Indian pharma cos look to acquire niche portfolios: Report

The Dollar Business Bureau

India’s major pharmaceuticals companies are now looking to acquire niche product portfolios in several regulated markets across the world, indicated a report on Tuesday.

"Recently, selected innovators have taken a call to exit their generics business and concentrate on branded/patented businesses creating billion dollar acquisition opportunities for large Indian pharma players in the regulated markets," said the report published by ICICI Securities.

The country’s largest ten pharmaceutical companies, which are incidentally cash-rich, are hungry to acquire companies with their niche product portfolios. The report pointed out that the top Indian pharma companies have plethora of funds, and they can raise capital easily from debt and equity capital markets.

In September, UCB sold Kremers Urban to Lannett for $1.23 billion and India-based generics portfolios to Dr Reddy's. Boeringer Ingelheim sold Roxanne Laboratories to Hikma Pharmaceuticals for $2.65 billion.

Teva recently acquired Allergan's Generics business, which led to the sale of certain products in the US and Europe. Dr Reddy's also obtained a portfolio of eight ANDAs (Abbreviated New Drug Applications) for $350 million. Zydus, too, bought two ANDAs for an unrevealed amount.

A few Indian companies are in the process of acquiring Teva's generics portfolio in Europe; a transaction expected to be worth $1-1.5 billion. Lupin and Sun Pharma recently bought several portfolios in Japan from Novartis and Shionogi.

“… given the high growth, volumes and profitability in regulated markets - USA, Western Europe and Japan - large as well as medium sized Indian pharma firms are targeting them with regular product registrations,” ICICI Securities said.

Indian pharmaceutical industry is expected to grow at a CAGR of 13% to $55 billion in 2020 from $30 billion in 2015, while exports are set to account for 50%.

Currently, the Indian Branded Formulations (IBF) sales comprise mainly of generic drugs (70%), with patented drug sales accounting for less than 10%.

The key therapeutic segments consist of cardiovascular, anti-infectives, and gastro, comprising of 40% of the total IBF market