1. Japan arm in recast, Lupin plans injectables biz via Nanomi unit

Japan arm in recast, Lupin plans injectables biz via Nanomi unit

With its wholly-owned subsidiary I'rom Pharmaceutical reportedly undergoing restructuring, Lupin...

By: | Mumbai | Published: May 9, 2015 1:08 AM

With its wholly-owned subsidiary I’rom Pharmaceutical reportedly undergoing restructuring, Lupin — the country’s second-largest pharma company by sales — is keen to accelerate growth in Japan by widening its basket of injectables via special technology platforms, such as the one offered by Nanomi BV, the Netherlands-
based company that Lupin acquired last year.

“We bought into a company called I’rom and we always recognised that it would have some kind of teething problem before it actually takes off. It’s got a regulatory pathway associated for the portfolio we want to bring into the market. That’s okay, but at the same time we believe we should do a little more to speed up the entire process,” Ramesh Swaminathan, chief financial officer at Lupin, said.

In 2011, Lupin had acquired Tokyo-based integrated healthcare services provider I’rom Pharmaceutical to expand its injectables portfolio. I’rom has strong distribution abilities in the segment. However, analysts say Lupin has found capitalising on this challenging since I’rom has, reportedly, lost a few contracts and is currently undergoing restructuring.

“Currently the turnover is approximately $70 million. we can suddenly go up as it depends on the portfolio and so on. We expect CAGR of at least 10-12% per year,” Swaminathan added.

I’rom Pharmaceutical’s turnover fell from Rs 384.45 crore in FY13 to Rs 333.71 crore in FY14 while profit after tax stood at Rs 30.83 crore in FY 13, which declined to Rs  0.39 crore
in FY14.

“There are a lot of complex products we are looking at, which will be used across the world. I think part of this portfolio will get shifted into Japan as well. We are also looking at an injectables portfolio in Japan out of Nanomi’s R&D unit,” observed Swaminathan.

Japan’s contribution to Lupin’s revenues declined from 13.6% in FY13 to 11.5% in FY14.

“We don’t really have an injectables portfolio in this company, so we really wanted to work on it. That is why it is taking its own time. It will take at least 2.5 years to get where we want to be,” Swaminathan said.

Lupin expects to launch five to six injectables in FY16, none of which are exclusive launch opportunities.
Over the past decade, the penetration of generics has increased from around 17% to approximately 50% while margins earned by companies stand at around 24%, which is below the average of 28-30%.

“I think we entered this market at the right time. The prospects are good, but the market is also rewarding players that give a richer portfolio,” noted Swaminathan.

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