Teva outlines expansion plans in Asia

Genéricos/Novedades | Posted 20/01/2012 post-comment0 Post your comment

Generics giant Teva is looking for deals in Asia, which the company believes will see strong future expansion in the use of generics.

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Teva’s Chief Financial Officer Mr Eyal Desheh listed countries such as China, India, Korea, Philippines and Vietnam as being possible areas for expansion, in a presentation at the 30th Annual JP Morgan Healthcare Conference in San Francisco, USA, held on 10 January 2012.

‘None of these will be huge acquisitions and this push may take a few years,’ Mr Desheh told Bloomberg during an interview at the conference.

Asia is one of the fastest growing healthcare markets in the world. Asia’s ageing population and the need for less expensive drugs are fuelling the growth of generics market in the region. The generics market for China alone was estimated to reach nearly US$41 billion in 2011 and is expected to increase at a 14.9% compound annual growth rate to reach a value of US$82 billion by 2016 [1].

Mr Dasheh also pointed to Brazil as being another potential ‘major market’ for Teva to ‘get into’. Brazil is the largest generics market in Latin America and is poised to become one of the fastest growing regions in coming years. With a compound annual growth rate of nearly 19% expected during 2010–12, it is not surprising that Teva is also looking to exploit this opportunity [2].

Teva also signed an agreement in September 2011 to build a manufacturing plant in Russia. The Russian Federation is the largest country in the world and has a population of almost 143 million [3], providing a huge potential market for Teva to tap into. Russia is an emerging market in the use of pharmaceuticals, and the US$3.5 billion Russian generics market is one of the fastest growing markets in the world [4].

Teva was outlining its future strategy at the conference and how life would be after the patent expires on Copaxone (glatiramer acetate), the company’s blockbuster multiple sclerosis treatment.

The US patents on Copaxone will expire in 2014. This is expected to hit Teva hard, as the drug is a major earner for the Israeli-based firm. Third-quarter sales in 2010 were US$808 million, up 4% on the same period in 2009 [5].

Mr Bill Marth, President of the company’s America’s Unit, also told Bloomberg that the company is looking to expand its branded business to compensate for the expiration of the Copaxone patent. Teva’s new Chief Executive Officer Mr Jeremy Levin, a former executive at Bristol-Myers Squibb, is expected to help generate more deals involving companies with experimental medicines, when he takes over in May 2012.

This is a bit of a turnaround for Teva, now the world’s largest generics company, which built its successful generics business based on challenging patents for proprietary drugs, but now seems to be set on joining the ‘other side’.

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References

1. BCC Research. Generic drugs: the global market – focus on Asia [monograph on the Internet]. BCC Research [cited 2012 Jan 20]. Available from: www.bccresearch.com/report/asian-generic-drugs-market-phm108a.html

2. RNCOS. Brazil generics market forecast to 2012 [monograph on the Internet]. RNCOS, c2012 [cited 2012 Jan 20]. Available from: www.rncos.com/Report/IM249.htm

3. Railean L. PMLive. Market access: Russia [monograph on the Internet]. PM Group Worldwide, c2011 [cited 2012 Jan 12]. Available from: www.pmlive.com/find_an_article/allarticles/categories/General/2011/november_2011/features/market_access_russia

4. Economic Times. Claris gets Russian nod for anti-infective drugs [monograph on the Internet]. USA, Bennett, Coleman & Co., c2012 [cited 2012 Jan 20]. Available from: www.articles.economictimes.indiatimes.com/2011-05-27/news/29590134_1_infective-claris-lifesciences-russian-market

5. GaBI Online - Generics and Biosimilars Initiative. Teva again files citizen petition against generic Copaxone [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Jan 20]. Available from: www.gabionline.net/Generics/News/Teva-again-files-citizen-petition-against-generic-Copaxone

Source: Bloomberg, Teva

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