Astellas forays into
Having consolidated its
position in the Japanese market, Astellas Pharma is gearing up to tap
the Indian pharmaceutical market.
Asurge of Japanese companies are gradually making inroads into the $8
billion (about Rs 38,535 crore) Indian pharmaceutical market, the first
being Eisai Co.Ltd., in 2005, followed by the much-hyped Daiichi
Sankyo-Ranbaxy deal last year. There were talks of Takeda
Pharmaceuticals entering the market with a possible buyout of Torrent
Pharmaceuticals, which was later known to be shelved.
A recent example is the establishment of the Indian subsidiary by one
of Japan's top drug maker, Astellas Pharma. Astellas, which
started its operations in India (with a liaison office) back in 2007,
will now have a business model of importing and marketing
pharmaceuticals products. “Astellas Pharma India aims at
establishing a business base in Indian market by developing sales and
marketing activities of in-house products, especially, in immunology
and urology, where Astellas has strong franchise globally,”
says Teruo Yasufuku, managing director, Astellas Pharma India.
Listed on the Tokyo Stock Exchange and the Osaka Stock Exchange,
Astellas was established in Japan in April 2005, by the merger of
Yamanouchi Pharmaceutical and Fujisawa Pharmaceutical.
According to recent IMS report, the company incurred a global
sales revenue of $5.3 billion (about Rs 25,522 crore) (MAT Dec 07) and
$6.2 billion (about Rs 29,858 crore) (MAT Dec 08), while in Japan, it
clocked sales of $2.2 billion (about Rs 10,594 crore) (MAT Dec 07) and
$2.6 billion (about Rs 12,522 crore) (MAT Dec 08). Apart from its
revenue-churning markets like the US and Europe, the company
has marketing subsidiaries in seven Asian countries, which
includes China, Korea, Taiwan, Hong Kong, the Philippines, Thailand and
The establishment of its Indian subsidiary is a part of the
company's overall business plan to further expand
and consolidate its businesses in the Asian markets, with India and
China being its top priorities.
Double digit growth of the Indian pharma market proved to be a
significant catalyst towards its entry into the region.
“India is one country where we decided to enter by ourselves.
The obvious reason was that the pharma market is growing in double
digits. Within Asia, we are targeting China and India because
markets like the US, Europe and Japan are stagnating in growth and
price fluctuations have cost us heavy. We have promising products in
our pipeline, to fulfill this purpose, a long term investment of $3.5 million (Rs 16 crore) was pumped in,” says
Himanshu Dave, director- sales and marketing, Astellas Pharma India.
“India is one of the fastest-growing pharmaceutical markets
in the world. Driven by huge patient base, increasing incomes and
strong penetration of health insurance, the pharma market is expected
to more than double its size in the next five years,” adds
As step one, the company
intends to tap the transplantation market in India with the launch of
its flagship product, Prograf. “India is the fifth largest
transplant market globally. With a huge population suffering from
chronic kidney failure and liver failure along with a lesser number
of cadaver organ donation, we expect the government to
strengthen cadaver organ donation programs,” says Yasufuku.
“We are into other areas like urology and the anti-bacterial
segment, but in India, we first want to focus on the
transplantation market. In India, kidney transplants
constitute 90 percent of the the total transplantation market, while
the remaining 10 percent is liver transplant market. According to our
compiled data, we have estimated that around 4,000-4,200 kidney
transplants and 400 liver transplants happen every year.”
Other prominent companies that have already forayed into the
transplantation market includes Swiss major, Novartis; Roche and
Panacea Biotec. Globally, Astellas works on an in-license and
out-license model apart from their own subsidiaries'
business. Earlier, GlaxoSmithKline (GSK) Pharma signed a collaboration
agreement with Astellas Pharma for exclusive rights for the
latter's injectible anti-fungal agent, micafungin (brand name
Mycamine) in the Indian market.
Last year saw MNC companies setting up sales offices in India with a
long term plan to make India its R&D hub. Dave claims that
Astellas India has no such plans on the cards. “We are only
looking at sales operations in India. As of now, we understand the
potentialities that the country has to offer and are in the process of
understanding the market for the next five years,” he adds.
Beyond Indian shores
Globally, a major part of the Astellas' turnover comes from
its mainstay products namely immunosuppresants, Progaf and Vesicare,
used in overactive bladder treatment. Other products contributing to
its all time growth in global sales include Harnal, Mycamin and
Protopic. Other major products which the company markets include
Lipitor, Micardis and Gaster. Overseas revenues contributes to 48.7
percent of its revenues with Asia contributing less than three percent.
In 2008, its R&D spending was about Rs 8,431crore (JPY 159
billion) 16.5 percent of the net sales.
Commenting on the Japanese market which is recently opening up,
Yasufuku says, “The market in Japan is tough. Most of
the generic MNC companies from Europe and the US are present
there in addition to over 2,000 Japanese companies. So it is a very
competitive market for us.” Japanese market is opening up to
generics, but a large portion of the population is covered by
insurance, hence, cost consciousness is not a consideration there.
“Now, around 15-20 percent of the market consists of generics
and this will be economical for the government that is why Indian
companies are eyeing Japanese market,” he adds.
Throwing light on its future strategy in India, Yasufuku mentions that
they are exploring possibilities and strategies to further expand in
markets, such as, urology and anti-infective. “Astellas is a
research-driven company, and surely will look at a robust data and
patent protection system for our future research product
line,” he claims.
The company has already got the go ahead from the Drug Controller
General of India (DCGI) for the launch of Prograf in India, which
should be out within fiscal 2009-10. Though the company has been
working with certain hospitals, however, no concrete plans are on the
cards to ink any alliances with them.
While many domestic and MNC pharma companies are now aggressively
looking at rural markets for accelerated growth, Astellas prefers to
concentrate on the urban markets. “Transplantation happens in
the metro cities so we will be targeting only those areas unless the
government starts some initiatives in the rural areas. Transplantations
are promoted because that is a better way of living rather than opting
for dialysis,” says Yasufuku. Astellas is now looking at
India and China as the major markets of growth. Its marketing
subsidiary in China, incurred a sales revenue of $100 million (about Rs
481crore). Its flagship product, Prograf, boasts around 50 percent
share in the calcineurin inhibitor market
“The Chinese pharma market size is said to be $20 billion
(about Rs 96,320 crore) whereas the India pharma market size is $8
billion (about Rs 38,524 crore). Both markets are promising, and we see
a huge growth potentials for Astellas products in both these
countries,” adds Yasufuku.
“It is quite encouraging to see a strong growing Indian
economy even during the financial meltdown. The growth in the pharma
sector projected for the next five years is in double digit. Insurance
penetration also has been improving on a rapid pace indicating better
health care environment. We are confident to start the business by this
financial year,” concludes Yasufuku in a positive