Billionaire Ajay Piramal-led Piramal Enterprises Ltd said on Monday it will acquire a portfolio of drugs from UK-based Mallinckrodt LLC for $171 million (Rs 1,163 crore) in its seventh pharmaceutical deal within two years.
The transaction also involves an additional $32 million payable depending on the financial performance of the acquired assets over the next three years, Piramal said in a stock market disclosure.
Piramal, through a wholly owned critical care unit, is acquiring drugs for spasticity and pain management from the UK biopharmaceutical company. The drugs include Gablofen, a severe spasticity management product which is marketed in the US, and two pain management products under development. Gablofen has also been approved for launch in eight European markets.
For the 12 months through September 2016, the acquired portfolio generated revenue of $44.6 million.
The transaction is subject to regulatory approvals in the US and certain other conditions, Piramal said.
Ajay Piramal, chairman at Piramal Enterprises, said this is the company’s seventh acquisition in the pharmaceutical sector in two years and takes the total investment by the company on inorganic growth to Rs 3,000 crores across its pharmaceutical businesses.
“This transaction is a step further in our strategy to make investments, in both internal developments and acquisitions, to expand our presence in the global generic hospital drug market, which is greater than $20 billion in size,” he added.
This is also the second acquisition by the critical care subsidiary in four months, said Peter DeYoung, CEO of the unit. The unit had sealed a deal in October last year to buy a clutch of products from Janssen Pharmaceutica NV for up to $175 million.
Apart from the Janssen acquisition last year, Piramal in August agreed to acquire US-based Ash Stevens Inc. for up to $52.95 million. In May, it agreedto purchase four brands from drugmaker Pfizer Ltd for Rs 110 crore.
In November 2015, Piramal acquired baby-care brand Little's for an undisclosed amount, entering a new segment to expand its consumer products business.
Apart from Piramal, a number of Indian pharmaceuticals companies have been making acquisitions. Earlier this month, Cadila Healthcare Ltd, which operates under the brand Zydus Cadila, said it had purchased US-based specialty pharmaceuticals company Sentynl Therapeutics Inc.
Aurobindo Pharma Ltd agreed to acquire Portugese drugmaker Generis Farmaceutica SA from private equity firm Magnum Capital Partners for €135 million earlier this month.
Piramal is a diversified conglomerate with a presence in pharmaceuticals, healthcare information management and financial services. Its consolidated revenue was around $1 billion in 2015-16, with 61% of revenue from outside India.
Eyeing more deals, other businesses
Separately, Piramal told VCCircle that acquisitions in the future would depend on whether there are targets available that fit its strategy.
“Our strategy is to get into more differentiated products which are either difficult to manufacture or face some comparative barrier in sales and distribution. Besides, if they are value accretive we will look at them,” he said.
He also said that the company has a strong presence in the US, Europe and Japan and that it will continue to focus on these regions.
On the company's plans to hive off its healthcare business from its financial services business, Piramal said this will happen in the medium term but not in 2017.
Piramal also said that its private equity arm, India Venture Advisors, is focussed on exiting its investments and that it does not have any plans to raise a new fund as of now.
IVA was founded in 2007 by Ajay Piramal and AK Purwar, former chairman of state-run lender State Bank of India. The fund recently exited multi-specialty hospital chains Ramesh Hospitals and Sri Kavery Medical Care.
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