Italy's Menarini looks to significantly build its Indian business

Menarini, the Italian drugmaker that recently partnered with Vivus ($VVUS) to sell its erectile dysfunction drug in Europe, is looking to grow its operations in India. It is bringing some new products to market there but would like to buy some established drug brands if it can find them at the right price. It is one of the investments the drugmaker has been making in search of new revenue.

"We are in discussions with some Indian firms, but unreasonable valuation is a constraint," Girdhar Balwani, managing director, Menarini India, tells the Business Standard.

The company is looking for deals of about Rs 500 crore ($80 million). The company expects the revenues of its Indian operations to reach about Rs 100 crore ($16 million) this year, with 80% of that coming from branded drugs and the rest from contract sales. It sells products in India for Boehringer Ingelheim and Johnson & Johnson ($JNJ). It thinks it can grow its existing branded business to about $40 million by 2018 but would like to add another $40 million to that with some over-the-counter sales and with an acquisition of new lines.

Menarini came to the rescue of Vivus in July when the U.S. drugmaker was casting about for a partner to help it get its new erectile dysfunction treatment Stendra off the ground. The drug was approved by the FDA last year, but was still on the shelf at Vivus, awaiting launch. Approved in Europe in June under the brand name Spedra, the drug will now make its debut with the help of Menarini.

Menarini agreed to pay Vivus €16 million up front for the right to take Spedra to 40 European countries, Australia and New Zealand. Chairman Alberto Giovanni Aleotti said the company expects to start rolling the ED drug out in the major EU countries early next year. "We are eagerly preparing for the launch," Aleotti said. The deal could grow to as much as €95 million ($121 million), plus royalties if all targets are met. Vivus will also supply the drug for Menarini to sell.

The Italian company has partnered with other companies to build up its business. Last year it pledged up to $1 billion to develop and manufacture 5 new cancer drugs with Oxford BioTherapeutics using the biotech's antibody-drug conjugate technology. Oxford is supplying the antibody, ADC arming tech and the cancer targets. Once researchers get proof-of-concept data, each company will divide up responsibility for getting the drugs to market. Oxford will be responsible for development in North America and Japan, and Menarini takes Europe, Asia and Latin America.

- read the Business Standard story