Smart strategy leading to an established global position

In the strategy of the JGL pharmaceutical company from Rijeka, the operation globalization was marked as a priority early on, at the beginning of 1990s in several directions of realization, according to the development and technology platform, and accompanied by a strong marketing evaluation of the product portfolio.

The first activity within the globalization process was the expansion to markets of the former Yugoslavia, and eventually JGL entirely developed its own operations in this market. The next key strategic decision was to open a representative in the Russian market with headquarters located in Moscow. The export strategy focused on the registration of medicine and other product categories, first in Russia, and later concentrically in other CIS countries. Today these two regions dominantly contribute to the export that accounts for over 70% of JGL sales, and the company was named the largest Croatian exporter to Russia in 2009 and 2011.

Based on constant analyses of the competition and external environment in the pharmaceutical industry, which is extremely dynamic in business strategy trends, and at the same time well regulated by legislation, the strategy of further globalization was gradually changing, focusing on developing cooperation with companies that already have established positions on the market, and active sales in certain marketing segments on the targeted export markets. The precondition was to select programs for the portfolio, and the chosen criteria were current marketing trends, long-term development potential, line completeness and brand strength, GMP status technology platform and a documentation set that meets very specific registration requirements.

Based on this, two program units have been defined, "international program" in which JGL sees a strong growth lever on exporting global markets, which M.Sc. Dunja Siuc Valković, Business Development Director in JGL describes in more detail:

"The first unit includes our own programs and brands of nasal sprays based on seawater and active substances of medications, manufactured within our own facilities, that are certified according to all requirements of the GMP practice for certain markets. The second unit pertains to JGL's own program of ophthalmic drugs developed in cooperation with relevant strategic partners, and manufactured by JGL both for its partners and for its needs in its own production facilities for sterile solutions, also in accordance with GMP guidelines. Both strategies represent B2B operations, directed towards meeting the requirements of the present-day pharmaceutical industry, which include a fast market entry and bridging the time gap, as well as using the partners' complementary competencies."

During the last two years, the activities for the achievement of the aforementioned objectives focused on active search for partners on the EU and North America (Middle East) markets, especially through the conclusion of distribution agreements for Aqua Maris- currently the most global company brand. In addition to this program, which can enter the markets fast due to its registration status of a medical device, at the same time the company underwent a DCP registration process in the EU for another product, the Meralys medication. This process allows licensing to partners based the on turn-key principle. The DCP registration process is very demanding in itself as it requires first-rate documentation and coordination in process management. A new process, according to Ms. Siuc Valović, in the operation development and globalization of JGL portfolio, is licensing and contract manufacturing.

"A large step forward was finding a strategic partner and signing a cooperation agreement with a Swiss pharmaceutical company with which we established an early license relationship in the development phase of the generic medicine called Latanoprost. This medicine is registered on the Croatian market as the first generic parallel, and on EU markets, where it was registered through a DCP procedure, it was also launched as the first generic drug. The opening of a new operation segment - contract manufacturing, based on a specific technology platform of sterile solutions - has enabled us to plan further cooperation for new strategic generic drugs in the ophthalmology segment. So, today we have a range of products in our pipeline, and a potential globalization program that will be the first generic drugs, continuing our expansion in the EU, as well as in other markets."

With the Latanoprost project, JGL is today indirectly present on ten EU markets through its Swiss partner, and is a supplier for about ten companies, some of them multinational. The market share of Latanoprost takes up a significant part of the EU market, especially in Germany and France, where partners have taken over 30% of the market. In addition to the EU, the potential of two main globalization programs was evaluated for other markets as well, so based on the analyzed operation and opportunities existing in the USA, JGL opened its office in New York last year.

The USA, as the world's largest pharmaceutical market, is interesting because of its level of development and relatively high prices compared to the EU, but entry barriers are high, entailing certain challenges - first the requirements of high pharmaceutical quality, which is a precondition to engage in sales in the first place. A segment that is somewhat less demanding for market entry in the USA is the Aqua Maris program, but entails a few obstacles as well.

"The first realized activities were the registration of several products of the Aqua Maris line, and follow-up activities for the plan realization are market research and the evaluation of potential partners.  A functional e-commerce web site is also planned by autumn. On the US market we expect brand building through regional saturation of distribution channels and final entry into retail chains (or mass market retailers), as well as a successful commercial positioning in the nasal hygiene segment."

Simultaneously with the entry strategy of the Aqua Maris program, another strategy is being evaluated, the Program of Ophthalmic Licensing. Due to the specificity of US patent law, which is rigorous and well-regulated with respect to the originator protection, it is extremely important to check all the aspects of the patent protection before market entry. On the other hand, the benefit of the first entry of a generic drug is exceptional. Together with its strategic partners, JGL is preparing several projects which will be implemented after risk evaluation, and a very important step forward in this segment will be the investment into technology and new capacities for sterile manufacturing.

The ophthalmic drug segment in the USA makes up 40% of the world's ophthalmic drug market, amounting to $ 6 billion, with an anticipated annual growth for this segment of 5.3% by 2025. Consideration that several important patents for original drugs will expire, the attractiveness of this segment is clear, as well as the JGL strategy verified in the EU, which helps achieve long-term balance of the Aqua Maris program.

"Forming partnerships in all segments of product realization is particularly important in our operations. In JGL, our strategy is orientation towards customers and partners, so today we have a whole range of partner relationships, including co-development, co-marketing, licensing, contract manufacturing... This allows for optimal usage of our resources, with the exchange of know-how being a driver that speeds up project realization", concluded Dunja Siuc Valković, Business Development Director in JGL.

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