Lupin says trying to find marketing partner, or open to possible sale of specialty drug Solosec

Drug maker said the company is trying to find a marketing partner or even be open to the idea of possible sale of its key specialty drug Solosec in the US.

“We are always opportunistically looking at what is the best way to get return on assets,” said Vinita Gupta, chief executive officer of Lupin in an interview to ET.

Gupta said Lupin’s focus in the US will be solely on driving market share gains of existing products, internal pipeline execution, partnered products; cost management and resolution of regulatory issues at manufacturing sites. Gupta added that the emphasis is towards complex generics like inhalation, biosimilars and injectables.

Lupin in its QFY22 earnings, took Rs 708 crore as impairment charge on Solosec citing “adverse market conditions”. The company also said it has reduced its front end sales force to zero, and went non-personal in promotion of the drug. The company before COVID had a front-end salesforce of 120 people.

“The commercial infrastructure on the specialty front has been scaled down completely,” Gupta said.

Gupta, who oversees the crucial US business that contributes about 36% of Lupin’s revenues, said the scripts (prescriptions) of Solosec were flat over the last six months, even as the investment remained significant.

Gupta said the scale down of the specialty division would save the company about $12 million – $17 million annually, contributing to boosting EBITDA margins.

Solosec is used for treatment of vaginal infection among women of childbearing age — became Lupin’s asset after it acquired Symbiomix Therapeutics by paying $150 million in October 2017.

The drug was approved by the USFDA in September 2017, with a 10-year marketing exclusivity. Lupin earlier said it will be spending $45-50 million on an annual basis on promotions, the highest ever by the Mumbai-based drugmaker on any single drug. Lupin was earlier expecting the drug to break even by FY22, but things didn’t pan out as estimated.

While Solosec is a promising product with few side effects and convenient for patients given that it is just a single dose, uptake has been slow. In addition, it faces stiff competition from a cheaper generic antibiotic, Metronidazole, which continues to dominate the market.

Indian drug makers like Lupin, Dr Reddy’s, Sun Pharma, among others have placed bets on specialty drugs that are protected by patents as strategy to mitigate the rapid price erosion and commoditization of plain vanilla generic drugs in the US. But these drugs, unlike generics, need sustained investments on the front end. This hasn’t been easy. Sun Pharma is still fighting it out, Dr Reddy’s sold their specialty assets citing that they are not aligned with the core-strategy.

US business

On the US portfolio, Gupta said there has been an impact of COVID-19 on seasonal products like generic Tamilfu and Cephalosporins last year, and this year things might not be any different.

But she hopes the ramp up of Albuterol and Arformoterol, and base business performance to drive growth in the US. Gupta said she expects the much awaited launch of generic long-acting bronchodilator drug Spiriva by mid next year.

Regulatory front

On the regulatory front, Gupta said the company has put in place systems and processes to address regulatory issues at plants.

“USFDA is looking at the quality system that the company has throughout the network, because the idea of different locations, different sites with different philosophies, different systems and procedures doesn’t work,” Gupta said.

“It does not give confidence if you don’t have an objective standard on which you can measure one site versus the other,” she added.

“On that front we have made significant changes over the last couple of years, with Johnny (Johnny Mikell) coming on board as the global head of quality a couple of years ago, that’s where it started. We also made changes to separate quality from operations. In last year and half we put in global systems and processes..on how we assess investigations be at Somerset, Goa, or Pithampur sites with the same lens,” Gupta said

“The interaction that we have had with the agency (USFDA), also, on the systems that we have put in place, have been well received from our perspective,” she added.

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