Bangladesh's Beximco Pharmaceuticals Ltd, which is listing in London, plans to exploit a quirk in international patent law to secure a head start in the cut-throat generic drugs business.
Salman Rahman, vice chairman of Beximco Group, Bangladesh's largest company, said on Monday its pharmaceuticals arm aimed to follow the lead of Indian generic firms - but with the advantage of being based in a least developed country (LDC).
The location is significant because it gives exemption from new international patent rules, under the so-called TRIPS regime, and means Bangladeshi firms can copy patented drugs and export them to other LDCs.
"Because of the TRIPS agreement, until 2016, we are legally allowed to reverse engineer patented products," Rahman said in a telephone interview.
"This gives us a tremendous opportunity. We can sell them in the Bangladesh market and we can export them to other LDC countries we will also be ready to enter developed world markets as soon as the drugs go off patent," he added.
India's drug industry used to operate under laws that did not recognise medicine patents, leading to the creation of a major drugs industry headed by firms such as Ranbaxy Laboratories Ltd and Dr Reddy's Laboratories Ltd.
But the ground rules changed in January this year, when India passed new patent laws as part of its commitment to the World Trade Organisation under the Trade Related Aspects of Intellectual Property Rights (TRIPS) regime.
That leaves Bangladesh in a unique position as the only LDC with a strong domestic pharmaceutical industry.
Rahman said Beximco Pharmaceuticals would exploit this by stepping up exports to other LDC markets that have a combined population of 700 million.
"Although their purchasing power is low, the numbers are high. We will obviously be selling at much lower prices," he said.
Beximco Pharmaceuticals hopes to have its drugs for AIDS and other serious diseases approved by the World Health Organisation next year and to win US Food and Drug Administration for a new factory by the end of 2006.
New funds of $21 million, raised through a share placing ahead of its London listing, will help to pay for completion of the new plant.