Nithya Subramanian

Dr Brian W. Tempest

New Delhi , April 11

RANBAXY Laboratories Ltd's Joint Managing Director and CEO (designate), Dr Brian W. Tempest, has his job clearly cut out — to steer the company towards the $2-billion mark by 2007.

Born in Lancashire in 1947 to a barber, the new head of India's leading pharmaceutical company aims at overtaking GlaxoSmithKline (GSK), the country's No. 1 pharma company, on the domestic front. He also intends to put the Ranbaxy brand on shop shelves across the globe in a short period of time.

Dr Tempest talks to Business Line about Ranbaxy's strategies and future growth opportunities.

Ranbaxy recently crossed the $1-billion mark. Where does the company go from here?

Well, we could smell the billion towards the end of last year. So, it's old news really. Our target is $2 billion by 2007 — that's what we are looking at right now. Vision Garuda wherein the company targets revenues of $5 billion by 2012 is on course. The fact that we actually hit $1 billion before the end of 2004, we are a little ahead of the game.

How do you plan to achieve the $2-billion target?

The $2-billion revenues will come from the strengthening of our generic business. We believe that we have a very robust generics model and that will continue to grow. We are just beginning to start work on the propriety branded side.

Will the propriety branded business account for 40 per cent of the revenues by 2007?

No, That is an approximate figure for our Vision 2012. Overall, we want to build the propriety branded business that will really kick in between 2007 and 2012. And we are taking certain steps towards that. We are focussing our research and development (R&D) investments into the propriety branded areas. We are setting up early working groups in the discovery area and at the same time in certain markets where we have actually established a branded franchise, particularly in the US, UK, Brazil and Germany. And what we see happening is that we will initially start with products that will be pseudo brands.

Currently, we are the only company in the world with the liquid form of metformin (used in treatment of diabetes); we are the only company in the world with a disposable form of amoxicillin. Those are little technical advantages that enable us to take a product exclusively to doctors. Then we have products coming from our R&D activities, the Novel Drug Delivery System (NDDS) programme which will kick in in three-four years. We will also have some new molecules come through. That is the plan; we are just in the midst of starting out now.

How will the implementation of the patent regime in India next year impact your business?

Internationally there will hardly be any change. It will be the same business model. What we launch today in India, in eight years we will be launching the same in the US markets. So, there's no change in the overseas market. And even after eight years, we come on a level playing field with the rest of generics players around the world.

In terms of the domestic market, though, there will be a change — from launching 30 or 40 products a year; it will be just five or six. But this won't happen overnight, it will happen gradually. And the product flow will actually come from our own innovation, our own discovery. Also, product flow could come either through licensing from maybe mid-sized European or Japanese companies or else from co-production or co-marketing with big pharma companies. So, we will have bigger launches, more consistent and more quality launches. In a couple of years that sort of evolution will take place.

What is going to be Ranbaxy's strategy for the domestic market?

The domestic market accounts for 18 per cent of our sales. So even if we achieve all our dreams in the domestic markets, it is not going to materially impact our corporate results. But overall in 2003, we had a much better year than in the past. We actually started 2003 with a certain gap between us and the No.1 company (GSK). By the time we finished last year and the first three months of this year, we have managed to shorten the gap. We would like to overtake the No.1 company, that's what we would like to achieve.

What are the new products that will hit the Indian market this year?

There will be surge of product launches because this will be the last year before the patent regime comes into play.

We are keen on expanding our share in the chronic area rather than the acute anti-infective area. Our exposure in the domestic market has really been quite substantial in anti-infectives over the years.

What would your main focus be in research and development?

Our investments in R&D have been increasing by one per cent every year. We plan to take it to 10 per cent by 2007. Part of the R&D investments go into the generics segment, but a majority of it is used for setting up propriety branded products. We are looking at generating discovery molecules and new products in anti-infectives, metabolic diseases, urology and asthma /inflammation.

What kind of growth are you looking at for the company this year?

In 2004 we are looking at 17 to 20 per cent growth, with most of the revenues from international markets.

What is your view on the backlash against generic companies in the US?

This is an India-centric view based on overreaction of what happened to other generic companies like Dr Reddy's. As regards us, the US market is just as attractive today as it was yesterday.

We are totally happy with the environment in the US, both regulatory as well as litigation. And we are ranked ninth in that country. We believe that there is a huge potential there.

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