Merck KGaA is investing €80 million ($107.67 million) in a new plant in China to make treatments for diabetes and other conditions and to realize its aspirations there. But it has turned to India as a way to cut production costs on some of products for emerging markets.
The companies announced today that Merck is negotiating with India's Lupin to handle the manufacturing of drugs that currently have sale of €1.8 billion ($2.3 billion) in emerging markets, including Brazil, Mexico, Indonesia, Philippines, several countries in Africa and Central Eastern Europe. The two will focus on diabetes and cardiovascular meds. It said as many as 20 products could be added to the mix over time. The first drugs are expected to launch in 2016.
"The agreement with Lupin is an exciting new approach for Merck Serono to address local health needs in fast‐growing regions with constantly increasing demand for high quality medicines from trusted companies like Merck Serono and Lupin," Elcin Ergun, who heads Global Commercial at Merck Serono, said in statement. "The collaboration will significantly strengthen our portfolio and Merck Serono's position as one of the major players in emerging markets, aiming to provide patients in these regions with better access to health."
|Lupin CEO Vinita Gupta|
Lupin has been on a bit of a binge to build up both its capacity and its presence in a number of markets. Earlier this year, it picked up a Netherlands-based manufacturing specialist to extend its reach in sterile injectable drugs within Europe. It announced on Monday that it was buying the rights to a portfolio of products from North Carolina-based Salix Pharmaceuticals ($SLXP) in Canada to get a start on that market. And CEO Vinita Gupta recently said the drugmaker is prepared to spend up to $1 billion on the right deal to build its capacity and capabilities in specialty areas like inhalation products. Lupin is establishing an inhalation drug R&D center in the U.S.
As for Merck KGaA, it broke ground last month in Nantong in the Shanghai region on what will become its second-largest manufacturing plant, where it will focus on production of diabetes drugs Glucophage, Concor and Euthyrox for the China market. It will also make drugs for heart and thyroid conditions. The facility will be about 40,000 square meters and have room for a 20,000-square-meter expansion. The company expects to wrap up construction in 2016 and start commercial production in 2017.
- here's the Lupin Merck announcement
- here's Lupin and Salix's announcement