Iceland-based Actavis Group has invested Euros 2 million to set up a dedicated API research and development centre in Bangalore. The facility is coming up at the old location of the Lotus Labs, a leading Indian clinical research organization (CRO) which Actavis had acquired last year. After the acquisition, Lotus Labs moved to a new office in Bangalore.

The R&D centre will be commissioned in October this year and around 50-70 scientists will be hired. No other details were disclosed.

The Indian entry is being viewed as a strategic initiative by Actavis for the development of API generic business. Ever since the company acquired Lotus Labs in 2005, it has been looking at India as a rich talent source and a cost-effective research location.

For Actavis, the Bangalore R&D facility will be largest after Turkey which is the other location of API activity. The centre will focus on the chemical development of molecules that go off patent, Dr Jon Valgeirsson, director, API Development, Actavis told Pharmabiz.

In order to strengthen its API presence in India which is an attractive destination in terms of economies of scale, Actavis is scouting for potentially viable generic business units in the country to bring them under its fold. Despite industry reports about Actavis initiating dialogues with several generic companies in the country, no information was divulged.

The generics hold limited promise in 2007 but from 2008-2010 good potential is predicted for the segment. The generic demand is because globally, cost containment in health care is a high priority and use of generics is much favoured. Therefore the generic drugs are poised to be more dominant. Our plan of action is to capitalize every bit of the opportunity, stated Dr Valgeirsson.

According to IMS Health in 2006, the generic industry is expected to grow at 13 percent. The Bain & Company reports blockbuster products coming off patent are valued at $22 billion in 2006, $27 billion in 2007 and $29 billion in 2008. By 2010, the global generic drug market is expected to touch $100 billion.

The Euros 79.3 million Actavis has been on a major acquisition mode globally after its hold over parts of European markets through Hungarian and Romanian mergers. Currently, it ranks after Teva, Novartis and Merck. Now the company is on a hostile bid to buy out Pliva, the Croatian generic major where it has already secured 20.4 per cent of outstanding shares. According to pharma analysts, "Barr Pharmaceuticals Inc. is in the process of agreeing to purchase Pliva for $2.2 billion in cash, crushing the deal of Actavis. Incase, if Actavis could purchase Pliva, then it would be the world's third largest generic major after Teva and Novartis."

Currently, the Indian operation of the company: Actavis Pharma Ltd. is located at Mumbai where G Shankar, is the managing director and Chief Financial Officer.