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  • Mar 10, 2000 - Lupin, Dr. Reddy’s to expand operations overseas

Lupin, Dr. Reddy’s to expand operations overseas

Mar 10, 2000

Lupin Laboratories (Lupin) and Dr. Reddy’s Laboratories (DRL) both have plans for aggressive forays into the global arena. While the former is planning to target the cefotexamine market in the USA, the later is stepping on the gas by setting up joint ventures in China and Brazil. DRL is one of the fastest growing companies in the pharmaceutical sector having a 1.4% market share in domestic formulations. The company has grown from being a bulk drug company to a respected formulation based company. It has products such as omeprazole (gastro–intestinal), ciprolet (anti–infective) Nise (pain and fever), Enam (cardiovascular) etc.

Lupin is a world leader in anti–TB drugs. It holds 70–75% of the world market of a major anti–TB drug ethambutol. Nearly 48% of the company’s turnover is contributed by anti–TB drugs.

So far Hoechst Marion Roussel (HMR) has a dominant market share of around $ 120 m in the cefotexamine market in the US and holds the process patent. Normally the originator (i.e. the first company) allows a second entrant a 20% market share without getting into a price war. If this were to happen in the current case, Lupin can target a market of $ 24 m (Rs 1056 m) without risking retaliation from HMR.

This would help the company to diversify its product portfolio and also provide it with cash for venturing into newer and more lucrative products such as those relating to the cardiovascular where the company has a miniscule presence.

DRL on the other hand already has a well–established export business in the CIS countries. However, the Russian crisis last year caused a lot of bad debts for the company. The company wrote off around Rs 250 m over a period of two year’s. The Chinese market is a relatively closed market, hence the need for a joint venture with a Chinese company.

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