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Yusuf K Hamied

Yusuf K Hamied, chairman and managing director, Cipla wants to put an end to rumours that multinational giants are in talks with the pharma company to acquire it. In an interview with Business Standard , Hamied emphasises the importance of international collaborations and partnerships for Indian pharma companies to grow in the global market space, but insists that Cipla's dealings with multinational companies has so far not gone beyond such collaborations. Excerpts:

There are strong rumours that multinational pharma firms are in talks with Cipla for a complete acquisition. Even names like Teva, Pfizer, Sandoz and Ranbaxy were making the rounds. Is there any basis for such rumours?

As matters stand today, we have no intention of selling the company. These all are quite speculative and have no substance. I have not been talking to any of these companies and I'm sure, it will not happen in my life time. At the same time, national as well as international business collaborations are crucial for Indian pharma companies to sustain growth in the domestic and global market space. However, we cannot predict the future situation at this point of time.

Cipla has strategic alliances with global generic companies — Ivax as well as Teva. Has the recent acquisition of Ivax by Teva had an impact on Cipla's partnerships with these companies?

Though our company had alliances with both these entities, the acquisition deal and the consolidation process between these two have not made any impact on Cipla yet.

Cipla has announced that it would go ahead with the production of avian flu drugs to fight a possible pandemic. Since there is patent protection on one of these drugs, how would you go about it?

Since the currently available drugs to treat the avian flu have not yet been granted patents in India, nobody can stop any generic manufacturers from producing it in the country. So Cipla is readying for the production of Oseltamivir as well as Zanamivir in India. The company is currently in the process of preparing bioequivalence studies and will get necessary approvals from the regulators.

The company will make the drugs available for Indian patients as well as patients in all the least developed countries, where there is no patent regulation yet, at the time of an outbreak. I wish such a situation would not arise. However, we'll keep the stocks ready.

Cipla made successful moves to lower the prices of HIV/AIDS drugs globally by introducing cheaper generics despite pressure from multinationals. There has been criticism that the company will capture a sizeable market for its generic drugs in those markets. How do you respond to this?

Cipla's move has been a part of its commitment to the population of India and it is the same with any other poor country which cannot afford the high drug prices fixed by multinationals, who enjoy a monopoly in the name of patent protection. In India, healthcare is in a state of perpetual crisis as the disease profile is frightening here. Same is the case with many of the poor countries. It was a bold step on our part to announce a major price reduction for our triple drug cocktail Triomune — at below $1 per patient. However, the multinationals are now on the defensive. Apart from lowering their prices, they accused us of not having WHO approval for our anti-AIDS drugs. But within a relatively short time, a number of anti-retroviral drugs and three of our factories got WHO qualification.

Do you support the Intellectual Property Rights (IPR) regime in India?

We respect patents. But it should not lead to a monopoly as the country cannot afford to have such a situation, at least in the case of medicines. What we want is a permanent compulsory licensing system to ward off monopoly. This will allow generic drug companies to produce the drug by paying a royalty, for the benefit of the large majority of the Indian population. Cipla believes in that and it is ready to pay 4 per cent royalty to the originator. The bird flu threat has, in fact, given the country an opportunity to take hard look on how it wants to implement the product patent regime that has now became effective here.

When Novartis was granted the exclusive marketing right (EMR) for its anti-cancer drug Glivac, despite the lack of clarity on the claims of the originator, generic companies, including Cipla, had to withdraw their generics from the market. Do you foresee the same kind of situation in the post-IPR regime when patents are granted on such borderline cases?

Imatinib was apparently a borderline case. So the government should not have granted the EMR. As the drug had a patent granted pre-1995, it didn't deserved the grant of patent in India as per the current IPR law. Following the exclusive marketing right (EMR) granted to Novartis, the generic players had to withdraw their cheaper versions, leaving thousands of poor patients in the lurch. It should not happen. Using the opportunities such as pre- and even post-grant oppositions, generic companies should come forward to prevent such non-deserving candidates from obtaining patent protection, for safeguarding public health.

What are your growth strategies for Cipla, including future investments?

The company has plans to invest about Rs 300 crore towards capacity expansion at all its facilities in Baddi, Patalganga, Kurkumbh and so on. The facilities will be upgraded in view of the stringent requirements of the global market. The company expected to clock a 15-per cent growth in sales in the financial year 2006. Profits will be in line with the previous year. Exports will be a thrust area for Cipla in future. We currently spend about 4 per cent of our turnover on research and development and it will go up significantly in the coming years.

