Nycomed Expands In Turkey, Despite Tough Pharma Environment

Swiss pharmaceutical manufacturer Nycomed has acquired rights from specialty pharmaceutical company Biomeks Ilac (Biomeks) to market a portfolio of over ten pharmaceutical products in Turkey.

Nycomed has ambitious plans to increase sales in Turkey by 30% in the next four years. Despite the government's recent, severe cost cutting moves, it believes the country's long-term growth prospects are strong.

The portfolio Nycomed bought generated €10 million ($14.5 million) in net sales in 2010, and includes Almirall S.A.' s Biofenac (aceclofenac), Anika Therapeutics, Inc's Orthovisc (hyaluronan), Bionorica AG's Sinupret and Agnucaston (herbal products), Helsinn Healthcare SA's Duroprox (oxaprozin) and CSL Behring's Rhophylac (Rho(D) immune globulin).

It includes medicines for pain, gastrointestinal diseases as well as pharmacy products, which complements Nycomed's core therapeutic areas, Bedri Toker, general manager of Nycomed Turkey said in a statement. Nycomed, which is privately held, doesn't publicly break down its Turkish sales, but its 2010 revenues from the Asia-Pacific, Middle East, and African markets totaled $249.8 million.

Nor is Nycomed alone in its opinion of the Turkish pharmaceutical market, because more than 150 companies -largely focused on generics -- are present there, including more than 50 multinationals (Also see "Turkey's Changing Pharma Market Scene: What Opportunities For MNC Drug Makers?" - Scrip, 6 Sep, 2010.). "Rising standards of living and general reimbursement of medicines have jump-started the pharmaceutical market, which is forecast to expand at 15% annually - compared to 3-5% annual growth in mature markets," a Nycomed spokesperson said. Nycomed established an affiliate in Turkey in January 2010.

Still, legislation introduced in December 2009 increased cost controls, causing the Turkish pharmaceutical market value to fall by 20%, Nycomed's Turkish affiliate said. A further 9.5% compulsory discount was sprung on an unwitting industry in December 2010 (Also see "Turkey Again Slashes Drug Prices; Manufacturers And Pharmacists Cry Foul" - Scrip, 11 Feb, 2011.).

Strict cost-containment measures and further potentially pending changes to pricing and reimbursement are eroding profitability for pharmaceutical manufacturers and tempering expectations, but opportunities remain, says IMS Health. Growth expectations for the domestic market have fallen to around 5% through 2013, it adds (Also see "Dusk And Dawn In Emerging Markets? Pharmas Find Growth Elsewhere Offset Turkish Price Cuts" - Scrip, 4 May, 2010.). In spite of the latest pricing curbs, the regulatory environment is well established and easy to navigate, the industry says.

GlaxoSmithKline PLC is now rumored to be pursuing Turkish generic firm Biofarma Pharmaceutical Industry Co. Inc. Acquiring a manufacturing facility in Turkey can speed drug registrations by satifying a GMP requirement to have a ministry-approved manufacturing site (Also see "GSK Reportedly Bidding For Turkish Biofarma, Local Manufacturing Key To Market Registration" - Scrip, 14 Apr, 2011.).

IMS Health places Turkey in the third tier of pharmerging markets (ranked based on growth prospects), with incremental market value growth of between $1 to $5 billion between 2008 and 2013. This compares with a $40 billion plus growth for China over the same period (tier 1) and growth of between $5-15 billion for India, Russia and Brazil. Turkey is the 17th largest pharmaceutical market in 2011, with potential climb to 15th position by 2013, despite challenging conditions for brand products, the market research firm estimates.

With 39% of the company's sales coming from emerging markets in 2010, Nycomed sees itself as being among the leading competitors in these countries. "By 2015, our objective is to boost turnover from emerging markets to around 60% of our total sales," the Nycomed spokesperson said.

- Faraz Kermani (f.kermani @elsevier.com)

[Editor's note: This article appeared in 'The Pink Sheet' DAILY, April 14, 2011.]