Hyderabad: US-based Mylan Laboratories Inc., the world’s third largest generics company after it closes a pending acquisition of Merck KGaA, is set to try and boost the European antiretroviral (ARV) drug sales of its Indian entity Matrix Laboratories Ltd. Mylan is also set to bring a significant amount of Merck KGaA’s finished dosage formulation manufacturing to its low-cost Indian facilities.
“If it was Mylan that added volumes and efficiencies to Matrix, it is now Mylan’s acquisition of Merck that will bring more volumes to Matrix that allows it to achieve more scale and efficiency,” said Mylan CEO, Robert J. Coury, who is also the chairman of Matrix.
“Matrix will be the hub of the world for us,” said Coury. “With the acquisition of Merck, we will certainly leverage its commercial, global portfolio. But, what is significant to achieve efficiency in API (active pharmaceutical ingredients) business is volume, volume and volume. We aim to achieve scale not just in APIs, but also scale in manufacturing, scale in commercial footprint, scale in product portfolio and scale in sheer size.”
The antiretroviral business is an area of prime focus for Matrix, which has made significant investments in building resources for these drugs that fight AIDS. Matrix is now one of the few players in the world that is completely integrated, from the intermediate stage to the finished dosage stage for antiretroviral products.
While generic APIs segment, at Rs551 crore, constituted 33% of Matrix’s total sales of Rs1,648 crore, ARVs (Rs339 crore) contributed 21% to sales in 2007. Finished dosage forms (FDF) accounted for 26% (Rs430 crore) of revenue.
“Wherever it makes sense, Matrix’s FDF business will get aligned with the group (Mylan) business. Both ARVs and generic APIs businesses will continue to be thrust areas of Matrix. However, it will not be at the cost of each other. Based on the available opportunity, we will go after opportunities and keep on building these independent businesses,” said Matrix managing director Rajiv Malik. In antiretrovirals business, Matrix has started migrating to finished dosages. According to Robert, the biggest issue with finished dosage form of antiretrovirals is not the production but distribution of those products.
A partnership with the Clinton Foundation has helped Matrix not only in producing large volumes of this product but also in distributing them in markets such as Africa.
“In addition to Africa, we will now have access to countries such as Brazil, Argentina and many others in the European market through acquisition of Merck. We now see a huge opportunity...,” said Coury. Matrix has successfully completed a key US Food and Drug Administration inspection of its API manufacturing facilities in Vizianagaram near Visakhapatnam, Kazipally and Jeedimetla, near Hyderabad, and a finished dosage facility at Nashik in Maharashtra.
Said Sarabjit Kour Nangra, vice-president-research with Angel Broking Ltd: “Leveraging the Matrix’s low-cost manufacturing for the ARV business is among a series of outsourcing activities that can be passed onto Matrix. This would further boost the ARV business of the company (Matrix), which already constitutes a significant proportion of its revenues.”