HIV drugs to lead Mylan?s generics charge in India

Nearly a month after announcing its entry into India?s formulations market, US-based Mylan Inc is giving final touches to its product portfolio for India, with special thrust on antiretrovirals (ARVs) to treat HIV/AIDS. However, with the domestic market fragmented and cluttered, analysts said the entry would be challenging for the US generics major, which clocked $5.5 billion sales in FY 2010.

Mylan, which has taken up office space at One Indiabulls Centre in Mumbai?s Lower Parel, is also learnt to be scouting for a CEO to exclusively head its India operations. At present, Rajiv Malik, formerly CEO of Matrix Labs, which Mylan acquired in 2007, and now chief operating officer of Mylan Inc, also oversees the Indian operations.

The R50,000-crore Indian pharma market is growing at 12-15% every year, double the pace of growth in developed markets like the US. Mylan?s rather late entry follows that of innovator companies like Abbott Laboratories and Japan?s Daiichi Sankyo with their large-scale acquisitions here, and other MNCs like GlaxoSmithKline, Novartis, Pfizer and Merck, who have long established their presence in the low-value, high-volume Indian market.

Replying to queries from FE, Malik said: ?Given our existing strength in ARVs, they will certainly play an important role when we enter the Indian commercial market in the next 12 months. We will follow ARVs with other products.? Mylan, he said, is already one of the world?s largest producers of active pharmaceutical ingredients (APIs) used to manufacture generic ARV therapies, and also offers a line of finished dosage formulations of ARVs, including adult and pediatric therapies.

During his visit to Mumbai last month, Mylan chairman and CEO Robert J Coury had said that the company no longer looks at India as its ?backroom? and will be launching its products in India over the next one year, without specifying what those products will be.

Mylan, which reported profits of $345.5 million for the year ended Dec 2010, did not give a break-up of its revenues from the ARV segment, but said its Asia Pacific sales grew 7% for the quarter ended December 2010, primarily driven by increased sales of ARV finished dosage products and higher sales of APIs by Mylan?s subsidiary in India, Matrix.

Sujay Shetty, director and pharma leader with PwC, said that with the rising number of HIV cases, ARVs are a growing category in the country.

Although the first HIV/AIDS case was identified in Indian in Chennai in 1986, according to USAID estimates, in 2009, there were 2.4 million people living with AIDS in the country. ?This is a competitive market, which includes established players like Cipla and Ranbaxy,? he said. Malik adds: ?Today, approximately one out of three people in the developing world being treated for HIV/AIDS depend on a Mylan ARV product.?

Asked about plans to strengthen the leadership team, Malik said: ?We have an exceptionally strong leadership team in place in India, most of which have been with Matrix prior to Mylan?s acquisition of the business in 2007…We are always evaluating our leadership needs to reflect the evolving needs of our business.?

According to Navroz Mahudawala, managing director of Candle Partners, Mylan should have planned its India entry into formulations earlier. ?It is not easy to succeed in a market such as India, which is highly fragmented and cluttered,? he says. When asked about this, Malik said: ?India is certainly an extremely competitive marketplace; however, we believe we are well-positioned to succeed here and can differentiate ourselves both from local players and other MNCs. Key to this differentiation is educating Indian physicians, pharmacists, customers and consumers about what the Mylan brand stands for: unmatched supply reliability, outstanding customer service, operational integrity, product breadth and innovation (including niche products) and ? above all ? superior quality.? He said the company?s vertical integration and operational efficiency will allow it to compete from a cost perspective. ?Mylan has strong track record building and maintaining leadership in our markets around the world. As a result, we believe that we can become a leader in India in the coming years,? he said.

Asked about plans to enter into outsourcing deals in India, Malik said that Mylan has significant internal capacity across different global manufacturing sites, including sites in India. ?However, to support the demands of a growing business, we continually and routinely explore opportunities such as contract manufacturing.?