Source: The Economic Times, Nov 07, 2016
Mumbai: Global drug maker Abbott is setting up an innovation and development center (I&D) in Mumbai aimed at developing new drug formulations, new indications, dosing, packaging and other differentiated offerings to feed into its global branded generics business that clocked sales of $3.7 billion last year. The centre will act as a “hub” and ship products to at least 30 countries that will further develop the products to suit local needs. Abbott officials did not divulge the amount it is planning to invest.
Speaking to ET, Mike Warmuth, Executive VP, Established Pharmaceuticals division of Abbott said the proposed investments will result in doubling of its local scientific manpower like packaging technologists, formulation development specialists and clinicians. The centre will also have a pilot scale plant, he added. “We are investing in innovation and scale and we are doing it in areas where people have needs. It is not about getting sales for the sake of getting bigger,” Warmuth, who is based in Basel, Switzerland, told ET on his second trip to India in the last two weeks.
Abbott has its existing innovation and development centres in Chile and Columbia for the regional needs in Latin America and one in Russia. The Indian I&D hub is expected to become its biggest center in the next few years.
The drugs-to-devices giant drew over a fifth or $850 million (Rs. 5673 crore) of its global branded generics business from India in 2015. Warmuth described India as a “cornerstone of success” making specific reference as a “talent exporter” and how it helped Abbott gain a scientific edge in its other countries of operations.
Warmuth said he expects the India business to outperform the market consistently as in the case of its other 15 priority markets that together contribute 75% of the total sales. “We do the heavy lifting, providing products at a rate that is affordable and not price gouging,” he noted.
He said his company will explore about 20 to 30 products that are likely to come off-patent in near future. Beyond that, Warmuth said part of his “model” includes in-licensing drugs that may include biosimilars. It exists in the “realm of the possibility” but not necessarily of a big scale in India.
Abbott is uniquely positioned in the global branded generics business. It carved out the business and separated AbbVie, its innovation products business. Abbot has been among the most aggressive investors in India. Last year in one of the biggest deals in the real estate space, it acquired commercial property in Mumbai’s business district Bandra Kurla Complex at Rs 1479 crore.
The drug maker had leapfrogged to the number one position India after it snapped up Piramal Healthcare’s prescriptions business for $3.7 billion in 2010. Last year Abbott slipped to second position with Sun Pharma acquiring Ranbaxy to gain the top spot.
Asked about the overall regulatory and economic environment in India, Warmuth said the regulators are trying to do the right things but he maintained it would be good to see the environment a little more stable when making investment decisions. “Overall that does not really change our view on the market itself,” Warmuth added.