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Waiting for New Opportunities

Vicenzo D'Elia - Alfa Wassermann
Director General

STORY INLINE POST

Wed, 09/06/2017 - 10:27

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Q: Alfa Wassermann had plans to expand its gastroenterology portfolio. How far along are you?

A: We have invested in product registration in this field but we are a little behind schedule. COFEPRIS processes are taking longer than we expected. In our opinion, in some cases it is requesting more information than described in norms. Perhaps it is trying to show a stricter profile than the FDA. Nonetheless, we are continuing with our plan to launch three products for gastroenterology in 2017.

Q: In the wake of the Teva-Rimsa deal, what is the appetite for M&A in Mexico?

A: It has become a little more difficult to find M&A opportunities due to prices. After the price Teva paid to acquire RIMSA, many now have lofty price aspirations. But we will keep looking for other business opportunities.

Worldwide, Alfa Wassermann is expected to expand its presence through smart and focused geographic investments. There is no question the pharmaceutical sector continues to face multiple challenges on many fronts. Despite this short-term uncertainty, I believe Mexico’s economy in the medium and long term will do fine.

Q: Has peso depreciation affected your operations?

A: We have seen significant currency devaluation so the cost to import products and our operational costs have increased. There are many services we have to cover in foreign currencies. In some cases we have to take the loss, but we must also reduce and relocate resources. For example, if for next year we had three projects planned, we should only go ahead with two.

I remember reading a report from a financial expert saying the value of the dollar would reach MX$30 per dollar. The international environment is not friendly right now and it presents many challenges. Companies like ours have to be selective when investing and focus on finding returns. There is a tremendous opportunity for local companies that can be more aggressive and gain market share.

Q: How do government tender processes affect an international company?

A: We do not sell to the government. It has been a challenge for international companies to enter the National Formulary and being accepted by IMSS and ISSSTE is a long process. People that come to Mexico have to plan for the long haul if they want to be in that business. It is difficult to have access and frankly for the next two years we do not foresee a positive environment because of the budget cuts in healthcare. Evidently, the government has no funds to get new technology. It is going to be a challenge to get access to the government without a generics division.

Q: How does the Mexican market differ from other Latin American markets?

A: One of the main differences is getting products into the government healthcare system. New technology is more easily accepted into the National Formulary in others countries than in Mexico. Also, the generics market in other countries is more stable. Here it is too young and is still growing. However, Mexico enjoys price freedom. This is a positive benefit for us because price controls and caps in other countries have been a challenge. Here, we are also experiencing new models like those of Farmacias Similares and Genoma Lab, which I have not seen in other countries.

Q: What are your short-term ambitions for Mexico?

A: Our goal is to consolidate our presence here and ensure we become a well-positionned company. We will continue in gastroenterology, in deep venous diseases and in new therapeutic areas. We bought a company in Italy that has a large cardio metabolic portfolio, which we will assess after the merger is completed. I continue to see Mexico as a long- term opportunity. We must stay open-minded and keep an eye open for new chances.

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