In a rare interview, Pankaj Patel, chairman and managing director of India’s fourth-largest pharma company, Cadila Healthcare, tells Neha Bothra that the company is looking to expand its biosimilars portfolio through its own R&D efforts and expects the segment to contribute 10% to the company’s total revenue by 2020. Cadila’s new chemical entity (NCE) pipeline includes two new drugs being developed to treat diabetes and anaemia. The company is expected to complete phase 1 of clinical trials by the end of the year. Patel said Cadila may consider raising capital if market conditions are good since it has enhanced its borrowing limit to Rs 10,000 crore. Excerpts

What are Cadila Healthcare’s primary focus areas at this point in time?
In India, we have the fourth-largest market share and globally we are sixth. We focus on innovation, NCEs, biologics and we are working on transdermals. We aim to achieve a turnover of Rs 10,000 crore by 2015-16.

What are the main growth drivers?
We’ll focus on our four big markets — India, US, Brazil and Mexico — to drive growth. Growth in these markets comes from both market penetration and new product launches. We are also actively involved in launching new biosimilars. We are working on some novel biologics, including one that is particularly important — saroglitazar. It has completed phase 1 successfully and is moving towards phase 3.

Speaking of biologics, what’s your strategy to scale up in this segment?
We have a large pipeline and are ramping up the portfolio through our own clinical development and R&D. We have seven drugs at different stages of development. These will be launched over a period of time and create a full basket of biosimilars for us. And, going forward, we will look to sell these products in other markets. We have already got approvals for some biosimilars in emerging markets. We are looking to get approvals in more countries, including Europe and the US, and have filed applications with regulatory authorities for approvals.

What kind of value are you looking to unlock from biosimilars?
This could be a significant contributor in the long term. In five years, biosimilars should contribute approximately 10% to our total revenue.

Could you share some details on the NCE pipeline?
Our NCE Lipaglyn is performing very well. There are over 70,000 patients using this drug. We are developing drugs for additional indications, including NASH (liver inflammation) and tuberculosis. Our pipeline has two products that are currently undergoing phase 1. Zydpla 1 is a molecule for diabetes and is currently in phase 1 in the US. Zyan 1 is focused on anaemia and is undergoing phase 1 in Australia. Our phase 1 study should be completed by the end of this year and, based on the results, we would decide to move on with the molecule.

What about the generic drug pipeline?
On the generic front, we have filed around 255 abbreviated new drug approvals (ANDAs). We have got 98 approvals as of now and 157 are pending approval. This will secure our future growth.

The USFDA had issued Form 483 to the Moraiya facility in September 2014. Any update?
There is no issue with the Moraiya facility but we cannot comment on it. We are currently supplying drugs to the US. We have submitted our response and the US FDA is reviewing it.

How are Cadila’s markets in Southeast Asia, Latin America, Mexico and Spain doing?
We believe our emerging markets, including Brazil and Mexico, are going to be future growth drivers for us.

You are seeking to enhance your borrowing limit to Rs 10,000 crore. How much do you plan to raise for acquisitions?
This is an enabling provision and we haven’t decided to raise the money yet.

Have you discussed any time-frame with board members for raising funds via a debt-equity mix?
We might raise the money if market conditions are good and then decide if there is an opportunity. Currently, there is no concrete plan to raise capital but we have taken this provision because it takes 3-4 months to get approvals.

So, would you consider a QIP if market conditions are good this year?
I cannot say for sure.

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