Empagliflozin

Mumbai: In an exclusive interaction with ETPharma Editor Vikas Dandekar , Aman Mehta , Managing Director (Designate), Torrent Pharma from August 1 — outlines his clear roadmap. The aggressive buyouts in India to break into the top three ranks, a methodical ramp-up in the US market, expanding beyond oral solids into complex generics and injectables through partnerships, and the hurdles to a biosimilars ramp-up. Mehta also discusses the industry’s readiness for innovation, opportunities in GLP-1 weight-loss drugs, and why CDMO remains off Torrent’s radar. As the new MD, starting from Aug 1, it will be interesting to know your initial thoughts of leading the organisation at a time when there are both challenges and opportunities? It is an absolute honour and privilege to be taking up this new role. Most of the foundation has been laid by my father and uncle for the past two decades, when their vision was to build one of the leading India-based businesses in pharmaceuticals. I think it is mainly for me to follow that path to build on what they have laid as a platform and how do we incrementally invest further from here. We have seen ourselves as a more of a branded generics company for the last decade or more. Branded generics in the sense we operate in markets which are predominantly out-of-pocket, so India, Brazil being the two main markets. Of course, we have a strong presence in Germany as a third key market and then the US. So, it is more about evolving the existing platform with incremental steps and building a larger presence in the international markets from here on. India has a very strong base and how do we capitalise on the existing international presence to make it even stronger, that is the goal for the next couple of years. That would mean a more globalised organisation than you are at present. But the US market has not been as strong as it has been for most other top tier companies from India. Though there has been some uptick now from your last quarter's information. How do you want to go there? Do you think opportunities are there at present? What changes do you see and how will the Torrent strategy be going forward? Definitely we are not happy with our position in the US market as of today. It may have been the right call when we had taken to not double down on the US when the others had done so because we were facing different sets of challenges. But I think that time is now behind us and we would certainly need to enhance our presence in the US market. All said and done, it is the biggest market in the world as a generics player and we will need to find our niche in the US. And though it's late, I still believe that there are opportunities that exist. And there are ways we can leverage our existing strengths to have a meaningful uplift from here. In terms of the opportunities that you spoke of, can you take us through a few of those, what you think can be a good target for you in the US? Generally we see a swamping of generics. So how will it be different? Yes, absolutely. The space that we operate in, which is oral solids mainly, is quite crowded. And to differentiate, is becoming more and more difficult. But even then, there are opportunistic plays that keep coming every now and then. And those are the kinds of places which we would like to pursue rather than having an entry in a very crowded market, it's not the ideal way to grow from where we are today. Within oral solids, we still see that there are opportunities that exist. And outside oral solids there are multiple other avenues of growth - injectables, different platforms that we don't have currently, and we wish to partner in these models, where we work with companies who have existing infrastructure and who have complex products and they would seek a partnership model. That's the immediate goal for the next one or two years, and in non-oral products we would want to expand our portfolio through partnerships. There is also talk about acquisitions and there are a few targets in the US that some industry experts have been speaking about. Would you be keen to see those as part of your future mandates? Yes, definitely. There has been a slight change in our approach in the recent past. We were prioritizing mainly India for acquisitions. We do see that while organic growth must be the long-term growth driver, inorganic growth can improve our position from where we are today, if it is done in a thoughtful and disciplined way. So, while in the India market we are a bit more ambitious in terms of acquisitions, in the international markets we would be very measured and there would be a string of pearls approach rather than anything major or transformative. But certainly we are looking at acquisitions abroad, especially in the US, if something meaningful comes up, we would be quite keen to pursue it. Would that also include opportunities in biosimilars? Any niche play that you may want to get into? Biosimilars, overall, at this moment, no. I think to have a meaningful presence in biosimilars, you must invest a significant amount and it has a very long gestation period. So, as of now that's not on radar, but we are certainly studying the space and let's see if there's change anytime soon. But as of now that is not part of the plan. Is Europe a little more conducive so far as biosimilars are concerned? Yes, Europe is certainly conducive, in the sense that there are many more opportunities in terms of markets that have opened. We have a front-end presence in Germany, which is a key European market. We would be keen to explore licensing in biosimilars and leverage our front-end as the main opportunity for entering the biosimilars at this stage. India has been your backbone for growth. That’s a huge example, as we spoke about growing a business. Yet, in terms of rankings, if I see the last pharma-track data, you are at number seven. There are more aggressive companies, which are taking the market share higher. How do you want to describe your position in the home market? We are aware of those very speculative days of big bids, which couldn't really go through? What would be your plans going forward so far as the India market is concerned? As far as the India market is concerned, we have reached the position today through mainly inorganic growth over the last decade. Our rank was much lower ten years ago than it is today. That's certainly a big positive that has happened in the sense that from where we were to where we are, we are in a much stronger position to invest further and even grow the business from here. I would say that from here onwards, acquisitions will