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