Cipla Charts Plans to Build Pipeline of Specialty Drugs to Give US Biz a Boost
Drug co to also scout for in-licensing opportunities to close the gap with local rivals
Mumbai: Cipla has set its sights on building a pipeline of specialty drugs in the United States. The company, India’s third-largest drugmaker, plans to deploy more funds for research and development in respiratory, dermatology, neurology and oncology segments and hopes for the first commercial launch in the US around 2020.
Scouting for in-licensing opportunities is also part of the plan to jumpstart work, according to the company, which clocked over $2 billion in global sales last year.
Cipla’s move is aimed at closing the gap with fellow drugmakers such as Sun Pharmaceutical Industries, Dr Reddy’s and Lupin. The drugmaker, which is going through an uneasy transformation process to professional management over the past four years, had partnered leading generic companies such as Teva but remained on the sidelines in the world’s largest drug market.
Last year, it acquired US-based Invagen in a deal worth $550 million. Its total US sales added to abo-
revise US sales guidance to of total sales by 2020
may cut exposure to less than 100 markets from the present 130 ut $400 million last year, much lower than that of its Indian peers that entered the generics business early on and scaled up to a critical mass, clocking sales of well over $1 billion in the US. But Cipla’s global chief operating officer Umang Vohra said there is enough scope for the company to leapfrog and leverage its inherent technological capabilities with a thrust on the specialty side to narrow the gap with its local peers. “What we don’t want to happen is to try to catch up on the US generics piece now and then five years later, we again start to catch up on the specialty side of the business. As we begin to catch up on the US generics space, we are also ensuring attention to specialty business,” said Vohra, who joined the company in September last year after spearheading a range of leadership roles at Dr Reddy’s for over 14 years.
Cipla’s research budget may spiral up to 8% of sales from 6% at present as it prepares for the new opportunities, he said. Vohra said that the company may revise its forecast of achieving 20% sales from the US market by 2020 to about 30% of sales by the end of this decade. He admitted that the company is a late starter in the US and that it could have gained significantly had it taken products such as esomeprazole (where Teva significantly gained sales) or Dymista (for which Meda partnered Cipla and got acquired earlier this year by Mylan for $7.2 billion) on its own.
Cipla is now in the process of identifying products that can cater to the future healthcare needs such as long acting injectables or that can help patients with easier dosing options. “We will not be present in more than two therapies and it will be an incrementally innovative product with a 505(b2) route. It will be a well-known active (substance or ingredient) that is repurposed,” Vohra said. He said dermatology is another area that Cipla can also explore, like many other companies, as it is easier to have an incremental innovation in this segment. The clinical end-points in some of such drugs are not difficult to achieve, which may be completed with as little spends as $20-30 million, he said. Sun Pharma and Dr Reddy’s have been aggressively ramping up their innovative drugs pipeline, particularly in dermatology segment, in the US. While US will be the key focus for Cipla, Vohra is firming up plans to cut exposure to more than 130 emerging markets where the company currently operates. The company may consolidate focus to less than 100 markets. “If we are to deploy our assets and the best people, we have to make a choice and it is linked to relative returns,” Vohra said.
All of the 30 markets together may not be contributing more than 1% of the total sales, he said. The markets that Cipla may exit include Azerbaijan, East Timor, Curucao and Paraguay. On the much-watched issue of US FDA’s observation for the firm’s Indore site, Vohra said he expects to hear from the regulatory agency by May.
Cipla’s research budget may spiral up to 8% of sales from 6% at present as it prepares for new opportunities