global front, Strides completed $250 million of capital expenditures and has enough capacity to grow to the next level. "We have achieved a growth phase in the international business and divested in the Latin American business. Therefore no more investments are slated. Our GSK partnership for branded generics business globally allows us to access 95 countries. All these will take up much of our capacity. We are now focused on increasing the quality of our business in existing markets, he said.
With the present global economic slowdown, Strides is unperturbed as there is no need to raise any cash because all its projects are complete and on course. It will not be slowing down on recruitments or R&D efforts. The company is adding another 400 personnel to its total strength of 3,000. "We will continue to be aggressive in our strategy and outlook," said Kumar.