Aché plans Latin America expansion, innovation efforts

One of the biggest pharmaceutical companies in Brazil, Aché started a new growth cycle in 2015. It wants to become more international and advance primarily into Latin American markets – the goal is to double in size every five years and launch at least one medication developed through radical innovation efforts, which will consolidate its leadership in the anti-inflamatory segment, with Acheflan.

The company's main path to this goal is drawn by the 2030 strategic plan, devised with the collaboration of new CEO Paulo Nigro. The executive, who before headed Tetra Pak in the Americas, took the helm effectively in January. The company spent nearly two years headed by a management committee after the exit of José Ricardo Mendes da Silva in early 2013.

Multinational rivals approached the company's shareholders – the Depieri, Dellape Baptista and Siaulys families – last year to buy the business, which had net revenue of R$2.1 billion and profit of R$471 million then. But the negotiations didn't move forward and the shareholders, faced with the renewal of their long-term strategy, weren't even eyeing deal opportunities.

Mr. Nigro says the new strategic plan is supported by five pillars, which include growth in all business segments and priority focus on innovation. The company invested around R$140 million in innovation last year. The amount rose to R$200 million so far this year, with R$20 million focused solely on the so-called radical innovation.

The executive says that Aché wants to develop a new market-leading drug that is a reference in innovation, like Acheflan, which demanded ten years of research and was the first phytotherapic medication fully developed in Brazil. With sales of over R$20 million a year, it receives 28% of the segment's prescriptions.

To bolster development of innovative drugs, Aché will launch Tuesday at its new headquarters in Guarulhos, São Paulo, the Molecular Design and Synthesis Laboratory, within its new Radical Innovation Center. “We want a new synthetic radical innovation,” Mr. Nigro says, adding that the list of promising bets includes vitiligo and anxiety drugs.

The current radical innovation portfolio involves 16 projects divided among synthetics, phytotherapics (one for diarrhea, which also has significant sales potential) and skin cosmetics. Those molecules, Mr. Nigro says, can allow Aché to enter foreign markets, especially in Latin America, which gradually would also start to receive other products.

“We will go with a new portfolio, more sophisticated, and once the commercial relation is established, we gradually will add other existing products,” he says. The company's exports only represent 1% of businesses today and initially there are no plans to acquire production assets abroad. “We don't believe in internationalization through acquisition,” Mr. Nigro says.

Another access pathway to foreign markets is partnering with foreign companies to develop technology platforms. The first Aché partnership in this sense was signed with biopharmaceutical company Ferring, focused on researching and producing peptides and proteins.

Holding drugs that earn sales upward of R$100 million, like Alenia (for respiratory ailments) and anti-inflamatory Tandrilax, Aché is financing its expansion mainly with its own funds. Mr. Nigro says that net revenue should rise 10% in 2015, with most growth coming from new products launched in the last two or three years. Aché has 176 products in its development pipeline.

In addition to prescription drugs, generics and over-the-counter medication, Aché also operates in the skin cosmetics segment and prepares to enter the institutional market of hospitals and the government. Nearly 100% of its sales now take place in retail.

• Tweetar