New Delhi: Dec2 Despite awaiting Roche's licence for production and petitioning the government for compulsory licensing, Indian companies have lined up capacities and markets for generic tamiflu (Oseltamivir).

On Friday Laboratories Ltd said it was ready to provide oseltamivir phosphate capsules, a treatment for Avian influenza, to the US healthcare system if asked by Washington or Roche, the innovator.

The company has a current capacity to produce 300 million capsules (75 mg doses) which would be scaled up to 1.3 billion capsules a year.

Cipla,too, plans to start supplies of Tamiflu to some Asian and European countries from January, reports Dow Jones, quoting joint managing director Amar Lulla.

The generic major has a capacity to produce 750Kg of the drug a month, which can treat 750,000 patients.

“In terms of available capacity, within six months, we anticipate being able to produce 22 tonnes per annum (equivalent to 300 million capsules) of the Active Pharmaceutical Ingredient (API) based on Ranbaxy's API process. Within a twelve month period, we expect to scale up our operations to produce a total of 100 tonnes per annum,” said Ranbaxy CEO and managing director Brian Temestinastatement.

“The API would be manufactured in Ranbaxy's FDA compliant facilities in India , and the capsules could be manufactured at its US facilities,” Mr. Tempestadded.

He said it was estimated that within the first six months approximately 20 million patients could receive a course of treatment, and within the first year in excess of 100 million patients could be managed for the Avianflu.

“The company will make all efforts to work with the USFDA to secure approvals to manufacture the API as well as capsules within the company's facilities in order to reach the projected goals as may be indicated by the US government,” headed.

Roche is still believed to be in talks with several generic majors including Ranbaxy and Cipla to grant licences for the generic. It has also told the governments of Thailand , Indonesia and Philippines that they are free to produce Tamiflu.

MUMBAI: Leading pharmaceutical company Cipla Ltd has entered into a deal with US-based Akorn Inc to develop and supply a generic oral anti-infective drug.

Under the deal, Cipla will develop and make the drug, while Akorn will make the regulatory submissions and do the clinical development.

Akorn will pay Cipla development fees as  and when milestones are reached. Akorn will have exclusive marketing rights for the drug in the United States .

Sources said Akorn Inc has already signed a letter of intent with Cipla to develop and supply an oral anti-infective abbreviated new drug application drug product.

The letter of intent anticipates executing a definitive agreement within 90 days upon terms and conditions agreeable to both Akorn and Cipla. Amar Lulla, joint managing director, Cipla said, “The drug will hit the US market in the next 18-months.” He refused to divulge the size of the deal and name of the drug.

Akorn has manufacturing facilities located in Decatur , Illinois and Somerset , New Jersey and markets and distributes an extensive line of hospital and ophthalmic pharmaceuticals. The drug is distributed and used mainly in US hospitals and has a current market size of $100 million.

This could be a windfall for Cipla. Its exports have jumped 32.63% year-on -year to Rs 320.5 crore in the September quarter. This was driven largely on a surge in its formulations business.

Formulation exports at Rs 248 crore in Q2 FY06, grew 57% year-on-year and that was largely owing to higher dispatches of budesonide inhalers to Germany .

MUMBAI: For some time now, Yusuf Hamied, chairman and managing director of generic drug maker Cipla has been talking about making a drug to combat the dreaded bird flu.

He said that he would manufacture 100,000-200,000 dosages of the bird flu drug Tamiflu for emergencies.

However, as per international patent laws, the company would not be allowed to sell the product in the signatory countries.
This means that Cipla would not be able to market the drug in the lucrative US and European markets.

“We are planning to manufacture the bulk drug and store it and hope that we never have to use it,” he said. Hamied denied that Cipla had already spoken to Roche about a possible contract manufacturing deal, but would approach the Swiss pharmaceutical major shortly.

Roche currently holds the worldwide patent for Tamiflu. “We would like Roche to give us the licence for the countries where the drug is patent protected,” Hamied said.

Cipla doesn't require Roche's approval for selling the drug in markets not covered by the patent protection laws.

