The generic industry is consolidating rapidly, of course, but India’s Glenmark hopes to succeed by balancing copycats with innovative R&D. The Economic Times spoke with ceo Glenn Saldanha and this is an excerpt…

ET: What do you see happening in the pure generic industry in the coming years?
Saldanha: There is going to be a lot of consolidation. In the next five years there are going to be only a few major generic players who will be able to cater to the US and Europe generic market. Wholesalers will want to deal with companies who have many products. A product basket of five or six won’t do anymore. So companies are going to want to consolidate to get scale and to increase the product basket. The barriers for entry are also going to be high so there are going to be interesting changes. The US FDA is getting stringent and clamping down on companies, so smaller companies will find it more difficult to comply with the regulations.

ET: Do you think an Indian company will launch an innovative drug by 2010?
Saldanha: I think 2011 or 2012 is a more reasonable timeframe. For our part, we currently have 32 molecules in phase two II trials and another two in phase III. We are targeting around eight molecules in the clinics in this financial year. By the next financial year, we will have at least two molecules in phase three trials. Our target launch date for our first molecule will be 2012 and if that happens it will be a truly global launch. We are targeting a 2012 launch in the US.

ET: With the FDA getting more stringent, how important is US market for Indian companies?
Saldanha: There is definitely going to be a shift in the next five to 10 years…

…The US will continue to be a big market. We have big plans for the US generics business. We have so far received 35 ANDAs and are expecting another 4-5 this quarter but its percentage to a company’s contribution will go down. Our revenue has more than doubled over the previous financial year for the US business and we have once again doubled revenue in the first quarter.

On the specialty side, we are also looking at acquisitions in the US market which will help make an inroad in that area. We are also concentrating on developing the BRIC countries and building a platform there. We have no presence in China at the moment.

ET: There is a lot of talk about pharma companies looking to acquire biotech companies…
Saldanha: I don’t know what the pharma industry will get by buying biotech companies. The skill sets are different and difficult to get. Also the guidelines about bio-similars are blurred as far as the US is concerned. Europe has taken a lead in this area but even there only one product by Sandoz has been approved for sale in the US and UK.

ET: What challenges do you see the industry facing in the coming years?
Saldanha : A large number of patents will be expiring over the next few years. That presents a huge opportunity for generic companies. However, while the size of the market for drugs going off-patent may look quite large, intense competition reduces the slice available to generic companies. Also the pipeline of drugs going off patent gets much thinner past 2011.

Also with the new patent laws, companies in India can’t make generic versions of drugs patented after 1995. So I think the growth is going to continue at 14 to 15 percent for the next two years. But it is going to marginally slow down after that.