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Cipla in talks with GSK, Teva for supplying generic drugs

Cipla in talks with GSK, Teva for supplying generic drugs
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First Published: Tue, Jan 05 2010. 12 14 AM IST

Expanding line-up: Cipla chairman and managing director Yusuf Hamied says the drug maker will launch 50-100 products this year. Santosh Verma / Bloomberg
Expanding line-up: Cipla chairman and managing director Yusuf Hamied says the drug maker will launch 50-100 products this year. Santosh Verma / Bloomberg
Updated: Tue, Jan 05 2010. 12 14 AM IST
Hong Kong: Indian drug maker Cipla Ltd is in talks with drug companies, including GlaxoSmithKline Plc (GSK) and Israel’s Teva Pharmaceutical Industries Ltd, to supply generic drugs, chairman and managing director Yusuf Hamied said on Monday.
Cipla, India’s second largest pharmaceutical company by market value, has been in negotiations with GSK for six months, Hamied said in an interview.
Expanding line-up: Cipla chairman and managing director Yusuf Hamied says the drug maker will launch 50-100 products this year. Santosh Verma / Bloomberg
“It may be specifically for one or two products—it is not a down-the-line drug deal,” said Hamied.
He also said there was “not a chance” that Cipla was in talks to sell a stake to a partner company.
In December, Cipla had said it was in talks with a number of global drug makers, including Pfizer Inc., to supply generic products.
Hamied also confirmed recent reports that Cipla was in supply talks with German drug maker Boehringer Ingelheim GmbH.
Global drug makers such as GSK and Pfizer are increasingly looking to low-cost destinations such as India to tie up supplies as they battle falling prices and increasing generic competition.
Cipla, with a market value of $5.5 billion (Rs25,575 crore), is one of the world’s biggest producers of low-cost antiretroviral drugs to fight HIV/AIDS. The company provides AIDS drugs to African firms for just $350 per year per patient compared with $10,000 charged by multinationals.
Hamied, who holds a doctorate in chemistry from Cambridge University, said Cipla would launch 50-100 different products this year, including veterinary drugs and agrochemicals.
The company exports to 183 countries.
Shares of Cipla, which have gained 76% over the past year, closed 0.42% higher at Rs337 on Monday, when the Bombay Stock Exchange’s Sensex closed at 17,558.73 points, up 0.5%.
Hamied said Cipla expected a revenue of $1.1 billion in the current fiscal year.
Demand for generic drugs from Indian producers such as Cipla, Dr Reddy’s Laboratories Ltd and Ranbaxy Laboratories Ltd is booming as nations battle rising healthcare costs.
But Hamied said that the World Trade Organization regulations, which since 2005 have prevented Indian generic drug firms from copying patented drugs, mean Indian generic companies have to change their business model or risk being swallowed up by multinational firms.
Cipla said it was in negotiations for in-licensing agreements—where foreign companies can sell their products through Cipla—with at least two Japanese companies. “This is going to increase a lot in India” as generic drug companies look for other business models, said Hamied.
He said negotiations between multinationals and the World Health Organization for a voluntary patent mechanism—where selected patents for HIV and other disease treatments are put in a pool for generic companies to imitate—are making no headway.
“The multinationals don’t want China, India or Brazil in the pool. So who is going to manufacture the raw materials?” said Hamied. “They have not involved any generic producers in the talks. All they are doing is delay, delay, delay.”
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First Published: Tue, Jan 05 2010. 12 14 AM IST
More Topics: Cipla | Drug | GSK | Teva | Pharma |