At a time when most Indian drug makers are launching generics to monetise patent expiries in the US, Glenmark has chosen to walk a road less travelled. The company has chosen a strategy to capture niche segments with limited competition, such as dermatology and oral contraceptives, in the world’s largest drug market.
“Glenmark’s US product portfolio consists of focused presence in niche and high-entry barrier segments like dermatology, hormones, controlled substances and modified release categories,” Glenn Saldanha, chairman and managing director of the Mumbai-based company, told Business Standard.
Other companies, he said, were trying to benefit from the depleting pipeline of patented products. Glenmark preferred to stay off that race. The company maintains focus on drugs where it can corner sole marketing exclusivity.
It has planned to launch 10 products in the US during the current financial year, of which five are oral contraceptives, to be launched by August. It also commands a portfolio of 19 products in the derma space. Besides, Glenmark is exploring exclusive marketing rights spanning the next few years.
According to a company official, Glenmark expects to launch a dermatology product in the US in financial year 2013-14, with 180 days of marketing exclusivity. It also wants to launch a low-cost version of a major drug, Zetia by Merck, in 2017-17 in the US, with similar rights to tap a significant share in the market. The drug has a market size of around $1.4 billion.
Glenmark is already enjoying marketing exclusivity on the generic of GlaxoSmithKline’s anti-malaria drug, Malarone, and Nycomed’s Cutivate lotion.
| GLENMARK IN THE US | ||
| FY12 | FY13 | |
| Product launches | 12 | 10 |
| Products approved | 14 | - |
| Applications filed for product approvals | 12 | Up to 15 |
| Total capex | Rs 200 cr | Rs 250 cr |
| Total generics approved = 75 Total generics pending for approval = 38 Source: Glenmark | ||
“Glenmark’s strategy will work for it in the long term. It tends to gain incremental market share by targeting specific segments, very unlike other major Indian companies which are focused on big drugs,” said a sector analyst with Prabhudas Lilladher, the financial services group.
According to the analyst, many drugs with huge market size tend to attract a lot of companies for launching generics. “Hence, not only does the market get disintegrated but this also ends in price erosion, dragging (down) individual gains for each company,” he said. While, Glenmark’s strategy allows it a small but dedicated market, with almost no price erosion.
The company had launched 12 products in the US in 2011-12 and is set to file fresh applications for 15 products in 2012-13, all in niche segments.
“The entire process of manufacturing and developing an oral contraceptive is very complex. So far, only two companies, Teva and Watson, have managed to make an impact in the segment and command majority market share,” Saldanha said. “We have been able to make a dent and grab market share from these two key players.” Glenmark is the first Indian company to be granted approval for a generic oral contraceptive in the US.
The company’s aggressive filings stem from the fact that the company is not looking at contract manufacturing alliances and is instead trying to build a product portfolio of itself in the US. Glenmark’s US business, the highest contributor to its overall sales, rose to a little over 32 per cent in 2011-12 from below 20 per cent in 2008-09. The company is expecting its US business to grow by 20 per cent in FY13.
Traditionally a research focused company, it has earmarked a capital expenditure of around Rs 250 crore for FY13, as against Rs 200 crore in the previous year. For FY13, the company has estimated research and development expenses of six to seven per cent of sales.
