Hospira, Inc. CEO: Global Expansion Lies in Follow-On Biologics, Takeovers

NEW YORK (MarketWatch) -- Hospira Inc. /quotes/zigman/346012/quotes/nls/hsp HSP -1.82% will look to generic versions of biologic-style drugs and international expansion for future growth, F. Michael Ball, chief executive of the generic-injectable-drug maker, said during an investor conference Wednesday.

"There's not a big need to change strategy here," Ball said. "There's simply the need to globalize it." He said Hospira can do this by getting existing products approved in other countries and through acquisitions in emerging markets, which present a $5 billion opportunity.

He also said that fixing problems at some of the company's manufacturing facilities is a priority. Last year, the Lake Forest, Ill., company received a warning letter from the Food and Drug Administration regarding its pharmaceutical and device manufacturing facilities in North Carolina. Hospira has said it is working with the FDA to resolve the issue and that it took immediate action to address the agency's concerns, including recalling certain products manufactured at those facilities. The company incurred $54.3 million in charges related to the facilities last year.

"We will get it fixed," Ball said. "That is job number one."

Ball also said he sees growth coming from biosimilars, which are roughly the equivalent to generic versions of biologic-style drugs. The company already sells biosimilars outside the U.S. and sees a $116 billion global market in the drugs. Hospira expects to launch biosimilars in the U.S. between 2013 and 2015.

He also aims to increase gross margin to a mid-to-high-40% range through what he calls "high quality, low-cost manufacturing." This includes a 1.1M square-foot facility in India to boost capacity for making generic drugs.

Hospira shares were up 3.8% to $45.89 in recent trading.

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