Ricardo Spindola
CEO
Farmapiel
/
View from the Top

Cosmetics and Personal Care Market Ripe for Growth

Wed, 09/09/2015 - 11:54

Q: You have a long history working for major pharmaceutical companies in the dermatological field as well as with a major hospital. What made you decide to branch out on your own with Farmapiel?

A: My long-term ambition has always been to branch out as an entrepreneur. I have for the most part worked within the dermatological field throughout my career, although I had the honor to be selected as CEO for Medica Sur in 2011. Medica Sur was implementing a new strategy and I spent two and a half years there helping them realize that vision. The hospital is home to some of the best physicians in Mexico, even in Latin America, that are highly professional and ethical, and I was very proud to be a part of the team. However, recently the opportunity arose for me to acquire Farmapiel and the company met my target requirements in terms of size and therapeutic class, which was dermatology. There are very few pharmaceutical companies in Mexico that are truly local. Farmapiel was founded in 1991 in Mexico and was a family owned business until I acquired it in 2013. I am not venturing into the business entirely alone - I recently invited a private equity fund, EMX Capital, to hold a majority stake in the company and it has been productive to have them on board. This is the first stage in my growth plan for the long-term future of the company.

Q: How have evolving consumer and patient patterns changed the dermatological industry?

A: I think there are two critical factors in Mexico’s case when dealing with looking at the potential growth of dermatology products. One is that people’s health and habits have changed significantly compared to 20 years ago. On a global scale, people take better care of themselves, wanting to live a healthy life and look younger. This has also increased the life expectancy to an average of 75 to 80 years old. Increased life expectancy leads to a corresponding growth in dermatology and the industry has developed on a large scale in the last few years, with a major impact on the health sector. There are an infinite number of specialists today who are able to diagnose every kind of skin problem. In terms of skincare, people have more of a desire to protect and care for their skin, and so are more amenable to wearing sunscreen or using products to treat acne for example. The other factor benefitting the sector is the increase in economic purchasing power of Mexico. More and more people will have access to healthcare, including dermatology over the coming years. Both of these trends should have a positive impact on the growth of the dermatology sector in general.

Q: How dynamic is the current dermatological climate in Mexico and where is your main focus?

A: As with any other pharmaceutical business, it is extremely competitive and has many players. Mexico has always been an attractive market because of its size and its opportunities for growth. The competitive environment is tough in general terms, and dermatology is no exception. We believe however that the opportunities exist for companies that want to introduce differentiated solutions to add value for physicians and their patients. There are a lot of commercial activities in dermatology but what we are focusing on is therapeutic solutions. We see clinical dermatology as our key segment, not necessarily consumer products, but rather products that are required by physicians, dermatologists, and specialists. Plastic surgeons and medical professionals are a good example of our key customer base. Nevertheless, we do not limit ourselves and we do sometimes see potential opportunities to provide products for other sectors or niche activities. Thankfully our team is capable and expert enough to be able to be flexible. The innovation we have in this field is much more advanced today than it was ten years ago. Patients have access to better information, better products, and more comprehensive, integrated solutions. So while we focus on therapeutics, a degree of activity in the commercial arena is of course essential and companies need to be involved in promotional activities and distribution processes.

Q: What sorts of therapeutic products are you focusing on?

A: When I acquired Farmapiel, the company specialized in clarifying agents and products for wound healing and for acne. Now we are expanding the different sectors of the company to include sunscreens and products to treat more severe conditions such as atopic dermatitis. Our aim is to develop products centered on improving the health of patients’ skin, creating better quality of life and confidence. We have products for the treatment of acne and scars and conditions such as keloid scars. We also have lightening products for age spots, sunspots, and radiation spots. We provide pediatric products and therapeutic solutions for allergic reactions that affect the skin. We have launched new products, including sunscreens, products to help reduce hair loss, and others designed for specific skin conditions. In fact, hair loss products make up some of the top selling dermatological products in the industry right now in Mexico.

Q: How have you devised your production strategy?

A: We currently import semi-completed products from the US and Europe to pack and finish in Mexico. We have recently acquired a manufacturing plant in San Juan del Rio, Queretaro, which is being remodeled to comply with COFEPRIS requirements. Our plan is to have a first-class manufacturing site for semi-solid dermatology products, including creams, gels, ointments, lotions, and solid form products. We will continue importing the cosmetic products with the best reputations. In Europe and the US, there are some refined cosmetic advantages that we want to keep in the market. On a separate level we have identified an opportunity to undertake manufacturing in our Mexican site for some highly specialized dermatology companies, not only in Mexico, but elsewhere too. Production sites in developed countries have become more expensive and more complicated to operate and we see an opportunity to become a high quality, low cost producer. Due to our proximity to the US, we have also considered doing some contract manufacturing for some companies there.

Q: Do counterfeit products in the dermatological market severely impact the sector?

A: This type of illegal activity takes place everywhere in the world. In Mexico we have seen that the authorities are taking legal action to prevent the distribution of counterfeit products but there are still more procedures to consider. CANIFARMA has been actively working, through specific committees to pursue distributors of counterfeit drugs in Mexico and they have seen promising results so far.

With any advancement in technology or packaging, the threat of counterfeiting is imminent, so constant awareness is required.Fortunately, Farmapiel has never had to deal with such problems.

Q: Is the regulatory environment in Mexico regarding dermatological products sufficiently structured to support a thriving industry?

A: The regulatory environment in Mexico has been rapidly catching up to international standards. In terms of therapeutic care, dermatology products must be validated and certified in Mexico through the Ministry of Health. Personally, I would like to see processes progressing faster, but the government has provided us with different routes such as pre-reviews to speed the process up. These options may be appealing depending on company priorities.

Q: To what extent do you see Mexico being able to develop as an R&D hub for dermatological products?

A: I think Mexico has interesting opportunities and we have been working with the Ministry of the Economy, CANIFARMA, and CONACYT to consider our options for innovation in dermatology. In collaboration with other companies with interesting ideas we are exploring ways to work together and to bring about, new medical solutions. At this point, we are looking at different dosing ideas in terms of the way in which some of the dermatological products are being packaged. We have explored this with international companies in the US and Europe. We expect to work very closely with some universities; in fact, we have already been working with UNAM. From time to time we also work with other universities in different parts of Mexico. CANIFARMA has access to specific programs with the Ministry of Economy and ProMéxico.

Q: What export potential is there for Farmapiel’s products?

A: As well as contract manufacturing, we are also looking at exporting our products, firstly to Central America and the Caribbean. Activities by groups such as ProMéxico serve as excellent gateways for companies like ours to enter world markets. We may look at opportunities in the US and Europe because we are certain to see some interest from that market. To achieve this goal we have ensured that our equipment is top notch in order to meet the expected quality standards of the US and European companies. We obtain some of our equipment from Mexico and some abroad, and we find the equipment locally to be high quality at low cost. Our goal is to obtain certifications in different countries as evidence that, despite being able to provide a low cost, our quality is high. The documentation of processes and systems for pharmaceutical companies is extremely important in order to minimize potential risks and errors. Through this, we ensure good manufacturing practices and this can be more important than the equipment itself. The recent recognition of COFEPRIS by the WHO and the PAHO is beneficial for the industry and having recognized standards from the regulatory agencies makes us a member of an elite, compliant group.