Cipla's entry in the Tamiflu segment is expected to drive down the price, similar to what had happened in the HIV medicine market. Currently Roche retails Tamiflu at $60 for a strip of 10 tablets.

The generic bulk drug used to manufacture Tamiflu is Oseltamavir, which Cipla plans to manufacture. Another drug used to treat flu is Relenza, manufactured by GlaxoSmithKline. Cipla is also toying with the idea of manufacturing Relenza's bulk drug Zanamavir.

However, sourcing the raw material for the drugs — ischemic acid for Oseltamavir, and m-acetyl neuraminic acid — is posing to be a challenge, since limited number of players manufacture them.

These bases are extremely expensive. M-acetyl neuraminic acid costs $3500 per kg, and Cipla wants the multinational pharma companies to licence the extraction process in return for royalty.

Drug Effect:
Cipla Doesn't require Roche's approval for selling the drug in markets not covered by the patent laws.

It's entry in Tamiflu segment is expected to drive down the price.

However, as per the patent laws the company will not be allow to sell the product in the signatory countries.

Mumbai: US based Akorn Inc has signed a letter of intent with Mumbai-based domestic pharma major Cipla, to develop and supply an oral anti-infective abbreviated new drug development application (ANDA) drug product .Akorn will pay, Cipla product development milestone fees of an undeclared amount.

The US firm has agreed to purchase the product from Cipla and will own the ANDA with exclusive marketing rights in the US .

The oral ANDA anti-infective drug product is distributed and used primarily in US hospitals and has a current market size of approximately $100 million.

While Cipla will be responsible for the development and manufacturing of the drug, Akorn will be responsible for the ANDA regulatory submission and clinical development.

The letter of intent anticipates executing a definitive agreement within ninety days upon terms and conditions agreeable to both Akorn and Cipla.

Speaking about the tie-up, Arthur Przybyl, Akorn's chief executive officer said: “Over the years, Cipla has demonstrated its ability to successfully develop and manufacture drug products for the US marketplace. This product is an excellent fit for Akorn's distribution channel strategy because the product sales are primarily driven by hospitals.”

Akorn manufactures and markets sterile specialty pharmaceuticals. With manufacturing facilities in Decatur , Minois, Somerset and New Jersy, the firm markets and distributes an extensive line of hospital and ophthalmic pharmaceuticals.

In 1935, Mr. Khwaja Abdul Hamied set upThe Chemical, Industrial & Pharmaceutical Laboratories, which came to be popularly known as Cipla. He gave the company all his patent and proprietary formulates for several drugs and medicines without charging any royalty. On August 17, 1935 , Cipla was registered as a public limited company with an authorized capital of Rs.6 lakhs.

The search for suitable premises ended at 289, Bellsis Road (the present corporate office) where a small bungalow with a few rooms was taken on lease for 20 years for Rs.350 a month.

Cipla was officially opened on September 22, 1937 when the first products were ready for the market. The Sunday Standard wrote: “The birth of Cipla which was launched into the world by Dr. K A Hamied will be a red letter day in the annals of Bombay industries. The first city in India can now boast of a concern, which will supersede all existing firms in the magnitude of its operations. India has lagged behind in the march of science but she is now awakening from her lethargy. The new company has mapped out an ambitious programme and with intelligent direction and skillful production bids fair to establish a great reputation in the East.”

July 4, 1939 was a red letter day for Cipla, when the Father of the Nation, Mahatma Gandhi, honored the factory with a visit. He was “delighted to visit this Indian enterprise”, he noted later. From the time Cipla came to the aid of the nation gasping for essential medicines during the Second World War, the company has been among the pharmaceutical industry in India .

In 1942, Dr. Hamied's blueprint for a technical industrial research institute was accepted by the government and led to the birth of the Council of Scientific and Industrial Research (CSIR). Which is today the apex research body in the country.

In 1944, the company bought the premises at Bombay Central and decided to put up a “first class modern pharmaceutical works and laboratory”. It was also decided to acquire land and buildings at Vikhroli. With severe import restrictions hampering production, the company decided to commence manufacturing the basic chemicals required for pharmaceuticals.

In 1946. Cipla's product for hypertension, Serpinoid, was exported to the American Roland Corporation, to the tune of Rs.8 lakhs. Five years later, the company entered into an an agreement with a Swiss firm for manufacturing foromycene.

