alkem: Alkem Labs to grow chronic therapies, biosimilars to drive future growth: MD

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Alkem Laboratories, a top-seller of antibiotics, is focusing on the chronic therapy segments and is investing heavily in biosimilars and contract development and manufacturing services, its managing director, Sandeep Singh, told ET.

The Mumbai-based drug maker, which entered the US generics market over a decade ago, is also scaling back its investments on oral solids in the face of competition and price erosion.

Alkem, known for its mega-brands such as Clavam (amoxycillin and clavulanic acid), Pan (pantoprazole), Pan-D (pantoprazole and domperidone), and Taxim-O (cefixime), among others, is the fifth largest drug maker in India in terms of domestic sales.

The business, however, is skewed heavily towards the acute segment consisting of anti-infectives, gastro, pain and vitamins, which Singh is trying to change.

“What has worked for us in the past, will not work for us in the future, because the industry has changed, the disease profile has changed, business model also undergone some changes, our growth driver in the future–on the domestic side is chronic therapy, so far it is very small for us,” Singh said in an interview with ET. “Imagine a top-5 company; in cardiology we are ranked 23-24. Very clearly that’s an area we should look at.”

Alkem’s FY23 revenue from operations was Rs 11,599 crore, of which India accounted for 70%. The rest came from international business, of which the US alone accounted for 90%.

Singh identifies cardiovascular, diabetes and central nervous system (CNS) as key focus therapies.

To crack the chronic illness segment, Alkem has launched several new divisions, expanded its field force over the last two-three years, and is recalibrating its sales push from a largely general practitioner-driven to specialist-focused one.

Singh said he is seeing some green offshoots. The new launches, like heart failure drugs valsartan and sacubitril, and anti-diabetes medications sitagliptin and dapagliflozin, have garnered decent market shares despite competition.

He expects the chronic illness segment to contribute at least 25% of revenue.

Alkem has its roots in rural Bihar. It was founded 50 years ago by Samprada Singh and Basudeo Narain Singh. The drug maker grew organically, shying away from big-ticket acquisitions.

Singh’s other major bets are biosimilars and CDMO. For that, Alkem has invested more than Rs 1,000 crore in its wholly owned subsidiary Enzene Biosciences–the Pune-based biotech firm that’s developing biosimilars and has also built CDMO capabilities.

The managing director said Enzene will be an independent company, will fund its own research and will serve the biotech industry, and not just Alkem.

Enzene is making progress. The biotech arm has received approval for launch of three biosimilars–adalimumab, cetuximab and bevacizumab in FY23 in the Indian market and is conducting global trials for launch of select biosimilars in regulated markets.

Last week, Alkem launched the world’s first biosimilar version of anti-cancer drug Erbitux in India, developed by Enzene. Lupin also launched the same biosimilar with a licensing pact from Enzene.

On mergers and acquisitions, Singh said he will wait and watch for the next three to four years.

“When it comes to cash on books, we are a conservative company… But we will not do anything large just because we have money, nor we will give too much dividend and flush the money out,” Singh said. “I think in the next 3-4 years we will just watch out, because opportunities will also evolve rapidly.”

Alkem had net cash of Rs 2,140 crore as on March 31, 2023.

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