The Mexican market is about USD 13 billion. The generic and the branded generic market is all growing 20-25 percent, says Nilesh Gupta.
We are pretty excited about this acquisition. We have been talking forever to acquire in Latin America, Mexico in particular
Nilesh Gupta
MD
Lupin
Drug major Lupin on Thursday acquires Mexico-based Laboratorios Grin , a leading player in ophthalmic products marking its foray into the Latin American country. Speaking to CNBC-TV18's Archana Shukla, Nilesh Gupta, MD, Lupin says the acquisition will become the launch platform for Lupin's entire portfolio. Along with Mexico, the company is also interested in Brazil and some other markets where it may possibily head post this acquisition.
"Mexican market itself is growing at 9-10 percent and the generic market is growing faster at 20-25 percent. That is the kind of growth that we would expect as well but as we leverage our own portfolio we should expect that kind of growth, "Gupta adds.
Below are edited excerpts from the interview:
Q: How are you feeling about this acquisition?
A: We are pretty excited about this acquisition. We have been talking forever to acquire in Latin America, Mexico in particular. We were looking for a while and we zeroed in on Grin quite a while ago and then we finally closed the transaction. Sales of the company are USD 28 million. It is primarily in the ophthalmic space and is one of the top four players in that market in Mexico. This is a great specialty platform to build from.
We have our own ophthalmic support but automatically this will become the launch platform for Lupin for our entire portfolio. It is in Mexico but Brazil and some other markets that we are interested in will naturally also be able to head there with this acquisition.
Q: Opthalmic space is the biggest synergy that you have with Laboratorios Grin. What sort of other synergies do you have with this organization? What can Lupin bring to the Mexican and the Latin American Markets through Laboratorios Grin and what advantages do you get from this acquisition?
A: Lab Grin plays in the branded generic space. That is the sweet spot where we want to be as well. The Mexican market is about USD 13 billion. The generic and the branded generic market is all growing 20-25 percent and so, this becomes that vehicle.
Again you have the regulatory capabilities, they have manufacturing operations as well, they know how to commercialise products and so, we would use it for other than ophthalmic space as well. They have some small portions of non-ophthalmic stuff but we will use that as a platform for other stuff. We will do the opthals but then oral contraceptives are very interesting, dermatology products are very interesting.
Q: How are Mexican, Latin American markets growing? You said it is mainly branded and a bit of generics, how do you see that grow in terms of growth rates? What sort of growth rates do you expect Lupin to have now in the Latin American and Mexican markets?
A: Mexican market itself is growing at 9-10 percent. That is pretty good growth for a market of that size. The generic market is growing faster at 20-25 percent. That is the kind of growth that we would expect as well but as we leverage our own portfolio we should expect that kind of growth.
Lupin stock price
On March 26, 2014, Lupin closed at Rs 936.60, down Rs 26.9, or 2.79 percent. The 52-week high of the share was Rs 1003.00 and the 52-week low was Rs 606.20.
The company's trailing 12-month (TTM) EPS was at Rs 42.06 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 22.27. The latest book value of the company is Rs 108.10 per share. At current value, the price-to-book value of the company is 8.66.
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