continue to remain a priority. And the top three in the Indian market is something that we have our eyes on. Organically it may be difficult to achieve in the near term. But certainly through inorganic growth it seems quite possible, and may be in the next couple of years, if something materializes, that certainly is going to be part of our ambition. So you will aggressively pursue an inorganic buyout route to see that your ranking improves and probably get into the top three? That's correct, absolutely. That is again, something that has been a very bold and very unconventional move from Torrent side. We had always associated Torrent within a particular range of buyout, but if it is really a breakout kind of a buyout that will be a very strong move and a commitment to the Indian market, is it? Yes, absolutely. The commitment to the Indian market remains as strong as ever. Even with some of the structural changes that are happening or have happened in the recent years, we believe that the inherent demand of the Indian pharma market is not going to change. And that is what gives us confidence to invest inorganically as well. The base of the market will not shift dramatically, and that's where we want to be - a top 3 player from currently, we are 7th. Top 3 looks to be an ambitious but realistic goal. Within how much time do you think that probably could happen? I would say, hopefully in the next 3-5 years. Generally what we see of the Indian market, of course there are dramatic changes happening, but most of it is very crowded. We saw in the empagliflozin market, 150-170 players within a couple of weeks? Is there a kind of a tiredness because how much can you sell for the same? The pricing really crashes and it doesn’t really make you any different from being the 93rd player which is also selling the same empagliflozin? We were actually studying the same very recently to understand what new launches may be, how have they evolved over the last five years versus today. You are right in the sense that certainly a very large number of entrants who are in the market on day one. Having said that, interestingly what we also analysed is that 90 per cent of the market remains with the top 6-7 companies. So, you are essentially losing only 10% of the market when new competition walks in. So, it is certainly not positive that there is so much competition, but it is also not so dramatically negative either. And we see that in fact our performance as far as Torrent Pharma goes in the new launches, has been one of the strongest we have seen in recent years. In terms of market share, whether empagliflozin or sitagliptin from two-three years ago, we have been consistently in the top two to three market share ranks when new launches are concerned. So, I would say that while the number of launches looks very very competitive, market share gives a very different picture and it's essentially within top six to seven companies for most products. That's a very interesting data. So, in how much time does that situation change? Say for example, if 150 new launches happen within a few weeks and then in your reading 90 percent share is with a few players, in how much time do you think this situation changes? Within the first few months it is very visible. If the market share trends of the first 2-3 months are seen, they don't change dramatically. Unless there is a product differentiation or price disruptions that happens. But in those cases it is very very rare to change the market share after the first couple of months of launch. And that's evident already in the empagliflozin case that was mentioned. You have expanded your base of medical reps significantly in the last 3 years from 3600 to 6400. So, it's a very strong statement again to really go deep down in the market. What's been the strategy there and do you think you will be adding more to that number? Yes, certainly. We closed this year at 6400 MRs. If I look back at 2021, maybe four years ago we were at 3600. So, we may close this year at nearly 7000 this year. So that's almost doubling in four years. So, it's a progressive move that we are making into more - methodical expansion, to have more products in the market with adequate market share and also increase the territorial reach, where may be were not adequately present before. We have seen that the last couple of years, especially in the last two years have given pretty good results in doing so. Maybe we were a bit late in doing it. But nonetheless, it is still an opportunity that's quite meaningful and we will continue to pursue field force expansion going ahead as well. As we have discussed the top three markets, US, Europe and India. Now is the time to shift the gears a little bit more on how do you see the competitive landscape going so far as India is concerned vis-a-vis what we are seeing from China. There are dime-a-dozen deals that are happening from China, in terms of early stage to mid-stage to even some late-stage compounds being licensed out. The last one was 3S Bio giving Pfizer $ 6bn deal. How do you see that in comparison to what our Top Indian companies are doing or are positioned? China has certainly leapfrogged on the innovation front over the last decade. I think there is so much innovation coming from the Chinese companies, whether to US or Western markets or within China. Maybe they don't really have much of an incentive to be in the generics space. I think they have kind of already transitioned to the innovation space. So in generics in oral solids we still don't see much competition from China coming in. In certain segments such as injectables, there is definitely tough competition coming from Chinese companies. But what we are seeing is that most of the Chinese companies and Chinese investments are going to innovation and it's quite incredible how the number of deals, out licensing have skyrocketed in the last couple of years. There is a question about how Indian companies see that big change happening. There have been hurdles and there have been drips. How do we leapfrog? Is there something to be done to really gain that momentum? Yes, I think as far as Indian companies are concerned, many companies have invested and certainly there has been an ambition and effort put in in the last several years. And there is still a lot of investment. In terms of innovation in India, several companies have invested in this. There are companies who are still investing in this. But to really get on a global scale, it would require many things to come together including support from various institutes, from government, from multiple ecosystem approaches