Not so Fine in Europe?

API and fine chemicals companies in Asia are flexing their muscles in a bid to increase their market share in key territories. This has been demonstrated by India's Malladi Drugs and Pharmaceuticals, which earlier this summer acquired Novus, a US company, to boost its presence in the pseudoephedrine (an ingredient used in cough and cold formulations) market. Reportedly, this is the first time (and it certainly won't be the last) that an Indian API manufacturer has bought a US counterpart and drives home the message that Indian companies are looking at providing products on a global scale. The deal gives Malladi an almost vice-like grip on a third of the global pseudoephedrine market, and more importantly, a foot in the lucrative US sector.

Gurminder Marwaha

Elsewhere, generic firm Alpharma has signed an agreement with India's Shasun, which will see the latter develop, manufacture and supply generics and APIs for sale by the former. But it doesn't just stop there for Shasun; the company has also signed an API manufacturing and supply agreement with Codexis for a generic.

Another Indian company, Dishman, is also looking at continued expansion into 'foreign' markets. It recently acquired Synprotec, a UK-based contract research organization. Not content with increased presence in Europe, Dishman has also set up an alliance in Saudi Arabia that will see a new API plant being built in Riyadh (claimed to be the first in the region), and more significantly, gain the Indian company a presence into the Middle Eastern market.

And just to prove it's not just Indian companies taking the initiative, Taiwan's Panion & BF Biotech has obtained a US patent on high-grade ferric citrate, which can be used as an API for the treatment of iron deficiency diseases.

Western Europe-based manufacturers are not only under pressure from Asia, but also from Eastern Europe. Croatia's Pliva has opted to consolidate its position in the generics and APIs sectors after selling off part of its business. Meanwhile, in a desperate bid to transform the fortunes of its fine chemicals business, Lanxess, the spin-off of Bayer, is slashing its workforce by 960 and consolidating its facilities in a bid to reduce running costs by €100 million a year. Good luck.

The price war that European-based manufacturers were so keen to avoid has started to take shape. The East has made the first move, and now it's over to Europe to decide how best to meet the challenge (surely it can't become competitive, can it?). And who said things get quiet in the summer?

Gurminder Marwaha gmarwaha@advanstar.com