Indoco Remedies has entered into a long-term drug supply pact with Aspen Pharmacare, the largest pharmaceutical manufacturer in Africa and one of the top 20 generics manufacturers in the world.
The deal encompasses a number of ophthalmic products and will extend to 30 countries in emerging markets. Indoco will offer these products for registration and supply the same from its global standard manufacturing facilities in India. Aspen will market and distribute these products in various geographies immediately on obtaining the regulatory approval, said a press release.
Aspen enjoys a market share of over 30 per cent of the generics market in South Africa and going by this success rate, Indoco anticipates a substantial market share in different territories, including Brazil, Venezuela, Mexico, South Africa and Russia, said Suresh G Kare, chairman and managing director.
“This arrangement will provide a steady stream of revenues, even during the process of product registration in the form of milestone payments, and the sale proceeds are expected to commence from the first quarter of 2011,” he said.
Both companies did not disclose the size of the deal.
A few months ago, Indoco had signed an alliance with the US-based Watson Pharmaceuticals to develop and manufacture a number of generic drugs with a current market size of $670 million for the US market.
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Bangalore-based Strides Arcolab had recently bought the stake owned by Aspen Pharmacare in two 50:50 cancer drug making joint ventures — Onco Therapies in India and Onco Laboratories in Cyprus — besides one plant in Brazil. Earlier, companies such as Lupin had alliances with Aspen Pharmacare.
A dwindling new drug pipeline and drugs losing patent protection are now forcing multinational drug companies to take up generic drug selling, which they had shunned earlier. India has capability to supply such generic products at 40 per cent of the development costs incurred in the US and Europe.
In the last one year, leading drug company Pfizer Inc had entered into long-term generic drug sourcing pacts with Aurobindo, Strides Arcolab and Claris Life Sciences.
Dr Reddy's also had entered into a similar deal with GlaxoSmithKline (GSK), the second largest drug maker in the world. GSK also had entered into a similar collaboration agreement with Aspen in 2008 to significantly extend its pharmaceutical portfolio in emerging markets.
The over Rs 400-crore Indoco Remedies had earlier partnered with Amneal Pharmaceuticals to market a few ophthalmic products in the US market.
It targets major growth from contract research and manufacturing business in future years. More than 75 per cent of the Rs 100 crore-plus export revenues of Indoco are from contract manufacturing services, especially from large companies in Europe.