‘R&D continues to be the key driver for sustained growth’—Kushal Suri, Head International Business Development, Morepen Laboratories
More than three decades old, research-oriented API manufacturing pharmaceutical company Morepen Laboratories has established its presence not only in the generic but also in the OTC and FMCG segments. The company continuously strives to grow both in domestic as well as in the international markets. Kushal Suri, Head International Business Development, Morepen Laboratories talks in details about the company’s plans with Usha Sharma
Tell us the journey of Morepen Laboratories and its ongoing activities.
The company started as an Active Pharma Ingredients (API) player in 1984 and then moved up the value chain from simple semi – synthetic products to complex multi stage synthesis. Within 18 months of filing its Drug Master File (DMF) in September, 1997, we attained the title of being the second largest manufacturer of Loratadine in the world. Morepen became the youngest Indian company to win US FDA approval for its flagship product ‘Loratadine’, whose patent was to expire in 2002.
By year 1998, we had set up three state-of-the-art manufacturing plants at Parwanoo, Baddi & Masulkhana in Himachal Pradesh, for manufacture of API, OTC and formulation products namely, antibiotics, anti-prozoals, Proton pump inhibitors, anti-diarrhoeal, anti-inflammatory and anti- allergic products etc with international standings.
The company has tied up with many multinational generic companies to market its products in the developed and regulated markets. We follow the concept of Green Chemistry by developing various chemo enzymatic methods for its new as well existing products including Atorvastatin, Rosuvastatin, Ursodiol and other top selling drugs.
Recently, the company’s quarter performance reported a significant growth. What key factors have driven the growth?
Recently, we received US FDA approval for our manufacturing facilities at Baddi and Masulkhana, and it allowed us to begin exports of our bulk drug Montelukast Sodium to the US and other regulated markets of the world in. It resulted in our export sales in Q1’FY 2019-20 for Montelukast Sodium to rise by 210 percent and that of Atorvastatin Calcium by 57 percentvis-a-vis the corresponding quarter of the previous fiscal. In domestic market, Atorvastatin and Rosuvastatin registered maximum growth of about 262 per cent each during the same period.
Globally, Morepen Laboratories is amongst the key players of Atorvastatin API. Tell us about the prevalent market trends, challenges and opportunities? And how is Morepen capitalising it?
Morepen has US DMF, COS & TDMF for Atorvastatin Calcium Crystalline Trihydrate. It has been granted international patent on process for amorphous form of the cholesterol-reducing world’s largest selling drug Lipitor (Atorvastatin Calcium) in US, Canada and India. Its polymorphic form VI patent is also granted in Russia and South Africa. Atorvastatin calcium amine salts patent was recently granted in India. Apart from Atorvastatin, Morepen has been granted with patent for Montelukast sodium amorphous in US, Europe and Canada. For Indian market, we have also received patents for Loratadine and Desloratadine. However, we see challenges in procuring of raw material from China due to environmental issues. Since we have USFDA approval and registration in various countries, it allows us to get into the new markets which are being explored and customers are being tapped.
How big is the global Atorvastatin API market? And what percentage is it growing at? Of that, what percentage is captured by Morepen Laboratories?
Our market share is small at Rs 72.01 Crores (2018-19) which is about 1.44 per cent of global market and is increasing. Morepen has recorded sales of Rs 72.01crores in the last financial year, with a growth of 25 per cent. Our market size is around Rs 5000 crores, and we manufacture about five tons per month and plans to double the capacity to about 10 tons per month.
Do you see a threat from Chinese market for Atorvastatin API, which is expected to be the highest growth rate of 5.86 per cent from 2018 to 2023? and how to deal with it?
Morepen is looking for alternative Enzymatic routes of Synthesis of various key intermediates of Atorvastatin to make our process more cost effective and eco-friendly so as to tackle challenges from Chinese markets. Morepen has total capacity of about 5MT per Month for all forms of Atorvastatin calcium including Amorphous, Crystalline Form I & Form VI of Atorvastatin Calcium. Presently, Morepen is producing 4 MT per month of Amorphous and Crystalline Form I of Atorvastatin Calcium.
