Hyderabad: Drug maker Pfizer Inc., the world’s largest by revenue, is banking on its alliance with Aurobindo Pharma Ltd to turn around its generic medicines unit and drive overall growth, president and general manager David Simmons said.

Boost in profile: A file photo of (left) Aurobindo chairman P.V. Ramaprasad Reddy and Pfizer president and general manager David Simmons. The alliance with Aurobindo would help boost Pfizer’s established drugs unit, Simmons says. Bharath Sai / Mint

The drug maker will also consider buying factories in India. “Where an acquisition looks very attractive financially, we would certainly consider it," he said in a recent interview.

In May, Pfizer acquired rights to sell 55 tablets and five injectable drugs from Hyderabad-based Aurobindo in at least 70 emerging countries. These medicines treat conditions such as cardiovascular ailments and central nervous system disorders.

New York-based Pfizer is under pressure as several of its medicines such as its cholesterol drug Lipitor go off-patent in the next couple of years. These drugs contribute nearly 40% of its revenue.

Lipitor, the world’s best-selling drug that fetched $12 billion (Rs55,000 crore) in 2008, or a quarter of Pfizer’s annual revenue, suffered a 9% drop in the September quarter mainly due to prescription benefit programmes and because poor and uninsured patients are increasingly opting for copycat versions of the drug.

To counter the impact of the patent expiry and competition from generic drugs, Simmons said Pfizer is implementing a three-pronged strategy to expand its portfolio.

“We can partner with companies like Aurobindo and in-license their products. We can make them (products) at our own manufacturing plants, where we have a unique capability. Or, we can acquire a company with the assets," he said.

The alliance with Aurobindo, Simmons said, would help boost Pfizer’s established drugs unit, which sells prescription drugs that are losing sales to generic competition. “By 2011, we are going to turn it (established drugs unit which he heads) into a growth engine for Pfizer."

The unit contributed at least one-fifth of Pfizer’s $48 billion revenue in 2008, or close to $10 billion. In the September quarter, its sales fell 12% while the firm suffered a 3% drop in revenue at $11.62 billion.

According to Pfizer’s website, the global established products market, which was at $270 billion in 2006, is expected to grow to at least $500 billion by 2011.

Ravi Agrawal, an analyst with brokerage Edelweiss Securities Ltd, said Pfizer has a 4% market share in the established products business globally and aims to grow faster than the market.

“Pfizer has carved out emerging markets and established products business units in a strategic initiative to create smaller and more focused units," he said. “While the emerging markets unit focuses on Pfizer’s initiatives in rest of the world markets, the established products unit focuses on products that have lost marketing or patent exclusivity in the developed markets."

Aurobindo, Agrawal added, was likely to emerge as a key supplier to Pfizer’s generic drug needs.

The firm would “supply to Pfizer’s emerging markets unit for the generic portfolio and for the established products segment for developed markets including Greenstone (Pfizer’s generic pharma subsidiary) in the US", he said.

Simmons said Pfizer was upbeat about its product pipeline and the drug maker’s focus was on optimizing its patent-protected products and the innovative portion of the portfolio. Eleven of the firm’s 25 new drugs are in late-stage studies.