An older article on the state of pharma affairs in India:
Indian pharma companies on takeover spree.
By Ramnath Subbu
MUMBAI. Indian pharmaceutical companies have been moving aggressively to acquire companies overseas in the recent past. That should not come as a surprise because over the last few years, they have not only gained critical mass in terms of balance sheet size and streamlined operations, but also have access to cheaper funds.
Dr. Reddy's Laboratories acquired the U.S.-based Trigenesis Therapeutics for $11 million thus signalling the company's foray into the speciality drugs segment. The company will commence marketing products from Trigenesis in three years.
Wockhardt also announced the acquisition of the German firm esparma for $11 million marking its foray into what is the largest market in the EU for branded generics. This is Wockhardt's third acquisition overseas after Wallis Laboratories in 1998 and CP Pharmaceuticals in 2003 for Rs. 83 crores. Zydus Cadila had acquired the formulation business of Alpharma of France for 5.5 million euros and Ranbaxy acquired the French generic drug company, RPG Aventis for around $70 million.
"All available indicators that global generics market is growing. It is very competitive there and provides funds for R&D. Drugs prices outside India are far more remunerative than here and that generates investible surplus," said D. G. Shah, secretary general, Indian Pharmaceutical Alliance (IPA). "This is no doubt an entry strategy and a move to accelerate growth," he added.
While addressing the media recently, Habil Khorakiwala said, "The U.S. market is very attractive and one can expect much faster growth there. In the next 3-5 years, the U.S. market could be as important as the EU and India".
"Although not as large as the U.S. market, the EU could soon be getting there in terms of both quantity and value. The European market is not as cluttered as the U.S. market and offers an opportunity to build critical mass," said Mr. Shah. In 2001, export of generics was worth a mere $2 billion. Studies done by Indian Pharmaceutical Alliance indicate that by 2007, India's export of generics will be around $12 billion while the size of the domestic generic market will be $7 billion. In 2001, India accounted for 22 per cent of the global generics market and this could go to 33 per cent by 2007. The global generics market will reach $57 billion by 2007.
"If we want to accelerate growth, the need is to acquire companies with market authorisation and only change the site for manufacturing to India given the significantly lower costs here.
Also, these companies will look for one small manufacturing facility to show the final packaging there. If anything, that helps in better product acceptance overseas till the company name becomes better known. It is only a perception," said Mr. Shah.
....and no, I am not the Indian Pharmaceutical expert that you are seeking, just trying to help in any way
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