Drugmaker Cipla, a prominent name in the respiratory segment in India, is now eyeing the Chinese market through a manufacturing joint venture in the country with Shanghai-based Jiangsu Acebright Pharma to make respiratory drugs in China. Respiratory illnesses are a major cause of death in the country.
Cipla (EU), a UK-based wholly owned subsidiary of Cipla, and Jiangsu Acebright Pharma will set up a JV in China, where the former would hold an 80 per cent stake and Acebright would hold the remaining for a combined investment of $30 million.
The JV will set up a manufacturing facility of respiratory products. The plant is expected to be commissioned in 2020.
“While our core home markets remain our current growth anchors, we see China as a crucial part of our future road map. In May, we inaugurated our office in Shanghai. We have a long-standing relationship with Acebright, and this partnership to build a manufacturing facility in China is a significant step for us,” said Umang Vohra, managing director and Global chief executive officer of Cipla.
Cipla has already started clinical trials of a dry-powder inhaler (Fluticasone Propionate Salmeterol or FPSM) in China. It had launched FPSM in eight European countries and also in Australia.
In an earlier interaction with Business Standard, Vohra had indicated that in two to four years, the company expects to see good traction from the Chinese market.
“In two to four years, we will see good traction from the Chinese market. It is essentially a branded market and the size is huge. While it takes patience to enter the market, it does offer great potential,” Vohra had said.
In fact, after establishing a stronghold in the domestic market, Cipla is eyeing the next leg of growth in the segment to come from global markets. The company enjoys a 67 per cent share across the Indian subcontinent’s respiratory market and sees potential for a 14-15 per cent growth as the market is under-penetrated.
In India, respiratory constitutes a 31 per cent share in the overall revenue.
Most of the respiratory products that Cipla has lined up for the international markets have a market size of around $2 billion or so. The competition is expected from three to four players. It sees $100-million revenue from each of the key products (generic Albuterol, FPSM, and generic Advair) depending on how many other players get approval.
The $100-bn Chinese market too has potential for respiratory drugs.
Cipla thus sees a potential in the market which is largely dominated by multinationals like GlaxoSmithKline, Novartis, Boehringer Ingelheim among others.
“We are keen to take our well-established expertise in the respiratory segment to patients in China. Simultaneously, we will explore various routes to build a portfolio of products in other therapeutic segments such as oncology,” Vohra added.
The company does not have significant exports to China at the moment.
“We do not have a significant export presence to China right now. The focus is broadly respiratory products through local manufacturing and other therapies through import and other potential routes. We are looking at the oncology segment for instance,” said a Cipla spokesperson.
Jiangsu Acebright Pharmaceuticals Co is a subsidiary of the Shanghai Acebright Pharmaceuticals Group. Acebright Group, established in 1996, is mainly engaged in anti-viral, oncology products and vitamin ingredients.
It is a supplier of anti-viral and oncology active pharmaceutical ingredients (APIs) APIs for global market and a manufacturer of finished dosage products to meet HIV/AIDS and cancer patients’ needs for China market.
Shengping Xu, chairman of Acebright Group, said, “We have a long-standing partnership of more than 20 years with Cipla which shares our vision and approach towards patients. We....strongly believe the joint venture will bring more products to Chinese patients in the respiratory segment.”