Company Watch

Ranbaxy on an alliance spree

Our News Bureau - Mumbai

Ranbaxy started its operation in Yemen by tying up with a local firm, Pharma and by showcasing Ranbaxy's products in an event to around 350 Doctors. R M Aggarwal, Ambassador of India attended the formal launch of the event, along with eminent doctors of the government as well as the private sector.

Commenting on the launch, Sanjeev I Dani, Senior Vice President and Regional Director-Asia and CIS, Ranbaxy, said "Yemen is an important market for us and we are extremely delighted to be here. Our endeavour is to partner in bringing down the health care cost in Yemen by providing value added international quality products at affordable prices."

Ranbaxy has tied up with Natco Pharma as business partner for its Yemen operations. The tie-up is believed to be essentially a marketing alliance with no equity participation between Ranbaxy and Natco. Natco is one of the pioneers in the healthcare sector in Yemen. Ranbaxy has robust plans for the Yemen pharma market and will focus on therapy areas such as anti-infectives, gastro-intestinal, cholesterol lowering and anti-allergic therapeutic categories. Natco already has alliances with top global companies such as Pfizer, Roche, AstraZeneca, Novartis and Eli Lilly, among others. Ranbaxy is the first Indian company to have established such a major presence in the Middle East with a strong presence in 11countries. The company has a strong product pipeline with 160 approvals till date in the region. UAE is the single largest market for the region where Ranbaxy enjoys the distinction of being the largest generic company with 20 products. Two of them feature among the top 50 pharmaceutical products in UAE.

In another development, Ranbaxy has also signed a product development agreement with Merck for drug discovery and clinical development collaboration in the anti-infectives field. As per the deal, the two partners will work together to develop clinically validated anti-bacterial and anti-fungal drug candidates. The agreement is in line with Ranbaxy's recent overtures for collaborative research in various segments with other pharma companies both in India and abroad.

Under the terms of the agreement, Ranbaxy will receive an undisclosed upfront payment, in addition to potential payments totalling more than $100 million associated with the achievement of various research, development and regulatory approval milestones for each target included in the collaboration. Ranbaxy will also be eligible to receive significant royalties on worldwide net sales of any products commercialised under the agreement.

Malvinder Mohan Singh, CEO and MD, Ranbaxy, said that the agreement is for multiple programmes with each molecule having a potential milestone payment of up to $100 million. As of now, the agreement is between Ranbaxy and Merck, but it would be a part of Ranbaxy Life Sciences, their R&D division, as and when it is made an independent entity. He expressed their keenness on striking other such drug development research tie-ups with global pharma companies.

Ranbaxy will carry out drug discovery and clinical development through phase II of clinical trials. Merck will then develop and commercialise the drug candidates. The collaboration, beginning this year, will have an initial term of five years and can be extended mutually. This deal could be similar in nature to Ranbaxy's existing relationship with GlaxoSmithKline. The two had struck an alliance in 2003 under which Ranbaxy conducted the optimisation chemistry required to progress drug leads to the stage of candidate selection.

For Merck it would be in line with other such deals in India. For instance, Merck had recently entered into an agreement with Nicholas Piramal for oncology drugs besides its deal with Tata Group controlled Advinus for metabolic disorders.

Meanwhile, Ipca Laboratories is in talks with Ranbaxy Laboratories to widen the scope of their existing tie-up for sales in US to include more drugs and to extend it to cover Canada, a top official said. Ranbaxy had agreed to sell 22 drugs manufactured by Ipca in the US, of which six are expected to be launched in this fiscal year, Executive Director A K Jain said. "It will be a large list of drugs, much bigger than the list that we currently have," Jain said. "Hopefully this year it should be finalised."

"Over three years, each of these products will have 10 percent market share," Jain said forecasting revenue of about 2.5 billion rupees from the United States in three years.