Sun Pharma and Dr. Reddy’s rework strategy to deal with US market pressures

By PharmaCompass

2018-09-13

Impressions: 341

Indian drugmakers — Sun Pharmaceutical Industries Ltd and Dr. Reddy’s Laboratories Ltd (DRL) — made headlines recently for their new strategies. And the US market is at the helm of the strategical changes being implemented at both the companies. While Dr. Reddy’s plans to double its US product portfolio over the next five years, Sun Pharma is betting big on its specialty pipeline in a bid to climb up the value chain, and deal with increasing US market pressures.

India’s largest drugmaker Sun Pharma has a portfolio of about 10 specialty products, of which five are already in the market, two more are likely to be commercialized in the next few quarters; and two more await US Food and Drug Administration (FDA) approval.

According to Dilip Shanghvi, managing director of Sun Pharma, the company has been investing in building its global specialty business for the last few years so that they continue to earn reasonable returns on investments. The company plans to continue investing in global specialty business — a move that is driven by severe pressure in the US market, which in turn is forcing companies to increase their research and development spends.

Credit Suisse expects the specialty business of Sun Pharma to break even in financial year 2021.

Similarly, DRL plans to double its US product portfolio over the next five years. This was one of the five core growth areas that the company highlighted in a recent meeting with analysts and investors, Antique Stock Broking report said.

The company wants to ensure that no commercial opportunity is wasted due to issues related to its manufacturing plants, the report added. Quality is likely to remain center-stage for DRL and the company is making improvements in this regard over the last two years.

The five core growth areas for Dr Reddy’s are (i) intensifying efforts in complex generics and developing dossiers for world markets given the legacy strength in complex APIs; (ii) doubling the number of marketed molecules in the US in the coming years (iii) capitalizing on the first-mover advantage in China; (iv) breaking into the top-10 drug makers’ by sales list in India; and (v) keep enhancing the compliance processes at its plants.

The management has indicated that the US remains the focus area and the company is likely to launch 15 products annually with an aim to double the marketed products to 170 in the coming years. The company will focus more on oral solids and injectables in the US, while for China, the focus will be on the oncology segment.

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