Mexico Provides Room to Grow

Q: Zydus works in generics but is looking at biosimilars and vaccines. Which strategic therapeutic areas interest you most?

A: Zydus started as a generics company but its unique distinction from other Indian pharmaceuticals is that it is the first company to register a new chemical entity (NCE). Saroglitazar, used to treat diabetic hyperlipidemia, was launched in 2013 and we are looking to commercialize it globally under the name Lipaglyn, starting with a handful of countries including Mexico. The second area we are considering entering is biosimilars and vaccines. We started working on this as few companies will provide a portfolio to the extent of over 20 biosimilars and around 20 vaccines. Some of these products have already been launched in India and they will be taken to other emerging markets.

Q: What is the company’s strategy to carve out a bigger slice of the Mexican market?

A: Zydus is a new entrant in Mexico and we are keen to scale up our operations. There are various options to do so and to become relevant to the market. We entered Mexico in 2013 and we want to grow both organically and inorganically. There are few trillion-dollar economies in the world and so Mexico is a huge opportunity. If any global generic company wants to increase in size and importance, it must have a presence in the larger markets and Mexico is the 11th largest pharmaceutical market in the world.

Q: What strategy did introducing the CNS portfolio to Mexico correspond to?

A: We initially explored various areas as CNS is not one of our major business lines. Overall, we have strong lines in gynecology, respiratory, cardiology and diabology, but not CNS. However, CNS is in the top five chronic diseases and the area is growing. Looking at health indicators, depression is classed among the top five, which is rare for an emerging market such as Mexico. We found that CNS could be important for us and our decision was the right one, so we are confident we will continue to see growth.

Q: Zydus aims to be a research-based company by 2020. What roles will CNS and Mexico play in this?

A: The vision established by our chairman is to make Zydus a quality, global research-based company. Regulation surrounding biotechnology and biosimilars is not yet extensive. We took some time to fully understand this and we are now efficient at handling small molecules. Officials worldwide face big challenges in laying down the pathways and putting systems in place for biotech. COFEPRIS is dynamic and understands the importance of biosimilars due to the exorbitant cost of innovators. Over the past 10 years, the importance of biological products in terms of usage and market share has increased, which is a clear indicator of the future of the pharmaceutical industry. Few are capable of producing them, which gives Zydus an advantage in tending to this need.

Q: What will be Zydus’ priorities for next five years in Mexico?

A: We want to consolidate our CNS business in the next five years. We will look at how to leverage our strengths for R&D capabilities, to look for opportunities for inorganic growth and to fulfill our aspiration to access the tender market. We will try to carry out some global clinical trials here to make it easier and faster to get COFEPRIS approval. The regulatory environment is extremely dynamic and COFEPRIS does not depend on others to approve its decisions. It is self-sufficient and it knows the countries’ needs.

Q: Do you have plans to build a plant in Mexico to bolster your chances of selling generics to the government?

A: To be successful in Mexico there is no one particular segment or style of operation. The government tender market is worth around US$2-2.5 billion. We have the capability to supply to it but we do not have local facilities. However, there are ways to circumvent this: one is to manufacture indirectly. It would be a key move from an investor point of view.