Lupin aims to break into top 5 in Japanese market

As part of the plan, the firm's Japanese arm Kyowa Pharmaceutical will source active pharmaceutical ingredients (APIs) from India to leverage on cost advantage so that it can sell highly competitively priced generic drugs there.

Besides, the company is also looking at in-licensing and partnerships with European and American drug majors to market products in Japan.

"The aim is to become one of the top five generic pharma companies in Japan in terms of profitability," Lupin President AAMLA & Business Development Vinod Dhawan told PTI.

At present, Kyowa Pharmaceutical that reported sales of 10.4 billion yen (nearly Rs 575 crore) in Japan in 2009-10 is the 7th largest generic maker in Japan. Dhawan said the company is looking to achieve a revenue growth of 20-25 per cent in Japan, which will be mainly driven by new products launches and cost efficiency measures.

As a strategic move, KP plans to start sourcing APIs from India, through which it is aiming at about 15 per cent to 20 per cent saving over the existing cost of procurement.

"The first lot of APIs will be sourced from India by the end of next financial year (early 2012). It is easier to control cost of active pharmaceutical ingredients due to backward integration," Dhawan said, adding Kyowa historically has been sourcing APIs from within Japan or Europe.

"It will now use Lupin APIs manufactured in India. A total of nine APIs, which are the largest selling, will be sourced," Dhawan said.

Lupin's big move for the Japanese market comes at a time when the government there had agreed to treat Indian pharma firms at par with its domestic companies and thus making it easier to market generic drugs, under a free trade pact between the two countries.

Lupin plans to launch 10 products in the Japanese market through Kyowa in this fiscal. It is looking at launching drugs in various therapeutic areas, including central nervous system (CNS), cardiology, diabetes and gynecology.

Lupin had estimated Kyowa to close FY10-11 with a revenue of 11.6 billion yen (about Rs 640 crore). The Japanese arm had witnessed 16 per cent increase in net sales to Rs 172.7 crore in the third quarter FY11 as against Rs 148.9 crore in the same period last fiscal. In FY 2010, Japan contributed 11 -12 per cent to Lupin's total revenues of Rs 4,740.5 crore.

Japan is Lupin's third largest market after US and India. Kyowa currently sells nearly 200 products in the Japanese market.

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