GSK India Lines Up Growth Plans to Gain Lost Ground
The Economic Times 01/10/2015
Vikas Dandekar & Divya Rajagopal
Mumbai : The Indian arm of British drug maker GlaxoSmithKline (GSK) is planning a major initiative to wrestle back ground it had conceded over the past few years. Until a few years ago, GSK held the top rank in India, but was steadily edged out by aggressive rivals, and it also lost market share in key drugs due to price cuts imposed by the government. However, top GSK officials asserted that a turnaround is in the works. "As a leadership team, we are trying to find out what ammunition is needed (to grow), what new capabilities are to be build," said Annaswamy Vaidheesh, GSK Pharma's newly-appointed managing director, in his first interview after taking charge of the company.
"We don't want to be seen as a leading company that has been around, but as an innovative company that brings solutions, not just in metro cities but all across. This is the most exciting agenda that I am setting up. I am calling it fast forwarding the future," he explained.
Given the way GSK had performed in the past three years, Vaidheesh's optimism is sorely needed. Experts say in the past three years, GSK not only failed to catch the Indian pharma gold rush, but its growth had trailed the industry average. In 2014, GSK's generic drug sales fell 2 % in the Indian pharma market to Rs.2,752 crore, when the overall industry grew 10%.
However, this year there's a slow uptick. Latest data from the All India Organisation of Chemists and Druggists Association shows a 5 % growth for the company
But despite the challenges of price cuts and competition in areas such as antibiotics and respiratory drugs, the company has kept its faith in India and continued to invest. GSK has started work on building a facility in Karnataka with an investment of Rs.800 crore, that is expected to go on stream in 2017.
GSK is hoping to gain significantly from its deal with Swiss drug maker Novartis which helped it secure a pipeline of vaccines in return for its oncology portfolio.
Vaidheesh is expecting that with the integration of Novartis' vaccine business, GSK may post a 25% growth. While GSK itself has a portfolio of 10 vaccines, its offerings will expand to two more such as Rabipur (against rabies) and the pentava-lent vaccine Quinvaxem. Rabipur alone contributes roughly Rs.150 crore, market sources said. Of the estimated Rs.2,400 crore Indian vaccines market, the private vaccine business is close to Rs.l,600 crore and growing at about 11%, according to market sources. GSK tops the vaccines business with sales of roughly Rs.400-450 crore till date, "...we are confident of bringing our global pipeline of products to India in the next couple of years," said Vaidheesh. Last week, the European regulatory agency recommended for approval GSK's non-inhaled biologic drug mepolizumab, branded as Nucala, to treat a severe form of asthma.