AstraZeneca is boosting its presence in emerging markets through its first branded generics supply deal, with India's Torrent Pharmaceuticals, mirroring similar tie-ups by other Big Pharma groups, according to Reuters. The Anglo-Swedish company said on Thursday that Torrent would initially supply it with 18 generic medicines for which Torrent already has licences in a range of countries. AstraZeneca -- which will host an investor day on March 16 to highlight its plans for emerging markets -- intends to use its own brand to sell these products in lower-income markets where it already has a strong commercial footprint. Cheap off-patent medicines sold in high volumes in emerging markets under a multinational brand name are a growing target for major drugmakers, though some investors worry about the impact on margins of this move down the value chain. And as growth in demand for prescription pharmaceuticals slows in the West, where many blockbuster drugs are losing patent protection, the appeal is set to increase. Emerging markets are forecast to contribute around 70 percent of pharmaceutical industry growth in the next five years and branded generics represent approximately 50 percent by value in these markets, AstraZeneca said. The AstraZeneca-Torrent deal only covers 18 products in nine countries to start with, but this is expected to grow over time. "In markets where consumers and physicians have a strong preference for trusted brands, we believe AstraZeneca's long-standing reputation for quality is a sustainable competitive advantage," said Tony Zook, who heads the company's global commercial organisation. Financial terms were not disclosed and a company spokesman also declined to name the medicines involved or the countries where they will be sold, for competitive reasons. Shares in Torrent rose 4.1 percent to 495 rupees on the news by 0845 GMT, after earlier hitting an all-time high of 501.70. AstraZeneca stock was off 0.5 percent in a flat European drugs sector. ASTRAZENECA SLOW TO JOIN TREND For AstraZeneca, the Torrent alliance is the first of its kind, although the London-based group is already selling some of its own originated medicines in emerging markets as branded generics. Its cholesterol blockbuster Crestor, for example, is priced to compete with a range of cheap generic copies in the Indian market, where the drug does not enjoy patent protection. Other major drugmakers have been more proactive than AstraZeneca, which until now has been cautious about an industry-wide drive towards diversification. British rival GlaxoSmithKline has struck similar branded generic supply deals with India's Dr Reddy's and Aspen of South Africa, while Sanofi-Aventis has bought a number of emerging market businesses, such as Brazil's Medley. Pfizer, the world's biggest drugmaker, has also been looking actively for acquisitions to bolster its emerging markets presence. According to Citigroup analysts, AstraZeneca lags its peers in terms of the percentage of its revenues that are generated from emerging markets. Novartis, Sanofi-Aventis and Bayer lead the way with around 25 percent of group sales from emerging markets, while AstraZeneca's emerging market revenues were $4.35 billion in 2009, or 13 percent of the group total.
