BackCipla to enter 30 new markets in next two years
The company is looking at new markets in Latin America, Africa and Eastern Europe
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Cipla Ltd is set to enter 30 new international markets over the next two years as the drug maker plans to double its revenue from overseas markets.
Chief executive Subhanu Saxena, who joined Cipla in 2012, said the company has already entered 17 new markets in the last financial year. For the fiscal year ended 31 March, the company’s international business accounted for 25% of Cipla’s overall sales.
Cipla entered markets including Sri Lanka, Iran, Yemen, Myanmar, Morocco and Algeria in the last financial year by setting up front-end operations through joint ventures or partnerships with local drug manufacturers. The company is looking at new markets in Latin America, Africa and Eastern Europe, Saxena said in an interview. Cipla’s revenue from overseas markets grew 9% to $459 million in FY15.
“Though we are among the first drug manufacturers in India, we have missed global opportunities. Compared to other large players, who earn 50-60% of their revenue from markets such as the US, Cipla earns about 8% from the US market," said Saxena on the rationale behind the expansion. However, the company needs to balance its revenue from all the markets and doesn’t want to depend only on the US market, he said. Saxena also plans to double revenue from the US market to 15-20% by 2020, with an additional 20% of sales coming from Europe.
“The long-term vision of Cipla USA is to bring the company’s immense human intellectual capacity and extraordinary breadth of product technology directly to the US market. Cipla will look to capitalize on its wealth of respiratory, oncology, HIV and other therapy experience into meaningful healthcare solutions in North America," Saxena said.
Expanding the respiratory drug portfolio with more launches is key to its global plans. Till date, Cipla has launched eight respiratory products, including metered dose inhalers (MDI), nasal spray and respules in Europe. Some of the European markets are Croatia, Sweden, Germany, Czech Republic, Slovakia, Belgium, Hungary and the UK. “Over the next 12-18 months, we expect to have a presence in more European markets," said Saxena.
Cipla’s expansion in the US and Europe will be mainly supported by its plans over inhaler products such as Advair and Symbicort, two of the largest-selling drugs in the world. Cipla plans to file Abbreviated New Drug Application (ANDA) for Advair with the US Food and Drug Administration in 2016-17. Generic Advair MDIs were launched in Germany and Sweden last year.
However, analysts say that Cipla’s expansion into the US with respiratory drug launches is an overhyped story.
“Advair DPI (Dry Powder Inhaler) launch in US is not expected before FY2020 and that too has an inherent risk of life cycle management by GlaxoSmithKline Pharmaceuticals Ltd post its launch of respiratory drugs Breo and Anoro while Cipla may in the first wave as Mylan NV and Teva Pharmaceutical Industries Ltd seem to be ahead in their filings," a report by domestic brokerage Sunidhi Securities & Finance Ltd in February said.
The global respiratory market is worth $35 billion, out of which the US and EU together account for 50% share.
The launch of combination inhalers by Cipla in the US will also have to satisfy strict regulators. “Although Cipla and some other players (Sandoz International GmbH and Teva) have received approvals for their combination inhaler products in some of the European markets, guidelines for approval of generic combination inhalers are much more stringent in US as compared to Europe," said Abhishek Sharma, an analyst at India Infoline Finance Ltd.
Cipla launched combination inhalers such as Fluticasone/ salmeterol MDI in select European markets including Croatia, Germany, Sweden, Slovakia, Czech Republic and added Belgium and Hungary recently.
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