SA Pharma still attractive for foreign investors

SA Pharma still attractive for foreign investors

South Africa may have fallen out of favour with many foreign investors, but Indian investor, Lupin – a transnational pharmaceutical company that is currently the 7th largest global generics player and the 5th largest in the US by prescription – still views SA as fertile ground for growth.

It recently acquired local generics gem, Pharma Dynamics, to expand its local operations in the areas of anti-infective, respiratory, female healthcare, complex molecules and speciality products.

Currently, Pharma Dynamics only has about 165 employees, yet small as the company is it has proven to be a formidable force in the SA pharma sector and is today – a mere 15 years after its inception – among the fastest growing top 20 pharmaceutical companies in the country. It is also the biggest supplier of cardiovascular pharmaceuticals in the country by far, both in terms of value and volume.

The deal effectively doubles Pharma Dynamics’s product pipeline, which could catapult the company into fourth place within the next seven years.

Lupin’s global manufacturing operations are spread across India, USA and Japan, and it supplies Active Pharmaceutical Ingredients (APIs) and formulations approved by leading pharmaceutical regulatory authorities like the US FDA, World Health Organisation, MHRA (UK), TGA (Australia, MHLW (Japan, ANVISA (Brazil) and the MCC in SA. This will enhance Pharma Dynamics’ already impressive supplier base across Europe.

Erik Roos, newly appointed CEO of Pharma Dynamics says Lupin’s global presence means the company is also able to harness the potential of global sourcing as a way to further reduce the cost of medicine.

“Its continued investment too into the development and distribution of generics will stimulate competition and ultimately provide greater access to quality medicines at a fraction of the cost of brand-name equivalents.

“Other advantages of Lupin’s global footprint beyond low cost, include tapping into skills or resources unavailable domestically, developing alternative supplier or vendor sources to further stimulate competition and increasing total supply capacity. This all underscores the importance given by the National Department of Health to strengthening healthcare in the country, by ensuring availability of medicines to consumers at pocket-friendly prices,” says Roos.

Apart from manufacturing pharmaceuticals, Lupin also employs 1 700 scientists who are engaged in Research and Development activities in Generics Research, Process Research, Pharmaceutical Research, Advanced Drug Delivery Systems (ADDS) Research, Novel Drug Discovery and Development (NDDD) and Biotechnology Research, which means Pharma Dynamics will gain access to the latest in new-generation generics, including biosimilars.

According to Roos some significant launches are on the horizon for 2018/2019, which will open up new markets for the firm.

In addition, he believes that SA pharma has an important role to play in improving the country’s economic outlook and that foreign investment by multinationals such as Lupin remain critical to SA’s future success.

“South Africa’s pharma market as a whole is estimated to have a value of R59.6 billion and big pharmaceutical companies continue to invest heavily into South Africa – the impact of which has caused a positive ripple effect across the economy, especially if one considers that the local pharmaceutical manufacturing sector employs and supports a total of 11 000 jobs across the country. The jobs that the industry creates involve a range of skills, from suppliers, retail to personal services and require a workforce with diverse skills and education levels from Ph.D. scientists, entry-level technicians, to sales and support staff of all kinds.

“Ultimately, the pharmaceutical industry helps to support a vibrant economic ecosystem that is vital to the SA economy and our country’s competitiveness in the global market,” concludes Roos.

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