that need to play rather than individual companies coming in. It's not too far out but it's certainly today it's tough to match that level of investment required. The ambition of the industry is certainly to move up the value chain. There are talks that we have seen are very encouraging from various forums of making a move to this. Maybe in the next 5-10 years, things will change. So, at least the companies are in a very strong position today in the Indian pharma market to invest seriously and meaningfully for innovation. And it's certainly looking possible that India could also make the leapfrog change in the coming decade. We have seen that it is a strenuous journey to move into an innovation fold and the results are again spectacular, if you really stayed the course of the entire journey, we have seen how companies have been able to really gain a lot of traction and also beef up their pipeline. Hopefully that will also happen with some of the other Indian companies. I was again interested in something that is being talked about almost everywhere about GLP-1 and weight-loss drugs. Any thoughts on that for Torrent, how do you want to position? Will you be among the first wave of launchers in India when the semaglutide patent expires in 2026 March? Yes, certainly. It has been on our radar for quite some time. And we have positioned our launches as of now hopefully to be in the first wave. We are looking at both - injectable GLP1 and Oral GLP-1. We believe as of now, the injectable market will likely be more crowded. But we will still aim for a meaningful play in this space, given our existing strengths in the chronic diseases segment. But oral, as of now, is going to be a smaller part of the market, but may be less competitive as of now. And we are positioned as of today, to be in the first wave of the launches. So, while both will be important and meaningful launches for Torrent, the oral could be a bit more interesting in the sense that there could be less competition playing out here. Will there be any opportunities to do a launch for tirzepatide also? But I think the patent expiry is only in 2036. So, do you think there will be some opportunities there as well? No, not until the patent expires, unless there is a partnership route. So, Lilly generally has been interested in partnering with Indian companies. So, hopefully if something works out there, that would certainly be of interest. I also believe there are some other siRNA products which are being worked out, some completely different modalities and Indian companies have been tying up with global MNCs to launch those kind of products. So those opportunities are also something that you can look forward to, right? Yes, absolutely. Those are more as of now going to be through licensing. Because patent expiration is a bit far away. Some of them have already been launched in the Indian market. But the main thing is the accessibility and pricing. These are very very expensive products. So, if there is a way to bring down the price meaningfully, through either innovation or obviously after patent expiration it will be different, but licensing may be a cost effective therapy in this space that would really be beneficial for the Indian market. Because right now it is miniscule share of patients who get access to it. There is a PCSK inhibitor from Novartis – inclisiran - which is already here in the Indian market, and then there is again a protein-based therapy from Amgen, which is being sold by Dr Reddy's - Repatha. So those kind of products are something that probably will be lapped up by Indian companies, so far as the reach is concerned? Absolutely. Even then the pricing would be a constraint, to match the Innovator pricing. Indian companies would launch but still - naturally in a patent period that's not very unusual. While that's a big positive, whether this market can really increase in size, it's all a matter of bringing down the pricing. Hopefully in the next couple of years, some innovations would help bring that. What's your sense on CDMOs? Many companies are looking at that opportunity and there is a lot of growth. Some of the reports that we see, say that a market of about 140-150 billion, where India has a very miniscule presence, may be less than 10%. Do you think that could also be an opportunity for you going forward? Overall Indian CDMOs have done fantastically well over the last couple of years. It's probably something that may continue to get more shares globally from other markets or other countries. So, overall Indian CDMOs, to me, seem very very positioned for very good growth from here. As far as we are concerned, we have not considered entering this space. It's a fundamentally different business model compared to what we operate in. And I am not sure that it is something we would be able to justify if we are entering this space. As of now we have no plans to enter CDMO space. If I am to sum up the conversation we had, you will look at stage-wise ramp up, selective ramp up in the US, domestic market. You will not hesitate to do big buyouts, with the aim of being in the top 3 or 5 leading Indian companies. CDMO is not really an interesting opportunity for you, Europe probably could be a good area for biosimilars, in terms of launching, because you already have a beachhead in Germany. And I think, overall, the picture you gave looks like a good setup for an opportunity to grow. Right? That's the way you would like to summarize it? Absolutely. The most one-line summary is that we are just not happy with our international presence today. We certainly have a big job ahead of us and we are keen that we build a much bigger presence. And we would look at capital allocation in the international markets very differently to what we had in the past. Which will be routed for acquisitions as well? Yes. Acquisitions will be part of it but again, it will be very very methodical, and nothing transformational. It will be in a very digestible way I would say. Any views on MFN, pricing, tariffs all the things that we are getting signals from the West? I think we are on the same page as everyone. And in the same boat as everyone else, that is still very uncertain. Of course, if it does get implemented, it could be a slight negative for the industry overall. But again, generics may not be impacted to the degree that branded Pharma would be. That's the current feeling. I think it's best to wait for the fine print to come out before taking any actions or making any speculative comments at this moment. Don’t miss the full conversation. Watch the complete interview here: By Vikas Dandekar ,