Torrent uses Unichem portfolio to boost domestic business

Company aims to clock 41% revenue from the Indian market in the current financial year

Torrent Pharmaceuticals, which is facing a slowdown in its US business, has turned its focus to growing its domestic business that analysts expect will clock a 25 per cent compounded annual growth rate (CAGR) over the next three years.

The Ahmedabad-based company is also working on integrating the portfolio of Unichem, a company it bought for ~3.6 billion in November 2017.

The domestic formulations business is the breadwinner for Torrent, the company is expected to clock nearly 41 per cent of its revenues from the Indian market in the current financial year, up from 34.5 per cent a year ago.

With the latest acquisition of a portfolio of 120 brands from Unichem’s India and Nepal business, the company is working on repeating what it did with the Elder acquisition. Torrent more than doubled Elder’s portfolio after acquiring the company for ~20 billion in December 2013. The company had acquired 30-odd brands from Elder, the major ones being Shelcal, Chymoral, Enzar, Deviry and Carnisure.

According to a Torrent spokesperson, Shelcal has crossed ~3 billion in sales from a base of ~1.5 billion, while Chymoral has touched ~1.5 bn from a base of ~600 million. Torrent added a field force of 2,800 from its Unichem acquisition.

The company now collectively has 5,000 medical representatives for its India business. Unichem generates around ~600,000 per medical representative, lower than Torrent, according to the company spokesperson. “We are planning to increase the top line to ensure that productivity rises,” the spokesperson added.

A Mumbai-based analyst said there would be some downsizing of the field force, given the doctor overlaps. It could be 10-15 per cent at least, the analyst added. When asked about its future plans, the company said: “We believe in optimising the field force throughout the organisation in sync with our business priorities.”

The Torrent spokesperson said the business overlap was around 30 per cent. Overlap brands would continue to be promoted based on their strength of the

prescriber base, positioning and potential. In the US, Torrent has been facing a tough time for over a year.

The company saw the share of revenue from its business decline from 40 per cent in 2015-16 to 23 per cent in 201617. Analysts expect this to further contract to 18 per cent in the current financial year.

Torrent recently acquired US-based generics and over-the-counter (OTC) drug firm Bio-Pharm Inc. The company expects to launch the first product from this unit in the current quarter.

“The first product will be launched in 2017-18. Bio-Pharm has 10 abbreviated new drug applications (ANDAs) pending approval from the US Food and Drug Administration (FDA). We should expect a few of them to be launched in the next financial year,” the spokesperson said.