The Actavis Group, one of the world's leading players in the development, manufacture and marketing of generics, stormed into India in 2000 through a co-development initiative with Dr Reddy's. It set up an outsourcing office in Hyderabad and thereafter it went on alliance and acquisition spree. While it formed alliances with Emcure Pharmaceuticals, Shashun and Orchid Chemicals, it acquired Lotus Labs, Grandix Pharmaceuticals and Sanmar Specialty Chemicals Ltd. The company continues its quest for more strategic alliances or acquisitions to maintain its strength as a European player with the largest presence in India. The company has also opened a state-of-the-art laboratory in Bangalore for active pharmaceutical ingredient (API) research. In an interview with Nandita Vijay of Chronicle Pharmabiz, Robert Wessman, CEO, Actavis Group, discusses the future course of action. Excerpts:
What are the factors that brought you to India?
India has a long tradition in the generic space. The country also has a sound human resource armed with the knowledge and expertise in generics. There are many Indian manufacturing units that have received the US FDA and the UK MHRA approvals. Unlike in Iceland, there is a huge availability of qualified manpower in the country. During our search for destinations to invest and grow business, India happened to be the right hub having the infrastructure and individuals to work on products that are in the pipeline. Our current strength in India is 620 employees.
Could you give us an overview of the activities at R&D centre in Bangalore?
The R&D centre was set up at an investment of Euro 2 million and is focused on APIs only. There are 60 scientists working here. This facility is one of our largest centres and can be placed second to our centre at Turkey undertaking similar activities. Bangalore centre has a pilot plant focusing on the development of chemical molecules that go off patent.
As you have completed two key acquisitions - Grandix and Sanmar - what is your next step?
Our idea is to expand the generic business. Grandix has an annual production capacity of 700 million tablets, which we are in the process of augmenting to 4 billion to have the largest capacity in India. We have invested $ 50-60 million in the last three years for acquisitions and the R&D centre expansion. We intend to spend $ 100 million additionally and would look at more Indian companies. We are looking for more land to expand the Grandix facility.
How do you perceive the global generic industry?
We are among the top five generic majors in the world along with Teva, Sandoz, Merck and Ratio Pharma. The sector will witness massive consolidation through mergers and acquisitions and only five or six large global players will exist. The top line growth of generic players is falling by 10 per cent annually. There is a serious need to get business volumes from the generic space. Actavis is gearing up to emerge as one of the top three global companies. We have a chance to achieve it this year, but if it does not happen now, it will definitely be within the next three years.
Would generics be the driving force of the pharma industry in future?
We see ample growth in the generic industry because of the low penetration of products in the sector. Italy, France and Japan have a penetration of less than 10 per cent unlike the US and UK where it is as high as 80-90 per cent. While the generics consumption is increasing, there is stiff competition in terms of prices, which are being hammered every day. With the infrastructure investment made by Actavis in India we have an edge in the global markets.
What according to you are the key strengths of Actavis?
Our capabilities in development have allowed us to develop a strong product pipeline. Barring hormones and respiratory drugs, we have cardiovascular, gastroenterology, central nervous system and oncology products developed in-house. Our game plan is either to tie-up or to acquire companies, to have a full line of supply. We now have over 350 projects in development/registration and more than 650 products are available in the market. We have a presence in over 32 countries and have built-up a network of distributor channels. Investments in production plants in India, Malta and Bulgaria will allow us to remain competitive in the global market that is known for declining prices.
How has falling prices affected market prospects of Gabapentin? How is Ramipril, the ace inhibitor, doing when doctors prefer angio-tension II blockers?
Gabapentin sales were $30 million before the patent expiry and Actavis has 20 per cent of the market in the US where we are second biggest company for this product. The company has plans to launch it in Europe. Coming to Ramipril, we are basically focused on generics and so the ace inhibitors have been a success and we have a whole range of them. We are also looking at the future generation of cardiovascular drugs. We are not forming any specific opinion about the branded products but are just offering alternatives to the brands. We have already picked a pipeline of molecules from central nervous system to cardiovascular which have a patent expiry date between 2015 and 2017.
What are the future global initiatives?
We want to become leader and make sure it is on the basis of quality and reliability of our products and processes.