Sun Pharmaceutical Industries is planning to invest more in patented medicines, using the ‘search and development’ model, according to a Bloomberg report.
The company can acquire early-stage developments and generate revenue from patented medicines, the article quoted founder Dilip Shangvi as saying.
The pharma major has so far spent about $1 billion on its patented-medicine programme, Shanghvi estimates. He added that money made from sale of generics in the US will be used to redevelop the company.
Pharmaceutical companies in India only produce generic drugs, and do not develop their own medicines.
Shanghvi said the new approach is modelled on British drugmaker Shire’s strategy of acquiring and licensing products, instead of focusing on R&D.
The company’s managing director admits that working on patented drugs requires an additional skill set, but said developing those skills is not impossible.
Since Shanghvi owns 55 percent of Sun Pharma, he says it is easy for him to take crucial decisions and implement new strategies. The move follows the recent upheaval in the generic drug business, which cost Shanghvi $17 billion and the title of India’s richest person. His personal fortune now stands at about $7.8 billion, or the eight wealthiest person as per Bloomberg Billionaire Index. A four-year decline on the back of record clearances by the US Food & Drug Administration to boost competition and large number of sweeping price-fixing lawsuits erased 65 percent value from the Sun Pharma counter.
Shanghvi expects the company to pick-up enough early-stage innovations and key personnel to generate half its revenue from patented medicines. “The advantage is that I have end-to-end understanding of all aspects of the business,” he said. “It’s easier for me to take decisions involving risk, because I am able to assess risk from multiple dimensions. In a big company they will need 8 or 10 people who have to look at it.”
Earlier in May, Sun Pharma was named in a US lawsuit accusing 20 drugmakers of a conspiracy to inflate prices of over 100 drugs. The lawsuit was filed by 40 US states. Other Indian companies named in the lawsuit are Aurobindo Pharma, Glenmark Pharmaceuticals, Lupin, Wockhardt and Zydus Pharma. – Money Control