Amgen growth in Brazil picks up, eyes doubling portfolio by 2020
SAO PAULO (Reuters) - Amgen Inc, the world's biggest biotechnology company, has had a surge in sales in Brazil this year and it plans to double its drug portfolio in the country by the end of the decade, the company's top local executive says.
Eduardo Santos, head of Amgen Brasil, said in a recent interview that revenue rose 54 percent from a year earlier in the first half of 2014, more than double the company's average annual growth in Brazil since it arrived three years ago.
Citing competitive concerns, he declined to say how much Brazil contributed to Amgen's $18.7 billion revenue in 2013, but he said the unit has reached financial self-sufficiency.
The release of three patented Amgen drugs in Brazil this year boosted sales and helped expand the drugmaker's local business beyond its unpatented medicines, which will face rising competition in coming years.
Brazil's aging population and rapidly growing access to private healthcare have sparked growth of a market for innovative and expensive pharmaceuticals of the kind Amgen develops to treat cancer, kidney failure and other diseases.
In the interview at Amgen's offices in Sao Paulo, Santos said an ongoing slump in Latin America's largest economy has put some pressure on government budgets, but it will do little to reduce demand for Amgen's medicines."The market for new cars may contract, but our patients' diagnoses will remain."
He added that the company's challenge is stronger competition, not weaker demand.
Four Brazilian drugmakers - EMS, Ache, Uniao Quimica and Hypermarcas SA - are investing about 500 million reais ($225 million) to open a new biopharmaceutical plant by 2016. By producing biologically developed treatments rather than purely synthetic drugs, the Brazilian rivals will pressure prices in Amgen's niche just as they have for generic medicines.
Amgen plans to double its patented drug portfolio in Brazil from five to as many as 10 medicines by 2020, Santos said, but the company sees no need to expand with more local acquisitions after its $215 million purchase of drugmaker Bergamo in 2011.
"Given our profile, there's not many businesses we could buy here," he said. "Our idea is not to participate in any consolidation."
He said the idea of Amgen opening a new plant in Brazil is also "a question mark for now," but that the company continues to invest in local tests for drugs it is developing. Some 2,500 patients are participating in Amgen clinical trials at more than 200 Brazilian research centers, he said.
($1=2.22 Brazilian reais)
(Editing by Peter Galloway)