Lupin eyes speciality businesses in US

Mumbai-based pharmaceutical company Lupin is scouting for speciality assets in women's health and neurology businesses in regulated markets such as the US. Speciality assets are branded businesses for niche therapies that require sales force in the US to sell products.

The focus on speciality acquisitions comes at a time when generic drugs are going through pricing pressure in the US, the world's largest market for medicines.

This comes about five years after the generic drug maker took the inorganic route to evolve as a complex generic and speciality drug maker with wider geographic spread. It has put its focus on building scale in geographies and acquiring speciality brands.

"With the investments that we have in place, we are well set as far as capabilities go for complex generics," says Vinita Gupta, chief executive officer at Lupin. "Now, our focus on the inorganic front is to look for opportunities that can enable us to grow a speciality brand business, particularly in women's health and neurology," Gupta says.

While acquisition of assets such as Nanomi and Gavis complemented its technological capabilities on the generic front, buyouts of companies such as Grin in Mexico, Medquimica in Brazil and Temmler in Germany helped it expand geographically.

"We will continue to look for acquisition opportunities that give us leverage in therapy areas that fit into our strategic focus," says Gupta.

The therapeutic areas of Lupin's focus are women's health, pediatrics and neurology. The big-bang acquisition of Gavis for $880 million in the US two years ago also helped it acquire Methergine, a speciality medicine used by women after child birth. On the pediatric front, it has the legacy portfolio of Suprax. For therapies in neurology-related ailments, the company acquired related assets through its acquisition of 21 generic brands from Shionogi in Japan for $150 million last year.

"The number one priority for acquisition for the company is speciality in the US," Nilesh Gupta, managing director of Lupin, told Business Standard earlier. Speciality has become imperative for the US markets as customer consolidation and increasing competition in the world's largestmarket erode margins for generic drug makers.

Lupin wanted to reach a $5-billion annual turnover by 2017-18 taking the inorganic route, then it reduced the target to $3.5 billion as it continued to look for the right assets. It continues to look for speciality assets in Europe and Japan, besides the US. "From a balance sheet perspective, the company can do an acquisition worth as much as $1 billion," said Nilesh. "But, our sweet spot remains a couple of $100-million type of deals. So, our acquisitions will be somewhere in that range, of $200 million to $1 billion," he said.

“Now, our focus on the inorganic front is to look for opportunities that can enable us to grow a speciality brand business, particularly in women's health and neurology” VINITA GUPTA Chief executive, Lupin