Generic drugmaker Ranbaxy rolls out name-brand medicines.
By: Melinda Sherwood
Rising costs of research and development and patent expirations continue to plague the nation’s largest pharmaceutical companies, but one of the biggest threats to big pharma is coming from generic upstarts, companies like Ranbaxy Pharmaceuticals Inc., an India-based drugmaker with offices in Princeton.
Ranbaxy is using profits from its highly successful generic line of drugs, exported to over 70 companies around the globe, to fund innovative research for its own branded line of medicines.
Last month, Ranbaxy announced the release of one of its most promising branded drugs, DisperMox a dispersible tablet form of amoxicillin with numerous advantages over traditional forms of amoxicillin, particularly among the pediatric and geriatric community.
"As the fastest growing pharmaceutical company in U.S. over last 5 years, the launch of DisperMox is another important and exciting step in Ranbaxy’s evolution into the branded pharmaceutical space," said Jeffrey Thomas, who joined Ranbaxy as vice president of brand marketing and sales in August. "With the height of the respiratory season right around the corner, we think doctors and patients will find this revolutionary form of amoxicillin more convenient to administer while providing for dosing accuracy and potency."
Ranked the ninth largest generic company worldwide, Ranbaxy’s basket of generic and branded drugs includes everything from anti-infectives to pain relievers, as well as treatments for cardiovascular and central nervous system diseases.
The company launched its first generic drug in the United States, a broad spectrum antibiotic called Cefaclor, in 1998. "That established our presence in the U.S. market as an anti-infective house that has depth and breadth," said Charles Caprariello, vice president of business development.
Since then, Ranbaxy has received approval from the U.S. Food and Drug Administration for over 60 generic drugs. Its 2002 U.S. operations achieved sales of $296 million a growth of 162% over the preceding year.
For its branded product line, the company is focusing not so much on developing blockbuster drugs as it is on enhancing existing staple medicines with innovative delivery techniques that make them more patient-friendly.
DisperMox tablets, for example, are dispersible in water and taste like strawberry, making them ideal for children who can’t swallow large pills.
And because DisperMox doesn’t require refrigeration, it has a much longer shelf life than traditional amoxicillin treatments.
DisperMox can treat such common childhood ailments as bacterial ear infections among the most common cause of pediatric office visits in 2001, and a market estimated to be in excess of $105.7 million.
"We’ve taken those chemicals and formulated it in a different way to make it much more patient-friendly, more effective in terms of administration and compliance," said Mr. Caprariello. "We thought that innovative technology would be the wave of the future and distinguish Ranbaxy."
Ranbaxy is a wholly owned subsidiary of Ranbaxy Laboratories Limited, of New Delhi, India. In 1995, the company opened an administrative office in Raleigh, N.C., and purchased North Brunswick-based Ohm Laboratories’ manufacturing facility that same year to launch its U.S. operations.
The company has a total of roughly 262 employees in the U.S. 80 in its Princeton offices on College Road, 25 at a distribution office in Jacksonville, Fla., 15 at its Gloversville, N.Y, manufacturing site, and over 100 at its North Brunswick manufacturing sites.
In anticipation of increased U.S. sales, Ranbaxy recently purchased a manufacturing facility in North Brunswick formerly owned by Nestle. The U.S. market is projected to contribute more than 50 percent of Ranbaxy’s total revenues in the near term, according to a company statement.
About 25 to 30 percent of Ranbaxy’s total product portfolio is manufactured out of the North Brunswick facility.
But one of Ranbaxy’s advantages over U.S. drug makers is R&D facilities in India, where a large pool of affordable talent in the health care sector is readily available, said Mr. Caprariello. "There’s a very strong concentration of scientific expertise that resides in India," he said.
That expertise equals speed in gaining approval from regulatory bodies. "The industry average is 18.1 months to get FDA approval," he said. "Our average is 14 months. We’ve had a range anywhere as low as 8 months to 25 months."
Hemant Shah, an independent pharmaceutical analyst with HKS & Co. in Warren, says that Ranbaxy is definitely a company to watch. "The generic business has given them enormous opportunity to create resources to fund innovative drugs," he said.
He sees great promise in the company’s DisperMox tablets. "It is absolutely novel," he said. "The biggest problem with amoxicillin as we take it today is that it has to be kept frozen. We, as adults, can take tablets, but children need it in a liquid form."
Amoxicillin, he added, is among the top five prescribed drugs, and much of that is used for pediatric purposes.
Ranbaxy is leading a trend in the pharmaceutical industry, he said, in capitalizing on its offshore resources. "Eventually, pharmaceutical is going to see the same trend as IT almost all major IT companies like IBM have major operations in India," said Mr. Shah, a pharmacist who spent 20 years in research and sales positions at Merck and GlaxoSmithKline.
The company also has a good record with the FDA, he said. "Ranbaxy probably has the best record with the FDA in terms of compliance, better than Merck, better than any pharmaceutical companies I can think of," said Mr. Shah. "Ranbaxy almost never gets cited for violations. Their facilities are state of the art."
Ranbaxy submitted approximately 25 Abbreviated New Drug Applications in 2002, and plans to launch 10 to 15 branded drugs in the United States in the next two to three years. Forty percent of its revenue is projected to come from the company’s proprietary business by 2007.
"I think (Ranbaxy) will be a household name in a couple of therapeutic areas," said Mr. Thomas.
But Mr. Shah predicts it will be several years before Ranbaxy can produce a blockbuster drug. "As far as it being a threat to Merck or Pfizer, it’s always possible, but not in our generation," said Mr. Shah. "Ranbaxy has just begun in the past three or four years, so for them to come out with blockbuster drugs that’s going to take 10 or 15 years."