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Why Lupin’s Solosec is a cautionary tale for the much-hyped speciality drug business

The company’s speciality business has contracted 50 percent, as Covid continues to take a toll and limits its ability to promote Solosec to prescribing doctors

November 10, 2020 / 04:58 PM IST
 
 
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Drug maker Lupin, which had pinned its hopes on flagship speciality drug Solosec driving sales growth in the US market, finds those plans in some disarray due to the sharp drop in prescriptions for acute medicines and the continued impact of Covid-19 in that market.


Lupin has scaled down the operations of its speciality business focussed on women’s health. The company reduced its front-end salesforce by over 120 people to 45 in June and is focussing more on a digital push to promote the drug. To limit cash burn, Lupin reduced patient co-pays coupons, though this also means lower sales.


“The last two quarters have been quite a dynamic situation on the (speciality) business. One, because of Covid, the business is down 50 percent, and then our restructuring certainly had an impact on share of voice,” said Vinita Gupta, Lupin CEO, during the company’s recent earnings calls.


“Our scripts (prescriptions) are relatively flat; revenues are relatively flat. Obviously, that’s not what we are satisfied with,” Gupta added.


Analysts say weekly prescriptions of Solosec before the onset of Covid-19 stood at more than 2,000 patients, with 10 percent quarter-on-quarter growth. The product contributed $3-5 million in revenues.



Huge bet

Solosec, which is used to treat bacterial vaginosis — the most common vaginal infection among women of childbearing age — became Lupin’s asset after it acquired Symbiomix Therapeutics by paying $150 million in October 2017 to expand the women’s health segment.


The drug was approved by the USFDA in September 2017, with a 10-year marketing exclusivity. Lupin earlier said it will be spending $45-50 million on an annual basis on promotions, the highest ever by the Mumbai-based drugmaker on any single drug so far. Lupin was earlier expecting the drug to break even by FY22.


To be sure, Solosec is a promising product with a high cure rate, few side effects and convenient (patients need just a single dose). Despite these advantages the uptake has been slow. In addition, it faces stiff competition from a cheaper generic antibiotic, Metronidazole, which continues to dominate the market.


But it is Covid-19 that has made things difficult for the company.


Gupta said Lupin’s sales teams were able to make only 35 percent of their face to face calls with gynaecologists and obstetricians in the US who write prescriptions.

For a product that is very promotion-sensitive, this doesn’t augur well.


But Gupta still believes Solosec will turn the corner during the first half of 2021, as the Lupin team works on ramping up scripts and revenues. She hopes the slowdown of Covid-19 and the USFDA approving a new indication for Solosec, to treat Trichomoniasis or trich in women, will be key drivers for the turnaround.



Cautionary tale

But others aren’t too excited about speciality drugs or prescription drugs that are based on incremental innovation such as repurposing or a novel formulation or requiring special handling.

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Speciality drugs are approved using a different pathway, called the 505(b)(2) new drug application, with a limited period of exclusivity. They see speciality drugs mitigating the rapid price erosion and commoditisation of plain vanilla generic drugs in the US.


The advantages end there. Companies have to build marketing and sales machinery to build brands, get the drug formularies to add the drug, and payers to back it. All this is very new for Indian drug companies, who are known for selling generic drugs.


Dr Reddy’s, for instance, in a major shift in strategy, sold or out-licensed most of its speciality or proprietary portfolio last year, and decided to refocus on the generics business.


Click here to read about Dr Reddy’s Labs’ reasons for scaling down its speciality business


Cipla, too, was talking about expanding into the speciality segment through acquisitions, but now says it is focussed on the generics business.


Cipla acquired Nasdaq-listed speciality business firm Avenue Therapeutics in 2018 for up to $215 million to access specialty drug Tramadol, which is delivered intravenously (IV) to manage post-operative pain.


“We are focussed on generics. The opportunity in the generic business is huge. The US generics business has been seeing healthy tailwinds, be it pipeline, bet it pace of approval, be it pricing,” said Kedar Upadhye, Cipla’s Global Chief Financial Officer.


“There are several issues about speciality; it is very expensive, just from the point of investment and capital requirement; and it has a long gestation — it takes a lot of time to break even and the capability required for go-to-market, portfolio is very high,” he said.


“One has to be careful, if you get into it then you should go with a long horizon. And it’s a risky choice, when you have enough headroom in generics business,” he added.

Sun Pharma, which has invested over $1 billion in building a portfolio of speciality assets, however, remains committed despite the Covid headwinds.
Viswanath Pilla is a business journalist with 14 years of reporting experience. Based in Mumbai, Pilla covers pharma, healthcare and infrastructure sectors for Moneycontrol.
first published: Nov 10, 2020 04:58 pm

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