Cipla to set up biotech plant in South Africa

An employee works at the reception area of Cipla at its headquarters in Mumbai
Cipla is investing 1.3 billion South African rand (about Rs 600 crore ) in a biotechnology plant in South Africa as it aims to make cancer drugs affordable and grow presence in the market.

The announcement was made on Friday, coinciding with Prime Minister Narendra Modi's visit to South Africa. Cipla Biotech, a subsidiary of the company, will construct the plant at a special economic zone in Durban which will commence production in 2018.

Cipla acquired South African drug firm MedPro in 2013, its first large foreign acquisition and has been ramping up presence in the African nation. The announcement for a new biosimilar manufacturing unit follows its investment in a new distribution centre and an upgrade to an existing manufacturing plant in South Africa. The South African market contributed around 14 per cent to the company's consolidated sales in FY15.

Over a decade ago, Cipla had shot to limelight offering low-cost anti-retroviral drugs for AIDS treatment and drawing criticism from global drug makers, which have accused the Indian company of copying their innovation.

In a statement, Paul Miller, chief executive officer of Cipla MedPro, said in South Africa people without access to private insurance have limited or no access to any biologic medicine due to very high prices of innovator molecules. Currently, about one in 50 patients in South Africa have access to biologic medication. “ We are striving to reduce this number to one in five through the production and supply of biosimilar medication at an affordable price. This embraces Cipla ethos for advancing health care to all.”

Subhanu Saxena, global chief executive officer of Cipla said Cipla's investment in the unit will enable the creation of the first biocluster in Africa.

Cipla had planned to build a biosimilar portfolio in China, but last October, decided to exit the venture and sold its stake in Hong Kong-based Biomab Holding. Cipla had partnered China’s Guojian Pharmaceuticals and Hetero Drugs to launch biosimilar products in India and it continues to market them.

Last September,  Cipla announced all its biologic business will be consolidated in Cipla Biotech, which will focus on drug development in cancer, respiratory, and diabetes treatments.

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