Chronic therapies and oncology in particular will be among the key drivers of private equity investments in the Indian pharmaceuticals market, according to a report by healthcare consulting firm IQVIA.
IQVIA released the report called ‘Winning in the Indian Pharmaceutical Market: Investment Themes and Alternate Channels of Play’ at the tenth edition of News Corp VCCircle’s Healthcare Investment Summit, which took place in Mumbai on Tuesday.
IQVIA has identified four drivers of growth and investment based on an analysis of transactions over the past five years with deal values of more than $20 million.
The report states that formulators such as Shilpa Medicare and Natco Pharma which have a specialty focus in chronic areas have attracted significant investments.
Baring Private Equity Partners India is the single-largest PE shareholder in Shilpa Medicare, with Tano Capital and TA Associates among its other PE investors. Natco Pharma counts Multiples Alternate Asset Management and CX Partners among its backers.
The report said that Mankind Pharma’s entry into chronic therapies was also a significant driver for recent investments. Earlier this year, a consortium of investors led by ChrysCapital invested $350 million (Rs 2,334 crore) in Mankind in the single-biggest PE transaction in the Indian healthcare space.
IQVIA’s report further stated that regulatory market presence and innovation/investment in speciality businesses is another driver of PE investments in large formulators.
It cited the examples of Sun Pharmaceutical, Intas Pharmaceuticals and Glenmark, all of which are backed by Singapore state investment firm Temasek.
According to the report, another key driver for investments is the vertical integration by pharma companies, where two stages of production are combined. The report points at investments in Laurus Labs and Symbiotec Pharmalab in this regard.
The presence of drug portfolio with a wide spectrum from early stage to commercial manufacturing also attracts PE investments, the report added.
It referred to global and local PE funds' investments in Syngene International and Neuland Laboratories, which have significant revenue share from innovator portfolios.
The other drivers for investment include strong research and development capabilities, consumer-focused portfolios and large successful brands.
IQVIA provides advanced analytics, technology solutions, and contract research services to the life sciences industry. It was formed through the merger of IMS Health and Quintiles.