The Next Growth Multiplier - Asia Pacific (APAC)

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The Next Growth Multiplier


Asia Pacific (APAC)

Lupin by numbers in Asia Pacific

LUPIN’S ASIA PACIFIC (APAC) REGION INCLUDES IMPORTANT BUSINESSES SUCH AS THE COMPANY’S 3RD LARGEST MARKET JAPAN FOLLOWED BY THE PHILIPPINES AND AUSTRALIA. APAC CONTRIBUTED 13% OF LUPIN'S GLOBAL REVENUES, RECORDING SALES OF ` 17,767 MILLION DURING FY 2016; A CAGR OF 15 % OVER THE LAST 4 YEARS.

Lupin's Sanda facility, Japan

According to various industry and global think-tanks such as IMS, McKinsey and PWC, the APAC region is amongst the fastest growing markets in the world; and is currently sized at USD 350 billion, representing close to 30% of the global pharmaceutical market. Importantly, APAC is slated to drive close to 50% of the global incremental growth going forward. Demographic and epidemiologic factors suggest rapid urbanization, aging population and the growing prevalence of chronic diseases combined with strong GDP growth and increased healthcare spend will contribute to the region being a high growth market for the Industry.

APAC Sales (RS. million)

Lupin’s growing presence and leadership credentials in Japan, The Philippines and Australia coupled with our efforts to enter new geographies with meaningful acquisitions are going to help us address these growth opportunities. FY 2016 saw us add depth by focusing on creating a quality pipeline, entering new therapies and expanding our manufacturing capabilities to address future demand which would ensure long-term growth. We have also entered new markets like Vietnam, Myanmar and Malaysia where we function through local business partners. Additionally, the region also covers geographies like Greater China, Taiwan, Indonesia, South Korea and Thailand, where the Company is keen to expand its footprint. We are switching gears and the APAC markets could well be the next growth multiplier.

Japan

Japan is Lupin’s 3rd largest market and contributed 10% to our global revenues during FY 2016. It is also the Company’s largest market within APAC contributing 77% of the region’s revenues. FY 2016 was a good year for Lupin’s Japanese business, Kyowa Pharmaceutical Industry Co., Ltd. including Kyowa CritiCare Co., Ltd.

APAC Sales (RS. million)

(collectively Kyowa) with the Company generating revenues of ¥ 25,062 million ( 13,646 million), a growth of 6% over the previous year. Lupin remains the 9th largest generic pharmaceutical player in the Japanese market with a strong presence in the Neurology, Cardiovascular, Gastroenterology and Injectables segments. Japan is a very important market for Lupin and we plan to make significant investments in Japan and in India to address the Japanese market.

Japan is the 2nd largest pharmaceuticals market in the world with sales of over USD 115 billion. Generics account for 56% of total pharmaceutical volumes in Japan, growing by 8%. The Japanese Government has a target of 80% generic penetration by 2020 which translates into an additional 25-30% of overall pharmaceutical volumes going generic. Add to this, patent expiries valued at over USD 14-16 billion by 2018 and the sum total amounts to one of the largest growth opportunities available to Lupin globally. The Company has been working on streamlining its business operations in Japan by focusing on creating a quality pipeline that includes biosimilars, taking measures to improve market penetration and expanding its manufacturing operations to meet future demand.

Construction for a new dedicated Oral Solids manufacturing facility at Tottori, Japan is on track and in full swing. FY 2016 saw Lupin’s dedicated offshore Japan manufacturing facility in Goa, India go operational and this will enable continued supplies from India and improved margins for the business. The new injectable line in Kyowa CritiCare has also gone on-stream this year.

The Philippines

The Philippines pharmaceutical market is valued at USD 3.4 billion. Lupin’s subsidiary Multicare Pharmaceuticals Philippines Inc. (Multicare) had a very strong year recording revenues of PHP 1,626 million ( 2,297 million) clocking a growth of 42% for FY 2016 as against an Industry growth rate of 9%. Multicare is ranked 22nd and is amongst the fastest growing pharmaceutical player in The Philippines (IMS March 2016). Multicare is a premium branded generics company with a strong presence in Women’s Health, Childcare, Anti-Infectives, Central Nervous System (CNS) and Paediatrics segments.

Australia

The Australian Pharmaceutical Market is valued at USD 12.5 billion with generics accounting for over 20% of the total market. Our Australian subsidiary Generic Health Pty Limited (Generic Health), generated revenues of AUD 29 million ( 1,395 million) and reported a growth of 12%, outperforming the market growth rate. A rapidly growing Over The Counter (OTC) market combined with factors like National Health Insurance coverage makes Australia a lucrative opportunity. Generic Health is a supplier of key generic prescription and OTC medicines to pharmacies and hospitals in Australia. Generic Health has also recently launched ‘Pharmacy Action’ – a new comprehensive range of quality, OTC products.

Scientists at the Kyowa Research Centre, Japan
Scientists at the Kyowa Research Centre, Japan

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