In 2003 Cipla launches TIOVA (Tiotropium bromide), a novel, inhaled, lonf-acting anticholinergic bronchodilator that is employed as a once – daily maintenance treatment for patients with chronic obstructive pulmonary disease (COPD).

Exports for the financial year ended March 31, 2005 amounted to more than Rs.10,500 million. Cipla exports raw materials, intermediates, prescription drugs, OTC products and veterinary products. Cipla also offers technology for products and processes. Technicals and processes. Techinical know-how/fees received during the year 2004-05 amounted to Rs.415 million, Cipla's manufacturing facilities have been approved by the following regulatory authorities: Food and Drug Administration (FDA), USA , Medicines and Healthcare products Regulatory Agency (MHRA), UK

Therapeutic Goods Administration (TGA), Australia Medicines Control Council (MCC). South Africa National Institute of Pharmacy (NIP), Hungary Pharmceutical Inspection Convention (PIC), Germany World Health Organization (WHO) Department of Health. Canada State Institute for the Control of Drugs. Slovak Republic ANVISA . Brazilz.

AN HONOUR: The Director, Tata Sons Ltd, J. J Irani, presenting the V. Krishnamurthy award for excellence to the Chairman of the Cipla, Yousuf K. Hamied (second left), in Hyderabad on Saturday. The former CMD of the Madura Coats, M.B.S. Henry, and the Chairman, ONGC, Subir Raha (extreme right), look on. Photo: Mohd. Yousuf

HYDERABAD: The chairman and managing director, Cipla Limited, Yusuf K.Hamied, on Saturday urged the Government to reexamine the recently passed Patents Bill, saying it would eventually be harmful to the majority of people.

Accepting the V. Krishnamurthy award for 2005 for excellence from J.J. Irani, Director of Tata Sons, here on Saturday, he said that India must decide its own destiny.

Disease profile

" We cannot blindly follow directives emanating from the corridors of power, be it in London or Washington".

Giving an account of the disease profile in the country -- 80 million cardiac patients, 60 million diabetics, 110 million patients with mental illness, 50 million asthmatics and an equal number of Hepatitis B cases, he said the World Bank had estimated that India will have 35 million HIV positive cases by 2015, about 50 per cent of the world's total at that time.

Given these morbid statistics, he said India simply could not afford any form of monopoly in health care. By 2010, many of the newer, important drugs would be beyond the purchasing ability of most Indians.

The ONGC chairman, Subir Raha, read out the citation of the award, instituted by the city-based Centre for Organisation Development (COD). Mr. Irani, lauding the leadership qualities of Mr. Krishnamurthy, said that a successful leader should have vision, perseverance, clarity and credibility.

M. B. S. Martin, former managing director, Madura Coats, also spoke. B. L. Maheshwari, director, COD, welcomed and Habil F. Khorakiwala, CMD Wockhardt Limited proposed a vote of thanks.

This is our 70th year, and the awards are a good landmark to remember it by

With a growth rate of 6.6 percent, Cipla has outpaced the industry-average growth rate of 6.4 percent. In the domestic market, Cipla has over 1000 products of which 55 were launched last year. The company has introduced several new products and line extensions including Duova Rotacaps and inhalers for COPD, Duovir E Kit for HIV management and a range of asthma products with a unique in-house multihaler device for delivery of the active ingredient.

“Our ranking in the domestic market can primarily be attributed to the fact that we have one of the largest product portfolios in the industry,” says Cipla's Joint MD, Amar Lulla. “The WHO rejection of our anti-retroviral did affect business, but later it was found that the bio-study lab analysing the product was at fault. The name of our product was cleared and the sales recovered,” reveals Davinder Singh, Technical Director, Cipla.

Apart from the new products launched, Cipla has taken many new initiatives in the past year in the areas of manufacturing, research & development and marketing. The company came up with new manufacturing facilities in Goa and Baddi. It also entered into a research alliance with a Bangalore-based biotech company to develop biopharmaceutical products. A number of patents, local as well as international, were also filed during the year.

“We conducted a number of activities to celebrate our 70 years in the industry, among which was our initiative to conduct AIDS awareness drives in schools and other forums,” discloses Singh. Cipla's initiatives in the coming year include expanding into new markets and new products. “Predominantly, we intend to come out with a suite of hormone products, anti-cancer drugs and a new range of lyophilisers,” declares Singh.

