Caplin Point: Meet the Uniquely Defined Generic Pharma Exporter

The Silicon Review

"Founded in 1990: IPO in 1994, Caplin Point Laboratories Ltd is regarded as one of the leading suppliers of pharmaceuticals in emerging markets today, with over 2000 products licenses across the globe”

Brainchild of Chennai-based first generation entrepreneur Paarthipan, Caplin Point today is regarded as a successful Company that has defied all odds to successfully navigate and sell generics in relatively unknown markets that carried an element of physical risk. In an era where pharma companies have grown through an almost exclusive focus on US, Caplin has survived all odds to become an effective marketing company with 60% revenue from trading i.e sale of formulation to Latin America markets sourced from China and India.

The company expects to generate 20 to 25% Compounded Annual Revenue Growth (CARG) for the next five years. Caplin intends to transform its top line of today into its bottom line six years from now. (It has already done so now – 2010 top line is the bottom line in 2016). From a long term perspective, Caplin has invested in an injectable manufacturing facility that is approved by EU-GMP and ANVISA and now awaiting the coveted USFDA Approval. Caplin Point will select to specialise in the complex injectable space without diluting its managerial attention in other commodity spaces of the pharmaceutical industry. The company has selected to enter into an alliance with Fresenius Kabi (Euro 28 bn revenues, 2015) for few of the filings in US. It has also entered into business strengthening partnerships to launch the products in US, a relative derisking against the prospect of going alone for a large opportunity with a lot at stake. The company aims to enter the US market by 2018/19 after filing 9 ANDAs between 2016-17 followed by a similar number each year.

Defining Uniqueness is Caplin’s Way
The company defines uniqueness in it’s own way. Today, it is regarded as a small but highly profitable generic pharma exporter with focus on semi regulated markets of Latin America. Unlike domestic pharma companies that rely on a distributor in semi-regulated markets, Caplin has strived to build last mile logistical solutions with exclusive agents, which assists in reaching right up to retailer / pharmacy level.

Starting its journey by selling ointments and creams in physically risky markets such as Angola, Caplin Point today enables distributors to build warehouses and address the pharmacies directly, which leads to faster inventory turns at 8x, that is nearly twice the industry average.

Attaining Glory with Exceptional Business Model
Since its inception, Caplin Point has carved out a niche for itself with the focus on semi regulated markets of Latin America and Africa. The triumph of Caplin Point is primarily attributed to its unique business model. Started out as a marketing and manufacturing outfit, the company aimed at largely ignored or physically risky markets such as Guinea, Mali, Somalia and Angola. Indeed the company was going to places, which were very far from India or China and perceived to be risky. Also, most of these countries markets were deemed too small for the larger peers. Along the way, company did some interesting things.

1) Adopted an asset light model whereby it would source formulations from two of the largest Chinese formulations players and sell to Latin American and African markets: the drugs are vetted by its own quality control labs in China.
2) Created last mile connectivity vs. the easier approach of appointing an importer for its products, which is the model followed by many Indian companies.
3) Wide choice of products supported by better purchasing power for drugs in Latin America than comparable bottom of pyramid populace in India.

Additionally, one more reason that contributed to it’s success is the wide range of products offered across varied geographies. Caplin Point has over 2000 product licenses across the globe with a further 350 in the pipeline for emerging markets.

Plotting the Future
Headquartered at Chennai, the company is reaching for new heights by entering the highly regulated US market with a niche injectable and ophthalmic portfolio. Caplin Point’s latest state of the art injectable plant CP-IV has been approved by EU-GMP and ANVISA-BRAZIL and will be inspected by US FDA in October 2016. Company will be filing 9 ANDA’s within the next 6-9 months, with a similar number of ANDA filings every year from here on. The company receives a major share of its current revenues (90%) from emerging markets of Latin America. Caplin has remained debt-free despite huge Capex spend and Opex increase, over the last 4-5 years. The company is also in the process of developing a healthcare portal to automate pharmacies and distributors in the existing markets of Latin America.

Meet the Visionary

C. C. Paarthipan, Chairman– A visionary and first generation entrepreneur, C.C.Paarthipan’s stint in the pharmaceutical industry goes back almost 3 decades. He started his career in the 80’s as a medical representative and never looked back. He scaled multiple heights to bring Caplin Point to its position today. Fascinated by the road less travelled, he has taken the company’s products to different corners of the globe, catering predominantly to the bottom of the pyramid, with good quality at affordable prices. He continues actively heading the organisation in its multi-pronged growth approach for the years ahead.

“The Company is committed to implementing the most stringent Quality Management Systems and drive it effectively through all its units”