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Gujarat-based mid-sized pharma player Unimark Remedies has now decided to move up in the value chain from being an ingredient maker to making formulations. The company is eyeing the US market for launching its first formulation and is expecting a nod from the country's drug regulator by September this year.
Talking about the move, Yogesh Parikh, executive director of Unimark told Business Standard , " We are expecting our first abbreviated new drug application (ANDA) to get approval by September. Formulations are higher margin products, and the US market offers a great opportunity." He added that in India one needs to build a brand if one wants to get into formulations business. "Also, the market size for individual products is not very high, therefore, one has to work on developing multiple brands, and that would take a lot of time as well as investements," Parikh explained as to why Umimark chose to enter the US market instead of starting with India.
The company has 32 drug master files (DMFs), of which only six have been commercialised. "We are working on converting the remaining to formulations, and are trying to choose APIs where we are strong in terms of cost competitiveness," Parikh said.
Unimark has developed APIs for popular drugs like Atorvastatin, an anti-cholesterol drug, Benezepril, an anti-hypertension drug. Atorvastatin's market size is estimated to be around $13 billion ( over Rs 7400 crore) globally. The cholesterol lowering drug from Pfizer under the brand name of Lipitor has gone off-patent in November 2011. Now the market is open for players like Teva Pharmaceutical Industries, Mylan, Dr. Reddy's Laboratories, Aurobindo Pharma, Actavis Group among others who are scrambling for grabbing a share of the pie. Owing to stiff competition that lowered the drug's prices, Teva dropped plans to make Atorvastatin formulations.
Unimark also could not start production of Benezepril, as Teva did not show much interest in the API. As the average approval time for US Food and Drugs Administration (USFDA) is around 26 to 32 months now, formulations companies are now deciding their priorities as to which drug they want to launch in the market first. As Parikh pointed out, "Many formulation makers are choosing to go for back-ward integration, thus lowering the demand for APIs. Thus, for companies like us, forward integration is the way ahead."
Investments on making formulations would not be much, as the Ahmedabad-based company has worked out alliances with Alchem International who will manufacture the formulations on Unimark's behalf.
