Singapore-headquartered pharmaceutical company Mundipharma expects to close at least 30 deals to acquire consumer product brands by end of 2018 to strengthen its foothold in the emerging markets including Southeast Asia, said CEO Raman Singh.
He told DEALSTREETASIA that the company has closed 19 deals as of June 2018 as part of its effort to balance its consumer and pharmaceutical products stream. Singh also added that acquisition is the fastest way to expand the company’s footprint in the region.
“Over the last seven years, we’ve done close to 50 deals in both pharmaceutical and consumer products in emerging markets. The CAGR for emerging markets is about 35 per cent for the past year. At the moment, Malaysia is not the biggest market for us – Indonesia is followed by the Philippines. But in terms of strategic standpoint, Malaysia is our nerve centre. Thailand has been going well, it accounts for about 10 per cent of our global revenue in consumer health. In Malaysia, it’s 60 per cent consumer health and the rest pharmaceuticals,” he said.
Mundipharma has also been keen on digital transformation as Singh noted that the healthcare industry is one of the most regulated and traditional industries.
“Typically, the healthcare industry is a very reactive one – you fall sick, you take medicine or see the doctor. But digitisation has enabled this industry to move from reactive to predictive and eventually to preventive. Digital plays a huge role in predictive. Today you could be monitored by your wearable technology or AI or virtual reality to predict your condition,” he commented.
Mundipharma has made several “collaborations” with biotechnology startups to digitise its business, including developing a device to monitor pain and experimenting using augmented reality to detect glaucoma.
“In fact, some collaborations we’re talking is investing the company and/or taking a percentage in the company. This budget sits with me to fund these experiments. It’s a few million dollars,” he said.
Singh joined Mundipharma in 2011 and has primarily led the company’s business expansion into emerging markets. For the past three years, he has been focusing on digitising the company’s business. When asked if the budget or check sizes would be increased in the near future, he said “definitely”.
“We’ve got some failures and pluses – be it investment in products or companies. It could take longer than we thought for things to take shape. I’ve been really pleased with the investments that we’ve done. Definitely will increase budget in investments for these startups. As we start seeing success, it builds a lot of confidence for this path,” he added.
On research and development, he noted that the R&D budget of pharmaceuticals companies are getting minimsed because it is “inefficient and unproductive”.
“So now, you see many biotech companies coming up in the US and China. There are a lot of such collaborations going on between biotech and pharmaceutical companies where the latter provide the seed money or acquire the near-finished product produced by biotech companies,” he said.