Continuously evaluating opportunities for tie-ups with large MNCs: Ramesh Swaminathan, Lupin

In a chat with ET Now, Ramesh Swaminathan, President-Finance & Planning, Lupin, talks about their deal to market some of US firm Salix Pharmaceuticals Inc's products in Canada. Excerpts:

ET Now: You have entered into this marketing as well as distribution agreement with Salix. Give us some more insight into what exactly is it that you would be doing for the Canadian markets and how big is the market for Salix products?

Ramesh Swaminathan: This is our first entry into Canada and Canada, of course, is a pretty large market. It is $22.5-billion strong and the GI market is, in fact, close to about a billion-and-a-half, but 76% of the Canadian market is actually branded market. Salix is not present in Canada per se. So we would be distributing their products.

Currently, we are talking about two products, the rifaximin and Relistor. One is for hepatic encephalopathy, and the second is for opioid-induced constipation. Both are GI products, but this would actually stretch across other GI products over the period of time. We are having our own sales force actually for distributing this. We will start off small, but we do expect that we will get traction over a period of time.

ET Now: I would also like to know the financials of this Salix deal.

Ramesh Swaminathan: Well, that is something which is confidential to us. We would not be sharing details of this.

ET Now: As we understand, there will be an upfront payment as well as distribution fee that you will be giving to Salix and in addition Salix will also be eligible for additional pre-commercial as well as some sales milestone payments. You did tell us that you cannot share with us the exact contours, but if you could give us a ballpark figure in terms of what would be the outgo from Lupin’s books?

Ramesh Swaminathan: This is something which I cannot disclose at this stage.

ET Now: Can we also understand that besides Salix, there could be a couple of other deals as well in the pipeline, especially for the overseas markets?

Ramesh Swaminathan: We actually keep talking to various large pharma players for various kinds of deals and alliances. So we would not be wrong in actually saying that we are indeed looking at a host of other arrangements in the future. But these are speculative at the current juncture.

ET Now: Nevertheless, we picked up some important information for Lupin from our sources earlier this morning that you are in advance talks with Merck Serono to sign a pact for drugs, for a valuation of about $1.5 billion. Could you give us your comment on that?

Ramesh Swaminathan: As I said before, we do keep talking to various big pharma companies for various kinds of alliance. So potentially I cannot speak about any deal until it actually is signed up.

ET Now: We understand that deal possibly could be surrounding drugs called Zaxine or Relistor. If you could give us some insight into these drugs, particularly the market potential and what they used for?

Ramesh Swaminathan: These are actually Salix drugs. Rifaximin as well as Relistor are something which are out of the Salix stable. One is for hepatic encephalopathy and the other is actually for opioid-induced constipation. Both are GI products and, as I said before, it is a billion-and-a-half market out there. We would expect it to do pretty well and it is growing.

ET Now: You did say that you would see how this partnership really progresses, but besides Canada, which are the other major markets you think this partnership could be developed in the future -- in the coming months or the coming years possibly?

Ramesh Swaminathan: It is pretty difficult to conjecture at this stage. It is currently for Canada, but over a period of time, we could expect it to roll forward to other markets also. But it is premature to talk about it.