In an interview with Sanjay Sardana, Mr Amin speaks about the pharmaceutical industry and his group's vision for the future. Excerpts:

Where does the Indian pharma industry stand today?
The domestic pharma industry is in a transitional phase. This has been triggered not only by changes in patent laws, but also by various other factors. With the patent laws being effective and inherent competitive advantages, India is being seen as a destination for supply of key intermediates, undertaking clinical trials and also as a big market for transnational corporations. Each of this will result in threats as well as opportunities.

We are now susceptible to changes occurring in health policies and legislation in any corner of the world. Cheaper generic options in the US mean a huge opportunity for Indian drug manufacturers who are looking overseas to enhance their presence. The key here will be the efforts put in by the companies towards research and development.

Today, the Indian industry is one of the largest and most advanced among the developing nations. Today, it is in a position to meet close to 70 per cent of the domestic requirement of bulk drugs and almost all the demand for formulations.

What are your views on the Indian industry in the post-patent regime and what does it need to do to take up the challenges?
The Indian pharma industry has already begun witnessing the law of "increasing returns" in the post-patent regime. Industry leaders will be taking clear positions and will be forced to differentiate between themselves in terms of the therapeutic categories, manufacturing and distribution expertise, regulatory expertise, generic and branded formulations etc.

The industry, especially small chemicals and intermediate manufacturers, will either be forced to quit, or will be important players in the supplier sector. The bigger players will try to consolidate their positions in the global market, whereas the medium and small companies can gain advantages by taking positions in the local markets. Of course, they have to be extremely cost-efficient, because the winner will be the cost leader.

I think there will ample opportunities for smart players.

In such a scenario, how important is research and development (R&D) for domestic companies?
The drug industry is highly R&D-oriented with a very high rate of obsolescence. In today's context, the subject matter of basic research in the drug sector has assumed greater importance and needs to be attended to on an urgent basis.

Since the MNCs have not shown much interest in introducing drugs related to the disease pattern in India, there is urgent need for Indian pharma companies to realise the situation in concrete terms and plough money into basic research.

What is your vision for the group?
Alembic group's pharma division has slipped as a result of mergers and acquisitions in other pharma companies. We would like to consolidate and improve our position in the pharma sector and aim to be back among the top five companies within the next two years. We aim to be in the Rs 1,000-crore club over the next three-four years.

What particular sectors/segments will Alembic focus on?
Our strength lies in the field of antimicrobial and antibiotics and specifically in macrolides (Roxithromycin, Azithomycin and Clarithromycin). Besides these, we have already added COX-2 inhibitors, anti-diabetics into our product portfolios. Alembic is also consolidating its position in APIs, BPCs and speciality chemicals, and taking a niche position in the global market.

What new initiative do you propose to take to add value to the company?
We are working cautiously and constantly on two strategic areas to ensure value addition. These strategic areas are research and development and entry into the regulatory markets. Research and development will be encompassing both chemical research (analogue and NCEs) and NDDS. NDDS will ensure quicker returns whereas NCE research is aimed at long-term benefits.

We have already taken steps in this direction. We have filed for patent of Nimegesic-IR (Nimesulide Instant Release Formulation), and tied up with National Chemical Laboratories, Pune (NCL) for NCE work on "Newer Analogues of Macrolides". Many more such tie-ups with academia in India are on the anvil.

We have an action plan for entry into the regulatory markets. One of our leading products is in the final stage for approval in Europe.

Efforts are also under way for entry into South Africa and Canada. We are working with at least two molecules for USFDA approval and are working on modalities for the same.

We have to develop a competitive edge in intangibles like intellectual property and regulatory compliance, systems, procedures and documentation, understanding legalities, etc.

What are Alembic's future plans and what kind of investments are lined up over the next two-three years?
Immediate investments will be in the areas of R&D, and developing an USFDA facility. We are also investing significantly in automation and de-bottlenecking in the existing manufacturing set-up to ensure better control on the process parameters and consistency in quality of output.

Which are the new drugs/molecules that Alembic is working on? Are these patented? If yes, when is Alembic expected to file for USFDA and when are these drugs going off patent?
We are developing efficient non-infringing routes of various products and plan to market them into the regulatory markets.

What do you propose to do for enhancing shareholder value?
For enhancement of shareholders' value, the company would like to have sustained more-than-industry-average growth in sales. Coupled with this, further improvement in ROCE (Return on Capital Employed) and EPS (Earning Per Share) will strengthen the shareholders' value in years to come.

Does Alembic plan to tap the US market with an ADR? If yes, when does the company propose to do so and what is the purpose?
Tapping foreign markets for equity issues is an option always available to the company. We will take a position at the right moment.

Does Alembic have any plans to enter the biotechnology segment?
No, we don't have immediate plans to enter into biotechnology.