Tell us more about your partnership with Vesale Pharma, Belgium and how it is accelerating the company’s growth?
The company is first to launch probiotic tablets in the Indian market. Since the product has been launched recently it is still in the phase of market penetration. Growth can be analysed only after six months at least.
What are the challenges you see in the prebiotics segment and how do you deal with it? Tell us more about the company’s presence in the FMCG and OTC market and how rapidly it is growing?
Probiotics is a lifestyle product and is costly as well. The demand of these products is picking up, which can be increased by regular advertising for which the company needs funds. Currently we have our presence in burns and cough and cold category. Our Burnol brand is a well-known trusted brand in burns category. Lemolate brand in cough and cold category has formidable presence in Eastern India (Bihar, West Bengal, Jharkhand, Assam). The company has around 225 products in its generics OTC Business. And we are adding many more products in other OTC categories like pain reliever, antacid, vitamins and minerals to increase its presence.
Tell us more about your new product launches?
Morepen has successfully completed its R&D and has developed various routes for the synthesis of some new API products under various categories like, Anti-coagulant,Anti- diabetic Anti-depressant,GnRH Antagonist, Anti-ulcerative, Anti-gout & Anti-depressant.
Why the company did diversify its business from pharma to FMCG and OTC?
During the year 2001-02, the company launched its consumer initiative of developing a wide range of products that could be directly promoted to build a large chain of customers. A consumer research was launched which revealed that consumers are well researched and updated about their requirements and are empowered with decisions making process for their health. Based on such such findings, our work began on developing a brand that could meet consumer expectations. And so brand of ‘Dr Morepen’ was born. Our aim from the brand was to target Rs 4500 crores, and establish its presence in Fast Moving Health Goods (FMHG) market. Dr Morepen’ brand was conceived as umbrella brand for various product categories, which will be used as a very effective cost effective market strategy in the long run.
Globally, regulators are becoming stringent, how are you enhancing your research capabilities and gearing up to tackle it?
R&D continues to be the key driver for sustained growth of the company. R&D’s major capabilities vest in developing robust and safe APIs at affordable cost, development of new polymorphs and non-infringing processes for the synthesis of various APIs and cost reduction by improving processes for existing APIs. Morepen owns a new state of art DSIR Approved R&D Centre located at Baddi Plant. The company is continuously adopting innovative processes in the manufacture of all its APIs and intermediates as well as in formulations. Morepen’s R&D Centre is backed by a strong Synthesis as well as Analytical division having most of advanced synthesis instruments. We are focussing on the expansion of intellectual property for all the research work carried out in R&D for new products by filing of new patent applications. Moreover, the company has already taken US FDA and other regulatory approvals which are very stringent.
How are you expanding your export reach? And what are your plans for the international market?
Morepen has recorded export sales revenue of Rs 31202 lakhs in the last financial year, a growth of 36 per cent. The company is filing DMFs in various countries to register itself as a preferred source of supply. Towards its journey of technological advancement and strengthening the exports of the company, various process as well as polymorph patent applications have been filed for new products like Empagliflozin, Dapagliflozin, Linagliptin, Rivaroxaban, UDCA and Rupatadine Fumarate. The Company is also working to capture highly sophisticated Japanese market for Loratadine, Montelukast, Atorvastatin, Fexofenadine & Olmesartan.
What are your growth targets for the next year? Are there any investment plans?
For the FY 2019-20, the company expects to achieve a consolidated growth of 15-18 per cent wherein business wise targets are expected to achieve a healthy growth, i.e. API is expecting a growth of 21 per cent, formulations 8 per cent, diagnostics over 20 per cent and around OTC 15 per cent. The company plans to invest Rs 20-40 crores towards capex requirements for increasing capacities for APIs for increased demands.