Move aimed at maintaining its lead over larger domestic rival Sun Pharma in world’s 2nd-largest drug market
Mumbai: Mumbai-based Lupin is on the lookout for buyout targets to maintain its lead in Japan, as its larger local rival Sun Pharmaceutical Industries steps into the world’s second-largest drug market which is pegged at $73 billion. With the Japanese government pushing for generic prescription, Lupin is among the companies hunting for acquisitions in a country that is extremely brand conscious when it comes to drugs.
“In Japan, we would like to double our base…we cannot grow organically. So, my goal is to double the base of Japan in sales,” Fabrice Ergos, head of Lupin’s Asia-Pacific business said in an exclusive interview to ET. “We cannot expect growth from our own portfolio, you know it is crude, plus to grow ourselves 10-12%, but we have to make a bold movement,” he said. The move comes at a time when Lupin’s US business has slowed down due to regulatory issues, while the Japanese market grew 9% in the latest quarter compared to that a year ago and made up for the company’s slow growth in North American markets. Lupin had in February announced that it will invest .₹ 100 crore in its Japanese plant. Ergos says that though the track record of Indian companies in Japan is not something to brag about, the market is very similar to Europe, where there were apprehensions about generics. However, what makes or breaks this market, Ergos said, is the request for quality that is superior to any standards in the US and Europe. “If they see a defect on the tablet, they will go and buy it from somewhere else. There is fierce competition in the aspect of the quality,” he said.
Lupin will soon be facing the fifth-largest generic company in the world, Sun Pharma, which sailed the eastern shore by acquiring 14 brands of Swiss drugmaker Novartis Pharmaceuticals in March for $293 million. Sun will team up with a local partner to sell the brands under its own brand name in Japan. Lupin is banking on the goodwill that it has generated through the acquisition of the local companies which it says gives an edge over its competitors. “We acquired Kyowa seven years back and Kyowa has its own brand identity with the customers, physicians, clinics, hospitals and distributors. Kyowa has been growing over 30% since it’s been acquired by Lupin. Not 30% CAGR, 30% per year,” Ergos said. Kyowa is established as a long-term supplier with high quality supply and “Made in Japan” tag, Ergos said. In Japan, we would like to double our base…we cannot grow organically. So, my goal is to double the base of Japan in sales
FABRICE ERGOS Head of Lupin’s Asia-Pacific business