Ajay Piramal-led Piramal Enterprises Ltd has sealed a deal to buy a clutch of products from Janssen Pharmaceutica NV for up to $175 million, it said on Monday. It joins other Indian pharma companies like Lupin, Cipla and Intas that have inked big overseas deals abroad in the last one year.
Cash-rich Piramal Enterprises, which sold its domestic formulations business to Abbott in a multi-billion dollar deal in 2010, said its wholly owned critical care subsidiary in the UK has entered into an agreement to acquire five anesthesia and pain management injectable products from Janssen.
The deal involves an all cash upfront payment of $155 million and up to an additional $20 million if the products achieve certain agreed financial milestones over the next 30 months. The products to be acquired are five injectable versions of established Janssen brands, Sublimaze (fentanyl citrate), Sufenta (sufentanil citrate), Rapifen (alfentanil hydrochloride), Dipidolor (piritramide), and Hypnomidate (etomidate).
Piramal has agreed to acquire the brand names and all related intellectual property of the products, including the know-how to make both the active pharmaceutical ingredients (API) and the finished dosage forms. The products are currently marketed in over 50 countries.
The proposed acquisition does not include the transfer of any manufacturing facilities or employees. As part of the transaction, Janssen will continue to supply finished dosage forms for up to three years and API for up to five years. Janssen will also continue to sell the products on behalf of Piramal until the marketing authorisations or relevant business relations are transferred to Piramal.
The transaction is expected to close this week.
Ajay Piramal, chairman, Piramal Enterprises, said, “Healthcare is an important focus area for Piramal Enterprises and we are strongly committed to growing this segment. The healthcare segment has grown at 17% CAGR over the last five years. This would be our 6th healthcare acquisition in the last two years, inorganically investing Rs 1,800 crore across our healthcare businesses.”
He said this acquisition is critical in shaping the firm’s product offerings, providing access to global markets and leveraging its existing capabilities.
Peter DeYoung, CEO – Piramal Critical Care, and also son-in-law of Ajay Piramal, said, “We are currently the third-largest player in the inhalation anesthesia market globally and continue to grow in that niche segment. Four of the acquired products are controlled substances which have higher barriers to entry.”
Piramal’s M&A play, demerger plan
The latest deal marks billionaire Ajay Piramal-led company’s third acquisition in the healthcare business this year alone. In August, Piramal agreed to acquire US-based Ash Stevens Inc for up to $52.95 million (Rs 355 crore) in an all-cash deal to boost its high-potency drug development business.
In May, Piramal had agreed to purchase four brands from drugmaker Pfizer Ltd for Rs 110 crore ($16.5 million). The company, through its consumer products division, snapped Ferradol, Neko, Sloan’s and Waterbury’s Compound brands from the Indian unit of Pfizer Inc. The agreement also included the trademark rights for Ferradol and Waterbury’s Compound in Bangladesh and Sri Lanka.
Piramal Enterprises that has diversified into financial services after its big deal with Abbott six years ago is rebuilding its healthcare business with these acquisitions. Healthcare remains a key revenue earner contributing around half of the total.
It is also looking to split its healthcare and financial services businesses to unlock value for its shareholders.
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