Pharmaceutical Technologist - November 2007 - (Page 38)

STRATEGIES Local success story turned global How Indian companies can become cornerstones in global growth plans Profile: Matrix Laboratories Ltd Many companies’ stories illustrate how the Indian pharmaceutical sector is becoming a key ingredient for global success. Take Matrix Laboratories Ltd (Hyderabad), a business venture started in 2001 by a young Hyderabad entrepreneur. In 2006, Matrix was acquired by US generics company Mylan Laboratories Inc. (Canonsburg, PA). The acquisition was a landmark deal for the Indian pharma sector in terms of size ($736 million) and the profiles of both purchased and purchaser. Mylan, one of the five largest generic finisheddosage forms players in the world, was established in 1961, strongly US-focused and had hardly ventured abroad with the exception of manufacturing facilities in Puerto Rico. Matrix, a much younger company, was established with global markets in mind and quickly managed to sell its high-quality APIs worldwide. Since inception, Matrix has posted spectacular growth rates in the Indian pharma industry. It is, therefore, unsurprising that it recently signed a much-noticed agreement with the Clinton HIV/AIDS Initiative to supply second-line antiretroviral drugs as well as a new, once-a-day pill for AIDS patients. The 2006 acquisition of Matrix has equipped Mylan with a strong vertically-integrated profile, while strengthening Matrix’s efforts in the production of finished-dosage forms. As Matrix CEO Rajiv Malik explains: “This was a highly complementary move as we have established our strengths in the API space, whereas Mylan is a strong player in the finished-dosage business and has the lion’s share in the US market for more than 50% of their products being marketed to date.” The acquisition seems to have given wings to Mylan, which following the success of the Matrix purchase, bought Merck’s (Germany) generic business last May. The combined group will have a much stronger global exposure. According to Malik, “Mylan was a local company, with a good critical mass, excellent supply chain, service to the customers, and great facilities with 20 billion units capabilities per year. They had efficiency of scale, but they also realized that they had limitations, as the US as a sole market is in itself a limitation factor. Mylan, therefore, needed to balance geographies.… The only thing they need to achieve is the scale in geographies, and this will be brought together by the joined efforts of the Mylan and Matrix teams.” The merger highlights how India can be a stepping stone for any global strategy. From backward integration to R&D facilities (Matrix is also posting encouraging results from its contract research and manufacturing activities), from international sales networks to FDAapproved manufacturing units, India’s offerings seem unending. A number of local companies can provide the pharmaceutical industry with tailor-made solutions for global growth. As Malik concludes: “We really feel proud of what has been achieved at Matrix in a short span. We started from scratch and created the kind of shareholder value that got them the award of ‘Fastest Wealth Creator’twice in the last 6 years.” PT Rajiv Malik Product mix can be a plus: Jupiter Led by Venkat Kalavakolanu, Jupiter Bioscience Limited (Andhra Pradesh) is confident about its planned expansions. “Our organization has a diversified profile, allowing us to offer a wide variety of products to a wide variety of markets. This in itself constitutes a safety feature that we enjoy tremendously, but we are far from complacency, as our teams are always on the lookout for scientific advances to bring better products offers and better services to our global clientele,” says Kalavakolanu. With offices in the US, the company provides peptides, specialty products, and organic and chiral intermediates. But its core focus is peptides, sold to pharmaceutical companies, biotech companies, and research institutes alike. According to Kalavakolanu: “We are equipped to be a global leader in peptides production, as we benefit from the Indian cost-competitive factor, as well as from a wealth of experience in the area.” The company has achieved a level of vertical integration in the peptides field that is unique in the world today. It offers a mix of products that differ depending on whether the target market is regulated or unregulated, including peptides, advanced APIs, organic chemicals, and formulations. This particular product mix allows flexibility and a certain security by balancing productions and geographies, explains Kalavakolanu. “Our company is investing in business development, notably for possible in-licensing deals, and in process development to improve our products and widen the offer to our customers.” Jupiter also has a solid list of products under development. “Our strength in India is adaptability, and we can literally work on any demand within our products scope,” adds Kalavakolanu. “This has been well-understood by the global pharmaceutical sector, and we have registered a great change in attitude, as well as an increase in interest and queries over the last 3 years.… Yet, what is required for still a large part of the industry is to look into India more objectively.” 38 November 2007 l pharmaceutical technologist http://www.ecreviews.com

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Pharmaceutical Technologist Contents Editor's Comment News Morpheus Feeling the Pressure Legal Crusaders The Holy-Grail of Start-Up Biotech Special Feature Q&A

Pharmaceutical Technologist - November 2007

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