Multinational deals set to continue in Indian pharma
Although GlaxoSmithKline said that speculation it is in talks with India’s Piramal healthcare is “unfounded”, recent comments by CEO Andrew Witty that the firm would focus on emerging markets fit with such a move.
In addition, comments by Sanofi Aventis chief Christopher Viebacher that the company wanted to expand its presence in India, coupled with his reservations about Pfizer-like mega deals, would seem to indicate that the firm is also on the look out for relatively small scale Indian acquisitions.
On a global scale, Indian drugmakers look like a very attractive proposition for acquisitions, particularly given their relatively low valuation compared to firms elsewhere. In addition, the country's massive internal market is also likely to feature prominently in the thinking of any potential multinational suitors seeking to sustain revenue growth.
Evidence for the potential attractiveness of India's drugmakers and its market first emerged in June last year with Daiichi Sankyo’s acquisition of Ranbaxy Laboratories for $4.6bn (€3.5bn).
The fact that Daiichi chose to proceed with the purchase despite Ranbaxy’s problems with the US Food and Drug Administration (FDA) and Health Canada suggests that the massive potential of the Indian market can overcome any short term concerns.
The prospect of more Indian deals was given further credence by the speculation that Wockhardt and Torrent Pharmaceuticals are among several firms to have been approached by multinational Pharma companies, according to a Livemint report.
An analyst said that: “Since the generic market is going to be more and more competitive, the growth prospects for companies that fails to focus on innovation seems bleak in the future.”
