 "Rajiv Malik")
Mylan, the third largest generic pharmaceuticals company in the world, has established a strong presence in India through the $1.6-billion buyout of Agila Specialties this year. President Rajiv Malik speaks to Reghu Balakrishnan on the challenges in Indian generic space and post-deal integration. Edited excerpts:
How would the Agila buyout change Mylan's operations in India and globally?
Today, we have a workforce of approximately 10,000 people in India (about half of our workforce globally). The pending acquisition of Agila's injectables businesses would bring us another 1,700 employees upon closing. Our operations in India include nine API manufacturing units, three finished dose manufacturing units, an oncology manufacturing facility, a reserach & development facility and a clinical research center. The acquisition would bring us an additional six injectables manufacturing facilities in India and the size of Mylan's injectables business would be doubled in 2014. We anticipate that our expanded injectables platform would deliver compound annual revenue growth of approximately 30 per cent from 2014 to 2018 and we are targeting revenues of approximately $2 billion from injectables in 2018. Mylan expects to launch more than 800 injectable products through 2018, with approximately 150 of those in the US, across a broad range of therapeutic categories.
There was a delay in approving the deal. Would the regulatory hurdles pull back more deals in India?
The focus of the Indian government is to attract foreign investment. However, based on recent developments, there appears to be greater uncertainty about whether the government would revisit existing policies and revise the current approach to evaluating foreign investment proposals, particularly as it relates to the pharmaceutical industry. The recent parliamentary report that suggests a potential ban on brownfield investment (in old units) could pose additional hurdles for those looking to invest in the country. Especially in pharma, companies would have to take into greater consideration potential regulatory uncertainties before making investments in India, at least in the near term. I believe companies want to see more definitive policy-related clarity before they take action. An environment conducive to foreign investment requires a stable, predictable and transparent policy regime. In addition, reduction in time on decision making also prompts speedy translation of approved foreign investment into actual investment flow.
What are the challenges for inbound deals in Indian pharma?
At times, we have felt that valuations of Indian companies were disproportionate to valuations in the rest of the global pharmaceuticals market. However, as a result of changing dynamics in this market, Mylan continues to see opportunities in India, as evidenced by our own activities here over the last year. For instance, we acquired Agila, we acquired several manufacturing sites (including one from SMS, one from Unichem), we broadened our existing partnership with Biocon, and we made progress on our partnerships with Natco and Famy Care. We believe there still are attractive opportunities to do deals in India, but as with all of our strategic activity, we look carefully at how an asset could contribute to the global Mylan platform.
How does Mylan plan to expand its HIV product portfolio in India?
We already offer one of the most comprehensive HIV product portfolios in the industry in India, including heat stable, combination, and pediatric formulations. Globally, we offer a portfolio of more than 40 ARV drugs and nearly 40 per cent of patients being treated for HIV/AIDS in the developing world rely on a Mylan product. We launched 18 ARV products in India and continue to look at additional opportunities to expand our products and services.
In addition to providing a broad range of ARV products, Mylan also has partnered with the AIDS Society of India to conduct classroom training sessions for doctors on the treatment of HIV. We also are working closely with NACO to provide ARV drugs through the Global Competitive bidding process, and are today one of the leading providers to NACO for their supplies.
Most recently, Mylan recently signed an exclusive agreement with Zyomyx, Inc. for the rights to distribute Zyomyx’s proprietary point-of-care (POC) CD4 T-cell count test in the developing world.
Apart from ARV, what will be the areas of focus for Mylan in India?
Mylan’s recently launched portfolio of Women’s Care products in India will consist of eight products, focuses on therapies such as hormones, pre- and post-natal nutrition and management of premenstrual syndrome (PMS). Women’s Care represents a high-growth therapeutic category in India and an opportunity for Mylan to help satisfy unmet medical needs. More than 85 per cent of women of childbearing age in India suffer from PMS, approximately one in five pregnancies in Indian women end in miscarriage, and it is estimated that the number of infertile couples in India is around 12 million.
Other product launching plans?
In fact, we plan to leverage the Agila injectables portfolio and launch a commercial business in oncology in India later this year. We also are making progress on our biologics portfolio. One of the oncology products we intend to launch in India is a Trastuzumab, the generic version of Herceptin. We are in the process of completing our Phase III trials for this product. We are looking at products for launch next year, such as Critical Care. On the commercial side, we would like Mylan to be among the top 10 players in the India Pharma sector. It is also worth noting that we continue to invest heavily in India from a capex and R&D perspective. Globally, we anticipate capex of $300-400 million for 2013. We invest 6-7 per cent of revenue in research and development.
How do you evaluate the recent developments in India like issuing compulsory licenses?
We believe that India, and all countries, need to ensure there is a balance between innovation and access/affordability. Generics are essential to ensure access and affordability, yet without a branded pharmaceutical industry, there would be no generics industry. While our mission is to ensure access to medicine to the world’s 7 billion people, we are respectful of intellectual property and believe in the importance of continued innovation across our industry.
