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Aurobindo looks for inorganic growth prospects in East Europe

Aurobindo looks for inorganic growth prospects in East Europe

Mumbai: Hyderabad-based Aurobindo Pharma is looking at inorganic growth opportunities in Eastern Europe and other geographies for deeper market penetration and to secure newer technologies.

Apart from acquisitions, the company is also keen to expand its product portfolio in the US and Western European markets with high-value drugs. The high-value products that are in the pipeline include oncology, hormones, depot injections, peptides, inhalers, patches and films, vaccines and biosimilars, the company said.

“Our acquisition strategy will be largely on two platforms. One is to penetrate markets deeper and the other to secure newer technologies and platforms. We always maintain that anything that can come across in Eastern Europe will be prioritized,” Aurobindo Pharma’s managing director N Govindarajan said in an earnings presentation.

But he was quick to add that there is no pressure on him to do an acquisition to fill any gap as “there are enough opportunities to grow organically”.

Earlier this year, the company announced the acquisition of Portugal’s Generis Farmaceutica SA from Magnum Capital Partners for a consideration of Euro 135 million (around Rs 969 crore).

The acquisition of Generis, by leveraging its strong portfolio and unrivaled brand recognition is expected to allow the company to establish itself as the top generics player in the Portuguese market.

On product expansion into existing markets, he said, “The portfolio mix is complemented with the introduction of high-value products and the future pipeline that includes oncology, hormones, depot injections, peptides, inhalers, patches and films, vaccines and biosimilars.”

For FY18, it plans to spend about USD 130 million towards capex in vaccines and biosimilar.

During the second quarter, its revenue rose 17 percent to Rs 4,436 crore driven by strong growth across key markets, boosting its bottom line by 29 percent to Rs 781 crore.

Formulation business contributed 83 percent of total sales and with Rs 3,663 crore, registering a 22 percent growth. API business accounted for the balance of Rs 772 crore in Q2.

In the formulations business, total sales from the US markets stood at Rs 2,099 crore, an increase of 21 percent year-on-year. The growth was primarily driven by new products and improved volumes of existing products.

“We have launched eight products, including two injectables in the September quarter. Aurobindo USA has witnessed a growth of 37 percent in the quarter driven by new product launches and higher volume,” Govindarajan said.

The company has filed a total of 90 injectable ANDAs as of end September, of which 51 have already been approved– two tentative approvals and the rest are under review with USFDA.

He expects injectable business, which has already ramped up well, to grow by at least 40 percent this fiscal. But oral division disappointed with a price erosion of 9-11 percent.

“Even though there is pressure, we still believe we would be able to grow our US business because there are a lot of opportunities for growing the volume as well to launch some new products,” Govindarajan said.



Source: PTI
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