Lupin’s Japan story assumes significance as it held on to the highly regulated market when most of its Indian peers quit.
Stock Market News » Mumbai-based Lupin Pharmaceuticals decision to stay invested in the Japanese market, when its peers gave up, has paid off. The firm clocked a 23.4 per cent year on year (YoY) growth rate in Japan sales in 2017-18, highest in the past five years. The firm is readying itself for the next wave of growth in Japan that would come from biosimilars and expects 50 per cent of its Japan sales to come from the speciality business.
Lupin’s Japan story assumes significance as it held on to the highly regulated market when most of its Indian peers quit. Ranbaxy, one of the first entrants, exited its joint venture (JV) with Nippon Chemiphar in 2009 December. Others like Dr Reddy’s, Orchid Chemicals and Cadila Healthcare too wound up their Japanese business in the following years.
Fabrice Egros, president, AsiaPac and Japan for Lupin, said, “We entered the Japanese market in the late 2005; at that time it was the second-largest pharmaceutical market in the world. Along with that, the regulatory reforms driven to support generics players and the National Health Insurance also supported the growth of generics to as high as 20-30 per cent. These factors made investing in Japan a natural choice for Lupin.” It made some strategic investments in that country and managed to grow them. Lupin acquired generics player Kyowa in 2007 when it ranked among the top 60 firms in Japan. Egros said in the last 10 years it has transformed to the sixth rank.
The Asia-Pacific region contributed around 17 per cent of Lupin’s global sales in FY2017-18 and Japan contributed 80 per cent to its revenues in the region. This is ex India, which is considered a separate region, and not a part of the APAC. With sales of Yen 35,478 million in 2017-18, Japan roughly contributed to 10 per cent of Lupin’s global sales.
The Japanese government has been pursuing the agenda of promoting generics and has set the target of 80 per cent generic utilisation by FY2020-21. Incentives will remain until this period and then it will switch to biosimilars. Lupin has thus drawn up a plan to build a biosimilars portfolio. It expects to launch rheumatoid arthritis biosimilar Etanercept in FY2018-19 and has tied up with Nichi-Iko for its distribution.
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