MUMBAI: Local pharmaceutical major, Cipla, has ended GlaxoSmithKline's 28 year reign to emerge as the leading player in the domestic retail pharmaceutical market for '04, market research organisation ORG-IMS's Pharmaceutical Retail Audit has said.

Cipla has garnered a 5.5% share of the domestic market at the retail level, with sales of Rs 1,128 crore, marginally ahead of GlaxoSmithKline (GSK).

“Our ranking in the domestic market is primarily due to the fact that we have one of the largest product portfolios in the industry,” Cipla's joint MD, Amar Lulla, told ET. With a value growth of 6.6%, Cipla has just about outpaced the industry overall growth rate of 6.4%.

The company has over 1,000 products in the domestic market. It has launched over 55 products in '04 alone. Cipla's anti-asthma brand Asthalin is ranked seventh among the top 10 retail pharmaceutical brands. Cipla's lead, however, is only a marginal Rs 14 lakh.

Besides, the data is restricted to only sales at the retail level and true picture of a company's standing only emerges if sales at hospitals are added up. GSK's spokesperson said ORG-IMS's data does not capture institutional sales or sales of vaccines, where GSK has a major presence.

“We believe that this data does not capture all aspects of our business,” he said. According to GSK's spokesperson, IMS Health's (which indicates sales made to hospitals and stockists) numbers for the year show GSK with a share of 6.45% and Cipla at 4.93%.

Shailesh Gadre, MD, ORG-IMS, said Cipla's growth was primarily driven by the new products that it launched over the last few years. “New launches, which have contributed to both value and volume growth, have been the primary differentiator for Indian companies,” he said.

According to ORG-IMS data, GSK has registered a value growth of 2.7%, much lower than the industry average of 6.4%. But the company's market share is still at a significant 5.4%, just below that of Cipla. Thus, GSK is still within striking distance of Cipla.

And given that a new patent regime is being implemented, the change could come sooner than later. “The domestic industry has focused on launching as many new molecules as possible while it still has the window of opportunity. But over time, the dominance of building brands will take priority,” Mr Gadre said

Ranbaxy trails Glaxo at the third spot, with a market share of 4.5% and sales of Rs 919 crore. Nicholas Piramal retains its fourth position with a market share of 4.3% and sales of Rs 872 crore. Sun Pharma saw the maximum value growth of 13.9% at Rs 674 crore.

The fifth ranked domestic pharma company has 3.3% of the retail market. Dr Reddy's Laboratories, which is ranked sixth, was the only company among the top 10 to suffer a dip in value growth. Its sales dipped 1.7% to Rs 499 crore, while its market share shrank marginally to 2.4% from 2.6% last year.

Ahmedabad-based Zydus Cadila also retained its position at the seventh spot, growing 5.4% over last year to Rs 496 crore. Its market share was unchanged at 2.4%. Unlisted Aristo moved up two ranks since last year to emerge as the eight largest player in the domestic market. Aristo was the only other company besides Sun Pharma to record double digit growth.

Its sales were up 13.2% at Rs 476 crore. Aristo pushed MNC Abbott India down one slot. Abbott registered a growth of 6.9% to Rs 473 crore. Abbott, incidentally, is the only MNC other than GSK to be on the top 10 companies. Another unlisted company, Alkem Laboratories, has managed a slot among the top 10. The company has registered a value growth of 7.5% at Rs 448 crore.

The Company has appointed M/s. Karvy Computershare Private Limited as its Share Transfer Agents in place of M/s. Intime Spectrum Registry Limited effective 1 st April 2005 . All concerned including investors are requested to send all documents, Share Transfer Deeds etc. at the under mentioned address:

Karvy Computershare Private Limited
(Unit: Cipla Limited)
“Karvy House” No 46, Avenue 4, Street No. 1
Banjara Hills, Hyderabad 500 034
Tel : (040) 23312454 / 23320751 / 23320752
Fax: (040) 23319434
Email: mailmanager@karvy.com

In addition to the aforesaid address, investors may also submit the documents at Investor Service Centres of Karvy across the country the details of which are available on its website www.karvy.com

M/s Intime Spectrum Registry Limited will cease to act as Share Transfer Agents of the Company with effect from 31 st March 2005 .