Pharmaceutical Technologist - November 2007 - (Page 40)

OUTSOURCING One-stop shop service The irresistible ascension of a service provider Profile: Jubilant Organosys Making advantage of the pricing pressure that started weighing on the global pharmaceutical shoulders a decade ago, Jubilant Organosys (Uttar Pradesh) has become one of India’s most noticeable and promising vertically-integrated leaders and has successfully established its presence at the heart of western markets. Anticipating well the growth in demand, Shyam Bhartia, the company’s chairman and managing director, steered Jubilant into a string of acquisitions that have made the company a well-anchored global player, with the aim of becoming a billion-dollar company within the next three years. From moving into active pharmaceutical ingredient (API) production in 2002, to purchasing PSI N.V. (Belgium) in order to learn more about the European market, to acquiring in 2005 US laboratory and generic manufacturer Trinity/Trigen (Maryland), to purchasing in 2007 Hollister-Stier Laboratories LLC (Spokane, WA), Jubilant has been busy expanding its reach across the globe, and across the spectrum of pharmaceutical activities. Today, Jubilant’s focus is the development of its profile as a leading custom research and manufacturing services provider. The company’s acquisition of Hollister-Stier will provide it with a direct entry into injectables contract manufacturing while bringing in a high-quality allergy extracts and products business. Explaining the rationale behind these foreign purchases, Bhartia explains that “the ideal acquisition is one where we can get a certain technology platform, one that is adding to our technology expertise and to our customer base when the customer profile is good. If the management of the company can take the benefit of Indian research and manufacturing and leverage it to increase the business, we see opportunities for acquisition.” Indeed, although it might require some changes in mentality in some parts of the western world, this is what is truly at stake. And to further show where the real synergies lie, he adds: “We don’t acquire for top and bottom line growth. This was our policy in the US, too when we acquired Trigen/Trinity. The strength was that we were developing products in India and manufacturing them in the US. Abbreviated new drug applications (ANDAs) were developed in India at much lower costs than in the states, filed in the US, manufactured there and then sold to the US industry. This is proper leveraging of the strengths of both sides.” Despite the ambitions of the company in the custom research and manufacturing services area, Jubilant also remains an API and finished-dosage-forms generic player, and isn’t intending to drop either activity. According to Bhartia, “Price erosion on the generic market has been very strong: sometimes 98–99% in the US market, all of this within a very severe competitive environment. Our strategy has, therefore, been two-fold. On one hand, entering the market with only few blockbusters and more drug delivery based products. We have developed, for instance, technology platforms for multidissolving, slow-release tablets and for other novel drug delivery systems. We, therefore, add value to our generics and can concentrate on niche product areas, where competition is less important. On the other hand, [we are] developing our outsourcing services to the large pharmaceutical companies.” The model allows the company to maintain revenue-generating activities while strengthening its position as a contract research and manufacturing services player. It also provides a full-package solution to global companies willing to outsource their development phases, scale-ups and manufacturing. “Today we offer a one-stop shop to these companies, from drug-discovery services, drug-development services, to intermediates, APIs and dosage forms in tablets, capsules and injectables.” Jubilant’s model is built on an ever-rising demand for a faster and cheaper development phase, allowing quicker cost-recouping exercises and more launches. “We can help the pharmaceutical industry to develop their pipeline,” says Bhartia. “For the same expenditure they would put together to develop a drug in the West, they can develop three or four.… In the next few years, there will be billions of dollars worth of patent expiries. So, as outsourcing partners, we believe there is a golden era ahead of us. We are moving with the market.” PT Shyam Bhartia 40 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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