‘We’re Here to Stay, Open to Buy Right Port­fo­lio’

The Economic Times - - Career & Business Life/companies -

My­lan is com­mit­ted to stay­ing in In­dia and plans to build up its pres­ence grad­u­ally while re­main­ing open to ac­qui­si­tion if the right port­fo­lio of prod­ucts comes along, says Ra­jiv Ma­lik, pres­i­dent of the $11.8 bil­lion Am­s­ter­dam-head­quar­tered generic and spe­cialty phar­ma­ceu­ti­cals com­pany. In an in­ter­view to Vikas Dan­dekar, Ma­lik talks about Meda, the com­pany My­lan ac­quired ear­lier this year for over $7 bil­lion, and the ar­bi­tra­tion pro­ce­dure with Strides Ar­co­lab over dis­pute of dis­clo­sures re­lated to the Agila buy­out. Edited ex­cerpts:

How do you see the In­dian mar­ket? Has it been a slower start than your ex­pec­ta­tion? When we launched in 2012, we knew it’s a crowded mar­ket in In­dia. But we are here to stay. We had an op­tion to come and ac­quire some­thing, but we thought build­ing up is a good plan. The re­sponse My­lan gets from key opinion lead­ers in seg­ments like gas­troin­testi­nal drugs is very en­cour­ag­ing. We are com­mit­ted to pro­vid­ing ac­cess to medicines. We are in no hurry and will build up in the right way. I do want to see the num­bers, but even if I don’t get the num­bers or the crit­i­cal mass, I will not walk out. My team is very pas­sion­ate. If we see the right op­por­tu­ni­ties like a port­fo­lio of prod­ucts to buy, we will look at it.

What are your im­me­di­ate pri­or­i­ties af­ter hav­ing ac­quired Meda for over $7 bil­lion? Ac­qui­si­tions are about ex­e­cut­ing strate­gies. We iden­tify gaps that we have as a global player. The gaps can be in ther­a­peu­tic cat­e­gories, tech­nolo­gies, ge­ogra­phies or in chan­nels of sell­ing. We have a strong pres­ence in generic drugs; we are strong in the sub­sti­tu­tion mar­ket in Europe. Our Ab­bott deal en­abled a lot of brand sell­ing; we are also good in in­sti­tu­tional sell­ing. We did not have an over­the-counter (OTC) pres­ence and that is the rea­son why we even iden­ti­fied Per­rigo. So, we went to the best next which ful­fils our cri­te­ria and Meda was the per­fect one to con­sol­i­date our Euro­pean po­si­tion. It also gave us a strong emerg­ing mar­ket space. In pro­forma My­lan, we will have 10-12% in OTC sales. The next part is to in­te­grate. We first did the Ma­trix deal, then (the gener­ics busi­ness of) Merck (of Ger­many), then we took Agila and we in­te­grated ev­ery­thing. We have a world-class global sup­ply chain op­er­at­ing; we are in the process of creat­ing a world-class com­mer­cial plat­form and many more coun­tries will get fur­ther crit­i­cal mass.

Will you also look at the Valeant as­sets that may be put on the block like the Bausch & Lomb eye care busi­ness? We do not need any­thing big. We may look at a bou­quet of prod­ucts that may fill our pipeline gaps. We have a foot­print and tech­nol­ogy. We will keep look­ing for deals that tuck into the gaps. How op­por­tu­ni­ties present at a given time and how they can fit in is a dif­fer­ent dis­cus­sion. But we are not look­ing for some­thing today. In case we find some­thing nice and niche like in der­ma­tol­ogy, we can look at those. For ex­am­ple, we bought Agila only to grow our in­jecta­bles pres­ence.

You have made a claim from Strides Ar­co­lab on dis­clo­sures for your deal re­lated to Agila. Aus­tralia’s Phos­pha­gen­ics has made a claim against My­lan. How will you set­tle these is­sues? From the time of sign­ing the deal and clos­ing it, we knew that there are cer­tain is­sues that were se­ri­ous. But we look at these is­sues as the glass is half full. We did not walk out. We rep­re­sent our share­hold­ers and it is our fidu­ciary re­spon­si­bil­ity to do the best for our or­gan­i­sa­tion. The ar­bi­tra­tion is go­ing on in Lon­don and is an­other step to de­liver on our re­spon­si­bil­ity.

What do you feel about Agila since the com­pany has faced is­sues with the USFDA? It is not that Agila in any form or shape is a de­fec­tive as­set. Till three or four years ago, ev­ery site of Agila was ap­proved by au­thor­i­ties all over the world. Agila was a part­ner of choice for multi­na­tional com­pa­nies. We looked into these things. We did our due dili­gence and that is not like a reg­u­la­tory in­spec­tion of the sites. In the due dili­gence process, the seller shows what is to be sold. We can ask ques­tions or ask for lim­ited data. But we can­not drill down like a US FDA in­spec­tor. The world changed around us af­ter that. The FDA, right­fully so, started look­ing at man­u­fac­tur­ing fa­cil­i­ties in a dif­fer­ent way. We are tak­ing a lot of the learn­ings and bring­ing that to the whole net­work, which will mean an­other level of com­pli­ance.

Q6. What is the sta­tus of the re­me­di­a­tion plans and the reg­u­la­tory in­spec­tions at the sites? We did a whole lot of changes at the sites and are car­ry­ing on with life. Re­cently, we had an au­dit of one of the fa­cil­i­ties, which went fairly well. We still have a cou­ple of ar­eas to work on but we are ready like in the SFF (spe­cialty for­mu­la­tion fa­cil­ity) and the OTL (Onco Ther­a­pies) and the USFDA may walk in any day.

How are the part­nered biosim­i­lars pro­grammes with Bio­con pro­gress­ing? We could not have ex­e­cuted the plans in a bet­ter way. The partnership is go­ing fan­tas­tic. We are deal­ing in science, the reg­u­la­tory path­ways are evolv­ing, and reg­u­la­tory ex­pec­ta­tions are evolv­ing. Alone this year we will be in a po­si­tion to file four of our prod­ucts in­clud­ing in­sulin in the US. These pro­grammes are ex­pen­sive, run­ning into $100-200 mil­lion, and we are very happy with Bio­con.

How do you see your Mo­menta deal for the next wave of biotech prod­ucts? We are ramp­ing up our global com­mer­cial readi­ness. The 7-8 pro­grammes that we have with Bio­con rep­re­sent op­por­tu­ni­ties up to 2022 launches. But be­yond that we needed to take our pipeline to the next phase. Mo­menta had things al­ready in mo­tion, with up­front work and the ba­sic science.


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