In an exclusive interview, Laurus Labs CEO Satyanarayana Chava said the drug maker has invested around Rs 750-800 crore on developing products and building factories.
Laurus Labs, one of the world's largest producer of antiretroviral and hepatitis-C active pharmaceutical ingredients (APIs), is in the process of moving up the value chain by entering generics business in highly regulated markets such as US and Europe.
In an exclusive interview to Moneycontrol, CEO Satyanarayana Chava said the company has invested around Rs 750-800 crore on developing products and building factories to meet the most stringent of regulatory expectations, and is just waiting to reap the benefit.
"Our API business is doing well, we are making around Rs 2000 crore revenue (per annum), and we emerged as one of the top-5 generic API companies. For us the next growth avenue is the formulation business," said Chava.
Till now, Laurus has filed 18 abbreviated new drug applications (ANDAs), of which 7 are Para-IV filings that makes it eligible for 180-days market exclusivity if it prevails in a lawsuit invalidating the patents of the originator company.
The company had received approvals for diabetes drug Metformin, antimalarial Hydroxychloroquine and Tenofovir, Lamivudine,Dolutegravir (TLD)
One-third of those ANDAs filed by the company are related to antiretroviral drugs used in treatment of HIV/AIDS patients, the rest are related to diabetes, cardio and oncology.
ARVs such as Efavirenz, Tenofovir, among others generate about two-thirds of the company's revenues. Hepatitis-C drugs (antiviral) is another area that the company has found a firm footing.
With US patents for some key HIV therapies such as Bristol-Myers Squibb Co.’s Sustiva (Efavirenz) and Gilead Sciences Viread (Tenofovir Disoproxil) are set to expire starting from December 2018, Laurus Labs is gearing up to launch the rip-offs of those drugs.
Beyond US, millions of people affected by HIV are living in Africa, Asia and Latin American countries. The market size of this segment is estimated around $1.5 billion.
But much of ARVs distributed in these markets, are procured in bulk through a global tenders, and are funded by US President’s Emergency Plan for AIDS Relief (PEPFAR).
To participate in those tenders funded by PEPFAR, the suppliers will have to go through USFDA approval process. This is done to ensure highest quality drugs are supplied to patients.
Three combination drugs that have emerged as potent weapons in the fight against HIV/AIDs for emerging markets include TLD, Tenofovir, Lamivudine, Efavirenz (TLE) 400 and TLE600.
With USFDA approval for TLD already in place, Laurus said it is expecting WHO approval by end of March for the same, and plans to file for TLE600 in October 2018 and TLE400 by January 2018.
Given the backward integration, large capacities and cost efficiencies it has built over the years, Chava expects the formulation business to see cash break even in FY20.
Chava also doesn’t see any funding problem, as cited by some companies.
"We are talking about $75 per year or $6.25 per month to manage a something like HIV/AIDS, this is less than the cost of treating cold. HIV/AIDS became a very manageable disease funding wise," Chava said.
South Africa that alone accounts 25 percent of world's HIV population is funding its own national AIDS control programme, by procuring drugs through floating tenders.In the fight to get a piece of the ARV market, Chava knows he will have to compete against heavyweights such as Mylan, Aurobindo Pharma and Hetero Labs.