Move aimed at main­tain­ing its lead over larger do­mes­tic ri­val Sun Pharma in world’s 2nd-largest drug mar­ket

The Economic Times - - Companies - Divya.Ra­jagopal@ times­

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

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